Pvt.ltd.co. suit filed without authority.
S.G.KRISHNAN
(Querist) 01 August 2012
This query is : Resolved
A Private Ltd. Company has filed a suit and also filed affidavits. The person who signed the plaint and affirmed the affidavits is not a Director, there is no board resolution authorising him, there is no power of attorney in his favour and also his name is not in AOA empowering to file suit and or to affirm affidavits. My questions are:
1. Whether the suit is maintainable ?
2. If not, please advise/guide by giving the
case law in the matter.
ajay sethi
(Expert) 01 August 2012
Order 29 Rule 1 of the Code of Civil Procedure reads as under:-
Subscription and verification of pleading.-
In suits by or against a corporation, any pleading maybe signed and verified on behalf of the corporation by the secretary or by any director or other principal officer of the corporation who is able to depose to the facts of the case.”
It can be inferred from the above that the Secretary, Director or a Principal Officer of a company would be treated as duly authorized to institute suits on behalf of a company
in the case of a Corporate, only persons specifically authorized can sign on its behalf. Usually such authorization is given either by a Board resolution or by an instrument of power of attorney.
United Bank of India's case in para 10, Hon'ble Supreme Court held as under:-
“Reading Order 6 Rule 14 together with Order 29 Rule1 of the Code of Civil Procedure it would appear that even in the absence of any formal letter of authority or power of attorney having been executed, a person referred to in Rule 1 of Order 29 can, by virtue of the office which he holds, sign and verify the pleadings on behalf of the corporation.
ajay sethi
(Expert) 01 August 2012
Supreme court has held in United bank of India Vs Sh Naresh Kumar & Ors that there is sufficient power in the Courts, under the Code of Civil Procedure, to ensure that injustice is not done to any party who has a just case. As far as possible a substantive right should not be allowed to be defeated on account of a procedural irregularity which is curable. Hence court should give an opportunity to cure the defect .i,e ratification.
C. P. CHUGH
(Expert) 02 August 2012
Rightly opined by Mr Sethi, Nothing more to add. Courts are generally liberal to allow opportunity to complainant to remove the deficiency with regard to authorisation of person making complaint on behalf of jurisdictional persons.
Advocate Bhartesh goyal
(Expert) 02 August 2012
Not filing the resolution passed by board of directors or power of attoney at the time of filing plaint in court does not fatal the case.It is merely an irregularity which can be cured and court generally permit to file the same later on.
