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2019 Supreme(AP) 195

IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI
AKULA VENKATA SESHA SAI, CHEEKATI MANAVENDRANATH ROY, JJ.
Bhjrang Cranes - Appellant
Versus
Shriram Transport Finance Co. Ltd. and Ors. - Respondent
Com. CA No. 3 of 2019
Decided On : 26-09-2019

Advocates:
Advocate Appeared:
For the Appellant : V.R.N. Prashanth for Indus Law Firm
For the Respondent: P. Veera Reddy for Kuncheam Maheswara Rao

Headnote:

Arbitration and Conciliation Act, 1996 - Section 19 - The 1st respondent herein is the claimant in the arbitration proceedings, initiated under the provisions of the Arbitration and Conciliation Act, 1996 (hereinafter called as the "Act") in the year 2014. The appellant herein filed the present interlocutory applications before the learned Arbitrator under the provisions of Section 19 of the Act praying the learned Arbitrator to dismiss the claim statements on the ground that the Power of Attorney is not legally valid. The 1st respondent herein resisted the said interlocutory applications by filing counters. The learned Arbitrator by way of an order dismissed the said applications – Held, the Board of Directors also approved the Power of Attorney executed in favour of Sri Vivek M. Achwal, Company Secretary. It is further clear from a reading of the said resolution that the Company also authorised him to delegate I his powers to other officials of the Company as may be deemed expedient and execute such documents and papers. Obviously in terms of the said resolution, Sri Vivek M. Achwal, Company Secretary, executed the Power of Attorney in favour of Sri Peethala Jagadeesh, Assistant Credit Manager, functioning at Visakhapatnam. According to Clause (h)(1) and (8) as mentioned supra, the power has been given in favour of the Assistant Credit Manager, mentioned supra. The judgments on which the learned Counsel for the appellants seeks to rely upon dealt with the cases where there was no authorisation in favour of the concerned, unlike the present cases. It is also significant to note in this context that the Honble Apex Court in the above referred judgment in United Bank of India v. Naresh Kumar (supra), while dealing with the provision of Order VI Rules 14 and Order XXIX Rule 1 of CPC categorically ruled that where the suits are instituted or defended on behalf of a public Corporation, public interest should not be permitted to be defeated on a mere technicality and as far as possible a substantive right should not be allowed to be defeated on account of a procedural irregularity which is curable. The Honble Apex Court also further observed that under Order VI Rule 14 CPC a pleading should be signed by the party and its pleader, if any, and as a company is a juristic entity, it is obvious that some person has to sign the pleadings on behalf of the company. The Honble Apex Court also ruled further that even in the absence of any formal letter of authority or Power of Attorney having been executed by 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 – Petition dismissed

JUDGMENT :

AKULA VENKATA SESHA SAI, J.

1. Since all these appeals raise common questions of law, this Court deems it appropriate and apposite to hear these matters together and dispose of these appeals by way of a common order.

2. The 1st respondent herein is the claimant in the arbitration proceedings, initiated under the provisions of the Arbitration and Conciliation Act, 1996 (hereinafter called as the "Act") in the year 2014. The appellant herein filed the present interlocutory applications before the learned Arbitrator under the provisions of Section 19 of the Act praying the learned Arbitrator to dismiss the claim statements on the ground that the Power of Attorney is not legally valid. The 1st respondent herein resisted the said interlocutory applications by filing counters. The learned Arbitrator by way of an order dated 16.7.2016 dismissed the said applications. The said order reads as hereunder:

"The petitioner under Section 19 of the Arbitration and Conciliation Act, for dismissing the claim statement as the Power of Attorney is not legally valid, on the ground that there is no material that the claimant company has issued any letter authorizing the Secretary of the Company to delegate the powers to others. In the claim petition it was asserted that the Asst. Credit Manager is competent to file the claim petition by virtue of the General Power of Attorney dated 18.10.2012. In Para 6 of the affidavit filed in support of this application it was asserted that the Power of Attorney is silent about the appointment filed in support of the claim petition. It cannot be disputed that the Resolution of the Board of Directors dated 9.11.2011 clearly authorizes the Company Secretary to delegate his powers to other officials. For the said reason I find no merits in the application and it is accordingly dismissed. Both parties are directed to proceed with the arbitration as the matter is getting delayed."

3. Assailing the validity and legal sustainability of the said orders passed by the learned Arbitrator, the appellant herein filed C.A.O. Ps. under Section 34 of the Act. The learned Special Judge for trial of Commercial Disputes-Commercial Division-cum-Principal District Judge, Visakhapatnam, by way of the orders under challenge in these appeals dismissed the said C.A.O. Ps. filed by the appellant herein. In the present appeals filed under Section 13 of the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015, the said orders passed by the learned Principal District Judge are under challenge.

4. Heard Sri V.R.N. Prashanth, learned Counsel, appearing on behalf of M/s. Indus Law Firm, for the appellants and Sri P. Veera Reddy, learned Senior Counsel, for Sri Kuncheam Maheswara Rao, learned Counsel for the 1st respondent and perused the material available on record.

5. It is contended by the learned Counsel for the appellants that the orders, passed by the learned Principal District Judge, which are impugned in the present appeals, are highly erroneous, contrary to law and opposed to the very scheme and object of the Act. It is the further submission of the learned Counsel that the findings recorded by the learned Principal District Judge to the extent of non-compliance with the provisions of sub-section (5) of Section 34 of the Act and the aspect of authorisation to initiate the arbitration proceedings are neither sustainable nor tenable. It is the further submission of the learned Counsel for the appellants that the resolution dated 9.11.2011 sought to be pressed into service on behalf of the 1st respondent herein does not authorise the Agent mentioned therein to institute and start the proceedings and in the absence of the said power, question of delegating the power either to institute or to start the proceedings to the Assistant Credit Manager, Sri Peethala Jagadeesh does not arise and it is impermissible. In support of his submissions and contentions, learned Counsel for the appellants t

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