2011 (2) TMI 1270 – SUPREME COURT OF INDIA – [2011] 107 SCL 377 (SC), [2011] 163 COMP. CAS. 37 (SC), 2011 (11) SCC 524, 2011 (3) JT 66, 2011 (3) SCALE 33 – Maintainability of the suit – authorized signatory – authority letter – suit was filed by the respondent through Shri Ashok K. Shukla, who described himself as one of the directors of the company and claimed that he was authorised by Shri Raj K. Shukla, the chief executive officer of the company vide authority letter dated 2-1-2003, to sign, verify and file suit for recovery on behalf of the company. A copy of the authority letter allegedly signed by Shri Raj K. Shukla was also annexed with the plaint. In the written statement filed on behalf of the appellant, a preliminary objection was taken to the maintainability of the suit on the ground that Shri Ashok K. Shukla was not authorised by the company to file the suit and the authority letter given by Shri Raj K. Shukla was not sufficient to entitle him to do so. – CIVIL APPEAL NO.
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also annexed with the plaint. In the written statement filed on behalf of the appellant, a preliminary objection was taken to the maintainability of the suit on the ground that Shri Ashok K. Shukla was not authorised by the company to file the suit and the authority letter given by Shri Raj K. Shukla was not sufficient to entitle him to do so. The respondent filed replication but did not plead that Shri Ashok K. Shukla was authorised by the company to file the suit. 5. On the pleadings of the parties, the trial court framed the following issues: (1) Whether the suit has been signed, verified and filed by a duly authorised person ? (2) What is the effect of not joining Shri 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 pl
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nd he had been authorised by the company to file the suit. Learned senior counsel extensively referred to the pleadings of the parties including the rejoinder filed on behalf of the company before the trial court, evidence of Shri Ashok K. Shukla and argued that the suit could not have been decreed because no evidence was produced on behalf of the company to prove that Shri Ashok K. Shukla was authorised to file the suit. Shri Gupta pointed out that resolutions dated 14-2-2001 and 19-4-2001, passed by the board of directors of the company had bearing only on the issue of operating the bank account and not on the issue of filing the suit and the Division Bench of 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 Asho
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inability of the suit on the ground that the plaint has not been signed, verified and filed by a competent and authorised representative on behalf of the company and that there is neither any valid board resolution nor any valid authorisation on behalf of the company nor a copy of the resolution has been filed along with the suit. It was also pleaded that the person who has instituted the suit on behalf of the company is not shown to be a power of attorney holder nor a copy of such power of attorney has been filed with the plaint and the authorisation letter purported to have been given by the so-called Chief Executive Officer is not a valid authorisation. 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
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present suit. Apart from this authority letter, the plaintiff-company has not filed on record any board resolution authorising Shri A.K. Shukla to sign, verify and institute the present suit. The plaintiff has also not filed on record its memorandum/articles to show that Shri Raj Kumar Shukla had been vested with the powers or had been given a general power of attorney on behalf of the company to sign, verify and institute the suit on behalf of the company. The present suit, therefore, has been filed merely on the strength of the authority letter exhibit PW1/A … 15. The trial court then referred to the judgment of the Delhi High Court in Nibro Ltd. 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
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ntment of Shri Ashok K. Shukla as a director, but reversed the finding of the trial court on issue No. 1 on the basis of the authority letter issued by Shri Raj K. Shukla and resolutions dated 14-2-2001 and 19-4-2001, by which the board of directors of the company had authorised some persons to operate the bank account. 17. In our view, the judgment under challenge is liable to be set aside because the respondent had not produced any evidence to prove that Shri Ashok K. Shukla was appointed as a director of the company and a resolution was passed by the board of directors of the company to file suit against the appellant and authorised Shri Ashok K. Shukla to do so. The letter of authority issued by Shri Raj K. Shukla, who described himself as the Chief Executive Officer of the company, was nothing but a scrap of paper because no resolution was passed by the board of directors delegating its powers to Shri Raj K. Shukla to authorise another person to file suit on behalf of the company.
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