# Bharat Petroleum Corp. Ltd v. M/s. Amar Autos & others

- **Citation:** (2008) 2 ILRA 552
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2008-05-07
- **Case number:** First Appeal No. 223 of 2008
- **Bench:** Amitava Lala, Shishir Kumar
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/bharat-petroleum-corp-ltd-v-m-s-amar-autos-others-41204
- **Pages:** 5

## Headnote

Code of Civil Procedure-Order XXIX Rule
I-Rejection of Plaint-suit instituted on
behalf of company plaint signed by
holder of power of attorney-Trail court
rejected the plaint on the ground that
such deed power of attorney not verified
by notary nor registered under Section
17 of the registration act-held-totally
perverse-once
suit
instituted
duly
verified and supported by affidavit-it
stand better than notary-more over the
Trail court can ask the signature of plaint
to file better affidavit expanding the
authority-but
rejection
order
held
arbitrary- illegal-liable to set aside.

Held: Para 11

There is a thinner line in between
authorization to sign and verify the
pleadings, and to institute a suit on
behalf of the corporation, company or a
body corporate. Whenever a person is
authorized
to
sign
and
verify
the
pleadings other than verification of
plaint, written statement, memorandum
of appeal, etc., it is doing so by filing
affidavit in support of such contentions.
Therefore, it stands on a better position
than ordinary verification. But a person
when
verifies
the
plaint,
written
statement or memorandum of appeal, it
is a verification simplicitor, meaning
thereby that the verification part is also
to
be
evidently
proved
unlike
an
affidavit, which itself is an evidence.
Hence, authorization to institute a suit
stands in the lower side than putting
signature and verifying a pleading by
way of an affidavit. On the other hand,
signature and verification of the pleading
of a plaint can not be made for the sake
of signature and verification alone but
for the purpose of filing of the same
before the Court either by him or by his
learned Advocate. As soon as it is filed,
the same will be treated to be institution
of such proceeding by the person who
has signed and verified. It is automatic.
Institution of suit and right to institute
the suit are distinct and different. The
argument
of
Mr.
Shashi
Nandan
restricted only to the first part of Order
XXIX Rule 1 of C.P.C. but not to the last
part. If the suit is proceeded and the
evidence is led and if any of the
defendants
want
to
challenge
the
verification of the plaint, he can call the
deponent as witness for the purpose of
examination. But Court can not prevent
anyone from instituting a suit when his
authority is apparently satisfactory. No
body will be prevented from enforcing
his legal right. It is a gross mistake on
the part of the Court below to construe
that the power of attorney should be
registered and then only the suit can be
instituted by a representative of the
company
or
corporation.
Moreover
justification of filing the plaint by the
authorised
representative
of
the
corporation
or
company
will
be
considered from the practical point of
view. If the Court below is not happy, it
could have called upon the company to
file an affidavit of competency, which is
desirable under such circumstances, but
not outright rejection of the plaint.
Therefore, from any angle the order/s
impugned appear to be perverse in
2 All] Bharat Petroleum Corp. Ltd. V. M/s Amar Auto and others
553
nature. Thus, in totality the orders
impugned in both the appeals can not be
sustained.
Case law discussed:
AIR 1997 SC 3, AIR 2006 SC 269, 2008 (36)
PTC 210 (Del.)(DB), AIR 1991 Delhi 25

## Text

552 INDIAN LAW REPORTS ALLAHABAD SERIES [2008
APPELLATE JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 07.05.2008

BEFORE
THE HON'BLE AMITAVA LALA, J.
THE HON'BLE SHISHIR KUMAR, J.

First Appeal No. 223 of 2008
Connected with:
First Appeal No. 222 of 2008

Bharat Petroleum Corp. Ltd ...Appellant
Versus
M/s. Amar Autos & others...Respondents

Counsel for the Appellant:
Sri Sudhir Chandra
Sri Prakash Padia.

Counsel for the Respondents:
Sri Shashi Nandan
Sri P.C. Jain

Code of Civil Procedure-Order XXIX Rule
I-Rejection of Plaint-suit instituted on
behalf of company plaint signed by
holder of power of attorney-Trail court
rejected the plaint on the ground that
such deed power of attorney not verified
by notary nor registered under Section
17 of the registration act-held-totally
perverse-once
suit
instituted
duly
verified and supported by affidavit-it
stand better than notary-more over the
Trail court can ask the signature of plaint
to file better affidavit expanding the
authority-but
rejection
order
held
arbitrary- illegal-liable to set aside.

Held: Para 11

There is a thinner line in between
authorization to sign and verify the
pleadings, and to institute a suit on
behalf of the corporation, company or a
body corporate. Whenever a person is
authorized
to
sign
and
verify
the
pleadings other than verification of
plaint, written statement, memorandum
of appeal, etc., it is doing so by filing
affidavit in support of such contentions.
Therefore, it stands on a better position
than ordinary verification. But a person
when
verifies
the
plaint,
written
statement or memorandum of appeal, it
is a verification simplicitor, meaning
thereby that the verification part is also
to
be
evidently
proved
unlike
an
affidavit, which itself is an evidence.
Hence, authorization to institute a suit
stands in the lower side than putting
signature and verifying a pleading by
way of an affidavit. On the other hand,
signature and verification of the pleading
of a plaint can not be made for the sake
of signature and verification alone but
for the purpose of filing of the same
before the Court either by him or by his
learned Advocate. As soon as it is filed,
the same will be treated to be institution
of such proceeding by the person who
has signed and verified. It is automatic.
Institution of suit and right to institute
the suit are distinct and different. The
argument
of
Mr.
Shashi
Nandan
restricted only to the first part of Order
XXIX Rule 1 of C.P.C. but not to the last
part. If the suit is proceeded and the
evidence is led and if any of the
defendants
want
to
challenge
the
verification of the plaint, he can call the
deponent as witness for the purpose of
examination. But Court can not prevent
anyone from instituting a suit when his
authority is apparently satisfactory. No
body will be prevented from enforcing
his legal right. It is a gross mistake on
the part of the Court below to construe
that the power of attorney should be
registered and then only the suit can be
instituted by a representative of the
company
or
corporation.
Moreover
justification of filing the plaint by the
authorised
representative
of
the
corporation
or
company
will
be
considered from the practical point of
view. If the Court below is not happy, it
could have called upon the company to
file an affidavit of competency, which is
desirable under such circumstances, but
not outright rejection of the plaint.
Therefore, from any angle the order/s
impugned appear to be perverse in
2 All] Bharat Petroleum Corp. Ltd. V. M/s Amar Auto and others
553
nature. Thus, in totality the orders
impugned in both the appeals can not be
sustained.
Case law discussed:
AIR 1997 SC 3, AIR 2006 SC 269, 2008 (36)
PTC 210 (Del.)(DB), AIR 1991 Delhi 25

(Delivered by Hon'ble Amitava Lala, J.)

1. Both the appeals are arising out of
the order/s passed by the learned Judge,
Small
Causes/
Civil
Judge
(Senior
Division), Agra dated 24th January, 2008
in Original Suit No. 225 of 2007 and 23
of 2007, by which the suits have been
dismissed under Order VII Rule 11 of the
Code of Civil Procedure (hereinafter
called as the 'C.P.C.') upon accepting the
objection/s on the part of the respondents.
Out of aforesaid two orders, impugned in
the present appeals, only difference is in
one of such orders it has been held that
the argument of the plaintiff therein has
no force to say that the case is not covered
under the provisions of Order II Rule 2 of
the C.P.C. However, both the appeals are
taken together for analogous hearing on
informal papers, to which neither of the
parties have any objection.

2. Mr. Sudhir Chandra, learned
Senior
Counsel
appearing
for
the
appellant in both the appeals, contended
that two suits have been filed by the
appellant when one suit has been filed by
the defendants in the Court below. Both
of their suits are dismissed only on the
ground that the power of attorney/s, as
executed by the plaintiff-company in
favour of one Sri Amit Garg through the
Chairman & Managing Director, can not
authorize such person to institute the suit
since it/those is/are not registered. Court
below is apparently prejudiced which
necessitates transfer of the case.
3. So far as merit of the appeals are
concerned, he contended that by a power
of attorney dated 26th September, 2005,
the Chairman & Managing Director was
authorised on behalf of the company to
act in this behalf inclusive of power to
institute, defend and prosecute, enforce or
resist any suit or other actions and
proceedings,
appeals
in
any
Court
anywhere within its civil, criminal and
other jurisdictions etc. inclusive of power
of delegation. Clause-19 of such power of
attorney speaks as follows:

"From time to time to substitute and
appoint any person or persons to act
under or in the place of the said Attorney
in respect of all or any of the matters and
to revoke every such substitution at
pleasure and appoint others."

At the end of such power of attorney it
says as follows:

"AND the Company hereby ratifies
and confirms and agrees to ratify and
confirm hereafter all and whatsoever the
said Attorney or his substitute or
substitutes shall lawfully do or cause to
be done in or about the premise by virtue
of these presents and declare that these
presents shall at all times be conclusively
binding in favour of third parties, who
have not received notice of revocation of
this power."

4. Said Sri Amit Garg was appointed
to be true and lawful attorney of the
company by virtue of and in exercise of
the power given to said Chairman &
Managing Director to do the needful by a
further power of attorney dated 30th
October, 2005. One of the important
clause of such power of attorney is as
follows:
554 INDIAN LAW REPORTS ALLAHABAD SERIES [2008
"To institute, prosecute, enforce,
defend, answer or oppose all actions and
other legal proceedings and demands
touching any of the matters aforesaid or
any other matters in which the Company
is now or may hereafter be interested or
concerned and also to refer to arbitration,
submit to judgment or become non-suited
in any such action or proceedings as
aforesaid and for such purpose to appear
before any Judges, Magistrates, Consuls
or other Officers in any Court or
Consulate."

Both the power of attorneys are
notarized power of attorneys.

5. It appears from Section 85 of the
Indian Evidence Act, 1872 that in case of
filing of power of attorney, it should have
some presumptive value. Therefore, we
require to test the essence of Section 85
hereunder:

"85. Presumption as to powers-ofattorney.-- The Court shall presume that
every document purporting to be a powerof-attorney, and to have been executed
before, and authenticated by, a Notary
Public, or any Court, Judge, Magistrate,
Indian
Consul
or
Vice-Consul,
or
representative of the Central Government,
was so executed and authenticated."

6. Section 17 of the Registration
Act, 1908 gives a list of documents,
which are compulsorily registrable. No
such provision is available in such section
which speaks that a power of attorney is
compulsorily registrable.

7. According to Mr. Sudhir Chandra,
the principles of 'agent' as under Sections
182, 190 and 191 of the Indian Contract
Act, 1872 are applicable in this case
particularly in view of Clause 19 of the
original power of attorney.

8. Mr. Chandra cited a judgement
reported in AIR 1997 SC 3 (United Bank
of India Vs. Naresh Kumar and others)
to establish that it is not disputed that a
company or corporation can sue and be
sued in its own name. As a company is a
juristic entity, it is obvious that a person
has to sign the pleadings on behalf of the
company. Even in the absence of any
formal letter of authority or power of
attorney having been executed a person
under Order XXIX Rule 1 of C.P.C. can,
by virtue of the office which he holds,
sign and verify the pleadings on behalf of
the corporation. A person may be
expressly authorised to sign the pleadings
on behalf of the company, for example,
by the Board of Directors passing a
resolution to that effect or by a power of
attorney having been executed in favour
of any individual. In absence thereof and
in cases where pleadings have been
signed by one of its officers a corporation
can ratify the said action of its officer in
signing the pleadings. Such ratification
can be expressed or implied. The Court
can, on the basis of the evidence on
record,
and
after
taking
all
the
circumstances of the case, specially with
regard to the conduct of the trial, come to
the conclusion that the corporation had
ratified the act of signing of the pleading
by its officers. In AIR 2006 SC 269
(Uday
Shankar
Triyar
Vs.
Ram
Kalewar Prasad Singh and another) the
Supreme Court held, in a similar
circumstance, that there is no scope of
automatic rejection of any proceeding
without affording an opportunity to the
person concerned to rectify the defect.
Procedure, a hand-maiden to justice,
should never be made as a tool to deny
2 All] Bharat Petroleum Corp. Ltd. V. M/s Amar Auto and others
555
justice or perpetuate injustice, by any
oppressive or punitive use. By citing a
Division Bench judgement of Delhi High
Court reported in 2008 (36) PTC 210
(Del.)(DB) (Eureka Forbes Ltd. and
another Vs. Hindustan Unilever Ltd.)
Mr. Chandra said that the Division Bench
held in a preliminary objection based on
Order VII Rule 11 of the C.P.C., the
averments made in the petition have to be
assumed to be true. The Court has then to
see whether said averments disclose a
cause of action or triable issue.

9. Mr. Shashi Nandan, learned
Senior
Counsel
appearing
for
the
respondents, on the other hand, drawn our
attention to Order XXIX Rule 1 of the
C.P.C., which speaks as follows:

"1. Subscription and verification of
pleading.-- In suits by or against a
corporation, any pleading may be signed
and verified on behalf of the corporation
by the secretary or by any director or
other principal officer of the corporation
who is liable to depose to the facts of the
case."

10. By showing such provision and
relying upon the persuasive value of a
Single Bench judgement of Delhi High
Court reported in AIR 1991 Delhi 25
(M/s. Nibro Limited Vs. National
Insurance Co. Ltd.) he stated that this
provision only authorises a person to sign
and verify the pleadings on behalf of the
corporation but does not authorise to
institute suit on behalf of the corporation.
He said that 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.
Needless to say that such a power can be
conferred by the Board of Directors only
by passing a resolution in this regard. The
question of authority to institute a suit on
behalf of the company is not a technical
matter. It has far reaching effects. It often
affects policy and finances of the
company. Therefore, there is no wrong on
the part of the Court below in dismissing
the suits under Order VII Rule 11 of the
C.P.C., which the Court below is
otherwise competent to pass when found
from the statement in the plaint that the
same is barred by any law.

11. Upon considering the pros and
cons of the matter we are of the view that
the learned Judge of the Court below has
proceeded in a wrong premises and with
hot-haste. According to us, a power of
attorney or an affidavit of such nature is
only required to prima facie satisfy the
Court that a company or corporation or a
body corporate has presumably proceeded
with the suit under its seal and signature.
It has nothing to do with the registration
of the document unless it is compulsorily
registrable. Persuasive value of M/s.
Nibro Ltd. (supra) can not pursue us.
There is a thiner line in between
authorization to sign and verify the
pleadings, and to institute a suit on behalf
of the corporation, company or a body
corporate.
Whenever
a
person
is
authorized
to
sign
and
verify
the
pleadings other than verification of plaint,
written
statement,
memorandum
of
appeal, etc., it is doing so by filing
affidavit in support of such contentions.
Therefore, it stands on a better position
than ordinary verification. But a person
when verifies the plaint, written statement
or memorandum of appeal, it is a
verification simplicitor, meaning thereby
that the verification part is also to be
evidently proved unlike an affidavit,
which itself is an evidence. Hence,
556 INDIAN LAW REPORTS ALLAHABAD SERIES [2008
authorization to institute a suit stands in
the lower side than putting signature and
verifying a pleading by way of an
affidavit. On the other hand, signature and
verification of the pleading of a plaint can
not be made for the sake of signature and
verification alone but for the purpose of
filing of the same before the Court either
by him or by his learned Advocate. As
soon as it is filed, the same will be treated
to be institution of such proceeding by the
person who has signed and verified. It is
automatic. Institution of suit and right to
institute the suit are distinct and different.
The argument of Mr. Shashi Nandan
restricted only to the first part of Order
XXIX Rule 1 of C.P.C. but not to the last
part. If the suit is proceeded and the
evidence is led and if any of the
defendants
want
to
challenge
the
verification of the plaint, he can call the
deponent as witness for the purpose of
examination. But Court can not prevent
anyone from instituting a suit when his
authority is apparently satisfactory. No
body will be prevented from enforcing his
legal right. It is a gross mistake on the
part of the Court below to construe that
the power of attorney should be registered
and then only the suit can be instituted by
a representative of the company or
corporation. Moreover justification of
filing the plaint by the authorised
representative of the corporation or
company will be considered from the
practical point of view. If the Court below
is not happy, it could have called upon the
company
to
file
an
affidavit
of
competency, which is desirable under
such circumstances, but not outright
rejection of the plaint. Therefore, from
any angle the order/s impugned appear to
be perverse in nature. Thus, in totality the
orders impugned in both the appeals can
not be sustained. Hence, the orders dated
24th January, 2008 passed by the Court
below in the above referred suits,
impugned in the instant appeals, are set
aside. Thus, both the appeals are allowed
without imposing any cost.

12. The suits will be heard as
expeditiously as possible. In case of any
displeasure of the parties about particular
Court, it is open for them to approach the
learned
District
Judge,
who
is
administrative head of the District, for
transferring the matters from one Court to
other but we should not judicially
encroach upon such field to maintain the
judicial restraint.

Appeal Allowed.
---------
APPELLATE JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 15.05.2008

BEFORE
THE HON'BLE (MRS) POONAM SRIVASTAV, J.

Second Appeal No. 452 of 2008

Late Sohan Lal and others ...Appellant
Versus
Sabhajeet

 ...Respondent

Counsel for the Appellant:
Sri. R.K. Mishra

Counsel for the Respondent:
Sri. V.K. Shukla

Code of Civil procedure-Section 100-Suit
for
cancellation
of
sale
deedplaintiff/appellant an old illiterate ladydenied the execution of document or
receiving
any
amount
towards
compensation-allegation of fraud and
misrepresentation also made-no specific
issue framed-held-judgment and decree
passed by Court below cannot sustainaccordingly quashed-remanded the case
with direction to frame specific issue and
give fresh finding.