Delhi District Court
Mahanagar Telephone Nigam Limited vs Mrs. Saroj Mahani on 7 March, 2012
1
IN THE COURT OF SHRI MAN MOHAN SHARMA
ADDITIONAL DISTRICT JUDGE (CENTRAL) 12
TIS HAZARI COURTS, DELHI.
RCA. No.: 12/2009
Unique case ID no. : 02401C0161762009
Mahanagar Telephone Nigam Limited,
Khursid Lal Bhawan,
Janpath, New Delhi110 050
..........Appellant
Versus
Mrs. Saroj Mahani,
BG2/7B, DDA Flats, (First Floor)
Paschim Vihar, New Delhi110 063
.........Respondent
Date of institution of appeal : 20.04.2009
Date of reserving judgment : 15.12.2011
Date of pronouncement : 07.03.2012
JUDGMENT:
1. This appeal under Order 41 of the Code of Civil Procedure has been filed against the judgment and decree dated 29.01.2009 passed by ld. Additional Senior Civil Judge, Delhi in suit no. 272/06, whereby the appellant's suit for recovery of Rs.18,883/ was dismissed.
2. The appeal was presented on 20.04.2009, beyond the period of RCA 12/2009 Mahanagar Telephone Nigam Ltd. vs. Saroj Mahani Page 1 of 12 2 limitation. It was accompanied with an application under section 5 of the Limitation Act, 1963 for condonation of delay. The same was allowed by my Ld. Predecessor vide order dated 13.07.2010 on the terms stated therein. As directed by the Court the cost imposed was payable to DLSA and a receipt no. 331/33067 dated 05.05.2010 in the sum of Rs.2000/ has been filed on record by the appellant. The condition precedent of payment of cost having been complied and notified to the court on 13.07.2010, the appeal is now being considered on merits.
3. Vide the impugned judgment and decree, the suit was dismissed on the ground of the plaint being not filed, signed or verified by a competent person.
4. I have heard the submissions of Sh. S. K. Jha, ld. counsel for appellant and Sh. M. Mahani, ld. counsel for respondent. The respondent also filed written arguments on record.
5. On behalf of the appellant it has been argued that the suit has been dismissed on a technical ground without affording an opportunity to the appellant to prove the authorization to institute the suit. The appellant is a public institution and there has been a miscarriage of justice. The appellant has otherwise proved the case on merits and there is no evidence led by the respondent.
RCA 12/2009 Mahanagar Telephone Nigam Ltd. vs. Saroj Mahani Page 2 of 12 36. The respondent has refuted the arguments of appellant and has argued that the case of the appellant has no legs to stand upon even on merits as detailed in the written arguments. The respondent has relied upon the following case law in support of her submissions:
(i). 'Ram Kishan Vs. State' 1974 RLR (Note) 71
(ii). 'P. D. Puri Vs. State' 1976 RLR (Note) 79
(iii). 'M/s Rajghria Paper Mills Ltd. Vs. General Manager, Indian Security Press and another Defendants' AIR 2000 Delhi 239.
(iv). 'Amin Seatrans Ltd. Vs. Owners and Party interested in Vessel M. V. 'Loyal Bird' AIR 1995 Calcutta 169.
(v). 'Nibro Limited Vs. National Insurance Co. Ltd.' 41 (1990) DLT 633 (MANU/DE/0138/1991).
(vi). Asia Today Limited vs. Sinhal Metal Industries Limited MANU/DE/1581/2006.
(vii). Shrijee Synthetics (Bombay) Pvt. Ltd. vs. Manju Falls MANU/DE/0729/1999.
(viii). Apple Valley Resorts vs. H. P. State Electricity Board MANU/HP/0014/2003.
(ix). Birla Dlw Ltd. vs. Prem Engineering Works MANU/DE/0590/1999.
7. No other point was argued or urged.
8. Briefly stated, the relevant facts are that the respondent had been an erstwhile subscriber of the appellant in respect of telephone no. 25256932 and on account of non payment of bill the telephone was disconnected. Claiming that outstanding bill was not paid, the RCA 12/2009 Mahanagar Telephone Nigam Ltd. vs. Saroj Mahani Page 3 of 12 4 appellant had filed the instant suit for recovery. The respondent contested the suit by taking various objections like the plaint being not signed, verified and instituted by a authorised person; suit barred by limitation and without any cause of action. On merits, the installation of telephone was admitted but the respondent challenged the bills to be highly inflated and not rectified despite complaints.
9. The following issues were framed by the ld. trial court on 07.11.2007.
1.Whether the plaintiff is entitled to the suit amount, as prayed for? OPP
2.Relief
10. The ld. trial court has not gone into the merits of the case as observed by it on the page 10 of the impugned judgment. The ld.
Trial court has primarily concerned itself with the question whether the suit has been properly instituted or not in accordance with Order 29 Rule 1 CPC.
11. There is a memorandum of authorisation which has been tendered in evidence as Ex.PW1/1 whereby certain powers including to sign, file and verify the pleadings (amongst other acts) have been conferred generally to various Authorities by designation and one of such Authority is the Senior Accounts Officer (Legal). The plaint has RCA 12/2009 Mahanagar Telephone Nigam Ltd. vs. Saroj Mahani Page 4 of 12 5 been instituted, signed and verified by one Sh. S. K. Arora, Senior Accounts Officer (Legal) and in para 2 of the plaint he has made averments about his authority. However the record reveals that on 05.02.2008 the witness PW1 Sh. S. K. Arora tendered his evidence by affidavit in examinationinchief and relied upon the notification Ex.PW1/1. The cross examination of this witness was deferred on that day as the defendant stated that he had received the copy of the affidavit in evidence on that day itself. The witness thereafter was not tendered for his cross examination, therefore the ld. trial court did not read the testimony of PW1 in evidence relying upon 1974 RLR (Notes) 71 & 1976 RLR (Notes) 80.
12. The aforesaid said view taken by the ld. trial court is founded on sound judicial principles as until and unless the adversary has an opportunity to test the veracity of evidence of a witness by cross examination the same cannot considered. There is nothing on record to suggest that the opportunity was available but not availed by the adversary on account of its own fault, neglect or refusal. Therefore the said inference of the ld. Trial Court is within the four corners of law.
13. The moot question which is relevant in this case is what the effect of the plaintiff not proving that the suit was duly instituted, RCA 12/2009 Mahanagar Telephone Nigam Ltd. vs. Saroj Mahani Page 5 of 12 6 signed and verified by a competent person. In this respect in the judgment of the Hon'ble Supreme Court of India in United Bank of India v. Naresh Kumar AIR 1997 SUPREME COURT 3 it has been held as under: "8. In this appeal, therefore, the only question which arises for consideration is whether the plaint was duly signed and verified by a competent person.
9. In cases like the present where suits are instituted or defended on behalf of a public corporation, public interest should not be permitted to be defeated on a mere technicality. Procedural defects which do not go to the root of the matter should not be permitted to defeat a just cause. There is sufficient power in the Courts, under the Code of Civil Procedure, to ensure that injustice is not done to any party who has a just case. As far as possible a substantive right should not be allowed to be defeated on account of a procedural irregularity which is curable.
10. It cannot be disputed that a company like the appellant can sue and be sued in its own name. Under Order 6 Rule 14 of the Code of Civil Procedure a pleading is required to be signed by the party and its pleader, if any. As a company is a juristic entity, it is obvious that some person has to sign the pleadings on behalf of the company. Order 29 Rule 1 of the Code of Civil Procedure, therefore, provides that in a suit by or against a corporation the Secretary or any Director or other RCA 12/2009 Mahanagar Telephone Nigam Ltd. vs. Saroj Mahani Page 6 of 12 7 Principal Officer of the corporation who is able to depose to the facts of the case might sign and verify on behalf of the company. Reading Order 6, Rule 14 together with Order 29, Rule 1 of the Code of Civil Procedure it would appear that even in the absence of any formal letter of authority or power of attorney having been executed a person referred to in Rule 1 of Order 29 can, by virtue of the office which he holds, sign and verify the pleadings on behalf of the corporation. In addition thereto and dehors Order 29, Rule 1 of the Code of Civil Procedure, as a company is a juristic entity, it can duly authorise any person to sign the plaint or the written statement on its behalf and this would be regarded as sufficient compliance with the provisions of Order 6, Rule 14 of the Code of Civil Procedure. A person may be expressly authorised to sign the pleadings on behalf of the company, for example, by the Board of Directors passing a resolution to that effect or by a power of attorney being executed in favour, of any individual. In absence thereof and in cases where pleadings have been signed by one of its officers a Corporation can ratify the said action of its officer in signing the pleadings. Such ratification can be express or implied. The Court can on the basis of the evidence on record, and after taking all the circumstances of the case, specially with regard to the conduct of the trial, come to the conclusion that the corporation had ratified the act of signing of the pleading by its officer.
11. The Courts below could have held that Sh.
RCA 12/2009 Mahanagar Telephone Nigam Ltd. vs. Saroj Mahani Page 7 of 12 8L.K.Rohatgi must have been empowered to sign the plaint on behalf of the appellant. In the alternative it would have been legitimate to hold that the manner in which the suit was conducted showed that the appellant bank must have ratified the action of Sh. L.K. Rohatgi in signing the plaint. If, for any reason whatsoever, the Courts below were still unable to come to this conclusion, then either of the appellate Courts ought to have exercised their jurisdiction under Order 41, Rule 27 (1) (b) of the Code of Civil Procedure and should have directed a proper power of attorney to be produced or they could have ordered Sh. L.K. Rohatgi or any other competent person to be examined as a witness in order to prove ratification or the authority of Sh.L.K.Rohatgi to sign the plaint. Such a power should be exercised by a Court in order to ensure that injustice is not done by rejection of a genuine claim.
12. The Courts below having come to a conclusion that money had been taken by respondent No.1 and that respondent No. 2 and husband of respondent No. 3 had stood as guarantors and that the claim of the appellant was justified it will be a travesty of justice if the appellant is to be non suited for a technical reason which does not go to the root of the matter. The suit did not suffer from any jurisdictional infirmity and the only defect which was alleged on behalf of the respondents was one which was curable.
13. The Court had to be satisfied that Sh.L.K.Rohatgi could sign the plaint on behalf of RCA 12/2009 Mahanagar Telephone Nigam Ltd. vs. Saroj Mahani Page 8 of 12 9 the appellant. The suit had been filed in the name of the appellant company; full amount of Courtfee had been paid by the appellant bank; document as well as oral evidence had been led on behalf of the appellant and the trial of the suit before the Sub Judge, Ambala, had continued for about two years. It is difficult, in these circumstances, even to presume that the suit had been filed and tried without the appellant having authorised the institution of the same. The only reasonable conclusion which we can come to is that Sh.L.K.Rohatgi must have been authorised to sign that plaint and, in any case, it must be held that the appellant had ratified the action of Sh. L.K.Rohatgi in signing the plaint and thereafter it continued with the suit."
14. The above judgment of the Hon'ble Supreme Court of India has been referred to by the Hon'ble High Court of Delhi in the M/s Rajghria Paper Mills Ltd. Vs. General Manager, Indian Security Press and Another AIR 2000 Delhi 239 and it was held (in para 20 of the Judgment) that 'unless a power to institute suit is specifically conferred on a particular director he has no authority to institute the suit on behalf of the company. It must therefore follow that although the plaint was signed and verified properly but the suit was not instituted by a duly authorized person on behalf of the plaintiff.'
15. In the latest case law in Asia Today Limited vs. Sinhal Metal RCA 12/2009 Mahanagar Telephone Nigam Ltd. vs. Saroj Mahani Page 9 of 12 10 Industries Limited MANU/DE/1581/2006 Hon'ble High Court of Delhi has referred to the judgment of Hon'ble Supreme Court of India in United Bank of India v. Naresh Kumar AIR 1997 SC 3. In para 29 of the said judgment Hon'ble High Court of Delhi has held that 'it is no more resintegra that signing and verification of the plaint is different from filing the suit by a competent person.' It is further held that 'normally the court does not insist for such technicalities nor gives much weightage on account of technicalities. However, the question of authority to institute a suit on behalf of a company is not a technical matter. It often affects the policy and finances of the company and has far reaching effects, therefore unless a power to institute a suit is specifically conferred, a particular director or person, merely contending that a person is a constituted attorney, such a person will not have authority to institute a suit on behalf of the company. Needless to say, such a power can be conferred by the Board of Directors by passing a resolution in this regard.'
16. The Trial Court record shows that in the minutes of proceedings dated 01.10.2008 the appellant stated before the Court that witness (PW1) has been transferred to some other Department. Due opportunity was afforded to plaintiff to substitute another witness in place of PW1 and despite adjournment. No such witness was RCA 12/2009 Mahanagar Telephone Nigam Ltd. vs. Saroj Mahani Page 10 of 12 11 produced on the adjourned date of hearing on 02.12.2008. The opportunity was extended for another date and the case was adjourned to 20.01.2009 for the said purpose. The opportunity was not availed and no witness was present in PE and consequently on 20.01.2009 the PE was closed. On that day DE was also closed on the statement of counsel for defendant that she did not want to lead any evidence.
Thus the lackadaisical attitude of the appellant is writ large on the face of the record. Despite various opportunities to rectify the lacunae in its case, the appellant did not take the requisite steps to prove the authority to institute the suit.
17. Thus in view of the material on record and in the light of the law pronounced as aforesaid the appellant has failed to establish on record the authority to institute the suit. The appeal is therefore dismissed.
18. Decree sheet be drawn accordingly.
19. The TCR be sent back with a copy of this judgment.
20. File be consigned to Record Room.
Announced in the Open Court On this 07th day of March 2012 (MAN MOHAN SHARMA) ADJ (Central)12, Delhi RCA 12/2009 Mahanagar Telephone Nigam Ltd. vs. Saroj Mahani Page 11 of 12 12 RCA 12/2009 Mahanagar Telephone Nigam Ltd. vs. Saroj Mahani Page 12 of 12