Andhra HC (Pre-Telangana)
Hyderabad Asbestos Cement Products ... vs Mohamad Argobasi Enterprises And Anr. on 18 January, 1988
Equivalent citations: AIR1989AP286, AIR 1989 ANDHRA PRADESH 286, (1988) 1 LS 239
ORDER Seetaram Reddy, J.
1. The 2nd defendant, the revisionist herein, seeks to revise the orders passed by the trial Court.
2. The format in brief is that the plaintiff, the 1st respondent herein, filed a suit against the petitioner and the 2nd respondent-State Bank of Hyderabad. Eight issues have been framed based on the pleadings. One of the issues viz. issue No. 6 is whether the plaint has been, instituted by a person validly representing the plaintiff. It is not in dispute that the suit was instituted in the year 1982 and issues, were framed on 7-6-1983 and the suit was posted for trial on 4-7-1983. The suit was dismissed for default on 6-8-1983. Again it was restored and posted to Sept. 20, 1983, but from then onwards it was adjourned several times and eventually to 10-7-1984. On 16-10-1984 an interlocutory application was filed by the revisionist herein to try the preliminary objection pn issue No. 6. It was turned down by the trial Court stating inter alia as under:
"In the present suit the learned counsel for the plaintiff represented that he has no oral evidence at all and the entire case depends on the documents which are filed on behalf of the plaintiff in the Court. The learned counsel for the 1st defendant also agrees with the view of the plaintiff that the suit can be disposed of on all the issues at a stretch and it is not at all necessary to decide the preliminary objection.....on 16-10-1984 the second defendant came up with the present petition to try the preliminary objection on issue No. 6. This fact would go to show that the petition has been filed to take some more time to get ready with the trial of the suit. I do not see any merit in the petition. Petition is not sustainable."
2A. It is further observed in para 10 as. under:
"The issue No. 6 is whether the plaint has been instituted by persons validly representing the plaintiff. Therefore, this issue does not relate to the jurisdiction of the Court. Secondly, it does not relate to Clause 2(b). It does not relate to bar the suit created by any law for the time being in force. Under the issue what is to be decided is whether the plaint has been instituted by a person validly representing the plaintiff. It is a mixed question of law and fact. The issue cannot be decided by a pure question of law as already stated."
3. The contention advanced on behalf of the petitioner herein essentially is two-fold. First, as per the power of attorney, the plaintiff has been styled as a company and under Abu Dhabi law, where admittedly the power of attorney has been executed, there is no Company law and therefore, the plaintiff could not have been delegated with an authority to file a suit, as it is not a properly ad validly executed power of attorney under Abu Dhabi Law, Second admittedly the power of attorney so executed does not empower to file a suit against the 2nd defendant; it enables only to file a suit against the 1st defendant i.e. State Bank of Hyderabad.
4. The counter contentions of the learned counsel for the respondents are that the question which is involved is not of any jurisdiction: it is a mixed question of law and fact; even if there is any inadequacy in the execution of the power of attorney, it could always be ratified by providing further material as it is nothing but an agency which is sought to be created under the power of attorney and, therefore, it need not necessarily be decided as a preliminary objection and it can just as well go along with other issues.
5. Before adjudicating the points involved certain material which is necessary may be set out. The power of attorney executed in favour of the plaintiff reads :
"By This Power of Attorney given on the 8th day of Jan., 1980.
Mohammed Ali Gobaisi Enterprises; at P.O. Box No. 4395 Abu Dhabi (hereinafter called the "Company") hereby appoint Mr. C. Doraiswamy and Mr. T. Dulipsingh partners in the law firm of kind and Patride of the Catholic centre, Armamen Street, P.O. Box No. 121, Madras, India (hereinafter called the Attorney) as through and lawful Attorneys of the Company for/or in the name of and on behalf of the Company to do or execute or any of the acts and things hereinafter mentioned that is to say :
To commence legal proceedings against the State Bank of Hyderabad in respect of the Company's claim against them and to execute, sign, enter into, acknowledge, perfect, do all such deeds, instruments, acts and things as shall be requisite for or in relation to all or any of the purposes or matters relating thereto and if thought fit to compromise, refer to arbitration, abandon and submit to judgment in these proceedings.
IN WITNESS WHEREOF these presents have been executed into that day and year first above written."
As to the fact whether Company law existed at all in Abu Dhabi, the material has been placed before the Court which contains in Business Laws of the United Arab Emirates Vol. II, by Majoric, J. Hall, which reads :
"There is no Company Law in Abu Dhabi. In addition, it is unlikely for a group of individual and/or companies to form a limited liability company as H.M. The Ruler will not, at the present time, entertain the formation of such companies. Decrees of incorporation are therefore only issued in respect of companies which are Government or-quasi-Government bodies, such as ADNOC. As a result, business organisations generally operate as partners and/or, where individuals are concerned, as traders.
However it is anticipated in view of the volume of business currently being carried on in Abu Dhabi that a company law will be issued but no date has yet been announced for such promulgation."
Rule 2 of Order 14, C.P.C. reads:
"2.(1) Notwithstanding that a case may be disposed of on a preliminary issue, the Court shall, subject to the provisions of Sub-rule (2), pronounce judgment on all issues.
(2) Where issues both of law and of fact arise in the same suit, and the Court is of opinion that the case or any part thereof may be disposed of on an issue of law only, it may try that issue first if that issue relates to(a) the jurisdiction of the Court, or
(b) a bar to the suit created by any law for the time being in force, and for that purpose may, if it thinks fit, postpone the settlement of the other issues until after that issue has been determined and may deal with the suit in accordance with the decision on that issue."
6. It is quite plain from the language of R. 2 of O. 14 that any point pertaining either to the jurisdiction of the Court or a law which bars the suit to be tried may at first be decided as a preliminary point though the normal rule is that the Court shall pronounce judgment on. all issues,, which mandate, however, is subject to the provisions of Sub-rule (2). It is essentially based on an object which has been deliberately introduced by the Amendment Act 1976 in order to see that the 1 is unnecessarily is not protracted and would not cause any harassment to the parties if it could be decided that 1 is itself is not maintainable in the Court and thus avoiding the avoidable litigation in the Court.
7-8. Bearing the above in mind, the question to be examined in this case is whether the power of attorney has been validly executed, enabling the plaintiff to maintain the suit in the Court?
9. So far as Abu Dhabi Law is concerned, it prima facie establishes that there is no Company in that country and it does not enable a group of indivisible (individuals?) or companies to form a limited liability company, as the Ruler himself will not entertain the formation of such companies. It does show prima facie that the plaintiff who has been admittedly styled as a company in the power of attorney will not be in a position to maintain the suit. In other words, it appears that this power of attorney has not been validly executed. The second infirmity that is sought to be placed before the Court is that the 2nd defendant at any rate cannot be made a party to the suit as power is not conferred upon the plaintiff to file a suit against the 2nd defendant. It may be that this lacuna is a curable one by further filing a ratification or a fresh power of attorney thereby curing the defect mentioned herein. Even to this day, that is not available before the Court. But assuming it is a curable irregularity, even on the first point, it appears to be an uphill task for the plaintiff to maintain its suit, as there is no recognition to any company in Abu Dhabi and, therefore, it has to be examined whether the suit itself is maintainable and if it is not maintainable surely it goes to the root of the matter and ousts the jurisdiction of the Court to entertain the same though the word 'may' has been employed in Rule 2 of Order 14. But this has been a deliberate amendment in the year 1976 which is to be read as "shall" and, therefore, mandatory, Once the Court forms the opinion that a point which has been raised to be adjudicated as a preliminary issue, it touches upon the jurisdiction of the Court or even any bar by which a suit is precluded from being entertained under any law, then that has to be decided at first so as to obviate the necessity of going through the entire gamut of the litigation viz., deciding all the issues involved and thereby cutting short the time that involves in the litigation and so forth. This was the primary, concern of the Legislature at the time when the amendment was enacted. Looked at from that angle, therefore, in my judgment this involves both the aspects firstly there appears to be a bar under Abu Dhabi law viz. a company cannot be invested with a power to file a suit because there is no company law whatsoever and therefore the recognition of company itself is out of the picture so far as Abu Dhabi law is concerned. Hence if that infirmity apparently is said to be residing in the power of attorney which cannot be said to enable the plaintiff to file a suit and if that suit cannot be entertained at all, it touches upon the jurisdiction of the Court itself. Hence it is eminently a fit case where so far as the facts are concerned the primary objection raised in this case has to be decided first. It is for the plaintiff to establish that he is in a position to maintain the suit. It is for him to produce the necessary documentary and/or oral evidence to establish the same.
10. So far as the second aspect of the case is concerned, the 2nd defendant, the petitioner herein, is said to have raised the preliminary objection at the time when almost the trial, according to the learned counsel for the respondent, is commenced This does not appear to be quite evident from the material on record. Once the suit was dismissed for default and it was restored in Sept 1983, thereafter it saw the adjournments for not less than a dozen times and eventually on 16-10-1984 when the matter was taken up the interlocutory application was filed by the petitioner, for disposing of the preliminary objection before the other issues are sought to be adjudicated. Could it then be said that there was a deliberate delay on the part of the 2nd defendant to protract the litigation. In my view it does not appear to be so true, there appears to be some laches on the part of the 2nd defendant. But then the suit was eventually taken up on 16-10-1984 and then for the first time on that occasion the 2nd defendant filed the petition though it could have been filed earlier. In any case the suit underwent adjournments and nothing fructified and, therefore, no detriment has been caused.
11. Looked at from any angle, therefore, I have no hesitation in holding that the trial court had to decide at first the preliminary objection raised on behalf of the 2nd defendant. Hence, the order under revision which suffers from error of jurisdiction is set aside and the matter is remitted back to the trial court for deciding the preliminary objection at first as expeditiously as possible preferably within twelve weeks from the date of receipt of this order. However, the trial court shall neither take cognizance of nor be influenced by any observations made herein in regard to the merits of the case. The parties shall be at liberty to lead evidence before the trial court.
12. The revision petition is accordingly allowed. No costs.