Delhi High Court

Delhi High Court: By way of an appeal, Pawan Hans Helicopters Ltd (’Appellants’) challenged the order passed by the Additional District Judge which had dismissed the suit on a technical ground as it had not been instituted by a duly authorised person despite coming to the conclusion that the appellant was entitled to a sum of INR 4,86,914’ towards the amount due from the respondent on account of sale of tickets as well unauthorized use of the complimentary ticket. The Single Judge Bench of V. Kameswar Rao, J., set aside the impugned judgement to the extent whereby the Trial Court hasheld that the suit was not filed by the authorised person but upheld the rest of the judgment.

In the matter at hand, the appellant was of the view that some documents were not required to be produced since duly notarized Power of Attorney (‘PoA’) dated 16-07-1996 in favour of the then Company Secretary (‘CS’) was put on record. Since the original PoA was not readily available, he produced the latest dated 30-11-2004 in his favour. The appellant submitted that the dismissal of the suit on a technical ground was contrary to the basic principle of law that the substantive right of a party should not be allowed to be defeated on a technical ground of procedural irregularity to ensure no injustice was done to any party.

Respondent opposed the application of additional documents and stated that the appellant had purposely not filed the documents on record despite having the same in possession. Order XLI Rule 27 of Code of Civil Procedure, 1908 (‘CPC’) allows leading additional evidence in an appeal subject to the Rules, however, the appellant could not satisfy the rules of the provision. It was submitted that the discretion of the Court to allow additional evidence was to be used sparingly. Inability of a party to understand the importance of a document does not constitute a ‘substantial cause’ within the provision of CPC.

However, the Court stated that the appellant was not allowed by the Trial Court only on the grounds that the Minutes of Board Meeting were not on record and since the fate of the appeal hinged upon this aspect, the Court allowed this application and decided to take the additional documents on record.

It was also stated that the respondent was required to deposit the amounts collected from the sale of tickets with the bankers of the appellant or with the appellant’s representative on a weekly basis. The monies collected from the sale of tickets were being held by the respondent in trust for and on behalf of the appellant. The respondent was supposed to return the unsold tickets and monies to the appellant’s officer. Further the respondent was required to submit a Bank Guarantee with the appellant as security.

The respondent was allegedly faltering in depositing the amounts received from the sale of tickets on the due dates as stipulated in the agreement. Due to the delay in the deposit of weekly collection amounts, a huge amount got accumulated. The respondent became dishonest and complimentary tickets were utilised by them without any authorisation from the Shrine Board and without any information to the appellant thereby causing loss to the appellant.

The appellant had filed a summary suit under Order XXXVII of CPC based on the admitted dues for recovery, along with the pendente lite interest of 18% till realisation of the amount, however, unconditional leave to defend was granted to the respondent.

Issue for consideration

  1. Whether the suit had been filed, signed and verified by a duly authorised person.

  2. Whether the period between March 2002 to May 2003 when the CS was not employed by the appellant could have filed the suit?

  3. Whether the plaintiff had falsely claimed an amount of INR 4,26,045/- towards the complementary tickets issued to Mata Vaishno as Devi Shrine Board?

  4. Whether the respondent was liable to pay interest of INR 6,73,655/- till 11-01-2002?

Court Analysis

The Court held that the PoA was validly executed which delegated the power in favour of the then CS and ratified all and whatever the attorney lawfully does. Therefore, all acts performed by him were stated to be valid. It was observed that the authorisation in case of a company can be given only after a decision to institute a suit was taken by the Board of Directors of a company.

It was noted that the PoA dated 30-11-2004, executed by the Managing Director in favour of the CS apart from sub-delegating the powers conferred on the Managing Director in the said Board Meetings additionally stated that the acts performed under the PoA dated 16-07-1996 was deemed to be valid. It was thus clear that the appellant company had expressly ratified the action of the CS in instituting or filing the suit in 2002.

The Court also noted the implied ratification of the institution of the suit by the CS after it perused the history of the present lis that had been pursued for 18 long years. Therefore, it could not presume that the suit filed by the CS was without authorisation of the appellant.

Upon perusing everything placed on record and considering the above stated facts, the Court held that the institution of the suit by CS was proper and justified. The Bench opined that that technicalities and procedural defects, which do not go to the root of the matter, should not be permitted to defeat a just cause, more so in cases where suits are initiated or defended on behalf of public corporations.

While answering the second issue, the Court stated that merely showing that he was not employed with the appellant between the period of March, 2002 to May, 2003 without respondent seeking further clarification from CS, it cannot be said that he was not in employment of the appellant when the suit was filed. It is the case of the appellant that he was working till March 20, 2002. The respondent had failed to satisfy this Court to the contrary.

Answering the third issue in contention, the Bench noted that the respondent had admitted that the cost of the complementary tickets works out to be INR 4,26,045/- whose authorisation slips were not produced by the respondent which ipso facto made appellant entitled to the amount from the respondent.

However, affirming the observation made by the Trial Court, the Bench stated that the appellant had failed to prove its entitlement to interest of INR 6,73,655/- and decided the issue in favour of the respondent and against the appellant.

With the above stated observation, the Bench set aside the impugned judgement to the extent whereby the Trial Court had held that the suit was not filed by the authorised person but upheld rest of the judgment.

[Pawan Hans Helicopters Ltd. v. Nidheesh Tours and Travels Pvt. Ltd., 2023 SCC OnLine Del 1574, decided on 13-03-2023]

Advocates who appeared in this case :

For the appellant- Advocate Puneet Taneja and Advocate Manmohan Singh Narula;

For the respondent- Advocate Hemant Chaudhari and Advocate Piyush Arora.

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