9911796707
TMI Blog2003 (9) TMI 538X X X X Extracts X X X X X X X X Extracts X X X X ..... to the respondents not to claim or raise any bill against the petitioner-company on account of alleged slow reading of metering equipment as per the alleged inspection conducted by the Executive Engineer (F/S) in February, 1993; ( iii )Respondents may be directed to refund the instalments already paid by the petitioner company from December, 1995 till April, 1996; and ( iv )Respondents may be directed not to interfere with or disconnect in any manner the electric supply to the unit of the petitioner company at village Mohal in District Kullu on the basis of illegal demand raised by them as detailed in para ( ii ) above. 3. It has been pleaded in para 1 of the writ petition as under : "That the petitioner-company is a private limited company incorporated under the Companies Act, 1955. The petitioner-company is running its business of hotelry on the National Highway in village Mohal, Tehsil and District Kullu. The Directors of the petitioner-company are Indians. On the facts and circumstances enumerated hereinbelow, the petitioner company has been grossly wronged by the highly illegal and arbitrary acts of omission and commission of the respondent - Electricity Board and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the company, or in any regulations not inconsistent therewith and duly made thereunder, including regulations made by the company in general meeting. (2) No regulation made by the company in general meeting shall invalidate any prior act of the Board which would have been valid if that regulation had not been made." A bare reading of the above provisions shows that 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 meetings, in all other cases the Board of Directors are entitled to exercise all its powers. Individual Directors have only such powers as are vested in them by the memorandum and articles. 7. It was contended by the learned counsel for the petitioner-company that under order 29, rule 1 of the Code of Civil Procedure, the pleadings can be signed and verified on behalf of the corporation/company by the Secretary or by any Directors or other Principal Officer of the corporation/company, who is able to depose to the facts of the case. According to the learned counsel since Shri Arun Sharma is the Director of the petitioner-company, he was authorised to sign and veri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supra ). 10. A learned Single Judge of the Delhi High Court distinguished the decision of the Hon ble Supreme Court by observing as under : ". . . As is manifest from para No. 8 of the report the only question which arose for consideration before the Supreme Court in the S.L.P. filed by the bank was whether the plaint was duly signed and verified by a competent person. It was in the said background that S.L.P. was allowed holding that L.K. Rohatagi must have been authorised to sign the plaint and in any case the bank had ratified the action of L.K. Rohatgi in signing the plaint and thereafter he had continued with the suit. In my view, in the facts and circumstances of this case, the plaintiff cannot derive any advantage from the above decision in the matter of said K.L. Rajgarhia being authorised to file the present suit on behalf of the plaintiff-company. . ." (p. 244) 11. Following an earlier decision in Nibro Ltd. v. National Insurance Co. Ltd. AIR 1991 Delhi 25 it was held that unless a power to institute a suit is specifically conferred on a particular Director, he has no authority to institute the suit on behalf of the company and that though the plaint was si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... him, he claims to be a principal officer and director, but there is no evidence on record to indicate that he had the authority to institute the suit. The memorandum and articles of association of the plaintiff company are also not placed on record. Even after the suit was instituted by Shri G. Jhajharia, no resolution was passed by the company ratifying this action. No such decision of the board of directors is placed on record in the present case. The plaintiff has examined Shri Ashok Kumar Jhajharia. He has placed on record Ext. PW/2/1 which is the resolution of the board of directors reappointing Shri G. Jhajharia as the director but his resolution does not empower Shri G. Jhajharia as a director to institute the present suit. Shri Ashok Kumar Jhajharia has stated that he was handing day to day management of the plaintiff company including the insurance part of it. He however does not state that Mr. G. Jhajharia was handling day to day management or was incharge of the insurance claim." (p. 33) 14. In the present case, as stated above, there are neither pleadings nor any other evidence to show that Shri Arun Sharma, through whom the present petition has been filed, is a Dir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and ambit of order 29, rule 1, Code of Civil Procedure, the Lahore High Court in Notified Area Committee v. Kidar Nath, AIR 1935 Lahore 345 has held : ". . . Similarly order 29, rule 1, Civil Procedure Code, also does not help the appellant. It merely define the person who is authorised to sign or verify the pleadings on behalf of the corporation (in this case the committee). It, therefore, comes into operation only after proceedings have been validly started and cannot be utilised to authorise an unauthorised person to institute suits on behalf of the corporation. . ." (p. 346) 18. The above view was followed by the High Court of Jammu and Kashmir in Seth Kirpal Chand v. Traders Bank Ltd. AIR 1954 J K 45. While dealing with the question that though there is no original authorisation, a subsequent ratification could render it legitimate. It was held : ". . .Here the initiative to institute the suit could be properly transferred to the Manager under article 105 of the articles of association, and, therefore, the subsequent ratification of the act of the agent by the principal could cure the original defect." (p. 47) 19. Again in University of Kashmir v. Gula ..... X X X X Extracts X X X X X X X X Extracts X X X X
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