Case: Panchanan Dhara &amp; Others Vs. Monmatha Nath Maity (dead) thr. L.Rs. &amp; Another

as all the courts have arrived at a finding of fact that the period for execution of the deed of sale had been extended. 32. Similarly, the applicability of the provisions of Section 29 of the Indian Contract Act having not been raised, the same cannot be permitted to be raised for the first time before this Court. Even otherwise we do not see, on a plain reading of the said agreement of sale deed 18.4.1971, that the terms thereof were uncertain or vague so as to attract the provisions of Section 29 of the Indian Contract Act. 33. Sections 46 and 48 of the Companies Act, read as under: "46. Form of contracts - (1) Contracts on behalf of a company may be made as follows:- (a) a contract which, if made between private persons, would by law be required to be in writing signed by the parties to be charged therewith, may be made on behalf of the company in writing signed by any person acting under its authority, express or implied and may in the same manner be varied or discharged. (b) a contract which, if made between private persons would by law be valid although made by parole only and not reduced into writing, may be made by parole on behalf of the company by any person acting under its authority, express or implied, and may in the same manner be varied or discharged. (2) A contract made according to this section shall bind the company. 48. Execution of deeds (1) A company may, by writing under its common seal, empower any person, either generally or in respect of any specified matters, as its attorney, to execute deeds on its behalf in any place either in or outside India. (2) A deed signed by such an attorney on behalf of the company and under his seal where sealing is required shall bind the company and have the same effect as if it were under its common seal." 34. Section 46 merely lays down the mode an signing contract on behalf of the company. Once a deed is executed on behalf of the company, it is company and not the persons signing can sue or be sued on the contract if the evidence is clear that the signature was only that of the company. 35. An oral agreement for sale is permissible in law. There is furthermore no dispute that the agreement for sale was entered into by three directors of the company. The subsequent letters written on behalf of the Company clearly demonstrate that all the directors were aware of the said agreement. The company before the Trial Court never chose to file any written statement or dispute the contentions raised in the plaint. The Company, thus, never denied or disputed the correctness or otherwise of the contents of the said agreement. The Company never denied or disputed the terms of the agreement nor raised any plea that the agreement was not binding on the company or the same was illegal. In fact in the deeds executed in favour of the agreement, it had clearly been stated that the suit for specific performance of contract filed by Respondent No.1 was pending. 36. In Chairman, Life Insurance Corpn. and others vs. Rajiv Kumar Bhaskar (2005) 6 SCC 188 ), this Court held: "Agency as is well settled, is a legal concept which is employed by the Court when it becomes necessary to explain and resolve the problems created by certain fact situations. In other words, when the existence of an agency relationship would help to decide an individual problem, and the facts permits a court to conclude that such a relationship existed at a material time, then whether or not any express or implied consent to the creation of an agency may have been given by one party to another, the Court is entitled to conclude that such relationship was in existence at the time, and for the purpose in question. (See Established Agency by GHL Fridman - 1968 (84) Law Quarterly Review 224 at p.231.)" 37. It is not in dispute that the contract was executed in the name of the company. It has furthermore not disputed that all the five directors executed the agreement. The Company was a private limited company. The Trial Court held: "As all the directors of the company took part in execution of ext. - 3 there was not necessity of giving any special authorization either u/s 46 or u/s 48 of the Companies Act for entering into or for execution of the contract. It is true that at the time of execution of the documents in favour of the party defendants (ext. A series) there was a resolution of the company. The copy of the said resolution was marked (ext. 1). On plain reading of Ext. (1) it is found that as 4 directors out of the 5 directors of the company were empowered to execute those documents said resolution was necessary u/s 48. of the Companies Act." 38. Before the courts below, execution of the agreement was not denied. Thus, even in the absence of resolution the contract could not have been held to be invalid or illegal. 39. So far as the question of putting up of the seal of the Company is concerned, it is a relic of the days when mediaeval barons, who could not read or write, used their rings to make a characteristic impress. Even in absence of a seal, the Company may still be held to be liable having regard to the nature of transaction and the authority of those who had executed it. If the act of the Directors is not ultra vires or no public policy is involved, the parties acting thereupon cannot be left at large. (See. Probodh Chandra vs. Roadoils (India) Ltd. AIR 1930 Cal 782 and OTV Birwel Co. Ltd. vs. Technical and General Guarantee Co. Ltd. (2002) 4 All ER 668). 40. For the reasons aforementioned, we

Court's decision (1 = petition accepted / positive for appellant, 0 = rejected / negative): 0

Reasoning from the judgment:
0[ds]are of the opinion that the plea raised by the learned counsel for the Appellant that the suit was barred by limitation cannot be accepted as all the courts have arrived at a finding of fact that the period for execution of the deed of sale had been extendedSimilarly, the applicability of the provisions of Section 29 of the Indian Contract Act having not been raised, the same cannot be permitted to be raised for the first time before this Court. Even otherwise we do not see, on a plain reading of the said agreement of sale deed 18.4.1971, that the terms thereof were uncertain or vague so as to attract the provisions of Section 29 of the Indian Contract ActSection 46 merely lays down the mode an signing contract on behalf of the company. Once a deed is executed on behalf of the company, it is company and not the persons signing can sue or be sued on the contract if the evidence is clear that the signature was only that of the companyAn oral agreement for sale is permissible in law. There is furthermore no dispute that the agreement for sale was entered into by three directors of the company. The subsequent letters written on behalf of the Company clearly demonstrate that all the directors were aware of the said agreement. The company before the Trial Court never chose to file any written statement or dispute the contentions raised in the plaint. The Company, thus, never denied or disputed the correctness or otherwise of the contents of the said agreementThe Company never denied or disputed the terms of the agreement nor raised any plea that the agreement was not binding on the company or the same was illegal. In fact in the deeds executed in favour of the agreement, it had clearly been stated that the suit for specific performance of contract filed by Respondent No.1 was pending. 36It is not in dispute that the contract was executed in the name of the company. It has furthermore not disputed that all the five directors executed the agreement. The Company was a private limited company. The Trial Court held:"As all the directors of the company took part in execution of ext. - 3 there was not necessity of giving any special authorization either u/s 46 or u/s 48 of the Companies Act for entering into or for execution of the contract. It is true that at the time of execution of the documents in favour of the party defendants (ext. A series) there was a resolution of the company. The copy of the said resolution was marked (ext. 1). On plain reading of Ext. (1) it is found that as 4 directors out of the 5 directors of the company were empowered to execute those documents said resolution was necessary u/s 48. of the Companies Act."Before the courts below, execution of the agreement was not denied. Thus, even in the absence of resolution the contract could not have been held to be invalid or illegal