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TMI Blog2009 (4) TMI 446X X X X Extracts X X X X X X X X Extracts X X X X ..... registry of this court to enable an appropriate minute to be recorded in terms of section 445 of the Act. The petitioner is also directed to publish the same in Deccan Chronicle and Andhra Jyothi newspapers. - C.P. NO. 82 OF 2005 - - - Dated:- 15-4-2009 - NOOTY RAMAMOHANA RAO, J. V. Hari Haran for the Petitioner. D. Srinivas for the Respondent. JUDGMENT 1. This petition has been moved in terms of sections 433, 434 and 439 of the Companies Act, 1956, seeking for winding up of M/s. Lotus Aluminium (P.) Ltd. and for appointing the Official Liquidator as its Liquidator. 2. The respondent-company was incorporated under the provisions of the Indian Companies Act, on 14-10-1999, with its registered office at Secunderabad, Andhra Pradesh. It was established for carrying on business of manufacture, import or for otherwise dealing with aluminium, brass, copper and all non-ferrous metals and their alloys. The authorised share capital of the company was Rs. 5 lakhs and the issued, subscribed and paid-up share capital as of 31-3-2003, was standing at Rs. 1 lakh. However, more than Rs. 82.88 lakhs is shown as received against allotment of shares. The petitioner has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the amounts paid through various cheques by the petitioner, to the company were all encashed by Sri K. Srinivasa Rao and he appropriated the said funds for himself. It is further pointed out that because of his various acts of commission and omission, the company has sustained a great loss and in these set of circumstances, he agreed to leave the service of the company and in turn the company had agreed to settle a sum of Rs. 32 lakhs to Sri K. Srinivasa Rao and accordingly, the company had paid the said money to Sri K. Srinivasa Rao on 10-4-2004 and 16-4-2004, respectively. Thus, the entire money, which is due and payable to Sri K. Srinivasa Rao has been paid and the said money includes refund of the monies to the petitioner herein also. It is further asserted that the company had assets worth more than Rs. 1 crore and that it is a debt free company. The respondent has further asserted that it is the husband of the petitioner-Sri K. Srinivasa Rao, in his capacity as the managing director of the company, issued the cheque bearing No. 368162 dated 15-4-2004, in favour of the petitioner herein-and hence, the petitioner, acting in concert with her husband, has unjustly unleashed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of association of the respondent-company. Exhibit P3 is the typed copy of the balance-sheet of the respondent-company struck as of 31-3-2002. Exhibit P4 is the cheque bearing No. 368162, dated 15-4-2004, drawn on account No. 469 on the Manasa Co-operative Urban Bank Ltd., Secunderabad, signed by Sri V. Ayodhya Ramulu and Ms. Sangeetha two of the directors on behalf of the respondent-company. Exhibit P5 is the cheque-return memo issued by the Manasa Co-operative Urban Bank Ltd., returning exhibit P4 cheque, for the reason that the signature of one of the directors is deferring. Exhibit P6 is the complaint in C.C. No. 1328 of 2004 lodged on the file of the Eleventh Metropolitan Magistrate, Secunderabad, against the respondent-company and its two directors Sri V. Ayodhya Ramulu and Ms. Sangeetha, who have affixed their signatures on exhibit P4 cheque. Exhibit P7 is the legal notice dated 16-4-2005. Exhibit P8 is the complaint lodged with the Post Master, Hyderabad Jubilee Post Office, Hyderabad, by counsel, who issued exhibit P7 notice to find out as to the dates on which the registered letters/notices were delivered. Exhibits P9 and P10 are the communications from the Customer Care ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aging director and Ms. Sangeetha as the director. These two cheques have been issued in favour of the Hyderabad Metro Water Supply and Sewerage Board and the Assistant Accounts Officer, Electrical Revenue Office, A.P.C.P.D.C.L, drawn in a sum of Rs. 1,685 and Rs. 451, respectively, towards the consumption charges of water and electricity. 8. RW1 admitted that the registered office of the company was situate, till 2004, at West Marredpally, Secunderabad, in a private building owned by Mr. K. Radhakrishna and Smt. K. Lakshmi Bai. He has also admitted that as per the balance-sheet struck as of 31-3-2006, the net current assets of the company were Rs. 34,33,333.35 in the negative, after taking depreciation into consideration and trial runs. 9. In the face of this material the questions to be answered are : (1) whether the respondent-company is liable to pay the petitioner the sum of Rs. 3,57,000 for which exhibit P4 cheque has been issued, or not; and (2) whether the company is unable to pay its debts requiring it to be wound up. 10. PW1 has clearly deposed that the respondent-company has received a sum of Rs. 3,57,000 from the petitioner towards share capital. It is furthe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ertaining the fact whether the petitioner has been repaid her money, as to whether PW1 continued to discharge any functions for the company beyond 1-11-2002. At best, it would create a shadow of doubt as to whether PW1 did really resign on 1-11-2002, at all or did he function thereafter as well. But, exhibit R14, the receipt furnished by the Registrar of Companies, clearly demonstrates that by 6-8-2004, the relationship between PW1 and the respondent-company has been totally severed, as Form No. 32 has been lodged by that date with the Registrar of Companies. It is clear from the admission of RW1 that the sum of Rs. 3,57,000 is reflected in the ledger of the company as the amount received from the petitioner towards share capital. Two things must emerge; either the company should be shown to have repaid the said money to the petitioner or it should have been shown to have allotted her the shares. Neither of these two things was shown to have taken place and on the other hand exhibit P4 is a cheque, which is issued from out of a cheque book belonging to the company. Therefore, it is reasonable to infer that exhibit P4 cheque has been issued with a view to refund the amount paid by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "Power of attorney" is not a contract, but is merely a document evidencing to third parties the existence of agency relationship and powers of the agent. In Corpus Juris Secondum it is stated as the authority may be conferred on an agent by a written appointment, and if the writing is formal the authority is said to be conferred by a letter of attorney and the agent is, an attorney in fact . And in Advanced Law Lexicon as a formal instrument by which one person empowers another to represent him or act in his stead for certain purposes. "Power of attorney" includes any instrument (not chargeable with a fee under the law relating to court fees for the time being in force) empowering a specified person to act for and in the name of the person executing it. American Jurisprudence, noted that, a person may properly appoint an agent to do the same acts and to achieve the same legal consequences by the performance of an act as if he had himself personally acted, unless public policy or the agreement with the principal requires personal performance McNulty v. Dean [154 Wash. 110]. It was further noted that, the grant of power is not, however, to be frittered away by very nice and m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee of a power-of-attorney may, if he thinks fit, execute or do any instrument or thing in and with his own name and signature, and his own seal, where sealing is required, by the authority of the donor of the power; and every instrument and thing so executed and done, shall be as effectual in law as if it had been executed or done by the donee of the power in the name, and with the signature and seal, of the donor thereof." 17. Then, what are those acts and actions, which the holder of a power of attorney can perform ? 18. For this purpose one has to bear in mind the distinction between all such actions, which are liable to be performed by a person in his individual capacity as distinct from those, which are liable to be performed in exercise of a statutory duty or function or such actions, which are liable to be regulated by a statute itself. 19. A Full Bench of the Madras High Court in M. Krishnammal v. T. Balasubramania Pillai AIR 1937 Mad. 937, speaking through the Chief Justice Beasley, has clearly pointed out that a power of attorney holder cannot plead on behalf of his principal in the following words (page 938): "...and he claimed that the power of attorne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... him to appear for and on behalf of the company, to conduct and represent the company in the proceedings, claimed the right of audience on behalf of the company and, applying the ruling in the former case, it was held that he had no right of audience. It is plain from these three cases that rules 1 and 2 of Order 3 of the Civil Procedure Code, do not give the recognised agent any right to plead in court on behalf of his principal either in the appellate or original sides of the High Court...." 20. The Full Bench had approvingly noticed the two earlier judgments rendered by the Calcutta High Court reported in Harchand Ray v. B.N. Ry. Co. AIR 1916 Cal. 181 and Eastern Tavoy Minerals Corpn. Ltd., In re AIR 1934 Cal. 563, in this context. The Andhra Pradesh High Court in Hari Om Rajender Kumar v. Chief Rationing Officer of Civil Supplies AIR 1990 AP 340, held as follows (pp. 343 and 345) : "5. Both American and English Courts have adopted the doctrine that a non-lawyer may not appear in court to represent another person. Outside the court-house, non-lawyers in earlier periods of American history freely performed tasks that today would be called the unauthorised practice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... What the power-of-attorney agent in his case seeks to do is the same as in Thayarammal and Sornam cases He wants to be placed in the same position as an advocate; in respect of not merely drafting and filing cases but pleading and arguing in court... It is clear therefore, that his acts amount to practising the profession of law. In fact, the power-of-attorney is executed in 1987 permitting the agent to file, plead and argue all cases of the principals in future and the deed is not confined to this or any particular case. Though this court has power to grant permission for non-lawyers to plead/argue cases in certain special circumstances, the present case is obviously not one such. Under the guise of seeking permission in each case, the petitioner is continuously pleading and arguing every case for the principals who are dal mill owners, and in a routine fashion, on the sole ground that the principals have decided never to engage any lawyers before any court or Tribunal. The parties are not seeking permission on any special grounds applicable to this case alone. They obviously want to engage the agent in all cases where normally lawyers should have been engaged. That clearly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oint such persons to represent him in court. Section 30 of the Advocates Act confers a right on every advocate whose name is entered in the Roll of Advocates maintained by a State Bar Council to practise in all the courts in India including the Supreme Court. Section 33 says that no person shall be entitled to practise in any court unless he is enrolled as an advocate under that Act. Every advocate so enrolled becomes a member of the Bar. The Bar is one of the main wings of the system of justice. An advocate is the officer of the court and is hence accountable to the court. Efficacious discharge of judicial process very often depends upon the valuable services rendered by the legal profession. 10. But if the person proposed to be appointed by the party is not such a qualified person, the court has first to satisfy itself whether the expected assistance would be rendered by that person. The reason for Parliament for fixing such a filter in the definition clause (section 2( q ) of the Code) that prior permission must be secured before a non-advocate is appointed by the party to plead his cause in the court, is to enable the court to verify the level of equipment of such a person fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess than when he is exercising any other right ( vide Jackson Co. v. Napper [1887] 35 Ch. D 162 at page 172). But this court has pointed out that the aforesaid common law principle does not apply where the act to be performed is personal in character, or when it is annexed to a public office or to an office involving any fiduciary obligation ( vide Rao Bahadur Ravulu Subba Rao v. CIT [1956] 30 ITR 163/AIR 1956 SC 604). 15. Section 2 of the Powers-of-Attorney Act cannot override the specific provision of a statute which requires that a particular act should be done by a party-in-person. When the Code requires the appearance of an accused in a court it is no compliance with it if a power of attorney holder appears for him. It is a different thing that a party can be permitted to appear through counsel. Chapter XVI of the Code empowers the magistrate to issue summons or warrant for the appearance of the accused. Section 205 of the Code empowers the Magistrate to dispense with the personal attendance of the accused, and permit him to appear by his pleader if he sees reasons to do so. Section 273 of the Code speaks of the powers of the court to record evidence in the presen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... attorneys. After the advent of the Advocates Act, 1961, the right of audience in formal court proceedings is liable to be confined only to the professional class of advocates, who are admitted as members and enrolled as such on the rolls by the Bar Council concerned. Therefore, grant of permission for audience is liable to be confined in favour of such class, but not otherwise. 24. However, the conventional view point that was holding field was that, a party could enter appearance and solicit the right of audience for himself. Our legal system is not allergic to receive the submissions of a party-in-person. Therefore, a party, whether well versed or not, in legal matters and whether trained or not, can enter appearance of himself and seek to be heard, by a court. That is not forbidden. To this day, right up to the highest court of our land, some parties, who are confident of their articulative abilities enter appearances on their own and are heard with the same kind of attention a professional lawyer is paid. But, however, the holder of a power of attorney, being not a party himself, but merely an agent of another person, cannot seek such right of audience. Pleading in formal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the company stand at Rs. 24.62 lakhs in the negative. He also admitted that exhibits R1 to R6, sales tax returns do not reflect the profitability of the respondent-company while denying that the respondent-company has not started its commercial production, all that the RW1 would say is that, it is carrying on job works. Hence, the respondent-company has failed to discharge the onus that it is a viable company not requiring to be wound up. 26. Further, the respondent has pleaded that the petitioner has suppressed the fact that it is her husband who was the former managing director of the company who carried on its business till he resigned as such. Hence, the respondent pleaded that the above petition should be thrown out. It will be relevant to notice that parties to a lis are required to disclose all relevant and material facts and are not supposed to indulge in any suppression of such facts. However, it is not every fact that matters. What matters are those facts, which have a direct bearing upon the issue(s) involved in the case. Since the relationship of the petitioner or her husband with the company, did not have any bearing upon the issue relating to return/refund/repay ..... X X X X Extracts X X X X X X X X Extracts X X X X
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