Does a Cheque-Case under NI Act Lie Against a Trust? Prana Educational and Charitable Trust v. State of Kerala, ILR 2023-4 Ker 252 – Whether Correctly Decided?

Saji Koduvath, Advocate, Kottayam.

“Prana Educational and Charitable Trust” is overruled by the Supreme Court, in Sankar Padam Thapa  v. Vijaykumar Dineshchandra Agarwal (Ahsanuddin Amanullah, Prashant Kumar Mishra, JJ), 2025 INSC 1210 (October 09, 2025).
Read: Sankar Padam Thapa  v. Vijaykumar Dineshchandra Agarwal: Landmark Decision on Trust – A Trust Cannot Be Made as a Party to a Litigation

Abstract

1. A ‘trust’ is an obligation.
                •➧ It is not a legal entity.
                •➧ It cannot be an association of persons, also.
                •➧ The properties of the Trusts vest in the trustees.
By virtue of Sec. 5, TP Act property can be transferred to Trusts.
No such enabling provision to file Cheque-Cases, against Trusts, in NI Act.

2. Sec. 141 of the NI Act, says as to “Offences by Companies”.
                 •➧  In Explanation (a) to this section, it is stated as under:  
                 •➧ “ ‘Company’ means any body corporate and includes a firm
                  or other association of individuals.”
                •➧  A ‘firm’, in law, is a collection of partners;
                   and it is a compendious name for all the partners.
                •➧  But, Trust will not fall in “any body corporate and includes a firm
                  or other association of individuals.”.
Therefore, Cheque-Cases under Sec. 138, NI Act will not lie against Trusts. 

What is Trust, in Law?

Sec. 3 of the Indian Trusts Act, 1882 defines trust as under:

  • “Trust: A ‘trust’ is an obligation annexed to the ownership of property, and arising out of a confidence reposed in and accepted by the owner, or declared and accepted by him, for the benefit of another, or of another and the owner.”

From the definition it is clear that ‘Trust’, in law, holds the following conceptions:

  • Trust is ‘an obligation’ upon the trustee.
  • It is to administer the endowed property.
  • The administration must be done by the trustee as if he is the owner of the trust property.
  • It must be done by him accepting the intents desired by the author.
  • And, the same must be for the benefit of the beneficiaries.

It is clear that the word ‘trust’ is used in law as an ‘abstract countable noun’, similar to ‘a concept’, ‘an idea’ or ‘a duty’.

‘A Trust’ is “An Obligation” and Not a Legal Entity

From the above, it is clear that, legally, a ‘trust’ –

  • (i)   cannot be a juristic person;
  • (ii) cannot be an association of persons; and
  • (iii) cannot be a tangible endowment or a corporeal property.

In Surya Kant Chunilal v. Mahesh Chand, AIR 1972 Del. 72 it is held as under:

  • “Further defendant No. 2 (Trust) is not a registered body or a juristic person. The properties of the Trust vest in the trustees.”

In Kansara Abdulrehman Sadruddin v. Trustees of the Maniar Jamat Ahmadabad,  AIR 1968 Guj 184, it is observed by the Gujarat High Court as under:

  • “The ‘trust property’ is nothing but the subject matter of the trust; that is, a property which is impressed with the obligation giving rise to a trust. When we speak of a trust, we speak merely of the requisite obligation which is annexed to the ownership of a property. This obligation is not a legal entity in any sense; as for example, the trust cannot own any property the property is owned by the trustee who is an entity by himself different from the trust, a trust cannot sue and a trust cannot be sued; it is only a trustee who can sue and who can be sued. It is only a trustee who can hold properties. A ‘trust’ cannot be a landlord since the trust properties vest in the legal ownership of the trustees. It is the trustee alone who can be a landlord. Since the trust is not a legal entity, no question of hardship suffered by the trust or accommodation required by the trust can arise for consideration.” (See also: Ramabai Govind v. Raghunath Vasudevo: AIR 1952 Bom 106).

Order 31 rule 1 CPC

Order 31 rule 1 of the Code of Civil Procedure spells out – a trust is not a legal person. It enables to file a suit by (or be sued) a trustee concerning ‘property vested in trustees’.

In Government of the Province of Bombay v. Pestonji Ardeshir Wadia, AIR 1949 PC  143, the Privy Council held as under:

  • “The trust is not the plaintiff, and there is no power under the Code for trustees to sue in the name of their trust, as members of a firm may sue in the name of the firm. The plaintiffs were, and were bound to be, the three trustees, and, as no notice was given specifying their names and addresses, the condition precedent to the filing of the suit was not fulfilled”.

The view taken by the Privy Council was accepted by our Apex Court in Ghanshyam Dass v. Dominion of India, AIR 1984 SC 1004, Penner JE, the Professor of Law at King’s College, London, in his Book, The Law of Trusts, has commented as under:

  • “The trust itself has no legal personality like a company, on behalf of which agents of the company make contracts which bind the company as a legal person itself. Having no legal personality, one cannot sue the trust itself for breach of contract; one sues the trustee for his own breach of contract, even though the breach was of contractual obligation he undertook to benefit the trust.”

Relying the Privy Council and Penner J E, the Kerala High Court held in KR Rajan v. Cherian K. Cherian, 2019-5 KHC 661; 2019-4 Ker LJ 981; 2019-4 Ker LT 1056, as under:

  • “Trust not being a legal person, and the Code of Civil Procedure not providing any enabling provision for the Trust to sue or for being sued in its name, there is no merit in the contention that the Trust is to be arrayed as an eo-nominee party. The arraying of the trust in its own name is otiose or redundant. It is the trustees who are to be impleaded to represent the trust.”

In M. V. Muthuramalingam v. D. Narayanaswamy, 1995-83 CC 77 it is held by the Madras High Court as under:

  • “Unlike a company registered under the Indian Companies Act, the trust is not a juristic person having a separate legal entity. It can act only through its trustees. So, when the petitioner came to issue the impugned cheques and that has resulted in his committing an offence under section 138 Of the Negotiable Instruments Act, he is liable to be proceeded against.”

The Madras High Court has held in Kishorelal Asera v. Haji Essa Abba Sait Endowments, 2003-3 Mad LW 372: 2003-3 CCC 367, and in Thiagesar Dharma Vanikam v.  CIT, AIR 1964 Mad 483; 1963- 50 ITR 798, that a trust not being a legal person is not entitled to sue in its own name (Referred to in: Thanthi Trust v. Wealth Tax Officer: 1989-78 CTR 54: 1989- 45 TAXMAN 121: 1989-178  ITR 28).

The Gujarat High Court has also held in Kansara Abdulrehman Sadruddin v. Trustees of the Maniar Jamat Ahmedabad,  AIR 1968 Guj 184, that ‘the trust is not a legal entity’ (See also: Ramabai Govind v. Raghunath Vasudevo, AIR 1952 Bom 106).

Following decisions do not present correct law (It is clear from the above)

(i) Pratheesh V v. State of Kerala, 2017-2 Ker HC 977. It is observed as under:

  • “It is the settled position of law that a registered trust is a legal entity and juristic person entitled to hold property by itself.”

(ii) Lal Chandra Jain v. Suparasdas Jain, 2016-11 All DJ 615. It is observed –

  • “It is also not in dispute that a registered Trust is a legal person/juristic person and can be sued or can sue in its own name, through the person responsible to manage it.”

Legal Persons, Arbitrary Creations of the Law

Salmond on Jurisprudence,  12th Edn., Page 305, reads:

  • “A legal person is any subject-matter other than a human being to which the law attributes personality. This extension, for good and sufficient reasons, of the conception of personality beyond the class of human beings is one of the most noteworthy feats of the legal imagination.”

Salmond reads further:

  • “Legal persons, being the arbitrary creations of the law, may be of as many kinds as the law pleases. Those which are actually recognised by our own system, however, are of comparatively few types. Corporations are undoubtedly legal persons, and the better view is that registered trade unions and friendly societies are also legal persons though not verbally regarded as corporations. If, however, we take account of other systems than our own, we find that the conception of legal personality is not so limited in its application, and that there are several distinct varieties, of which three may be selected for special mention.
  • 1. The first class of legal persons consists of corporations, as already defined, namely, those which are constituted by the personification of groups or series of individuals. The individuals who thus form the corpus of the legal person are termed its members.
  • 2. The second class is that in which the corpus, or object selected for personification, is not a group or series of persons, but an institution. The law may, if it pleases, regard a church or a hospital, or a university, or a library, as a person. That is to say, it may attribute personality, not to any group of persons connected with the institution, but to the institution itself.
  • 3. The third kind of legal person is that in which the corpus is some fund or estate devoted to special uses a charitable fund, for example or a trust estate.”(Quoted in: Shriomani Gurudwara v. Shri Som Nath: AIR 2000 SC 1421).

In Manohar Ganesh v. Lakshmiram, (1888) ILR 12 Bom 247, the Division Bench of the Bombay High Court set out the rationale for and the process by which legal personality is conferred on a Hindu idol. Justice West observed:

  • “The Hindu law, like the Roman law and those derived from it, recognizes, not only corporate bodies with rights of property vested in the corporation apart from its individual members, but also juridical persons or subjects called foundations. A Hindu, who wishes to establish a religious or charitable institution, may, according to his law, express his purpose and endow it, and the ruler will give effect to the bounty … A trust is not required for this purpose: the necessity of a trust in such a case is indeed a peculiarity and a modern peculiarity of the English law. In early times a gift placed, as it was expressed, “on the altar of God sufficed to convey to the church the lands thus dedicated.”(Quotted in M Siddiq v. Mahanth Suresh Das (Ayodhya Case):2020-1 SCC 1).

Law Attributes Legal Personality

Roscoe Pound, Jurisprudence, Part IV, 1959 Edition, on “Jurisprudence”, reads as under:

  • “In civilised lands even in the modern world it has happened that all human beings were not legal persons. In Roman law down to the constitution of Antonius Pius the slave was not a person. He enjoyed neither rights of family nor rights of patrimony. He was a thing, and as such like animals, could be the object of rights of property. … In French colonies, before slavery was there abolished, slaves were put in the class of legal persons by the statute of April 23, 1833 and obtained a ‘somewhat extended juridical capacity’ by a statute of 1845. In the United States down to the Civil War, the free Negroes in many of the States were free human beings with no legal rights.”(Quoted in: Shiromani Gurdwara  v. ShriSom Nath: AIR 2000 SC 1421; M Siddiq v. Mahanth Suresh Das (Ayodhya Case):2020-1 SCC 1)

The Supreme Court in Som Prakash Rekhi v.  Union of India, AIR 1981 SC 212, held that ‘a legal person is any entity other than human being to which law attributes personality’. It held further as under: 

  • “Let us be clear that the jurisprudence bearing on corporations is not myth but reality. What we mean is that corporate personality is a reality and not an illusion or fictitious construction of the law. It is a legal person. Indeed, a legal person is any subject-matter other than a human being to which the law attributes personality. This extension, for good and sufficient reasons, of the conception of personality is one of the most noteworthy feats of the legal imagination. Corporations are one species of legal persons invented by the law and invested with a variety of attributes so as to achieve certain purposes sanctioned by the law.” (Quoted in: Shriomani Gurudwara Prabandhak v. Shri Som Nath  :AIR 2000 SC 1421. See also: Samatha Hyderabad Abrasives Minerals v. State of AP: AIR 1997 SC 3297)

In SGPC v. Som Nath Dass, AIR 2000 SC 1421, the Supreme Court held:

  • “The very words ‘Juristic Person’ connote recognition of an entity to be in law a person which otherwise it is not. In other words, it is not an individual natural person but an artificially created person which is to be recognized in law as such.”

It held further that Guru Granth Sahib revered in Gurudwara had all the qualities to be recognized as juristic person. Holding otherwise would mean giving too restrictive a meaning to a ‘juristic person’ and that would erase the very jurisprudence which gave birth to it.It is observed (obiter) in this case that ‘it is really the religious faith that leads to the installation of an idol in a temple. Once installed, it is recognised as a Juristic Person. The idol may be revered in homes but its Juristic Personality is only when it is installed in a public temple’.

Nevertheless, Dr. BK Mukherjea, J. in his treatise ‘On Hindu Law of Religious & Charitable Trusts’ the principles as to legal personality, rights emanating therefrom, etc. with respect to a family temple, are presented in the same manner as that of a public temple (KM Senthivel Pillai v. Kulandaivel Pillai: 1970-2 MADLJ 555; P. Jayader v. Thiruneelakanta Nadar: ILR 1966-2 Mad 92; Commissioner of Endowments v. Sri Radhakanta Deb: 1969-35 Cut LT 992).

Is Trust  a ‘Living Person’ under S. 5 of the TP Act 

Can transfer of property be made to or by Trusts/Associations

Sec. 5 of the TP Act reads as under:

  • 5. “Transfer of property” defined:  In the following sections “transfer of property” means an act by which a living person conveys property, in present or in future, to one or more other living persons, or to himself and one or more other living persons; and “to transfer property” is to perform such act.
  • In this section “living person” includes a company or association or body of individuals, whether incorporated or not, but nothing herein contained shall affect any law for the time being in force relating to transfer of property to or by companies, associations or bodies of individuals.

Existing Laws as to Transfer of Property, will Remain in Force

Two points are emphasised in the 2nd paragraph of Sec. 5 –

  • First, all unregistered associations, whether incorporated or not, are ‘living persons’, so that transfer of property can be made.
  • Second, the qualifying second limb – ‘nothing herein contained shall affect any law for the time being in force relating to transfer of property to or by companies, associations or bodies of individuals‘ – makes it clear:
    • if any law regulates transfer of property to (or by) companies, associations or bodies of individuals, it will remain in force.

Note: Order 31 rule 1 CPC spells out – a trust is not a legal person. It enables to file a suit by (or be sued) a trustee concerning ‘property vested in trustees’.

‘Law for the Time Being in Force’ Includes ‘Common Law’

‘Law for the time being in force’ in Sec. 5 TP Act includes “common law”.

It is a reality – the common law of our country accepts as valid the ‘transfer of property’ made to or effected by well-known institutions, organisations, and associations attached to reputed trusts, institutions etc., though they are not juristic-persons in its strict sense. Our courts sumptuously refer to such deeds as documents executed by or in favour of such entities, when they are referred to as exhibits. For example:

  • Settlement deed by Ashramam–Swayam  Prakash  Ashramam v. G Anandavally  Amma : AIR  2010 SC 622;
  • Settlement to trust – S N Mathur  v. Board of Revenue: 2009-13  SCC 301;
  • Lease deed by trust to school – TNP Mothoo  Natarajan v. PV Ravi: 2015-2 MLJ (Cri.) 656;
  • Settlement deed to private trust –Kolli  Venkata Raja Vv. Govt. of AP: 2014-1 ALT 155;
  • Lease deed to a public trust –Nadigar  Sangham Charitable Trust, rep. by its managing Trustee, R. Sarathkumar v. S. Murugan:2013-1 MLJ 433;
  • Sale deed to Board of Trustees – Commissioner of Income Tax v. Chemists and Druggists Association Building Trust: 1995-215 ITR(Mad) 741;

“Bodies of individuals” in Sec. 5, TP Act

It may also be pointed out that, “bodies of individuals” in Sec. 5, TP Act is wide in meaning; and it stands independent. It is broad enough to take-in Beneficiaries/ Trustees of a Trust.

Accordingly, the registration and revenue authorities, without objection, register deeds relating to such properties in the names of such institutions, associations etc.

Read Blog: Dedication of Property in Public Trusts

Dedication can be made in favour of a Tank

It was held by our Apex Court in Kamaraju  Venkata Krishna Rao v. Sub Collector,  Ongole, AIR 1969 SC 563, that, under Hindu Law, a tank can be an object of charity and when a dedication was made in favour of a tank, the same was considered as a charitable institution. Without deciding whether that institution can also be considered as a juristic person, it was held that the same had to be registered in its name (ie., in the name of the tank) in the Inam register though it had continue to be managed by its Manager.

It is also noteworthy that Salmond on Jurisprudence reads: “Legal persons, being the arbitrary creations of the law, may be of as many kinds as the law pleases.”

Trust IS NOT A JURISTIC PERSON to File a Complaint Under the NI Act

There is discernible difference between the expressions in Sec. 5, TP Act and Sec. 141, NI Act.

  • Sec. 5, TP Act reads – “nothing herein contained shall affect any law for the time being in force relating to transfer of property to or by companies, associations or bodies of individuals“.
  • Sec. 141, NI Act says as to “Offences by companies”. It reads – “  ‘Company’ means any body corporate and includes a firm or other association of individuals.”

It is noteworthy that the scope of the enabling provision in the NI Act is considerably limited by the words – “includes a firm or other association of individuals”.

Because,

  • (i). As shown above, “bodies of individuals” in Sec. 5, TP Act (transfer to – “living person”) is broad enough to take-in Beneficiaries/Trustees of a Trust.
  • (ii). A firm, in law, is a collection of partners; and it is a compendious name for all the partners.
    • But, ‘Trust’ will not fall in ‘Company’or ‘any body corporate’ or ‘Firm’ or that “includes a firm or other association of individuals”.
  • But, Sec. 141 of the NI Act, confines it to “a firm or other association of individuals.”

BUT, it is held – (For NI Act) Public Charitable Trusts have ‘Juristic Personality’

To the question whether a Public Charitable Trust has been recognised as a juristic person for the purpose of Negotiable Instrument Act, it had been held by the Madras High Court (S. Nagamuthu, J.) in Abraham Memorial v. C. Suresh Babu, 2013- 2 Bank Cases  133: 2012-5 CTC 203: 2012-175 CC 361, that a Public Charitable Trust being capable of contracting, and capable of making and issuing a cheque or Bill (Sec. 26), it is a juristic person for the purpose of the said Act; and that a Trust, either private or public/charitable or otherwise, is a juristic person liable for punishment for the offence punishable under Sec. 138 of the NI Act.

This decision is referred to in –

  • (1) Nava Education Trust Thro Shambhubhai v. Prakashbhai Dhulabhai Patel (Gujrat, 12 March, 2024)
  • (2) Prana Educational and Charitable Trust v. State of Kerala, ILR 2023-4 Ker 252; 2023-6 KHC 175; 2023-4 KLJ 453; 2023-6 KLT 231
  • (3) Margadarsi Financiers v. State of Andhra Pradesh,  2019-2 ALD(Cri) 941; 2019-2 ALT(Cri) 197
  • (4) Goshir Gyaltsab Rinpoche, Tibetan Monk v. Karmapa Charitable Trust, (Sikkim, 29 Oct. 2018)
  • (5) G. Ramakrishna Reddy v. State of Andhra Pradesh, 2018 3 ALT(Cri) 156
  • (6) Hakkimuddin Taherbhai Shakor (Trustee) v. State of Gujarat, 2017 4 Cri CC 748; 2017 CrLJ 3143; 2017-3 GLH 571; 2017-4 RCR(Cri) 458
  • (7) Shah Rajendrabhai Jayantilal v. D. Pranjivandas, 2017-2 GLH 328
  • (8) E. Damodharan v. Triplicane Annadhana Samajam,  2016-2 CTC 277; 2016-1 LW 608; 2016-3 MLJ 889
  • (9) Sanjeev Khajuria v. Ravinder Singh Pathania,  2016-2 Bankmann 261, 2015-4 JKJ 615; 2016-1 NIJ 667; 2017-1 RCR(Civ) 550; 2017-1 RCR(Cri) 453
  • (10) Battula Parameswara Reddy v. Charity International Trust,  2015-3 ALT(Cri) 141
  • (11) Jeppiar v. State of Tamil Nadu (29 Nov 2012)

Prana Educational and Charitable Trust v. State of Kerala, ILR 2023-4 Ker 252

The Supreme Court, in Sankar Padam Thapa  v. Vijaykumar Dineshchandra, Agarwal (Ahsanuddin Amanullah, Prashant Kumar Mishra, JJ), 2025 INSC 1210 (October 09, 2025), overruled “Prana Educational and Charitable Trust”

Contention of the accused

The main contention of the accused (revision petitioners) in Prana Educational and Charitable Trust v. State of Kerala, ILR 2023-4 Ker 252; 2023-6 KHC 175; 2023-4 KLJ 453; 2023-6 KLT 231, basing on the Explanation to Sec. 141, was the following:

  • Trust is not a juristic person as defined under Section 141 of the NI Act.
  • The 1st accused being a charitable Trust and the 2nd accused being the Managing Trustee and signatory of the cheque, prosecution against the Trust and the Managing Trustee is not legally sustainable.

The accused relied on K.P. Shibu v. State of Kerala, 2019 (3) KHC 1 (B. Sudheendra Kumar, J.). It was held in this decision (K.P. Shibu v. State of Kerala) that a Trust is not a body corporate or an association of individuals as provided in the explanation to Section 141 of the NI Act.

High Court accepted the Case of the complainant

The High Court accepted the contention of the complainant that a Trust fall under the expression “company” as used in subclause (a) of the Explanation to Section 141, as it was inclusive of “any body corporate” and “a firm or other association of individuals“.

The High Court followed the following decisions:

  • (1)  Madras High Court: Abraham Memorial v. C. Suresh Babu, 2013- 2 Bank Cases  133: 2012-5 CTC 203: 2012-175 CC 361. It was held that though there was compulsory sentence of imprisonment prescribed under Section 138 of the N.I. Act, a Trust (an Artificial Person) can be prosecuted – as a drawer – and a Trust can be imposed only with fine or compensation.
  • In the light of Ramanlal Bhailal Patel v. State of Gujarat, 2008 (5) SCC 449, it was further held that (i) A Trust, either private or public/charitable or otherwise, is a juristic person who is liable for punishment for the offence punishable under Section 138 of the Negotiable Instruments Act; (ii) A Trust, either private or public/charitable or otherwise, having either a single trustee or two or more trustees, is a company in terms of Section 141 of the Negotiable Instruments Act; and  (iii) For the offence under Section 138 of The Negotiable Instruments Act, committed by the Trust, every trustee, who was in-charge of the day-to-day affairs of the Trust shall also be liable for punishment besides the Trust.
  • (2) Bombay High Court (Aurangabad Bench) in The Dadasaheb Rawal Co-op. Bank of Dondaicha Ltd v. Ramesh and others (2009 CrLJ 67; 2009 2 MhLJ 58). It was opined that a plain reading of the expression “company” as used in sub-clause (a) of the Explanation is that it is inclusive of any body corporate or “other association of individuals”. The term “association of individuals” will include club, trust, HUF business, etc. It shall have to be construed ejusdem generis along with other expressions “company” or “firm”.
  • (3)  Gujarat High Court in Shah Rajendrabhai Jayantilal v. D. Pranjivandas, 2017-2 GLH 328. It was found that the term “association of individuals” would include club, trust, Hindu Undivided Family business. Prima facie, it shall have to be construed ejusdem generis along with other expression “company” or “firm”. Therefore, a joint family business must be deemed as a juristic person like a company or firm. The High Court followed Anita Handa v. M/s. Godfather Travels & Tours Pvt Ltd, 2007 (11) SCC 297 (wherein it was viewed that a complaint against a Director of the company would not be maintainable if the company is not impleaded as accused; and that a plain reading of the expression “company” as used in subclause (a) of the explanation appended to Section 141 is that it is inclusive of any body corporate or “other association of individual“.

The Kerala High Court (Prana Educational and Charitable Trust v. State of Kerala, ILR 2023-4 Ker 252) distinguished the earlier decision, K.P. Shibu v. State of Kerala, 2019 (3) KHC 1, stating the following:

  • “It is discernible that the said decision is not so elaborative and the interpretation of the term “association of individuals” not done by applying the ratio of ejusdem generis. The principle of ejusdem generis intended for the construction of constitutional and statutory provisions means “of the same kind” and this doctrine provides that the general words which follow the specified words will be restricts to the same class of the specified words. While applying this principle,
  • (1) the general words must follow the specific words and the specific words must necessarily constitute, a genus/class
  • (2) the legislative intention of the statute to be born in mind for restricting the general word to the genus/class of the specified words if follows and
  • (3) this principle has to be used by the Courts properly and apply where it is necessary and not use this principle where it is not necessary so as to defeat the purpose of the statute and to cause miscarriage of justice are the conditions to be satisfied.”

A Discordant Note

‘A trust’, according to the definition, being ‘an obligation’; and, it does not convey the idea that (i) it is a “body corporate” or (ii) “a firm or other association of individuals” (as stated in Sec. 141 NI Act), it appears that the following decisions are not correctly decided –

  • Abraham Memorial v. C. Suresh Babu, 2013-2 Bank Cases 133: 2012-5 CTC 203: CC 2012-175 361, and
  • Prana Educational and Charitable Trust v. State of Kerala, 2023-6 KHC 175.

Conclusion

A trust differs from a ‘firm’, as a firm is, in law, a collection of partners; and it is merely a compendious name for all the partners, or only an ‘association of persons’  (Firm Alwar Iron Syndicate v. Union of India, AIR 1970 Raj 86; Shanker Hoursing Corporation v. Mohan Devi, AIR 1978 Del 255, DB).

Though a Firm is allowed to sue, or be sued, under Rule 1 of Order 30 CPC, it is only an enabling method to sue, or be sued, partners of a firm (both Registered and Unregistered), in the name of the firm. Suit by or against a firm is, in truth, suit by or against its partners.

  • It may also be pointed out that a trustee can be proceeded against, in a proper case, if the cheque dishonoured is signed by him (in the capacity as trustee). Because, as stated above, ‘trustee, who is an entity by himself’, stands technically distinct from the trust, in legal parlance; and, a trust has to be sued through its trustee (Abdulrehman Sadruddin v. Trustees of the Maniar Jamat Ahmadabad,  AIR 1968 Guj 184).

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