Himachal Pradesh High Court
Mandi Transport Co. Ltd. vs Himachal Pradesh Administration And ... on 29 May, 1957
JUDGMENT
Ramabhadran, J.C. (1) This is a plaintiffs' appeal against the judgment and decree of the learned District Judge of Mandi in Civil Suit No. 1 of 1952. It arises under the following circumstances: The plaintiffs, the Mandi Transport Company Limited, were incorporated in the erstwhile Mandi State, in 1939. It possessed 27 motor vehicles and it was running passenger and goods services on different routes in Mandi State.
On 1-7-1949, i.e. subsequent to the merger of Mandi State in Himachal Pradesh, the District Magistrate of Mandi, by means of an order under Section 10 of the Punjab Public Safety Act, 1947, as applied to Himachal Pradesh, requisitioned 20 of the above vehicles for a period of six weeks and placed them at the disposal of the General Manager, Himachal Government Transport. By means of the same order, the District Magistrate fixed a sum of Rs. 10/- as daily hire charges for each vehicle.
From 2-7-1949, the Himachal Pradesh Government started running its own transport services on the routes formerly used by the plaintiff-Company, and for that purpose, made use of the requisitioned vehicles. The period of requisition was extended by the District Magistrate, from time to time. Eventually, on 10-11-1949, sixteen, out of the twenty vehicles, were returned to the plaintiffs and the remaining four on 10-12-1949.
(2) The plaintiffs' case was that the requisition orders were illegal and ultra vires and the daily hire of Rs. 10/- per vehicle was unduly low. According to them, the daily hire should have been, at least, Rs. 20/- per vehicle. The plaintiffs also claimed compensation, because, as a result of the requisitioning order, their route permits were cancelled and their business came to a standstill.
(3) Another claim, put forward by the plaintiffs, was that their vehicles were seriously damaged during the time they remained under requisition. Consequently, they claimed compensation on that score also.
(4) In all, the plaintiffs claimed a total sum of Rs. 87,589/7/- from the defendants.
(5) The suit was resisted by the defendants, inter alia, on the following grounds : (a) The suit was barred by the provisions of S 43 of the Punjab Public Safety Act. 1947, as applied to Himachal Pradesh. (b) The suit was bad because it had been instituted by only one out of several liquidators of the plaintiffs, (c) The suit was time barred, (d) The requisition orders were perfectly legal and intra vires and were binding on the plaintiffs. The daily hire of Rs. 10/- per vehicle fixed by the District Magistrate was quite reasonable, (e) The plaintiffs were not entitled to any compensation on account of the cancellation of route permits, (f) No damage was caused to the plaintiffs' vehicles, as a result of negligence on the part of the defendants and their servants.
(6) Out of these pleadings, as many as 11 issues were framed by the learned trial Judge. After going into the evidence of the parties and hearing the arguments of their counsel, the learned District Judge has come to the following conclusions : (A) The suit was not barred under the provisions of Section 43 of the Punjab Public Safety Act, 1947, as applied to Himachal Pradesh. (B) The suit was incompetent, because it had been instituted by only one liquidator, Shri Mahendra Singh, although there were several liquidators. (C) The suit was within time. (D) The orders of requisition were legal and intra vires, but the District Magistrate had no power to fix the rate of daily hire. (E) The plaintiffs were entitled to a sum of Rs. 29,400/- as compensation for the cancellation of the route permits. (F) the plaintiffs failed to prove that the vehicles were damaged on account of negligence of the defendants and their servants.
(7) The learned District Judge non-suited the plaintiffs in view of his finding that the suit was incompetent, because it had been instituted by only one, out of several liquidators.
(8) Hence, this appeal by the plaintiffs. I may point out that in the appeal, the plaintiffs have confined their claim to a sum of Rs. 20,000/- and abandoned the rest of their claim.
(9) Arguments of the learned counsel for the parties were heard on 23rd and 24th 'instant. For reasons to be stated shortly, the appeal fails, except in the matter of a part of the costs of the suit.
(10) Learned counsel for the appellants, argued, vehemently, that the finding of the learned District Judge on issue No. 3 is erroneous and cannot be maintained. This issue runs as follows :
"Whether Shri Mahendra Singh has been properly authorized and is competent to file this suit on behalf of the plaintiffs? O. P. plaintiff".
(11) Shri D. R. Chaudhary, Advocate, for the appellants, urged that although the suit was instituted by Shri Mahendra Singh, liquidator, nevertheless, he was authorized to do so by the remaining liquidators and, consequently, the Court should hold that the suit had been filed by more than one liquidator. My attention was also invited to the fact that the plaint had been signed by Shri Besar Ram, Pleader another liquidator. I was, therefore, requested to hold that the suit had been filed by two liquidators.
(12) Neither of these pleas can, however, be accepted. As the learned counsel for the respondents rightly pointed out, Ext. P-C, which is a copy of the resolution, passed by the Board of Liquidators of the plaintiff-Company on 13-1-1952, merely shows that Shri Mahendra Singh, liquidator, was authorized to file a suit on behalf of the Company. It goes without saying that a resolution passed by the Board of Liquidators, is not the same thing as a resolution passed at a meeting of the shareholders.
Moreover, under Section 212 (3) of the Indian Companies Act, 1913, read with Section 179 (a) of that Act, a suit of the present kind must be instituted by, at least, two liquidators. That is the position under the Indian Companies Act, 1956, also, vide Section 512 (4), read with Section 457 (a) thereof. The learned District Judge has rightly pointed out that the Board of Liquidators could not authorize Shri Mahendra Singh to do a thing which the law forbids, i.e. they could not legalise the filing of a suit by a single liquidator, where the law requires that the suit should be filed, at least, by two liquidators. Consequently, the resolution, Ext. P-C, will not help the appellants.
(13) We now come to the other argument, namely, that since Shri Besar Ram had signed the plaint, as a pleader, the suit should be deemed to have been filed by two liquidators. Learned counsel for the respondents invited my attention to the contents of para 1 of the plaint as well as to paragraph 1 of the written-statement. Paragraph 1 of the plaint is to the effect that the plaintiff-Company had gone into voluntary liquidation and Shri Mahendra Singh, one of the liquidators, being conversant with the facts of the case, had been authorized to file the suit.
Paragraph 1 of the written-statement is to the effect that Shri Mahendra Singh was not the sole liquidator and the defendants did not know whether he was duly authorized to file the suit. Under these circumstances, the mere fact that Shri Besar Ram had signed the plaint, as a pleader, along with Sarvashri Kedar Ishwar and T. P. Vaidya, Advocates, would not change the situation.
(14) Shri Chaudhary, for the appellants, then submitted that the act of Shri Mahendra Singh in filing the suit had been ratified by the other liquidators and, therefore, the defect, if any, has been cured. He cited the following authorities: 1. Dahyabhai Girdhardas v. Bobaji Dahyaji, AIR 1953 Bom 28 (A). There, the facts were that the plaint was signed by the plaintiff's son, who was described therein as kulmukhtyar. Later on, it turned out that the son had no proper authority to sign the plaint. The plaintiff applied for permission to sign the plaint. Under those circumstances, Chagla, C. J., held that :
"A plaint signed by the son of the plaintiff, who had no proper authority to sign it on behalf of the plaintiff, can be allowed to be amended at a later stage by allowing the plaintiff to sign irrespective of the bar of limitation, inasmuch as the defect is merely formal." ' Learned counsel for the respondents rightly pointed out that this ruling has no application to the facts of the present case. It is not as though the suit was validly instituted by two liquidators and one of them forgot or omitted to sign the plaint. The suit, in the present form, was ab initio bad, and, consequently, the defect cannot be cured by permitting any liquidator to sign the plaint.
2. Kirpal Chand v. Traders Bank Ltd., Jammu, AIR 1954 J & K 45 (B). There, the facts were:
"A plaint, in a suit filed on behalf of a Bank, was signed and verified by its manager who, under the Articles of Association of the Bank, was authorized, with the previous sanction of the directors, to take legal proceedings to recover the dues of the Bank. He did not hold any power of attorney on the date of the suit. On an objection by the defendant, an amended plaint was filed by the Bank stating that the Bank had, by its resolution, confirmed and ratified the Manager's action. The Court allowed the amended plaint." On revision being taken to the High Court, Shahmiri, J., held that:
"As the initiative to institute the suit could be properly transferred to the Manager under the Articles of Association, the subsequent ratification of the act of the agent by the principal could cure the original defect."
This ruling, again, has no application to the facts of the present case. In the Kashmir case under the Articles of Association of the Bank, the Manager was authorized to take legal proceedings with the previous sanction of the directors. He did not, however, hold any power of attorney on the date of the suit. The Bank, by a resolution, ratified the Manager's action. Therefore, there was no statutory bar as operates in the present case (the bar contained in Section 212 (3) of the Indian Companies Act, 1913).
3. Fuli Bibi Mt. v. Khokai Mondal, AIR 1928 Cal 537 (C). There, with reference to a suit filed by a minor without a next friend, a Division Bench of that High Court observed that :
"Proceedings in a suit instituted by a minor, and not by the minor's next friend in his name, are not void. The policy of the legislature in enacting Order 32 was that where a minor has instituted a suit in his own name the proceedings, in normal cases, should not be treated as abortive, but that an opportunity should be given to constitute the suit in the regular manner. Order 32, Rule 1, is intended for the protection and benefit of the defendant.
But the ground upon which the protection is afforded to the defendant in a suit instituted by a minor is removed, when the defendant at all material times is aware or has received notice, of the minority of the plaintiff and yet elects to proceed to trial and take his chance of obtaining a decree in his favour on the merits without raising any objection to, or issue upon, the maintainability of the suit and prefers the objection for the first time, on appeal, when the trial has gone against him."
Learned counsel for the respondents rightly pointed out that no analogy can be drawn between a suit instituted by a minor without a next friend and the present suit. I agree that no such analogy can be drawn.
4. Wali Mahomed Khan v. Ishak Ali Khan, AIR 1931 All 507 (D). There, the facts were that a suit was filed in the name of a supposed minor through his mother, acting as his guardian, and describing him as a minor. In fact, the plaintiff was a major. Under those circumstances, a Special Bench of the Allahabad High Court held that :
"The suit cannot be thrown out, on the technical ground that the plaint, as originally filed, described him as a minor under the guardianship of his mother. Defect in its form should be cured if it is due to a bona fide mistake."
Here, again, I agree with the contention of the learned counsel for the respondents that the facts of the present case, being altogether different, this ruling will not help the plaintiffs.
(14a) Learned counsel for the respondents rightly urged that no question of ratification arises here, because the original act, i.e., the filing of the suit by one liquidator was ab initio illegal. He cited Notified Area Committee, Okara v. Kidar Nath, AIR 1935 Lab. 345 (E), referred to by the Court below, wherein Addison and Din Mohammad, JJ., with reference to a case arising out of the Punjab Municipal Act, held that :
"The Notified Area Committee cannot delegate its powers to its Secretary by a general resolution without reference to any particular case to institute civil suit on its behalf. The action of the Committee in so doing is ultra vires and cannot be validated by ratification as an illegal act cannot be legalised."
On the same analogy, it can very well be said here, that the filing of the present suit by one liquidator, out of several, cannot be legalised, because Section 212 (3) of the Indian Companies Act 1913 expressly lays down that such a suit should be instituted by, at least, two of the liquidators.
(15) During the course of arguments, an application purporting to be under Order 6, Rule 17 and Section 151, Civil P. C., was put in by learned counsel for the appellants, wherein I was requested to permit another liquidator to sign the plaint. This petition was vigorously opposed by the learned counsel for the respondents. Mr. Chaudhary submitted that the defect, if any, in the plaint was one of procedure and justice should not be denied to his clients on that account. He cited Sangram Singh v. Election Tribunal, Kotah, (S) AIR 1955 SC 425 (F), wherein their Lordships of the Supreme Court observed that :
"A Code of Procedure must be regarded as such. It is procedure something designed to facilitate justice and further its ends : not a penal enactment for punishment and penalties; not a thing designed to trip people up. Too technical a construction of sections that leaves no room for reasonable elasticity of interpretation should therefore be guarded against (provided always that justice is done to both sides) lest the very means designed for the furtherance of justice be used to frustrate it."
(16) Mr. Vaidya, for the respondents, rightly pointed out that this is not a question of procedure. The law lays down that the suit of the present kind should be instituted by, at least, two liquidators. Section 212 (3) of the Indian Companies Act, 1913, would have been enacted in vain, if its mandatory provisions can be ignored on the ground of hardship, or as merely procedural. Mr. Vaidya cited Vedakannu Nadar v. Nanguneri Taluk Singikulam Annadana Chatram, AIR 1938 Mad 982 (G).
There, Abdur Rahman, J., held that the plaintiffs could not continue the suits in the absence of the heirs of one Alagappa. A prayer was then made on behalf of the plaintiffs that Alagappa's heirs be impleaded and the case remanded for fresh trial. The prayer was refused by Abdur Rahman, J., since, in his opinion, prejudice would be caused to other side and the question of limitation would arise and further the plaintiffs had been negligent. In the same way, I may point out that the suit, out of which this appeal has arisen, was instituted on 18-1-1952. Written-statement was filed on 16-1-1953.
Issues were framed on 25-2-1953. Issue No. 3 distinctly refers to the question as to whether Shri Mahendra Singh was competent to file the suit. It apparently never occurred to the plaintiffs to ask for amendment of the plaint till 24-5-1957 i.e. during arguments in this Court. During the course of this judgment, I have pointed out that it is not a question of one of the liquidators having forgotten or omitted to sign the plaint.
If the suit had been validly instituted by two liquidators and one of them had forgotten to sign the plaint, then, the Court might have well exercise its discretion in favour of the plaintiffs and permitted the other liquidator to sign the plaint. But that is not the case here. The suit was filed on behalf of the Company by one liquidator and that fact cannot be altered by means of an application, purporting to be under Order 6, Rule 17. Under these circumstances, the application is rejected.
(17) In view of all that has been said, above, I concur with the view of the Court below that the suit was incompetent and, accordingly, hold that it was rightly dismissed.
(18) It was further argued by Shri Chaudhary, for the appellants, that the requisition orders were illegal and inoperative as the Punjab Public Safety Act, 1947, expired in the Punjab on 20-3-1949. Shri Vaidya, for the respondents, on the other hand, contended that the mere fact that the Act had ceased to be in force in the Punjab would not automatically have the effect of abating it in Himachal Pradesh also. I do not, however consider it necessary to go into this question, because I have already held that the suit was incompetent.
(19) There remains the question of costs. The learned District Judge has dismissed the suit with full costs (the plaintiffs have been: directed to pay a sum of Rs. 1,035/- as costs to the defendants). Considering (as already shown) that, on several issues, the District: Judge found in favour of the plaintiffs and the suit failed on account of the bar contained in Section 212 (3) of the Companies Act, 1913, I am of the opinion that it would be equitable to saddle the plaintiffs with only one half of the defendants' costs.
Similarly, in this appeal, the plaintiffs have-confined their claim to a sum of Rs. 20,000/-. Arguments here were directed mainly on Issue No. 3. The plaintiffs have spent considerable sums by way of court-fees etc. Therefore, in dismissing the appeal, I would direct the appellants to bear only one half of the respondents' costs.
ORDER (20) The appeal is allowed to this limited extent that the plaintiffs-appellants will be liable to pay only one half of the costs of the defendants-respondents in the trial Court. In other respects, the appeal is rejected. The order, dismissing the suit, will stand. As regards the costs of appeal, my order is that the appellants will pay one hall of the respondents' costs here.