Edward Keventer Successors ... vs Krishan Kumar Sud.
1968 Latest Caselaw 26 Del

JUDGMENT

Hardayal Hardy, J.

1. This civil revision under Section 25 of the Provincial Small Cause Courts Act, 1887, arises out of the dismissal of the petitioner's suit for recovery of Rs. 700 from the respondent, by the learned Additional Judge, Small Causes Court, Delhi.

2. The petitioner is a joint stock company incorporated under the Indian Companies Act, 1913, and is engaged in the business of marketing and sale of milk, butter and toher allied products. For the purpose of its business, the petitioner company has opened deptos in various parts of the country. One Shri Jai Chand Sud, who is father of the present respondent, Shri Krishan Kumar Sud, was a depto-holder appointed by the petitioner at Delhi. The petitioner alleged that the respondent had borrowed Rs. 1,050 from the petitioner on February 13, 1967, for liquidating the debt of his father because the petitioner was contemplating legal action against his father to recover the amount outstanding against him and that out of the amount thus borrowed by the respondent a sum of Rs. 350 only was returned by him in various Installments. As the respondent had failed to pay the balance of Rs. 700 in spite of service of ntoice of demand, the petitioner brought the present suit against him.

3. The respondent contended that Sri Labhaya Ram Pahuja, who had instituted the suit and signed and verified the plaint on behalf of the petitioner company, had no authority to do so. He also contended that no amount had actually been borrowed by him from the petitioner. All that had happened was that his father, Shri Jai Chand Sud, had gone to East Africa in December, 1956, for a few months. During his absence, the respondent was running the depto and with a view to avoiding litigation in respect of a sum of Rs. 1,050 which the petitioner represented was due from Shri Jai Chand Sud, the respondent agreed to have the said amount debited to his account subject to the condition that if his father returned within six months he would nto be liable to pay the same. He further contended that his father actually returned within six months and thus, as per agreement between the parties, his personal liability came to an end. The respondent went on to add that the arrangement arrived at between the parties was duly acted upon and that a sum of Rs. 350 was actually paid by the respondent's father towards partial discharge of the sum of Rs. 1,050 in respect of which the respondent had incurred conditional liability. He also alleged that his relations with his father became strained and that the present suit had been instigated by his father against him.

4. The suit was dismissed by the learned judge who held against the petitioner on the two points which had been raised by him for determination. He held that the suit had nto been instituted by a person duly empowered to do so on behalf of the petitioner company. He also accepted the respondent's defense that the arrangement devised by the petitioner's manager and the respondent during the temporary absence of the respondent's father, Shri Jai Chand Sud, was a stop-gap arrangement which ceased to be operative on the return of Shri Jai Chand Sud and as such the respondent was nto liable to pay the amount in question.

5. The decision of the learned judge has been assailed by Shri J. P. Chopra, learned counsel for the petitioner, on btoh the points. He has contended that the petitioner company is an incorporated company. According to its articles of association (exhibit PW 3/2), the power to institute legal proceedings on its behalf vests in its directors and they can delegate the same to an attorney, vide Article 120, Clauses (g) and (u). According to the evidence led by the petitioner, the authority to institute the present suit had been delegated to Shri Labhaya Ram Pahuja, general manager of the company, under a resolution passed by the board of directors of the company on October 2, 1953. The petitioner company had placed on record a copy of the said resolution marked exhibit PW 3/1. It had also placed on record a copy of the power of attorney executed in favor of Shri Labhaya Ram Pahuja (exhibit P-l). According to this power of attorney, Shri Labhaya Ram Pahuja, who had filed the present suit, was fully empowered to institute legal proceedings on behalf of the company. As regards his competency to sign and verify the plaint, learned counsel for the petitioner relied upon the provisions of Order 29, Civil Procedure Code, which lays down that in suits by or against a corporation any pleading may be signed and verified on behalf of the corporation by the secretary or by any director or any principal officer of the corporation who is able to depose to the facts of the case. Shri Labhaya Ram Pahuja being the general manager of the petitioner company, who according to the respondent himself had entered into the arrangement alleged by the respondent, was obviously the principal officer of the company and he was also able to depose to the facts of the case. There could thus be no doubt about the suit having been instituted and the plaint having been signed and verified by a person duly empowered to do so on behalf of the petitioner company.

6. Mr. Vohra, learned counsel for the respondent on the toher hand contended that the learned trial judge had given a finding that the petitioner had failed to establish the factum of the resolution, exhibit P.W. 3/1, having been passed by the board of directors. The petitioner had no doubt examined its accountant, Shri Suraj Bhan (P.W. 3), to establish that such a resolution had been passed and that the minutes book of the board of directors of the company had also been produced by him, but the resolution in question was alleged to have been passed on October 2, 1953, while the witness had entered the service of the company in 1956 only and had clearly admitted that he had no personal knowledge of the passing of the said resolution. Learned trial judge had also held that the resolution as contained in the minutes book was typed on a loose sheet and had been pasted to a leaf of the said book, but the job of pasting of the paper had also nto been done by Suraj Bhan (P.W. 3). Learned trial judge held that half of the book produced by the witness was lying vacant and that the witness could nto say if the book was kept in the regular course of business. He also held that the petitioner had withheld the evidence of its secretary or any toher person who had personal knowledge of the passing of the resolution and therefore it was legitimate to presume that the resolution said to have been passed by the board of directors on October 2, 1953, was nto a genuine one.

7. Mr. Vohra argued that this was a finding of fact which could nto be interfered with in a revision under Section 25 of the Provincial Small Cause Courts Act.

8. The scope of a revision under Section 25 of the Provincial Small Cause Courts Act has been authoritatively laid down by the Supreme Court in Hari Shankar v. Rao Girdhari Lal Chowdhury, (1962) 64 P.L.R. 1097, 1101 where their Lordships fully approved of the following observations made by Beaumont C. J. (as he then was) in Bell & Co. Ltd. v. Waman Hemraj, (1938) 40 Born. L.R. 125 ; A.I.R. 1938 Bom. 223 :

" 'The object of Section 25 is to enable the High Court to see that there has been no miscarriage of justice, that the decision was given according to law. The section does nto enumerate the cases in which the court may interfere in revision, as does Section 115 of the Code of Civil Procedure, and I certainly do nto propose to attempt an exhaustive definition of the circumstances which may justify such interference, but instances which readily occur to the mind are cases in which the court which made the order had no jurisdiction, or in which the court has based its decision on evidence which should nto have been admitted, or cases where the unsuccessful party has nto been given a proper opportunity of being heard, or the burden of proof has been placed on the wrong shoulders. Wherever the court comes to the conclusion that the unsuccessful party has nto had a proper trial according to law, then the court can interfere. But, in my opinion, the court ought nto to interfere merely because it thinks that possibly the judge who heard the case may have arrived at a conclusion which the High Court would nto have arrived at.' "

9. It however seems to me that in the present case the finding of fact recorded by the learned trial judge on this point is vitiated by his having laid an impossible burden of proof on the petitioner. Learned judge appears to have been of the view that for the purpose of proving the resolution it was necessary that the petitioner company should have produced its secretary who, according to the Companies Act, was required to maintain the minutes book. It was nto disputed that the book had come from proper custody. Shri Suraj Bhan (P.W. 3) had also deposed that the book produced by him was the minutes book of the company. He also identified the signature of R. Sharma, chairman of the meeting, who had signed the resolution in question. The witness stated that he had worked with Shri R. Sharma and could, therefore, identify his signature. He also stated that Shri R. Sharma was dead. In the circumstances, it could nto be held that the resolution which was duly entered in the minutes book of the company had nto been proved. Learned judge's observation that half of the minutes book was lying vacant and that the witness had nto stated that it was kept in the regular course of business, to my mind shows lack of appreciation of the true position regarding maintenance of such books. Minutes book is one of the books which is required to be maintained under the Companies Act. By its very nature, the proceedings of the meetings are recorded therein" as and when the meetings are held. If during the period to which the book produced in court pertained, the number of meetings held by the board of directors and the minutes of proceedings held at those meetings were nto numerous and extensive enough to fill the entire book, a part of the book was bound to contain no writing thereon. The book could nto have therefore been rejected on this ground. In the circumstances, the conclusion reached by the learned judge that the resolution said to have been passed by the board of directors on October 2, 1953, was nto genuine, appears to me to be nto only wrong but perverse. I, therefore, hold that the suit was properly instituted by a person fully empowered in law to do so on behalf of the petitioner company.

10. Mr. Vohra is, however, on a much firmer ground on the second point, on The petitioner's case as made out in the plaint was that a sum of Rs. 1,050 had been borrowed from it by the respondent on February 13, 1957, for liquidating the amount due to the petitioner from his father with a view to avoiding legal proceedings being instituted against his father for the recovery of the amount outstanding against him and that the respondent had paid out of the said amount Rs. 350 leaving a balance of Rs. 700 which he had failed to pay in spite of service of ntoice of demand. This case of the petitioner has been found by the learned trial judge to be false and it has been held that no amount was actually borrowed by the respondent who had been asked to sign a false voucher (exhibit P-2) acknowledging a sum of Rs. 1,050 having been advanced to him in cash.

11. The petitioner supported its case by the evidence of its accountant, Shri P.N. Kakkar (P.W. 1), who stated that the amount of Rs. 1,050 was paid in cash to the respondent by the cashier of the petitioner company and that he had thereupon made over the said amount to the assistant cashier of the company. To reinforce the position thus taken by the petitioner company, the petitioner's general manager, Shri Labhaya Ram Pahuja (P.W. 2), also supported the statement of Shri P.N. Kakkar and they btoh denied that the sum of Rs. 350 for which credit had been given by the petitioner to the respondent had actually been paid by the respondent's father, Shri Jai Chand Sud, till they were forced to admit the vouchers, exhibits P-10 to P-15, which were initialled by Shri Labhaya Ram Pahuja and showed that a sum of Rs. 50 was deducted from the commission payable to the depto-holder, Shri Jai Chand Sud, and it was that very amount which was credited to the account of the respondent. It also transpired that all those vouchers were signed by Shri Jai Chand Sud. Shri Labhaya Ram Pahuja was put a specific question in cross-examination as to whether the amount sought to be recovered from the respondent was still shown in the books of the company to be outstanding against Shri Jai Chand Sud. The witness could nto deny this fact.

12. Holding that no payment had actually been made by the respondent against the amount of Rs. 1,050 debited to him and that all the payments towards the liquidation of the said amount were made by the respondent's father, who had returned from East Africa within four months after he had left the country, the learned judge came to the conclusion that the version put forward by the respondent was true. Learned trial judge also held that the document, exhibit P. 2, which formed the basis of the petitioner's suit had nto been made with any degree of formality and that its contents had also been found to be incorrect. He therefore came to the conclusion that the respondent's version appeared to be more probable than that put forth on behalf of the petitioner company. This is clearly a finding of fact which cannto be interfered with in a revision petition.

13. Mr. J.P. Chopra, learned counsel for the petitioner, however submitted that the learned trial judge had completely ignored the respondent's letter dated January 14, 1957 (exhibit P. 4), which had been addressed by him to the general manager of the petitioner company.    The letter reads : 
  

  '' Dear Sir,
 

We are expecting money from our father who has gone to East Africa shortly. As soon as the money reaches us the o/s will be cleared. In the meanwhile I undertake to pay the sale proceeds daily for the goods received for us for the o/s dues I am responsible to the company.
 

 Your faithfully,
  

Sd/-  K. K. Sud." 
 

14. Mr. Chopra argued that by this letter the respondent undertook to discharge the liability of his father and was accepted as such by the petitioner company. In these circumstances, the petitioner company's right to enforce payment against the father of the respondent was lost and it could thereafter look to the respondent alone for payment of its dues. Reliance was placed in this connection by the learned counsel on Section 41 of the Contract Act. The argument appears to me to be wholly devoid of merit. It is nto the petitioner's own case that by the undertaking given the respondent was substituted as a debtor in place of his father. If that were so there was hardly any reason to deduct a sum of Rs. 50 every month out of the commission payable by the petitioner company to the respondent's father. Moreover it is the voucher, exhibit P. 2, which is the foundation of the petitioner's case against the respondent and nto the letter, exhibit P. 4, which was obviously written almost a month before the voucher, exhibit P. 2.

15. The result is that the revision petition fails and is dismissed with costs.