Delhi High Court
Economic Transport Carrier vs Economic Transport Carrier ... on 13 December, 2002
Equivalent citations: 2003 (66) DRJ 359, 2003 (26) PTC 195 Del
Author: J Kapoor
Bench: J Kapoor
JUDGMENT
J.D. Kapoor, J.
1. This is an application moved by one of the defendants, namely, Smt. Leela Devi Aggarwal. Admittedly the plaintiff firm is a registered firm comprising of three partners, namely, Sh. Madan Lal Aggarwal, Smt. Leela Devi Aggarwal and Sh. Suresh Kumar Aggarwal. Defendants passed off the name of the plaintiff's firm. The very composition of these two firms shows that they are different independent entitles. The instant application for withdrawal is moved by majority of the partners of the plaintiff firm, namely, Smt. Leela Devi Aggarwal and Sh. Madan Lal Aggarwal.
2. Now question arises whether the majority of the partners have the right to withdraw the suit filed by one of the partners of the firm without any permission or authority of the original partnership firm.
3. Admittedly the suit was filed by one of the partners of the plaintiff against the firm of which none of the partners of the plaintiff is a partner in the defendant firm. This is astonishing that the partners of the plaintiff-firm are allowing a stranger in the firm to use their name and trade name which is likely to jeopardise not only the interests of the other partners but also smacks of designs of collusion with the defendant-firm.
4. In such a situation the decision of the majority of the partners cannot be binding on the other partners particularly when the suit is for passing off the name of a firm or infringement of the trade name as commercial activity of every kind is prosecuted through a partnership firm. In no circumstances the majority of the partners can be allowed to permit a stranger to use their name or trade name as it would amount to offence of passing off. Every partner has a vital interest in the activities of a partnership firm. Majority cannot trample or impede the interests of minority partners.
5. Moreover, Section 12(c) of the partnership Act itself provides as under:-
"Any difference arising as to ordinary matters connected with the business may be decided by a majority of the partners, and every partner shall have the right to express his opinion, before the matter is decided, but no chance may be made in the nature of the business without the consent of all the partners."
6. Use of the name of the plaintiff firm by a stranger is not a minor matter. It hits at the very fount of the not only nomenclature of the firm but its business name also. This Court in Suresh Kumar Sanghi v. Amrit Kumar Sanghi and Ors. AIR 1982 Delhi 131 has held that the majority of the partners are not vested with a power to bind the other persons with regard to the matter of vital importance and decision with regard to the same must be with the consent of all the partners. Further the majority must act in good faith is another important aspect. Other observations made by this Court in this regard need to be quoted. These are as under:-
No doubt, a partnership being the business of all the partners, the powers of management of the partners are co-extensive but the control and management of partnership business can be exercised by a single partner and need not be by majority.
7. This being the position of law coupled with the fact that the applicants are not the plaintiffs as they have neither filed the suit nor sought any relief against any person, the application is not only highly misconceived but not maintainable also. Plaintiff is a master of the suit who has the power to withdraw or continue with the suit and none else. In this respect, the application is dismissed.
S. No. 1488/98
List on 14 April, 2003.
