High Court Of Delhi
NATIONAL AND GRINDAY BANK - Appellant
Versus
RADIO ELECTRONICS CORPORATION P.LIMITED - Respondent
Suit 428 of 1972
Decided On : 11/03/1977
EVIDENCE ACT, 1872 - SECTION 85 - POWER OF ATTORNEY - EXECUTION AND AUTHENTICATION - PRESUMPTION - REBUTTABLE - NOTARY PUBLIC - AUTHENTICATION - MEANING AND SCOPE - COMPANY - EXECUTION OF POWER OF ATTORNEY ON BEHALF OF - RESOLUTION OF BOARD OF DIRECTORS - NECESSITY.
Fact of the Case:
In a suit filed by the National and Grindlays Bank Limited against the defendants, the plaintiff sought to prove a power of attorney executed by two officers of the plaintiff company in favor of Mr. John Herbert Keeble. The power of attorney had been duly authenticated by a Notary Public in London. The defendants objected to the admissibility of the power of attorney, arguing that the plaintiff must first prove the resolution of the Board of Directors authorizing the officers to execute the power of attorney.
Finding of the Court:
The court held that Section 85 of the Indian Evidence Act raises a legal presumption about the due execution and authentication of a power of attorney that has been duly authenticated by a Notary Public. This presumption is rebuttable, and the other party has the right to produce evidence to show that the executant had no authority to execute the instrument.
Issues: Whether a power of attorney executed on behalf of a company by two of its directors is admissible in evidence without proof of a resolution of the Board of Directors authorizing the execution.
Ratio Decidendi: The court held that Section 85 of the Indian Evidence Act does not draw any distinction between the kind of documents, viz: power of attorney executed by an individual and the one executed on behalf of a Company. Authentication of any of these instruments by a Notary Public raises a legal presumption that the same has been duly executed and the person or persons who had executed, had the authority to do so.
Final Decision: The court overruled the defendants' objection and held that the power of attorney was admissible in evidence.
( 1 ) IN his statement Sh. Udayan Bose, Public Witness. I. wanted to prove, Power of Attorney, dt. 3. 11. 62 executed by two officers of the plaintiff company (The National and Grindlays Bank Limited) in favour of Mr. John Herbert Keeble. This power of attorney had been duly authenticated by a Notary Public in London. An objection has been raised on behalf of the defendants that unless and until the resolution of the Board of Directors authorising the said officers of the Company to execute the general power of attorney in favour of Mr. Keeble is proved, the locus standi and power of those officers to act on behalf of the Company cannot be established. It is accordingly submitted that the said document can only be marked for the purposes of identification and cannot be exhibited for being read in evidence.
( 2 ) IN answer, Shri Rajiv Sawhney, the learned counsel for the plaintiff Company, has combated this objection and has relied on Section 85 of the Indian Evidence Act. He has submitted that under this provision a power of attorney, after authentication, is not only admissible in evidence but also raises a legal presumption about its due execution. It is further canvassed that such a presumption is rebutable and that the other side has, therefore, every right to produce evidence to show that the executant had no authority to execute the instrument. To reinforce his arguments, he has placed relies on Jugral Singh v. Jaswant Singh A. I. R. 1971 S C. 761, National and Grindlays Bank Ltd. v. M/s. World Science News A. I. R. 1976 Delhi 263, Performing Right Society Ltd. v. Indian Morning Post Restaurant, A. I. R. 1939 Bombay 347, The Jaipur Udyog Ltd v. Union of India A. I. R. 1972 Rajasthan 129, and Nali Mohammad v. Jamal Uddin, A. I. R. 1950 Allahabad 524.
( 3 ) IN this connection the learned counsel for the defendants has contended that a power of attorney can be executed by two type of persons. One may be executed by an individual in favour of another person and the other can be on behalf of a corporate body in favour of a particular person. So far as the first category is concerned, there is no dispute as an authentication by a Notary Public establishes the identity of the executant and section 85 of the Indian Evidence Act raises the requisite presumption about its execution. Difficulty, however, sparkles in the case of the second type, where an executant darives the authority to execute the instrument from the company. Such an authority can be provided either in the Articles of Association of the Company or may be conferred by a resolution of its Board of Directors. It is argued by Shri Kumar that in his case the power of a attorney had been executed on behalf of the Company by two of its Directors and that it is, therefore, essential for the plaintiff to prove the resolution of the Board of Directors, which had armed them with the necessary powers. It is further contended that failure to produce and prove the resolution renders the power of attorney inadmissible, in spite of its authentication by the Notary Public.
( 4 ) IT has now to be seen whether the condition, which is being postulated by the learned counsel for the defendants, really exists in section 85 of the Indian Evidence Act. A plain reading of this section shows that it makes no distinction whether the power of attorney has been executed by an individual or some one on behalf of a company. The section prescribes in clear and unequivocal terms that a power of attorney duly authenticated by a Notary Public shall raise the presumption about its execution and authentication. Authentication is not merely attestation but something more. It means that the person authenticating has assured himself of the identity of the person who has signed the instrument as well as the act of execution. It is for this reason that the presumption under section 85, unless rebutted, stands and the document can be admited in evidence as a document executed by the person alleg
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