Delhi High Court
M/S Relaxo Footwears Ltd. vs M/S Rohitas Lal & Brothers & Ors. on 18 February, 2011
Author: Valmiki J. Mehta
IN THE HIGH COURT OF DELHI AT NEW DELHI
+ RFA No. 318/2001
% 18th February, 2011
M/S RELAXO FOOTWEARS LTD. ...... Appellant
Through: None.
VERSUS
M/S ROHITAS LAL & BROTHERS & ORS. ...... Respondents
Through: None.
CORAM:
HON'BLE MR. JUSTICE VALMIKI J.MEHTA
1. Whether the Reporters of local papers may be
allowed to see the judgment?
2. To be referred to the Reporter or not?
3. Whether the judgment should be reported in the Digest?
VALMIKI J. MEHTA, J (ORAL)
1. This case is on the Regular Board of this Court since 3.1.2011.
Today this case is effective item no. 5 on the Regular Board. No one
appears on behalf of the parties, although it is 2:40 p.m. I have therefore
perused the record and am proceeding to dispose of the matter.
2. The challenge by means of this Regular First Appeal under
Section 96 of the Code of Civil Procedure, 1908 is to the impugned
judgment and decree dated 31.5.2001 whereby the suit of the
appellant/plaintiff for recovery of Rs.1,56,121.95 was dismissed. I may
note that the suit was dismissed although the appellant/plaintiff had duly
proved its case and also though the respondents/defendants failed to lead
RFA No. 318/2001 Page 1 of 4
any evidence, inasmuch as the Trial Court held the suit was not validly
instituted. The challenge before this Court therefore is only with respect
to findings on issue no.3 and which issue and findings read as under:-
"Issue No.3:-
"Whether the plaint has been signed and verified and suit
instituted by a duly authorised and competent person?
OPP
9. Onus to prove this issue was on the plaintiff. As per
the pleadings Sh.Sushil Kohli was the Asstt.Manager and
Sh.Dinesh Shukla, Accountant of the company and were
authorized to file the suit and also to peruse the same
vide resolution dated 23.1.99 and they were also the
principal officers in terms of Order 29 CPC. Testimonies of
the only two plaintiff's witnesses viz. PW.1 & PW.2 are,
however, totally silent on the issue in hand. There is not
even on iota of whisper in the testimonies of any of the
two witnesses PW.1 & PW.2 that the plaint has been
signed and verified and suit instituted by a duly
authorised and competent person. PW.1 in his testimony
has only deposed to the extent that he had been
authorized by the company to depose before the court.
He did not utter even a single word if at all he had signed
and verified the plaint and instituted the suit. Perusal of
the plaint shows that the plaint has been signed by two
persons. Resolution Ex.PW1/1 of the company taken as
such also authorises two of the persons to take the
necessary actions. Who are those two authorised
persons, I do not find any evidence to such an extent and
what have they done is equally unknown. PW.1 by
himself has also not deposed that he, at all was one of
those persons who was so authorised. In the
circumstances, in the absence of any evidence, much less
sufficient evidence, to prove the issue in hand that the
plaint has been signed and verified and suit instituted by
a duly authorised and competent person, I have no
hesitation in holding that the plaintiff has failed to
discharge its burden to prove the issue no.3. The issue
no.3, therefore, decided against the plaintiff and in favour
of the defendants."
3. The aforesaid findings of the Trial court are wholly illegal and
perverse. A reference to para 1 of the plaint shows that Sh.Sushil Kohli
RFA No. 318/2001 Page 2 of 4
and Sh.Dinesh Shukla were authorized to file the suit. The resolution was
proved on record as Ex.PW1/1. It is therefore not understood as to what
the Trial Court means when it arrives at a finding that it is not known that
who are the two authorized persons. Surely, the two authorized persons
are those mentioned in resolution, Ex.PW1/1 namely Sh.Sushil Kumar and
Sh.Dinesh Shukla and of which Sh.Sushil Kumar appeared as PW1 and had
exhibited this resolution. Further, the only defence of the
respondents/defendants with respect to competence to file the suit was
contained in para 7 of the preliminary objections of the written statement
and para 1 of the reply on merits which read as under:-
"7. That the suit is not filed by the authorised person as the
person who has filed the suit is not competent or empowering
under the law. Mere resolution passed by the Director of the
company does not mean that the person in whose favour
resolution is passed becoming competent to file the suit until
and unless the same attorney is executed in his favour whereby
those powers should be specifically mentioned therein in his
favour empowering him to institute the suit before the court of
law the same does not that mentioned in the plaint.
.......................
1. That the contents of para 1 as stated are wrong and
denied. It is denied that the principal officer named in the para
under reply are authorised to institute the case, rest of the para
in so far as it pertains to the status of plaintiff company, is not
denied as plaintiff informed the defendants that it is a limited
company."
4. A reference to the aforesaid paras show that the authority to
file the suit was not on the ground that resolution was not passed but
what was contended was that a power of attorney should also have been
executed. The defence was therefore a legal defence and not a factual
defence. In law, if on behalf of a company a suit is filed it is not required
that there must be an attorney in favour of the person who files the suit
RFA No. 318/2001 Page 3 of 4
as long as a resolution of the Board of Directors authorizes the filing of the
suit. In the present case, the resolution of the Board of Directors has been
proved as PW-1/1. Also, in reply to para 1 on merits, it was not disputed
that the authorized signatory of the suit/plaint was a principal officer but
the defence was that he was not authorized to institute the case, i.e. the
person who filed the suit was admitted to be the principal officer of the
appellant/plaintiff. In terms of Order 29 Rule 1 of the CPC and the
decision of the Supreme Court in the case of United Bank of India vs
Naresh Kumar AIR 1996 6 SCC 660 It has been held that a suit should
be held to be validly instituted and it ought not to be thrown out on
technical grounds of lack of authorization, once, the suit has been pursued
for a long period of time. In the present case, the subject suit was
pursued right till the disposal and therefore the decision in the case of
United Bank of India (supra) squarely applies more so it was not
specifically denied that the person who instituted the suit was not the
principal officer of the company.
5. In view of the above, I set aside the order with respect to issue
no.3 and hold that the suit was properly instituted and filed on behalf of
the appellant/plaintiff. The suit of the appellant/plaintiff is therefore
decreed for a sum of Rs.1,56,121.95 along with pendente lite and future
interest till realization of the decree amount @ 9% per annum simple.
Decree sheet be prepared. Trial Court record be sent back.
FEBRUARY 18, 2011 VALMIKI J. MEHTA, J.
ak
