ORDER
P.S. Mishra, C.J.
1. The instant case is one in which we find that hitherto acknowledged the rule of piercing the veil generally in the field of public law, is applicable to the case of the writ petitioner-respondent, who has claimed to have a telephone installed in a premises by the appellant herein in the name of a firm and another in the name of his wife in the same premises, defaulted to the extent of about rupees eight lakhs in payment of the tariff for the latter telephone and has objected to the appellant invoking Rule 443 of the Indian Telegraph Rules on the ground that the telephone which stands in the name of the firm belongs to a person different from the telephone which stood in the name of his wife and in which the default amounted to about rupees eight lakhs. Legal character acquired by a firm to sue and being sued in its name is nothing but a compendious name given to the representation of all the partners and the law, how, in such a situation, a partnership should be viewed, is no longer in doubt in the sense that a firm is represented by a partner who is authorised to act on its behalf and he represents not himself alone but all the members of the firm. The writ petitioner – respondent firm represented by its consultant, is none other than Mr. M.V .K. Murthy and one Kesavarajula Hari Prasad, who has since been retired and replaced by the son of Mr. M.V.K. Murthy and Mrs. M. Mahalakshmi. The firm, however, originally applied for a telephone connection but the name of the applicant in the application No. TA – 21494 is shown as M.V.K. Murthy, Managing Partner, M/s. Mahalakshmi Legal and Tax Consultancy Services, as filed on 27-1-1986. It is not in dispute the telephone bearing No. 64877, later re-numbered as 474877, was allotted and installed against the said application in the premises in the occupation of Mr. M.V.K. Murthy and Mrs. Mahalakshmi and their son, who has been later shown to be a partner besides Mr. M.V.K. Murthy. Another application for a telephone connection was filed on 1-3-1990 in the name of Mrs. M Mahalakhsmi and a telephone was allotted later some time in the year 1994 and installed in the same premises wherein telephone bearing No. 64877, re-numbered as 474877, existed. Telephone bearing No. 479093 in the name of Mrs. Mahalakshmi, however was used frequently and alleged to have fallen in huge arrears of over rupees eight lakhs. The appellant disconnected telephone bearing No. 479093 for the arrears and invoked Rule 443 of the Indian Telegraph Rules to disconnect telephone bearing No. 474877 as well. A petition in the name of M/s. Mahalakshmi Legal and Tax Consultancy Services, represented by its consultant Mr. B. Satyanarayana, is filed in this Court. Learned single Judge has held, however, that Rule 443 of the Indian Telegraph Rules does not empower to disconnect the telephone of one person for the default of another person regardless of relation of the said two persons and on the facts as above, found that telephone bearing No. 474877 is in the name of a firm, which is a separate legal entity, and has no relation with Mrs. Mahalakshmi, who is not a partner of the firm.
2. A partnership firm or any other association of individuals which is a company, are legal entities in their own rights, provided they satisfy the required conditions for the said purpose, but they do not move unless such individuals who constitute the association i.e., the firm or the company, move. It is well settled that inert organs of a Corporation, which is nothing but an association of individuals, pulsate with the heart and soul of those who are managers and operate with the mind of the managers. A partnership, it is well settled, is a compendious name of the individuals who act for each other and who are accountable to each other as well as for the activities of the firm.
3. The applicant, in the instant case, of the first telephone which was installed in the premises, we have already noticed, is Mr. M.V.K. Murthy himself in the capacity of Managing Partner of M/s. Mahalakshmi Legal and Tax Consultancy Services. The applicant for the second telephone is Mrs. Mahalakshmi, his wife. She (Mahalakshmi) is not shown to be a partner of the firm – M/s Mahalakshmi Legal and Tax Consultancy Services. Her son, however, is named as a partner of the firm. If the smoke screen of the existence of the firm M/s. Mahalakshmi Legal and Tax Consultancy Services, is removed, one can see clearly the presence of Mr. M.V.K. Murthy as the applicant for a telephone connection and the telephone is handled by him as it is installed in the premises in his occupation. The other telephone in the same premises is installed in the name of his wife, Mahalakshmi. What has been hitherto used by people, who constituted private limited companies and created subsidiaries to such companies even as public limited companies to avoid taxes and the Courts noticed how, by creating two separate legal entities, certain persons were evading taxes and extended for such purposes the rule of piercing the veil and seeing the real person behind the companies and corporations, we have found to our dismay, has been used by a person, who, we are informed, is an advocate by profession and is running a legal and tax consultancy firm for the purposes of getting more than one telephone connection and using, in the event of default, the so called legal character of the firm to avoid disconnection by invoking Rule 443 of the Indian Telegraph Rules. We do not, however, propose to take any serious view of such a conduct of Mr. M.V.K. Murthy except to record that when cloak is removed the real relationship of the owner of the first telephone connection (Mr. M.V.K. Murthy) and the owner of the second telephone connection (Mrs. Mahalakshmi) is revealed and they are none else than the husband and wife. We are satisfied in the instant case that Rule 443 of the Indian Telegraph Rules is attracted and the appellant have committed no error in invoking the same.
4. There is some attempt before us on behalf of the petitioner – respondent to show that the alleged arrears of more than rupees eight lakhs were on account of miscalculation or mistake or for reasons of faults in the telephone connection, as, according to the learned counsel for the petitioner – respondent, such huge arrear of over rupees eight lakhs was just impossible in a short span of a few months of time of the use of telephone bearing No. 479093. Petitioner -respondent, however, has put things at every stage in a wrong perspective by instituting a suit seeking arbitration in a case where there is no possibility of plea of any written agreement to attract the provisions of the Arbitration Act and on the face of a clear provision Under Section 7-B of the Indian Telegraph Act for arbitration in cases of disputes about the claims of the telephone arrears, etc., and litigating at different fora to avoid disconnection as well as payment of the arrears of the telephone bills. We do not propose to say more on it, as, in our opinion, Mrs. Mahalakshmi is entitled to seek arbitration Under Section 7-B of the Indian Telegraph Act and there is no reason why the appellant should not concede to her demand for arbitration in accordance with law. If so advised, Mrs. Mahalakshmi, we presume she is fully represented before us in her husband Mr. M.V.K. Murthy, may make a proper representation to the General Manager, Telecom District, Labbipet, Vijayawada. In case any proper representation is made on her behalf, the General Manager shall take appropriate steps and ensure that a statutory arbitration is held without unreasonable delay. The arbitration, however, shall be without any prejudice to either party on the basis of the observations made by us above. The order that we pass here under, however, shall be in super session and in cancellation of any order which is in conflict to the above.
5. In the result, the appeal is allowed; the order of the learned single Judge is set aside; and the order in letter No. TR/K/ICC/94-95, dated 22-2-1995, of the first respondent in the writ petition (1st appellant) is restored and the appellants are free to implement the same.