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TMI Blog1966 (3) TMI 52X X X X Extracts X X X X X X X X Extracts X X X X ..... their acts outside the said powers will not bind the company. It is not possible to hold that the director, in refusing to respond to the notice given by the court, was acting within the scope of the powers conferred on him. He is only liable for his acts and not the company. If it was established that the company was guilty of abuse of the process of the court by preventing the director from attending the court, the court would have been justified in striking off the defence. But no such finding was given by the courts below. Thus the orders of the courts below are not correct. Appeal allowed. - 166 OF 1966 - - - Dated:- 10-3-1966 - K. SUBBA RAO AND V. RAMASWAMI, JJ. S.N. Andley, Rameshwar Nath and Mahinder Narain for the Appellant . A.K. Sen, B. Sen, B.P. Maheshwari, P.D. Bhargava and M.S. Narasimhan for the Respondent. JUDGMENT Subba Rao, J. This appeal by special leave is directed against the order of the Punjab High Court confirming that of the Subordinate Judge, Delhi, striking out the defence of the appellant under section 151 of the Code of Civil Procedure, hereinafter called the Code. Kanhaya Lal Bhargava, the 1st respondent, filed a sui ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o so will be to override the provisions of the Code. Order XXIX, rule 3, of the Code, does not empower the court to require the personal appearance of a director other than a director who signed and verified the pleading within the meaning of order XXIX, rule 1, thereof. Mr. Sen, learned counsel for the respondent, on the other hand, contended that the court had ample jurisdiction to strike out the defence of a party if he was guilty of abuse of the process of the court. In the instant case, he contended, Jugal Kishore, one of the permanent directors of the appellant-company, had adopted a recalcitrant attitude in defying the orders of the court to be present for interrogation and, therefore, the Subordinate Judge rightly, after giving every opportunity for him to be present, struck off the appellant's defence. Section 151 of the Code reads: "Nothing in this Code shall be deemed to limit or otherwise affect the inherent power of the court to make such orders as may be necessary for the ends of justice or to prevent abuse of the process of the court." The words of the section appear to be rather wide. But the decisions of this court, by construction, limited the scope of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 151 of the Code. Rajagopala Ayyangar J. made the following observations: "It is common ground that the inherent power of the court cannot override the express provisions of the law. In other words, if there are specific provisions of the Code dealing with a particular topic and they expressly or by necessary implication exhaust the scope of the powers of the court or the jurisdiction that may be exercised in relation to a matter, the inherent power of the court cannot be invoked in order to cut across the powers conferred by the Code. The prohibition contained in the Code need not be express but may be implied or implicit from the very nature of the provisions that it makes for covering the contingencies to which it relates." Having regard to the said decisions, the scope of the inherent power of a court under section 151 of the Code may be defined thus: The inherent power of a court is in addition to and complementary to the powers expressly conferred under the Code. But that power will not be exercised if its exercise is inconsistent with, or comes into conflict with, any of the powers expressly or by necessary implication conferred by the other provisions of the Code. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ain material questions relating to the suit. If so, there is no reason why the director who may be able to answer such material questions is excluded from the scope of rule 3. Such an interpretation will defeat the purpose of the said rule. Therefore, "Any director" in rule 3 need not be the same director who has signed and verified a pleading or on whom summons has been served. He can be any one of the directors who will be in a position to answer material questions relating to the suit. Even so, learned counsel for the appellant contended that Order XXIX, rule 3, of the Code, did not provide for any penalty in case the director required to appear in court failed to do so. By drawing an analogy from other provisions, where a particular default carried a definite penalty, it was argued that, in the absence of any such provision, it must be held that the Legislature intentionally had not provided for any penalty for the said default. In this context, the learned counsel had taken us through Order IX, rule 12, Order X, rule 4, Order XI, rule 21, Order XVI, rule 20, and Order XVIII, rules 2 and 3, of the Code. No doubt under these provisions particular penalties have been provided f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the memorandum of association. Some of the powers are delegated to the directors. For certain purposes they are said to be trustees and for some others to be the agents or managers of the company. It is not necessary in this case to define the exact relationship of a director qua company. The acts of the directors within the powers conferred on them may be binding on the company. But their acts outside the said powers will not bind the company. It is not possible to hold that the director, in refusing to respond to the notice given by the court, was acting within the scope of the powers conferred on him. He is only liable for his acts and not the company. If it was established that the company was guilty of abuse of the process of the court by preventing the director from attending the court, the court would have been justified in striking off the defence. But no such finding was given by the courts below. The orders of the courts below are not correct. We set aside the said orders and direct the Subordinate Judge to proceed with the suit in accordance with law. The appeal is allowed, but, in the circumstances of the case, without costs. - - TaxTMI - TMITax - Corporate Law ..... X X X X Extracts X X X X X X X X Extracts X X X X
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