State Bank of Travancore Versus Kingston Computers (I) (P.) Ltd.
Companies Law
2011 (2) TMI 1270 – Supreme Court – [2011] 107 SCL 377 (SC), [2011] 163 COMP. CAS. 37 (SC), 2011 (11) SCC 524, 2011 (3) JT 66, 2011 (3) SCALE 33
SUPREME COURT OF INDIA – SC
Dated:- 22-2-2011
CIVIL APPEAL NO. 2014 OF 2011
Corporate Laws
G.S. SINGHVI AND ASOK KUMAR GANGULY, JJ.
J.L. Gupta, Amit Wadhwa, Sanjay Bhatt and S. Mahendran for the Appellant.
JUDGMENT
1. Delay condoned.
2. Leave granted.
3. This appeal is directed against the judgment of the Division Bench of the Delhi High Court whereby the appeal preferred by respondent-M/s. Kingston Computers (I) (P.) Ltd. (“the company”) was allowed and the suit filed by it for recovery of Rs. 8,50,952 along with interest of Rs. 3,06,342 was decreed by reversing the judgment of the Additional District Judge, Delhi ('the trial court').
4. The suit was filed by the respondent through Shri Ashok K. Shukla, who described himself as o
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ri Debashish Saraswati in the present suit ?
(3) Whether any loss has been caused by the defendant to the plaintiff ?
(4) Whether payments have been made by the defendant in due course and in good faith as alleged in paragraph 3 of the preliminary objections of the written statement if so its effect ?
(5) Whether the plaintiff is entitled to the suit amount ?
(6) Whether the plaintiff is entitled to interest, if so at what rate and for what period ?
(7) Relief ?”
6. After considering the pleadings and evidence of the parties, the trial court decided all the issues except issue No. 1 in favour of the company but dismissed the suit on the ground that Shri Ashok K. Shukla was not authorised to file the same.
7. The Division Bench of the Delhi High Court allowed the appeal of the company, reversed the judgment of the trial court and decreed the suit by relying upon the letter of authority issued by Shri Raj K. Shukla in favour of Shri Ashok K. Shukla.
8. Shri J.L. Gupta, learned se
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the High Court gravely erred in relying upon those resolutions and the authority letter issued by Shri Raj K. Shukla in favour of Shri Ashok K. Shukla.
9. We have considered the submissions of learned counsel and scrutinised the record.
10. In paragraph 1 of the suit filed on behalf of the company, it was pleaded that Shri Ashok K. Shukla is one of the directors of the company and he has been authorised by Shri Raj K. Shukla, the chief executive officer vide authority letter dated 2-1-2003, to do the following things :
(i)to sign, verify and file a suit for recovery on behalf of the company against the State Bank of Travancore, R.K. Puram Branch, New Delhi.
(ii)to sign, verify and file any document, application to lead evidence, make statement or compromise the matter before the hon'ble court,
(iii)to appoint any advocate or pleader or counsel and to sign vakalatnama,
(iv)to represent the company or appear on its behalf before the concerned court, any public authority or Tribuna
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n.
12. In the rejoinder filed on behalf of the company, it was reiterated that Shri Ashok K. Shukla, who has signed, verified and filed the plaint was authorised by Shri Raj K. Shukla vide authority letter dated 2-1-2003.
13. In his evidence, which was filed in the form of an affidavit, Shri Ashok K. Shukla claimed that he is one of the directors of the company and has been authorised by Shri Raj K. Shukla vide authority letter dated 2-1-2003, to file the suit. In cross-examination, Shri Ashok K. Shukla claimed that he was the only director in the company and that the board of directors of the company had passed resolution authorising Shri Raj K. Shukla to take decisions independently. He also claimed that he had been given power of attorney on behalf of the company, which was filed on record. He however admitted that no resolution was passed by the board of directors authorising him to sign, verify and file the plaint.
14. The trial court analysed the pleadings and evaluated the ev
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td. v. National Insurance Co. Ltd. [1991] 70 Comp. Cas. 388 and Shubh Shanti Services Ltd. v. Manjula S. Agarwalla [2005] 125 Comp. Cas. 477 (SC), the Delhi High Court (Original Side) Rules, 1967 and proceeded to observe:
“… As already stated, it has not been averred in the plaint nor sought to be proved that any resolution had been passed by the board of directors of the plaintiff-company authorising Shri A. K. Shukla to sign, verify and institute the suit. It has also not been averred that the memorandum/articles of the plaintiff-company give any right to Shri A.K. Shukla to sign, verify and institute a suit on behalf of the plaintiff-company. It, therefore, follows that the plaint has been instituted by Shri A. K. Shukla only on the authority of Shri Raj K. Shukla, CEO of the plaintiff-company. Such an authority is not recognised under law and, therefore, I held that the plaint has not been instituted by an authorised person. Issue No. 1 is accordingly, decided against the plaint
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