Published on: May 18, 2024 19:25 IST
Court: High Court of Delhi
Case: Svapn Constructions v. IDPL Employees 2005
Hon’ble High Court of Delhi has held that sole proprietorship firm is not a legal entity through its sole proprietor. A sole proprietorship firm is not a legal entity which can sue in its own name. It is held that it is mandatory that the suit filed in the name of proprietorship firm which was neither a registered company nor a joint family nor a partnership firm is not maintainable in the absence of any prayer to seek amendment to allow the sole proprietor to sue in his name.
17. The petition has been filed in the name of M/s. Svapn Constructions and not in the name of Shri A.K. Khanna its sole proprietor. In the petition filed by the petitioner, no prayer has been made seeking amendment to sue in the name of the sole proprietorship firm. Even according to the averments made in the petition, though it is stated that Mr. A.K. Khanna is the sole proprietor of the firm, M/s. Svapn Construction, however, no permission has been sought to sue in the name of the sole proprietorship firm.
If the sole proprietorship firm is not a legal entity, the petition should have been filed by the sole proprietor in his name on behalf of his sole proprietorship firm and not in the name of sole proprietorship firm. Considering it from any point, the inevitable inference is that a petition in the name of a sole proprietorship firm which is not a legal entity is not maintainable.
Drafted By Abhijit Mishra