Proprietor Can Be Sued in Trade Name; Supreme Court Remands Matter to Trial Court to Decide Suit on Merits

A bench of Justices Vikram Nath and Sandeep Mehta heard an appeal arising out of SLP(C) No.25938 of 2023 challenging an Andhra Pradesh High Court order which had set aside a trial court order and allowed an application under Order VII Rule 11, Code of Civil Procedure, 1908 to reject a plaint. The dispute concerned whether a proprietorship carried on under a trade name (Aditya Motors) could be sued by naming the proprietor (Pilla Durga Prasad) in his personal capacity after the plaint had been amended to substitute the proprietor for the proprietorship.

The Court allowed the appeal, set aside the High Court's impugned order and directed the trial court to proceed to decide the suit on its own merits. The bench held that a proprietorship concern was merely a trade name and not a juristic person and that Order XXX Rule 10 CPC was an enabling provision which did not prevent a suit being brought against the proprietor. The Court emphasised that impleading the proprietor in his representative capacity caused no prejudice and adequately protected the interest of the proprietorship. The Court, in its reasoning, observed: “The use of the word can in Order XXX Rule 10 CPC only indicates that proprietorship concern may be made a party. However, it does not necessarily mean that the proprietor itself if made a party would not be enough, inasmuch as, the proprietorship is to be defended by the proprietor only and not by anybody else. Once the proprietor has been impleaded as a party representing the proprietorship, no prejudice is caused to rather its interest is well protected and taken care of by the only and only person, who owns the proprietorship. Order XXX Rule 10 CPC does not in any manner debar a suit being filed against the proprietor.” The Court further relied on established precedents that distinguished proprietorship concerns from firms and companies and observed that “a proprietorship concern is nothing, but a trade name given by an individual for carrying on his business.”

Background The appellants owned the schedule property and executed a registered lease dated 13 April 2005 in favour of Aditya Motors, a sole proprietorship of P.D. Prasad. After expiry of the lease the lessee did not vacate; the appellants served notice under Section 106 of the Transfer of Property Act and filed Original Suit No.118 of 2012 for eviction against Aditya Motors and others. During proceedings the plaintiffs obtained amendment under Order VI Rule 17 to delete Aditya Motors (defendant no.1) and substitute Pilla Durga Prasad as representative of the lessee; that amendment (order dated 28 March 2018) was not challenged and attained finality.

Thereafter the defendant sought rejection of the plaint under Order VII Rule 11 on the ground that the registered lease was in the name of Aditya Motors and that substitution of the proprietor left no cause of action against the named individual. The trial court rejected the defendant’s O.7 R.11 application by order dated 2 July 2018. The High Court allowed a civil revision petition, set aside the trial court order, applied Order XXX Rule 10 and held that the proprietorship ought to have been made a party; it allowed the application and directed rejection of the plaint. The appellants appealed.

The Supreme Court reviewed Order XXX Rule 10 CPC and relevant precedents (including Ashok Transport Agency v. Awadhesh Kumar and Shankar Finance and Investments v. State of Andhra Pradesh), held that proprietorship was a business name only and that suing the proprietor in his representative capacity was permissible and did not cause prejudice. The Court concluded that the High Court took a hyper‑technical view and committed error in relying on Order XXX Rule 10 to insist on suing the trade name separately. The appeal was allowed, the impugned High Court order was set aside and the matter was remitted to the trial court to proceed in accordance with law; pending applications were disposed of.

Case Details: Case No.: 2025 INSC 1046 Case Title: DOGIPARTHI VENKATA SATISH AND ANR. v. PILLA DURGA PRASAD & ORS. Appearances: (List advocates if available, for both sides using the format) For the Petitioner(s): Counsel not indicated in the judgment For the Respondent(s): Counsel not indicated in the judgment