IN THE HON’BLE HIGH COURT OF HIMACHAL PRADESH, SHIMLA. OSA No.2 of 2004. Judgment Reserved on:19.03.2010. Date of decision : June 4.2010 M/s.Ranbaxy Laboratories Limited …Appellant Versus Jerath Electronics …Respondent Coram: The Hon’ble Mr. Justice Dev Darshan Sud, J. The Hon’ble Mr. Justice Kuldip Singh, J. Whether approved for reporting?1Yes For the Appellants: Mr.Raman Sethi, Advocate. For the respondent: Mr.B.N. Mishra, Advocate. Dev Darshan Sud, J. This appeal has been preferred by the plaintiff whose suit was dismissed by the Hon’ble Single Judge on the ground that the suit instituted by the plaintiff was not maintainable as it has not been properly constituted. 2. The plaintiff instituted the suit for recovery of Rs.25,51,700/- with costs and future interest at the rate of 24% per annum on the allegation that it wanted to install a TOC Analyzer at its plant situated at village Ganguwala, Tehsil Paonta Sahib, District 1 Whether Reporters of Local Papers are allowed to see the judgment? yes 2 Sirmaur in Himachal Pradesh. The defendant-respondent agreed to supply TOC analyzer of STIP make. Purchase order Ex.PW-2/B was placed upon the defendant by the plaintiff stating that the consideration would be Rs.17 lacs and the defendant was to install and commission this Analyzer. 50% of the agreed price was payable to the defendant with the order which amount was infact paid. 40% of the amount was payable against proof of dispatch of the Analyzer and the balance 10% after installation. Receipt of 90% of the consideration amount of Rs.17 lacs is not disputed. Plaintiff claims non-performance of the contract had sued for breach of contract for a decree for a sum of Rs.25,51,700/- for the suit amount. 3. The Court settled 11 issues on the pleadings of the parties. Issue No.1 dealt with limitation, issue No.5 was, whether a valid agreement had been executed for supply of a TOC analyzer of STIP make, issue No.6, whether the defendant had failed to supply the equipment within stipulated time and issue No.8, that the plaintiff was entitled to refund of Rs.15,30,000/-, were decided in favour of the plaintiff. In other words the defence set up by the defendant was not accepted. Issue No.7 dealing with the fact as to whether the supply order was validly cancelled was held in favour of the plaintiff. Issue No.9 as to whether the plaintiff was entitled to damages as claimed, again this issue has been decided 3 in favour of the plaintiff. On the issue as to whether the suit was bad for non-joinder of necessary parties, the defence taken by the respondent-defendant was rejected. Issue Nos. 2 and 4 which deal with the properly constitution of the suit and as to whether Shri S.K. Patwari was entitled to file it, were found in favour of the defendant and the suit was dismissed. In other words, the overall aspect of damages and entitlement of the plaintiff-appellant for damages etc., the finding is in favour of the plaintiff- appellant. It is only on the question of maintainability that the suit has been dismissed. The plaintiff-appellant is now in appeal. 4. During the appeal, application under Order 41 Rule 27 of the code of Civil Procedure was filed by the appellant praying for permission to lead additional evidence. Evidence of PW-2 Shri S.K. Patwari was recorded. 5. At the outset we may observe that the approach of the Hon’ble Single Judge has been very technical. In Union Bank of India vs. Naresh Kumar and Others, (1996)6 SCC 660, the Supreme Court holds:- “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 4 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 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 5 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.” (Emphasis added) page Nos.663 & 664 6. The Hon’ble Single Judge does not consider the provisions of Order 29 of the Code of Civil Procedure (hereinafter referred to as the `Code’) which 6 authorizes the Principal Officer of a Company to institute the suit. Order 29 provides:- “29. Suits by or against Corporations: 1. Subscription and verification of pleading.-In suits by or against a corporation, any pleading may be signed and verified on behalf of the corporation by the secretary or by any director or other principal officer of the corporation who is able to depose to the facts of the case. 2. Service on corporation.- Subject to any statutory provision regulating service of process, where the suit is against a corporation, the summons may be served- (a) On the secretary, or on any director, or other principal officer of the corporation, or (b) By leaving it or sending it by post addressed to the corporation at the registered office, or if there is no registered office then at the place where the corporation carries on business. 3. Power to require personal attendance of officer of corporation. - The Court may, at any state of the suit, require the personal appearance of the secretary or of any director, or 7 other principal officer of the corporation who may be able to answer material questions relating to the suit.” 7. In South India Corporation (Agencies) Private Ltd. Madras vs. State Trading Corporation of India Ltd., Cochin, AIR 1970 Kerala 138, the Court interpreting this order holds:- “5. … … … … Apart from all this, Order 29, Rule 1, C.P.C. is but permissive and not mandatory. A plaint by a company may be signed by one or the other of the persons mentioned in the rule, “But” as Mulla points out at page 1340 Vol.2. C.P.C.: “This does not exclude Order 6 R.14, and as a Company is unable to sign itself the words `good cause’ in the latter rule enable a Company to authorize a person to sign a plaint on its behalf.” Therefore, even if Sundra is not the principal Officer of the Company he may still validly sign pleading provided he is a person duly authorized to sign it or to sue on behalf of the plaintiff. Thus a mere authorization by the plaintiff-Corporation was enough to make Sundra’s signature sufficient in law. I may also mention that it has been held, as Mulla points out at page 1342 of the same book: 8 “In the case of registered company an affidavit is not necessary and a statement in the plaint or written statement of the company that a person is the principal officer and able to depose to the facts of the case is sufficient….” From all this, it would appear that the objection taken is purely technical and, even if found sound, could be easily overcome by appropriate amendment of the plaint. After all, the plaintiff has been described in unmistakably clear terms and there is no dispute about the identity of the plaintiff. In such circumstances, it is only reasonable to hold that the amendment sought for by the defendant merely raises a contention which is purely technical or useless and of no substance. Says Mulla: “If after the evidence for the plaintiff has been taken, the defendant applies for an amendment merely for the purpose of enabling him to raise a purely technical objection to the plaintiff’s right to sue, the application should be refused”. Again, the learned author observes: “As the object of the present rule is to enable the real questions in dispute to be 9 raised on the pleadings, leave to amend should be refused to ...the defendant, where the proposed amendment would not help him in supporting his defence.” (At page Nos.140 & 141) 8. Similarly, in Ramachandran vs. Cardamam Marketing Co., 1988(2) K.L.T. 860, the question regarding validity of plaint instituted by an Officer on behalf of the Company was considered by the Kerala High Court in detail. The Court holds:- “7. Rules 14 and 15 of Order VI C.P.C. regulate the requirements regarding signing and verifying the pleadings generally. A Corporation can take the advantage of these provisions and have its pleadings signed and verified by a duly constituted agent as observed by a Division Bench of this Court; vide Kottayam Bank vs. Ahmed Kannu Rawther (AIR 1957 Ker.164). The division Bench held so because according to the Division Bench Order 29 Rule 1 which prescribes the mode that should be adopted in regard to signing and verifying of pleadings on behalf of corporation is only permissive in nature. Order 29 rule 1 reads:- 1. Subscription and verification of pleading. In suits by or 10 against a corporation, any pleading may be signed and verified on behalf of corporation by the secretary or by any director or other principal officer of the corporation who is able to depose to the facts of the case”. This provision says that any one of the persons described therein is competent to sign and verify the pleadings on behalf of the corporations. The further requirement that is insisted upon is that the person who signs and verifies the pleading must be one who is able to depose to the facts of the case. 8. From the facts stated supra it may perhaps be difficult to hold that Sri. Ananthasivan who has signed and verified the pleadings, is a duly constituted agent of the company. But it is clear that he is one who is able to depose to the facts of the case pleaded. In this context it is relevant to note that it is not the case of the defendant that he is not one who is not able to depose to the facts stated in the pleadings. For that matter the defendant has no case that at the time in question any one else was doing any act of management and therefore it is only fair to 11 presume that the person who has signed and verified the pleadings is the person, best of all others, to depose to the facts pleaded. The complaint of the defendant however, is that in his capacity as Secretary Sri. Ananthasivan is incompetent to sign and verify the pleadings because his appointment as Secretary has not been approved by the Central Government. May be that his appointment has not so far been approved by the Central Government. But the fact remains that he has been managing the affairs of the company even to the knowledge of the defendant; and “as such, it can safely be opined without the fear of contradiction that he is able to depose to the facts of the case pleaded. If that be the position he can at least be treated as the principal officer of the company if not its Secretary, competent to sign and verify the pleadings on behalf of the company. The object of the provisions regarding the verification of the pleadings is just to make sure that the person who signs and verifies the pleadings must be one who can depose to the facts of the case. I am fortified in this view by a decision of the Privy Council in The Delhi and London Bank Ltd. vs. Oldham (20 Indian Appeals 139) 12 (See also United Bank vs. P.C. Deb, A.I.R.1977 Cal.55, A.I.R. v. Ramchand (A.I.R.1961 Bom.292). The contention of the defendant that the pleadings have not been signed and verified properly and as such the suit has not properly been instituted is liable to be rejected.” (Emphasis supplied) Page Nos.861 & 862. 9. To similar effect is the decision of the Division Bench of Andhra Pradesh High Court in M. Iqbal & Company, Hyderabad & Ors. vs. Someswara Cements Chemicals Limited, Hyderabad, 1999(1) CCS 438 (A.P.), the Court holds:- “8. The plaintiff is a Company incorporated under the Companies Act. Under Order 29, Rule 1 C.P.C. pleadings can be signed and verified on behalf of the corporation by the Secretary or by any Director or even by the principal Officer of the corporation. Therefore, is it clear that the Secretary of the company is competent to sign and verify the pleadings. That apart, P.W.1 who is the Secretary of the Plaintiff-Company at the time of his deposition stated that Sri B. Madhusudhana Rao was the Secretary of the Company at the time of filing the suit. Therefore, the objection that the suit is not maintainable on this ground cannot be sustained.” (At Page Nos.440 & 441). 13 10. We find from the evidence on record of PW-1 Shri S.K. Patwari that he had been working as Company Secretary since 1996 and that the Company has been incorporated and registered under the Companies Act. There is no challenge to his appointment as such and even when he appeared in appeal tendering additional evidence no challenge was made to his appointment. Ex.A-1 which was produced in appeal clearly stated that Shri S.K. Patwari had been appointed as Company Secretary w.e.f. 21st September, 1995. The suit was filed on 23rd February, 2004. There is no evidence to show that he had either ceased to be Company Secretary on the day when the suit was instituted. 11. Learned counsel appearing for the respondent- defendant places reliance on the judgment of Calcutta High Court in Mohan Lal Mittal and Others vs. Universal Wires Ltd. and Others, 1983, Volume 53, Company Cases, 36, to urge that petitions under Sections 397 and 398 of the Act cannot be presented by the Company Secretary. The ratio of this judgment is not attracted to the facts of the present case as we are not dealing with civil cases under the Companies Act. 12. To similar effect is the judgments relied upon by the learned counsel in M/s. Nibro Limited vs. National Insurance Co. Ltd, AIR 1991 Delhi 25 and Bepin Chandra Mandal and Others vs. Emperor, AIR 1928 Calcutta 444. These judgments are distinguishable on their facts. 14 We, therefore, set aside the judgment of the Hon’ble Single Judge holding that the suit was not validly constituted. We find that PW-1 Shri S.K. Patwari was Company Secretary of the Company and was, therefore, in law authorize to have filed the suit. The objection raised by the defendant is purely technical. The appeal is accordingly accepted and the suit of the plaintiff is decreed for an amount of Rs.15,30,000/- (Rupees Fifteen lakhs thirty thousand only) as held by the Hon’ble Single Judge. It shall carry interest at the rate of 6% per annum from the date of suit till its realization. Let a decree in these terms be drawn up. (Dev Darshan Sud) Judge. June 4, 2010. (Kuldip Singh) (aks) Judge.