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Manmull [AIR 1924 Cal 74], it is position of law that a Partnership an entity distinct from the members
held by the Calcutta High Court as firm is not distinct from its Partners. composing it. Our partnership law is
under: However, Section 49 of the Act is an based on English Law and we have
“A partnership (under Section aberration and contradicts the very also adopted the notions of English
239 of Indian Contracts Act, 1872) concept of partnership. lawyers as regards a partnership
is a relationship which subsists Section 49 of the Act provides as firm.
between persons; but a firm is not under: 17. Some of the mercantile
a person, it is not an entity, it is Payment of firm’s debts and of usages relating to a firm have,
merely a collective name for the separate debts : however, found their way into
individuals who are members of “Where there are joint debts due the law of partnership. Thus in
the partnership. It is neither a legal from the firm, and also separate keeping accounts, merchants
entity, nor is it a person. [See per debts due from any partner, the habitually show a firm as a debtor
Lord Justice James in Ex parte Blain, property of the firm shall be applied to each partner for what he brings
In re Sowers (1879) 12 Ch. D. 522 in the first instance in payments of into the common stock and each
: 41 L.T. 46: 28 W.R.334, and per the debts of the firm, and if there is partner is shown as a debtor to
Lord Justice Far well in Sadler v. any surplus then the share of each the firm for all that he takes out of
Whiteman (1910)]. A firm name in partner shall be applied in payment that stocks. But under the English
truth is merely a description of the of his separate debts or paid to him. Common Law, a firm, not being a
individuals who compose the firm. It The separate property of the any legal entity, could not sue or be sued
is that and nothing more.” partner shall be applied first in the in the firm name or sue or be sued
It has been laid down by the Privy payment of his separate debts and by its own partner, for one cannot
Council in the case of the case of the surplus (if any) in the payment sue oneself. Later on this rigid law
Bhagawanjee Goculdas Vs. Alembic of the debts of the firm.” of procedure, however, gave way
Chemical Works Co.Ltd.,[1948 The Supreme Court had, in the to considerations of commercial
L.R.75Ind AP147] that Indian law case of Dulichand Laxminarayan convenience and permitted a firm
has not given legal personality to a Vs.CIT (AIR 1956 SC354) has to sue or be sued in the firm name,
firm apart from the partners. traced the origin of Section 49 as as if it were a corporate body (See
In the case of Munshi Ram under : Code of Civil Procedure, Order
Vs.Municiapl Committee [(1979)3 “16. As pointed out in Lindley XXX corresponding to rules of
SCC 83], the Supreme Court held as on Partnership, 11th Edition, at the English Supreme Court Order
under: page 153, merchants and lawyers XLVIII-A). The law of procedure
“7. Partnership as defined in have different notions respecting has gone to the length of allowing
Section 4 of the Indian Partnership the nature of a firm. Commercial a firm to sue or be sued by another
Act, 1932 is the relation between men and accountants are apt firm having some common partners
persons who have agreed to share to look upon a firm in the light or even to sue or be sued by one or
the profits of a business carried on in which lawyers look upon a more of its own partners (see Order
by all or any of them for the benefit corporation, i.e., as a body distinct XXX, rule 9 of the Code of Civil
of all. The Section further makes from the members composing Procedure), as if the firm is an entity
it clear that a firm or partnership it. In other words merchants are distinct from its partners. Again
is not a legal entity separate and used to regard a firm, for purposes in taking partnership accounts
distinct from the partners. Firm is of business, as having a separate and in administering partnership
only a compendious description of and independent existence apart assets, the law has, to some extent,
the individuals who compose the from its partners. In some systems adopted the mercantile view and the
firm.” of law this separate personality of liabilities of the firm are regarded
The said position has been a firm apart from its members has as the liabilities of the partners
consistently reiterated by the courts received full and formal recognition, only in case they cannot be met
from time to time while deciding as, for instance, in Scotland. That is, and discharged by the firm out of
the issues involving the status of however, not the English Common its assets. The creditors of the firm
Partnership and Partners and as Law conception of a firm. English are, in the first place, paid out of the
such there is no dispute as to the Lawyers do not recognize a firm as partnership assets and if there is

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