1996 (10) TMI 415 - HC - Companies Law

Summary

Issues:
1. Liability of an individual as a mere employee in a financial transaction.
2. Scope of revisional powers under section 18 of the Small Causes Courts Act.
3. Consideration of the aspect of limitation in a civil suit.

Analysis:
The judgment concerns a Civil Revision Petition (C. R. P.) where the petitioner challenged a decree passed against them in a suit related to a financial transaction. The petitioner, a former employee of a finance company, was held liable for a deposit amount based on a signed receipt. The petitioner argued that as an employee, they should not be held responsible for the financial dealings of the company. The court analyzed the nature of the petitioner's role in the company and concluded that being an employee, the liability cannot be fastened on them for the financial obligations of the company. The court emphasized that for liability to be established in such cases, it must be demonstrated that the amount was received or entrusted to the individual directly. The court highlighted the distinction between liability for directors, proprietors, or partners as opposed to mere employees in financial transactions.

Regarding the scope of revisional powers under section 18 of the Small Causes Courts Act, the court referred to a previous decision to explain the broader scope of review available to the High Court in such cases. The court clarified that under section 18, a total review of the order is permissible, allowing all relevant points to be raised and examined. The petitioner's advocate utilized this provision to refer to various parts of the record and evidence in the case.

Another issue raised was the aspect of limitation in the civil suit. The petitioner's advocate argued that the suit was time-barred, citing relevant case law. The court acknowledged the importance of considering limitation issues even if not explicitly raised by the parties. The court emphasized the duty of the court to examine all aspects of a case, including limitation, and the responsibility of litigants and advocates to bring such issues to the court's attention. Despite the limitation aspect not being highlighted earlier, the court noted the possibility of extensions due to acknowledgments, emphasizing the need for thorough scrutiny by all parties involved.

Ultimately, the court ruled in favor of the petitioner, setting aside the decree passed against them due to their status as a mere employee in the company. The C. R. P. succeeded on this ground, with no order as to costs being issued.