Date of Judgment
26 August 2025
🏛️ Court
Supreme Court of India
👨⚖️ Bench
- Justice Vikram Nath
- Justice Sandeep Mehta
📖 Citation
2025 INSC 1046 | 2025 LiveLaw (SC) 846
Background & Facts
- The appellants (landlords) had leased out their property by a registered lease deed dated 13 April 2005 to Aditya Motors, described as a business concern.
- Aditya Motors was not a company or partnership, but a sole proprietorship concern of Pilla Durga Prasad (respondent no.1).
- After the expiry of the lease, the tenant failed to vacate the premises.
- The landlords filed a civil suit for eviction against:
- Aditya Motors (tenant business name),
- Associated Auto Services Pvt. Ltd. (allegedly in possession), and
- its Directors.
- Later, through an amendment application (Order VI Rule 17 CPC), the landlords substituted Pilla Durga Prasad (the proprietor) in place of Aditya Motors in the plaint (28 March 2018).
- This amendment was not challenged by the defendants.
- Subsequently, Pilla Durga Prasad filed an application under Order VII Rule 11 CPC to reject the plaint, contending:
- The cause of action was against Aditya Motors (the trade name),
- Substituting him personally in place of the business name wiped out the cause of action,
- Therefore, the plaint was not maintainable.
Procedural History
- Trial Court (July 2018):
Dismissed the defendant’s application under Order VII Rule 11, holding the suit maintainable. - High Court of Andhra Pradesh (2020):
Allowed the revision, held that the suit should have been against the business name under Order XXX Rule 10 CPC, not the proprietor personally. It therefore ordered rejection of the plaint against Pilla Durga Prasad. - Supreme Court (2025):
Landlords appealed against the High Court’s order.
Issues Before the Supreme Court
- Whether a suit can be filed against a proprietor personally instead of the proprietary concern/trade name.
- Whether substitution of the proprietor in place of the business name defeats the cause of action and makes the plaint liable to be rejected under Order VII Rule 11 CPC.
- What is the true scope of Order XXX Rule 10 CPC regarding suits filed by/against sole proprietorships.
Supreme Court’s Analysis
- A sole proprietorship has no separate legal entity; it is only the business name of the proprietor.
- The real party in interest is always the proprietor.
- Order XXX Rule 10 CPC provides that a suit may be filed in the business name, but the word “may” shows it is permissive, not mandatory.
- Therefore, suing the proprietor personally is equally valid, as there is no distinction in law between the two.
- Substitution of Pilla Durga Prasad in place of Aditya Motors did not wipe out the cause of action.
- No prejudice was caused to the defendant, because the liability remains the same.
- The High Court took an over-technical approach by insisting that the trade name must be sued.
Precedents Relied Upon
- Ashok Transport Agency v. Awadhesh Kumar (1998) 5 SCC 567 – Proprietary concern is not a separate juristic person; suit can be in the name of proprietor.
- Shankar Finance & Investments v. State of Andhra Pradesh (2008) 8 SCC 536 – Proprietary concern and proprietor are one and the same.
- Other rulings reiterating that substance prevails over form in procedural law.
Judgment (Holding)
- The Supreme Court allowed the appeal.
- The High Court’s order was set aside.
- The Trial Court’s order dismissing Order VII Rule 11 application was restored.
- Directed the Trial Court to proceed with the eviction suit on merits.
Key Legal Principles Established
- Sole Proprietorship = Proprietor (no separate legal identity).
- Order XXX Rule 10 CPC – Using the business name is optional, not compulsory.
- Substitution of proprietor for business name does not defeat the cause of action.
- Courts should adopt a substantive approach rather than rejecting suits on technical grounds.
✅ Final Outcome:
The landlords’ eviction suit survives against Pilla Durga Prasad (proprietor of Aditya Motors), and the case will now continue on merits before the Trial Court.