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TMI Blog1998 (4) TMI 474X X X X Extracts X X X X X X X X Extracts X X X X ..... iled against this guarantor, after serving necessary notice on the guarantor which was also not honoured within the statutory period. 3. Both these petitions are dated 16-6-1997. They are signed by Shri R.M. Desai, the learned advocate appearing for the petitioner in both these matters, and they are verified by one R. Ashok Kumar, who was the then Deputy General Manager in charge of Ahmedabad Branch of the peti-tioner. A substantive reply has been filed to both these petitions. Apart from merits of the case, it has been contended on behalf of the respon- dents that it is not clear as to whether prior to filing of both these petitions, any decision had been taken by the Board of Directors of the petitioner Bank to file these winding up petitions and secondly that the person concerned who has verified the petitions did not have the authority to verify the petitions on behalf of the petitioner Bank. It is for this limited purpose that both the application Nos. 84 and 83 of 1998 have been filed subsequently wherein the prayers are twofold : ( a )that the applicant be granted leave and permission to amend the petition as mentioned in Annexure-I thereto, and ( b ) that the applic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ious authorities can exercise their powers is mentioned. Thus, as far as this item No. 11 is concerned, for our purpose, the power of the Chairman is mentioned as up to Rs. 500 lacs. 7. Thereafter, a proposal dated 14-3-1997 put up to the Chairman and Managing Director by one S.K. Parab, Deputy General Manager (Credit) through the Executive Director and the General Manager (Credit) is annexed as Annexure-B. The last two paragraphs of this proposal read as follows : "As our efforts in recovery of dues failed and the company did not arrange for inspection of the oil which is kept in Mumbai in the custody of Western Indian Oil Distributing Co. Ltd. we have no other alternative but to file recovery suit. We therefore seek your approval to file money suit against DOIL guarantors Western India Oil Distributing Company Ltd. (the owners of tanks in whose custody the oil is kept) and Narendra Forwarders, the clearing agents. With a view to accelerate the recovery process, we may be permitted to file winding up petition in Gujarat High Court against DOIL and Hynoup Food and Oil Industries Ltd. As the claim amount being Rs. 368 lacs plus interest, CMD is requested to accord sanction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uthorise any employees of the Bank or any other person to so act in the premises." Shri Desai, therefore, submits that Shri Chakrabarti does have the neces-sary authority to sign the pleadings on behalf of the Bank. 9. Shri Desai, the learned counsel appearing for the applicant submits that, firstly, there is no need for any resolution for a public limited company to institute a proceeding for winding up and in that behalf he relied upon a judgment of the Division Bench of the Madras High Court in State of Madras v. Madras Electric Tramways (1904) Ltd. [1955] 25 Comp. Cas. 378. Wherein it has been held with respect to section 166 of the Companies Act, 1913 (which is pari materia with section 433) as follows : "Under section 166 an application to the Court for winding up of a company can be presented by the company or by any creditor or contributory, and there is nothing in section 271 or any other provision of Part IX of the Act which excepts this provision of section 166 in the case of an unregistered company. There is nothing in section 162 or section 166 of the Indian Companies Act to lead to the inference that unless a company has resolved by a special resolution ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that under section 291 of the Companies Act, 1956, except where express provision is made that the powers of a company in respect of a particular matter are to be exercised by the company in general meeting, in all other cases the board of directors are entitled to exercise all its powers. Individuals directors have such powers only as are vested in them by the memorandum and articles. It is true that ordinarily the Court will not non-suit a person on account of technicalities. However, the question of authority to institute a suit on behalf of a company is not a technical matter. It has far-reaching effects. Order 29, Rule 1 of the Code of Civil Procedure, 1908 does not authorises persons mentioned therein to institute suits on behalf of a corporation - it only authorises them to sign and verify the pleadings on behalf of the corporation. Thus, unless a power to institute a suit is specifically conferred on a particular director, he has no authority to institute a suit on behalf of the company. Such power can be conferred by the board of directors only by passing a resolution in that regard." (p. 389) 12. Secondly, Shri Shelat also relied upon the judgment of a Single Jud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ision or any statutory guidelines (concerning the banks, for example as in the present case). In that view of the matter, in my view, there is nothing improper in the decision of the bank to institute the proceedings nor in their decision to authorise Shri S.K. Chakrabarty to sign and affirm the petition. 14. Although the petition was filed in June 1997, it is being signed and affirmed by a proper person as late as in April 1998. Such a course of action has been approved by the Division Bench of the Bombay High Court in the case of Western India Theatres Ltd. v. Ishwarbhai Somabhai Patel AIR 1959 Bom. 386 when a Division Bench of the Hon'ble Chagla C.T. and S.T. Desai, J. observed in para 16 as follows : "Now, the question is, what is the legal consequence of a petition not being properly signed by the petitioner. In our opinion, this is a mere irregularity which can be cured at any time. That is the view also taken by Mr. Justice Baker in the case to which reference has been made by us, and also in Lingagouda Marigounda v. Lingangouda Fakirgouda 54 Bom. LR 829: (AIR 1953 Bom. 79). We are told that the petitioner himself is present in Court and he is prepared to sign ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt is carried out. In the facts of the present case, it is also relevant to note that no orders have been passed as such prejudicing anybody during this period, namely, from 16-6-1997 (when the two petitions were filed) till passing of this order. 17. In the circumstances, both these Company Application Nos. 83 of 1998 and 84 of 1998 are allowed and the prayers ( a ) and ( b ) therein are granted subject to the aforesaid rider, namely that the amended petitions will be considered as filed on the date on which the amendment is carried out. 18. Shri Shelat seeks stay of this order which Shri Desai opposes. In my view, the ends of justice would be met if the actual carrying out of this amendment is deferred till 20-4-1998 within which period the respondent can obtain stay of this order if they deemed it fit. The respondents need not suffer technically due to amendment having been carried out in the meanwhile. The aforesaid amendment will, therefore, be not carried out until 20-4-1998. Shri Shelat states that in view of this direction he does not press for stay of this order at this stage. 19. The applicants will of course be at liberty to carry out the amendment and file a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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