Karnataka High Court
The Branch Manager, vs Shashikant Siddappa Timmapur, on 16 December, 2015
Bench: S.Abdul Nazeer, P.S.Dinesh Kumar
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IN THE HIGH COURT OF KARNATAKA
DHARWAD BENCH
DATED THIS THE 16TH DAY OF DECEMBER, 2015
PRESENT
THE HON'BLE MR.JUSTICE S.ABDUL NAZEER
AND
THE HON'BLE MR.JUSTICE P.S.DINESH KUMAR
W.A NO.100164 OF 2015
BETWEEN
1. THE BRANCH MANAGER,
ICICI BANK LTD., SHREE KRISHNA TOWER NO. 14,
KHANAPUR ROAD, RPD CROSS,
TILAKWADI, BELAGAVI-590 006.
2. THE CHAIRMAN & MANAGING DIRECTOR,
ICICI BANK LTD., LOANS AND
SECURITIES, 2ND FLOOR,
EMPIRE COMPLEX, 414,
SENAPATI BEPAT MARG,
LOWER PAREL (WEST),
MUMBAI - 400 013. ..... APPELLANTS
(BY SRI K.ANANDARAMA, FOR M/S POOVAYYA & CO.,
ADVOCATES)
AND
SHASHIKANT SIDDAPPA TIMMAPUR,
AGE:43 YEARS, OCC:BUSINESS,
R/O:"SIDDA-GANGA NIVAS",
CTS NO. 11758/B, SUBHASH GALLI
2ND CROSS, MAIN ROAD, OLD GANDHI NAGAR,
BELAGAVI - 590 016. ..... RESPONDENT
(BY SRI SHASHIKANT SIDDAPPA TIMMAPUR,
PARTY IN PERSON)
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THIS WRIT APPEAL IS FILED U/S.4 OF THE
KARNATAKA HIGH COURT ACT, 1961, PRAYING TO, SET
ASIDE THE IMPUGNED ORDER DATED 10.12.2014 IN
W.P.NO.84533/2013.
THIS APPEAL HAVING BEEN HEARD AND RESERVED
FOR JUDGMENT, THIS DAY, P.S.DINESH KUMAR.J.,
PRONOUNCED THE FOLLOWING:
JUDGMENT
This appeal has raised an interesting question with regard to statutory requirement of filing Board Resolutions under the Companies Act before the Registrar of Companies and issuance of certified copies by the said authority.
2. Appellant - ICICI Bank ('Bank' for short) has preferred this appeal challenging the Orders passed by the learned Single Judge dated 24.11.2014 and 10.12.2014 in W.P. No.84533/2013. Respondent herein had filed the said Writ Petition inter alia with a prayer to quash the order dated 03.10.2013 in Misc. Appeal.No.96/2012 on the file of I Addl. Senior Civil :3: Judge, Belagavi. After notice and appearance of appellant in the writ petition, learned Single Judge passed the following Order on 24.11.2014:-
"The learned counsel for the respondents-bank is directed to produce the certified copy of the resolution dated
03.05.2002 passed in 115th meeting of the ICICI Bank Ltd., and also resolution dated 30.10.2009 passed in its 166th meeting. The certified copy issued by the Registrar of Companies informing the date when such resolution was filed into the registry should also be produced within 10 days from today.
List this matter on 10.12.2014.
It is made clear that no further time will be granted."
3. It appears, appellants produced authenticated copies of resolutions of 115th & 166th meeting of the Bank under a memo dated 05.12.2014. Having noted that the said resolutions were not certified copies issued by the Registrar of Companies, the learned Single Judge by order dated 10.12.2015 directed the Registry to initiate contempt proceedings against the appellants by the following order:- :4:
"By order dated 24.11.2014, this Court had issued specific direction to the respondent ICICI Bank Ltd., for production of certified copy of resolution dated 03.05.2002 passed in its 115th meeting and also resolution dated 30.10.2009 passed in its 166th meeting. In compliance of the same, learned counsel for the respondents has filed a memo along with a letter issued by one of the officers of ICICI Bank Ltd., along with two resolutions said to have passed in its 115th and 166th meeting, which are not certified copies issued by the Registrar of Companies. Assuming for a moment, if the said resolutions are passed, the same would be filed into Registrar of Companies and certified copy of the same would be available, instead the respondents are trying to hoodwink the Court and thereby they have committed contempt of Court. Hence, the registry is directed to initiate contempt proceedings against respondents 1 and 2."
4. These two orders passed by the learned Single Judge are under challenge in this appeal.
5. Heard Sri K.Anandaram, learned Counsel for the appellants and respondent/party-in-person. :5:
6. Gravamen of appellants' case is that respondent had approached the Bank in the year 2006 to avail a loan of Rs.20,00,000/- against equity shares as security. Loan was sanctioned to him and respondent executed relevant documents. As per terms of sanction, respondent had agreed to maintain a security margin of 50% during the subsistence of loan. He had also agreed to repay monthly interest on regular basis. There was default on the part of respondent in repayment. Consequently, appellants sold some of the pledged shares belonging to the respondent and recovered a sum of Rs.65,131.90/- in the year 2007. Respondent filed various frivolous cases against the Bank one after the other. Appellants filed a Private Complaint PCR No.111/2012 alleging forgery and other offences before IV JMFC., Belagavi.
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7. In one of the cases filed by the respondent namely, O.S. No.152/2011 on the file of I Addl. Civil Judge & JMFC., Belagavi inter alia praying for a declaration that the interest charged by the Bank is illegal and for a direction to release all shares pledged by him, he had filed several interlocutory applications. I.A. No.1 was for release of pledged shares. An ex- parte order dated 23.02.2011 was passed thereon directing the Bank to release and transfer the securities pledged by the respondent to his DEMAT account. The said ex-parte order was challenged by the Bank in M.A.No.96/2012 before I Addl. Senior Civil Judge, Belagavi and the same was allowed and the matter was remitted back for re-consideration of I.A. No.1. The said order dated 03.10.2013 was challenged by the respondent before the learned Single Judge in the instant writ petition. :7:
8. In the course of proceedings, the learned Single Judge has passed the aforementioned two consecutive orders dated 24.11.2014 and 10.12.2014. Pursuant to the order dated 10.12.2014, suo-motu contempt proceedings in C.C.C.No.100068/2015 have been initiated. Appellants, aggrieved by the aforementioned two orders passed by the learned Single Judge, have preferred this appeal on several grounds urged in the memorandum of appeal.
9. Shri Anandaram, learned counsel for the appellants contended that the resolutions of 115th and 166th Board meetings were passed on 03.05.2002 and 30.10.2009 respectively. Under Section 192 of the Companies Act, 1956 ("the Act" for short), only certain categories of resolutions are required to be filed before the Registrar of Companies. Resolutions of 115th and 166th meeting were with regard to issuance of power of attorney to the officers of the Bank. Therefore, the :8: said Resolutions did not fall within the categories prescribed in Section 192 of the Act. Hence, the same was not filed before the Registrar of Companies. This aspect was not appreciated by the learned Single Judge, which resulted in passing the impugned orders. Accordingly, he prayed for allowing this appeal.
10. On the other hand, respondent/party-in- person supporting the impugned orders contended that every resolution is required to be filed before the Registrar of Companies and appellants have clearly violated the statutory requirement of the Act and the directions issued by the learned Single Judge. His contentions may be summarized as follows:
a) neither the contemnor nor the power of attorney holder, who were parties before the learned single Judge have filed the instant appeal. On the other hand, this appeal is presented by the Branch Manager and the same is not maintainable in law;:9:
b) leave of the Court is not sought to present this appeal.
c) the 115th and 166th resolutions have not been passed at all and therefore, they are not in existence.
He relied upon the following judgments in support of his case:
a) D.H.M.Framji v. Eastern Union Bank (1951 PUNJAB 371);
b) Kota Co-op. Agricultural Bank Ltd. V. State of Karnataka( AIR 2001 KAR 36);
c) U.Suresh Malya V. Okazaki Sekizai Co.Ltd., (2001 COMPANY CASES 354).
The sum and substance of appellants' case is that the resolutions in question were passed in the 115th and 166th Board Meeting of the Bank. The said resolutions do not fall within the categories prescribed under Section 192 of the Act and therefore exempt from mandatory requirement of filing them before the Registrar of Companies.
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The sum and substance of respondent's case is that in the first place, the 115th and 166th resolutions were not passed as claimed by the appellants and they are fabricated. Secondly, even if such resolutions were in existence, the same ought to have been filed before the Registrar of Companies as required under Section 192 of the Act. Therefore, the orders passed by the learned Single Judge is just and appropriate and do not call for any interference.
11. In the light of the pleadings and submissions of parties, following question arises for our consideration:
"Whether it is mandatory to file all resolutions passed by a Company incorporated under the provisions of the Companies Act, 1956 before the Registrar of Companies?
12. It is not in dispute that ICICI Bank is a 'company' registered under the Act and governed by : 11 : its provisions; in the 115th and 166th meeting of the Board of Directors of the Bank, the Bank had passed resolutions to appoint Power Agents/GPA Holder. As per the directions of this Court, the original minute book containing the Board Resolutions was made available and the same is perused by us. The resolutions passed in the said meetings read as follows:
"Copy of the Resolution passed by the Board at its 115th meeting held on Friday, May 3, 2002 v. Power of Attorney-
RESOLVED that ICICI Bank do execute a Power of Attorney in favour of such of the Officers of ICICI Bank and /or its subsidiaries/group companies as might be approved by any one of the wholetime Directors of ICICI Bank-
a) to sign and/or verify and/or file Plaints, Written Statements, Vakalatnamas, Affidavits, Petitions and all other documents on behalf of ICICI Bank connected with the legal proceedings filed by or against ICICI Bank or in which ICICI Bank is or may hereafter be a party or to protect its interest may wish to be impleaded as a party and whether ICICI Bank is acting for itself and/or as Constituted Attorney of any one or more institutions/banks;: 12 :
b)to execute on behalf of ICICI Bank, acting for itself and/or as Constituted Attorney of any one or more institutions, Agreements/Arrangements (tri[partite or otherwise) whereby the proceeds out of the securities offered by borrowers are share on pari passu basis or on a prior or subordinate basis between institutions/banks as also to execute Contributory or Joint Mortgage Deeds;
c) to sign on behalf of ICICI Bank, Documents of Release and/or Reconveyance in favour of mortgagors of the mortgaged properties or any part thereof upon discharge by mortgagors of all their obligations secured by the mortgage and/or upon decision to release the whole or part of the mortgaged property and whether ICICI Bank is acting for itself and/or as Constituted Attorney of other institutions/banks; and
d)to sign, execute, and complete for and on behalf of ICICI Bank, all Trust Deeds, Supplemental Trust Deeds, Trusted Agreements and all other deeds, documents and writings in connection with ICICI Bank acting as Debenture/Security Trustee, or any modifications thereof/thereto.
RESOLVED FURTHER that the Common Seal of ICICI Bank be affixed to the stamped engrossments of such Power of Attorney in the presence of any one Director and Mr.Balaji Swaminathan, Chief Financial Officer or Mr.Jyotin Mehta, General Manager & Company Secretary or Mr.Nilesh Trivedi, Assistant Company secretary or Mr.R.K.Saxena Chief Manger, who do sign the same in token thereof. "
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"Copy of the Resolution passed by the Board at its 166th meeting held on October 30, 2009 at Mumbai Common Seal of ICICI Bank be affixed on Power of Attorney for legal matters RESOLVED that, in partial modification of the resolution passed by the Board at its Meeting held on May 3, 2002 the Common Seal of ICICI Bank be affixed to the stamped engrossments of such Power of Attorney in the presence of any one Director and officials in the rank of Assistant General Manager and above in the Secretarial group, who do sign the same in token thereof.
RESOLVED FURTHER that all other terms and conditions continue to be as per the Resolution passed by the Board at its Meeting held on 3,2002 vide items no.V of the annexure to the Minutes"
13. Under Section 192 of the Act, a Company registered under the Act has a statutory obligation to file copies of resolution with the Registrar of Companies. Section 192 reads as follows:
192. REGISTRATION OF CERTAIN RESOLUTIONS AND AGREEMENTS (1) A copy of every resolution (together with a copy of the statement of material : 14 : facts annexed under section 173 to the notice of the meeting in which such resolution has been passed) or agreement to which this section applies shall, within thirty days after the passing or making thereof, be printed or typewritten and duly certified under the signature of an officer of the company and filed with the Registrar who shall record the same.
(2) Where articles have been registered, a copy of every resolution referred to in sub- section (1) which has the effect of altering the articles and a copy of every agreement referred to in that sub-section for the time being in force shall be embodied in or annexed to every copy of the articles issued after the passing of the resolution or the making of the agreement.
(3) Where articles have not been registered, a printed copy of every resolution or agreement referred to in sub-section (1) shall be forwarded to any member at his request, on payment of one rupee (4) This section shall apply to Page 99 of 332
(a) special resolutions ;
(b) resolutions which have been agreed to by all the members of a company, but which, if not so agreed to, would not have been effective for their purpose unless they had been passed as special resolutions ;
(c) any resolution of the Board of directors of a company or agreement executed by a company, relating to the appointment, re-appointment or renewal of : 15 : the appointment, or variation of the terms of appointment, of a managing director ;
(d)1[***]
(e) resolutions or agreements which have been agreed to by all the members of any class of shareholders but which, if not so agreed to, would not have been effective for their purpose unless they had been passed by some particular majority or otherwise in some particular manner ; and all resolutions or agreements which effectively bind all the members of any class of shareholders though not agreed to by all those members ;
(ee) resolutions passed by a company -
(i) according consent to the exercise by its Board of directors of any of the powers under clause (a), clause (d) and clause (e) of sub-section (1) of section 293 ; (ii) approving the appointment of sole selling agents under section 294 or section 294AA ;
(f) resolutions requiring a company to be wound up voluntarily passed in pursuance of sub-section (1) of section 484 ; and
(g) copies of the terms and conditions of appointment of a sole selling agent appointed under section 294 or of a sole selling agent or other person appointed under section 294AA.
(5) If default is made in complying with sub-section (1), the company, and every officer of the company who is in default, shall be punishable with fine which may extend to 2 [two hundred] rupees for every day during which the default continues. : 16 :
(6) If default is made in complying with sub-section (2) or (3), the company, and every officer of the company who is in default, shall be punishable with fine which may extend to 3 [one hundred] rupees for each copy in respect of which default is made.
(7) For the purposes of sub-sections (5) and (6), the liquidator of a company shall be deemed to be an officer of the company.
(underlining is by us)
14. A Company registered under the Act is duty bound to conduct periodical meetings of the Board as required under Sec. 285 of the Act and to record the resolutions passed in the minute book as required under Section 193 of the Act.
15. The resolution of Board of Directors which requires to be filed before the Registrar of Companies is traceable to Sec. 192 (4) (c). Perusal of the said provision extracted hereinabove, makes it clear that if a resolution of the Board of Directors is in connection : 17 : with the appointment of a managing director and matters incidental thereto, then, the same is required to be filed before the Registrar Companies. In the instant case, the resolution is in connection with appointment of a power agent and affixing of common seal. Therefore, the said resolutions clearly stood excluded from mandatory compliance of Section 192 of the Act to file copies thereof before the Registrar of Companies.
16. We shall now examine the submissions of the respondent.
a. Re: neither the contemnors nor parties before the learned single Judge have filed the instant appeal & leave of the Court was not:
This appeal is presented by the Bank and it's chairman. Bank is a company registered under Companies Act and therefore, a body corporate and a juristic person. It can appoint more than one power agent to act on it's behalf. It is not required in law for the very same employee / power agent to attend to a : 18 : particular litigation at all times to come. So long as the person filing this appeal had proper authority in law, the appeal shall be proper and maintainable.
Consequently, leave of this court was un-necessary file this appeal.
b) Re: that 115th and 166th resolutions have not been passed at all & they are fabricated :
In compliance with the directions of this court, original resolutions were made available for perusal.
We have perused them and are satisfied that original resolutions are maintained in accordance with law in bound volumes. The respondent was also permitted to peruse them. Therefore, the contention of the respondent that the resolution in question are fabricated is untenable and deserves to be rejected.
17. We have carefully examined all the three judgments cited by the respondent. In, D.H.M.Framji v. Eastern Union Bank (1951 PUNJAB 371) it is held : 19 : that if the power of attorney is not signed by the managing director, then the same is not valid. It is relevant to note that the issue which needs to be answered in this appeal is whether, a resolution of the board dealing with issuance of power of attorney is required to be filed with before the Registrar of Companies. Hence the said judgement is not applicable to the facts of this case. In Kota Co-op. Agricultural Bank Ltd. V. State of Karnataka (AIR 2001 KAR 36), this court was dealing with the issue concerning an advocate instructing/engaging another advocate to appear. In U.Suresh Malya V. Okazaki Sekizai Co.Ltd., (2001 COMPANY CASES 354) the issue was whether agency constituted gets terminated automatically. Hence these two judgements also do not lead the case of respondent any further.
18. This matter was heard for nearly 90 minutes. After arguing the matter till the last minute : 20 : before the day coming to close, the respondent attempted to make out one another point that the copy of power of attorney filed in this appeal is not made available to him and therefore, this appeal must be rejected. Keeping in mind that respondent is a party-in- person, we granted an extra leverage to him and permitted him to peruse the same. In addition, we have also gone through the vakalatnama and the copy of power of attorney granted in favour of one Purba Roy dated 09.02.2012 and satisfied that he is authorized to file this appeal and represent the bank.
19. In the circumstances, we are of the considered view that a resolution passed in the meeting of board of directors of a company concerning grant of power attorney and affixing common seal of the company do not fall under Sec. 192 of the Companies Act 1956. Hence 115th and 166th : 21 : resolutions of appellant bank were not required to be filed before the Registrar of Companies.
In the result, this writ appeal is allowed. Orders passed by the learned single judge dated 24.11.2014 and 10.12.2014 in W.P. No: 84533/2013 are set aside. All the other contentions are kept open for decision in the writ petition. No costs.
Sd/-
JUDGE Sd/-
JUDGE Rsh