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1998 Supreme(Ker) 404

Judges : RADHAKRISHNA MENON
RAMACHANDRAN - Appellant
Versus
CARDAMAM MARKETING CO. - Respondent
Case No : C.R.P. No. 1594,1595 of 1988-A
Decided On : 09/20/1988
Advocates Appeared :
C.M. Devan; For Petitioner M. Ramanatha Pillai; For Respondent

The competence of the Secretary of a company to sign and verify pleadings on behalf of the company, even without approval from the Central Government, as long as the Secretary is managing the affairs of the company and able to depose to the facts pleaded.

Headnote:

Competency of Secretary to Sue on Behalf of Company - Companies Act - S.269, S.388, Order VI R.14, Order VI R.15, Order XXIX R.1 CPC - The court held that the Secretary of the company, although not approved by the Central Government, was competent to sign and verify the pleadings as he was managing the affairs of the company and able to depose to the facts pleaded. The court rejected the contention that the suit was not properly instituted due to improper signing and verification of the pleadings.

Fact of the Case:

The revision petitioner, the 1st defendant, challenged the competency of the Secretary of the plaintiff company to sue on behalf of the company, as he was not duly authorized to sign and verify the pleadings.

Finding of the Court:

The court found that the Secretary, although not approved by the Central Government, was competent to sign and verify the pleadings as he was managing the affairs of the company and able to depose to the facts pleaded. The court rejected the contention that the suit was not properly instituted due to improper signing and verification of the pleadings.

Issues: Competency of the Secretary to sue on behalf of the company without approval from the Central Government.

Ratio Decidendi: The Secretary, although not approved by the Central Government, was competent to sign and verify the pleadings as he was managing the affairs of the company and able to depose to the facts pleaded.

Final Decision: The court dismissed the C.R.P as the Secretary was found to be competent to sign and verify the pleadings, and the suit was held to be properly instituted.

Judgment :-

1. The 1st defendant in O.S.267/82 who is the sole defendant in O.S. 128/84 is the revision petitioner.

2. The court below by a common order disposed of the preliminary issue, extracted hereunder, by the order under challenge:

"Is the signatory in the plaint competent to sue on behalf of the plaintiff company?".

3. The plaintiff is the 'Cardamam Marketing Co. (Travancore) Ltd., Brindavan Buildings, M.C. Road, Kottayam 1'. It is a public limited company within the meaning of the Companies Act. The plaint has been signed and verified by one Mr. N. Ananthasivan, designated as the Secretary of the Bank. The verification reads:

"I, N. Ananthasivan, M.A.LLB, Secretary of the plaintiff company solemnly declare that all the facts stated by me in the above paragraphs are true to my knowledge and belief".

4. According to the petitioner Sri. Ananthasivan, inasmuch as he has not been duly authorised to sign and verify the pleadings, has no authority to sign and verify the pleadings, and as such, the suit is liable to be dismissed as not maintainable.

5. The learned counsel for the respondent-plaintiff argues that Sri. Ananthasivan who has signed and verified the pleadings is the Secretary of the Company, and he has duly been authorised by the Articles of Association to sign and verify the pleadings. In support of this argument the counsel relied on Clause.27 and 29 of the Articles of Association. They read:

"27. the Secretary shall be the Chief Executive Officer of the Company subject to the control of the Board of Directors and the President or Chairman. He.shal-1 have the power to appoint the Office Staff such as Office Clerks, Inspectors, Supervisors, peons, etc., in consultation with the President or Chairman.

29. The Secretary shall be the competent person to sue and be sued on behalf of the Company and he shall represent the Company's interests in the Courts of Law."

Dilating on this point he further argued that the Secretary, in any event, can be treated as the principal officer within the meaning of 0.29 R.1 C.P.C. because he was managing the affairs of the Company at the relevant time.

6. The learned counsel for the defendant on the other hand argued that the person who has signed and verified the pleadings although a Secretary within the meaning of Clause.27 and 29 of the Articles of Association, has no authority to sign and verify the pleadings, because his appointment as Secretary, has not been approved by the Central Government. That such approval is required is clear from the provisions contained in S.269 read with S.388 of the Companies Act the learned counsel argues. It is not the case of the plaintiff, he argues, that the Company has obtained the requisite approval of the Central Government. He accordingly concludes the argument by saying that the pleadings cannot be said to have been duly signed and verified by a person who is competent under law to sign and verify the same and as such there is no suit in the eye of law. There is considerable force in this argument.

7. R.14 and 15 of Order VI C.P.C. regulate the requirements regarding signing and verifying the pleadings generally. A Corporation can take the advantage of these provisions and have its pleadings signed and verified by a duly constituted agent as observed by a Division Bench of this Court; vide Kottayam Bank v. Ahamed Kannu Rawther (AIR 1957 Ker.164). The Division Bench held so because according to the Division Bench 0.29 R.1 which prescribes the mode that should be adopted in regard to signing and verifying of pleadings on behalf of corporation is only permissive in nature. 0.29 R.1 reads:

1. Subscription and verification of pleading. In suits by or against a corporation, any pleading may be signed and verified on behalf of 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".

This provision says that any one of the persons described therein is competent to sign and v



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