Death Of One Of Partners Does Not Foreclose Continuation Of Civil Proceedings Initiated By Firm : Supreme Court

The Supreme Court observed that the death of one of the partners does not foreclose the continuation of the civil proceedings initiated by the firm. 

Kamal Engineering Works was a partnership firm comprising two partners – Shiv Singh Galundia and his son – Sumer Singh Galundia. The firm filed Civil Suit for specific performance of contract, damages, declaration and for permanent injunction. The Trial Court dismissed the suit and therefore they filed the First Appeal before the High Court. During the pendency of that appeal, one of the partners, namely, Shiv Singh Galundia died. His legal heirs moved an application under Order XXII, Rule 3 CPC in the pending appeal for their substitution as legal representatives of the deceased partner. However, the High Court dismissed the appeal observed that with the death of one of the two partners, the partnership firm stands dissolved automatically and, thereafter, right to sue does not survive to the other partner for seeking the relief(s) as were prayed for by the partnership firm in the Suit.

in appeal, the Apex Court bench of Justices Surya Kant and J K Maheshwari, referring to Order XXX Rule 4 and Order XXII Rule 10 CPC, observed thus:

"There is no gainsaid that where two persons have sued in the name of a partnership firm and if one of such persons dies during the pendency of the proceedings, it is not necessary to join the legal representatives of the deceased as a party to such proceedings, which shall continue in accordance with law. In other words, the death of one of the partners does not foreclose the continuation of the civil proceedings initiated by the firm."

The court further noted that, in this case, the legal representatives of the deceased had already applied for their impleadment in substitution of the deceased and there was no reason for the High Court to decline such a prayer when the application was moved in time without any other legal impediment in accepting their prayer.

The court also clarified its judgment in AVK Traders vs. Kerala State Civil Supplies Corporation Limited, (2013) 15 SCC 217

"Para 13 of the above-mentioned judgment cannot be said to have held the suit would stand abated in the event of death of one of the partners where the partnership firm comprises two partners. What this Court has observed is that where one of the several partners dies in the suit instituted in the name of the partnership firm “as compared to when one of the two partners of the partnership firm dies”, the decree so granted would not be executable even if the partnership firm succeeds in the suit. It does not mean that the suit stands abated.", the court said while allowing the appeal.

Case details

Sumer Singh Galundia vs Jeevan Singh (D) | 2022 LiveLaw (SC) 1041 | CA 9292 OF 2022 | 16 December 2022 | Justices Surya Kant and J K Maheshwari

For Petitioner(s) Mr. Anuj Bhandari, Adv. Ms. Anjali Doshi, Adv. Ms. Disha Bhandari, Adv. Mr. Gaurav Jain, Adv. Ms. Kanika Sanwal,Adv.

For Respondent(s) Mr. T. Mahipal, AOR

Headnotes

Code of Civil Procedure, 1908 - Order XXX Rule 4 and Order XXII Rule 10 - The death of one of the partners does not foreclose the continuation of the civil proceedings initiated by the firm - Where two persons have sued in the name of a partnership firm and if one of such persons dies during the pendency of the proceedings, it is not necessary to join the legal representatives of the deceased as a party to such proceedings, which shall continue in accordance with law. (Para 6-11)

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