1. This is a suit, which is ready for the hearing of final arguments. An application for dismissal of the suit under Order VII Rule 11 has been filed by the defendants, being G.A. No. 6 of 2019, and a preliminary argument with respect to maintainability of the suit has been put forth. Thus, leave was given to the parties to make their submissions regarding maintainability of the suit and the decision on this preliminary point has been rendered herein.
2. Mr. Mitra, counsel for the defendant had argued that under Order XXIX Rule 1 of the Code of Civil Procedure, 1908 [hereinafter referred to as "CPC"], a pleading must be signed and verified on behalf of a corporation by the secretary, director, or any other principal offer who is able to depose as to the facts of the case. He submitted that in the present suit, the plaint has been verified by a Mr. Amit Sen, who has stated that he is the "constituted attorney" of plaintiff No. 1 and the "Senior Manager and authorized representative" of plaintiff No. 2. The counsel submitted that Mr. Amit Sen did not fall into any of the categories of persons specified in Order XXIX Rule 1 and, thus, could not have verified the plaint. He further submitted that nothing was appended to the plaint, which would indicate that Mr. Sen was an authorized representative.
3. The counsel then placed Exhibits J, I and K before the Court and proceeded to argue that Exhibit J is an apostilled document and not a power of attorney, by which the President of the plaintiff company delegated certain powers to Mr. Laurent Raymond Audaz on 17th March, 2016. With respect to Exhibit I, the counsel submitted that it is a Power of Attorney nominating Mr. Amit Sen as the authorized agent and had been executed by Mr. Audaz on 10th March, 2016. He submitted that Mr. Audaz did not have any authority to execute this Power of Attorney on 10th March, 2016 as he had been delegated powers by the plaintiff on 17th March, 2016. He further stressed on the point that these documents were not put on record when the suit was filed. Further, the stamping on Exhibit I is dated 2nd January, 2017 and he argued that these documents were not even in existence on the date the suit was filed. When Section 2(21) of the Stamp Act, 1899 is read with Entry 48(d) of Schedule IA of the Act, it is clear that a power of attorney is required to be stamped and if not stamped, the presumption is that the document is invalid. Additionally, he submitted that these documents were only disclosed after taking time on multiple occasions.
4. The counsel further submitted that the law does not allow subdelegation and placed the judgement of Mangulal Chunilal -vManilal Maganlal and Anr., (1968) 2 SCR 401in support of his argument. He also placed the order dated 5th December 2018 in this matter, which recorded that the authorization for the plaintiff's witnesses to depose was on the way from Geneva and submitted that such authorization should have been given in 2016 itself.
5. Mr. Thaker, counsel appearing on behalf of the plaintiff argued that it is not obligatory to file power of attorney with the plaint and there is no law which mandates that the same should be done. He further submitted that Exhibit J was marked without any objections. With respect to Exhibit J, he submitted that the document was executed on 1st December, 2014 and was apostilled on 17th March, 2016. Thus, as per the document, Mr. Audaz did have the authority to appoint legal representatives to act for the plaintiff company and this is equivalent to a power of attorney under Swiss law. He also submitted that no case was made out in the written statement that Mr. Amit Sen had no authority to file the suit and this was raised for the first time only on 5th December, 2018. Furthermore, no question was put to him regarding his capability or competence to verify the plaint.
6. He further argued in response to the stamping argument made by the defendants that stamping has no effect on the validity of a document and is required to be done only for the purpose of adducing it in evidence. He placed questions 82-85 put to Mr. Sen before the Court, which relate to Exhibit I and submitted that the original document was only produced on 20th December, 2018 when the Court directed him to produce the same and they had earlier received the photocopy. With respect to Exhibit J, he submits that there is no cause for suspicion as the original of the document has been submitted by Mr. Audaz in another proceeding in a foreign country, which is why the plaintiffs could not produce the original document in the present matter. With respect to the defendant's argument that law does not allow subdelegation, he argued that express power of delegation has been given to Mr. Audaz in paragraphs 1, 3, and 4 of the authorization document marked as Exhibit J. He also submitted that Order XXIX Rule 1 must be read with Order VI Rule 14 of the CPC and placed the judgement of United Bank of India -v- Naresh Kumar and Ors., (1996) 6 SCC 660. He placed Exhibit K and clarified that plaintiff No. 2 authorized Mr. Amit Sen on 10th June, 2016 and later also ratified his actions on 25th July, 2018. Lastly, he clarified that the plaintiffs did not cause undue delay in producing the documents, but only sought leave of the Court on one occasion to procure the original.
7. I have heard and considered the arguments made by both sides at length. I find this preliminary objection with regards to the maintainability of the suit unsustainable.
8. Firstly, with respect to Exhibit J, it is a document that was executed on 1st December, 2014 and was apostilled on 17th March, 2016. However, on the day Mr. Audaz executed the power of attorney, that is, 11th March, 2016, Exhibit J was very much in existence and valid. The document grants wide powers to Mr. Audaz to appoint legal representatives and execute legal appointments on behalf of the Company and, thus, Mr. Audazhad full authority to him execute the Power of Attorney in favour of Mr. Sen on 17th March, 2016and was acting well within the powers when he did so.
9. Secondly, the defendant has argued that Indian law does not provide for sub-delegation of power of attorney. However, the authorization document marked as Exhibit J grants Mr. Audaz express powers, which are wide-ranging and includes appointment of legal representatives to act for the plaintiff Company. Thus, Mr. Audaz has acted within the authorization granted to him by the Company in executing the power of attorney in favour of Mr. Sen.
10. The judgement placed by the defendants of Mangulal Chunilal (supra) is distinguishable to the present case on facts. A Municipal Corporation Act and the powers granted under the said legislation were in consideration and the Court decided accordingly. In the present case, the authorization document lucidly provides clearly states the powers Mr. Audaz would have to act on behalf of the Company. The relevant extract is as follows:
"1. To appoint Legal Representatives to act for MSC Mediterranean Shipping Company S.A. and to file dissension of jurisdiction, apply to stay the proceedings, attend court hearings, attend hearings and meetings with regulatory authorities, raise and amend where necessary litigation, arbitration and other alternative dispute resolution requests, draft and file any defence, application, submission registration, filing or other similar document and have them signed on the Company's behalf, to make a compromise offer either out of, or before the court in accordance with the Company's instructions, make a counterclaim, make an appeal and accept service of the court documents for and on behalf of the Company;
2. To attend meetings with existing or prospective business partners and other related parties;
3. To execute legal appointments on behalf of the Company; and
4. To do all other acts and things and execute all such deeds and documents on behalf of the Company as may be necessary or desirable in connection with legal appointments on behalf of the Company."
11. The defendant's argument that Mr. Sen does not fall under any of the categories of persons mentioned in Order XXIX Rule 1 fails in light of the judgement cited by the plaintiff's counsel. In United Bank of India (supra), the Apex Court has held that Order XXIX Rule 1 should be read with Order 6 Rule 14 of the CPC. In paragraph 9 of the judgement, the court observes that a substantive right cannot be defeated on account of a mere irregularity and procedural defects, which do not go to the root of the matter. Further, in paragraph 10, the Court holds that in addition to Order XXIX Rule 1, a company can authorize any person to duly verify and sign pleadings on its behalf and such authorization will amount to sufficient compliance with Order VI Rule 14 of the CPC. The paragraph has been produced below:
"10. It cannot be disputed that a company like the appellant can sue and be sued in its own name. Under Order 6 Rule 14 of the Code of Civil Procedure a pleading is required to be signed by the party and its pleader, if any. As a company is a juristic entity it is obvious that some person has to sign the pleadings on behalf of the company. Order 29 Rule 1 of the Code of Civil Procedure, therefore, provides that in a suit by or against a corporation the Secretary or any Director or other Principal Officer of the corporation who is able to depose to the facts of the case might sign and verify on behalf of the company. Reading Order 6 Rule 14 together with Order 29 Rule 1 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. In addition thereto and dehors Order 29 Rule 1 of the Code of Civil Procedure, as a company is a juristic entity, it can duly authorise any person to sign the plaint or the written statement on its behalf and this would be regarded as sufficient compliance with the provisions of Order 6 Rule 14 of the Code of Civil Procedure. 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 being 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 express 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 officer."
12. Exhibit J was duly executed on 1st December, 2014 and the powers mentioned in the document were vested in Mr. Audaz. Thus, he was acting within his powers when he executed the power of attorney in favour of Mr. Amit Sen on 11th March, 2016. The document was apostilled on 17th March, 2016, but apostilling has no bearing on the validity of a document, and is merely carried out so that public documents can be recognized in a foreign country. With respect to sub-delegation being permissible, I find no force in the judgement of Mangulal Chunilal (supra) cited by
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the defendants, which was decided on the basis of a local statute, and it does not lay down any law on sub-delegation. Additionally, Mr. Amit Sen was competent to verify the plaint and when Order XXIX Rule 1 is read along with Order VI Rule 14, I find no fault on the part of plaintiffs in fulfilling the process of verification. The procedural rules laid down in the CPC must be read harmoniously and mere procedural defects should not affect substantive rights. In this case, I find no procedural defects at all and, thus, there is no cause to dismiss the suit on the preliminary point taken by the defendants. Further, since a lot of documents in this case had to be procured from a foreign country, I do not find any cause to view the plaintiff's request for extension to produce the originals with suspicion. 13. In my view the verification of the pleadings was duly done and Mr. Sen was authorized to verify the same. Thus, the defendant's preliminary contention fails and the suit is maintainable. 14. G.A. No. 522 of 2019 (G.A. No. 6 of 2019) is disposed of accordingly. The arguments on the main suit shall be heard on April 12, 2019. 15. All parties are to act on the basis of this order to be downloaded from the official website of this High Court.