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2011 Supreme(Mad) 3655

High Court of Judicature at Madras
ELIPE DHARMA RAO & M. VENUGOPAL
T. Mohanraj
Versus
Akila Thiruvidancore Siddha Vaidhya Sangam
O.S.A.Nos.359 & 360 of 2008
Decided on : 17-08-2011

Advocates appeared:
For the Appellant:V. Selvaraj, Advocate.
For the Respondent:Kanimozhi Mathi, Advocate.

Headnote:

The Court held that the plaint cannot be rejected on technical objections. The authority to file a suit is not a technical matter and a person who is neither a Member nor a Director of the Company, cannot file a suit on behalf of the Company. The Court also held that the suit is maintainable in view of the fact that a Company can maintain a suit of the present nature against a wrong doer.

Fact of the Case:

The Respondent/Plaintiff Company represented by L.N.Noel Raj (who represents the Respondent/Plaintiff Company) is neither a Director nor the Acting President as claimed by him and further, there is no such post of Acting President in the Bye-Laws of the Respondent Sangam. Also, the Respondent/Plaintiff is neither a person aggrieved nor a person interested in the subject matter.

Finding of the Court:

The Court held that the plaint cannot be rejected on technical objections. The authority to file a suit is not a technical matter and a person who is neither a Member nor a Director of the Company, cannot file a suit on behalf of the Company. The Court also held that the suit is maintainable in view of the fact that a Company can maintain a suit of the present nature against a wrong doer.

Issues: Whether the plaint can be rejected on technical objections. Whether the authority to file a suit is a technical matter. Whether a person who is neither a Member nor a Director of the Company, can file a suit on behalf of the Company. Whether the suit is maintainable in view of the fact that a Company can maintain a suit of the present nature against a wrong doer.

Ratio Decidendi: The Court held that the plaint cannot be rejected on technical objections. The authority to file a suit is not a technical matter and a person who is neither a Member nor a Director of the Company, cannot file a suit on behalf of the Company. The Court also held that the suit is maintainable in view of the fact that a Company can maintain a suit of the present nature against a wrong doer.

Final Decision: The Court allowed the Appeals and set aside the Common Order dated 07.03.2008 in Application Nos.7131 and 4527 of 2007 in C.S.No.752 of 2005 passed by the Learned Single Judge.

JUDGMENT :-

M. VENUGOPAL, J.

1. The Appellant/Defendant has filed the O.S.A.Nos.359 and 360 of 2008 as against the common order dated 07.03.2008 in Application Nos.7131 and 4527 of 2007 in C.S.No.752 of 2005 passed by the Learned Single Judge.

2. The Learned Single Judge, while passing orders in Application Nos.7131 and 4527 of 2007 in C.S.No.752 of 2005, has, among other things, observed that '... the Respondent/Plaintiff is not a commercial venture registered as a Limited Company under the Companies Act, 1956. It is an Association registered under Section 25 of the Companies Act, 1956, with the object of promoting Siddha System of Medicine. It is a non profitable organisation, which got registered under the Companies Act, 1956, instead of getting registered under the Societies Registration Act or under the Trusts Act. Therefore, a suit by such a non profitable organisation filed with a view to seek rendition of accounts from one of the erstwhile office bearers, cannot be thrown out under Order 7 Rule 11 of the Civil Procedure Code, on the ground of such a technical objection and further opined that, it is seen that a part of the cause of action allegedly arose within the jurisdiction of this Court. This is disclosed in Paragraph 30 of the Plaint. What is stated in Paragraph 30 of the Plaint may be true or false. But for the present, they have to be assumed to be true to decide the Application under Order 7 Rule 11 of the Civil Procedure Code. Moreover, Item-3 of the suit schedule property is stated to be a Dispensary in Ayanavaram, Chennai-600 023. Therefore, the other grounds on which the rejection of the Plaint is sought for, also cannot be sustained and resultantly dismissed both the Applications.”

3. The Learned Counsel for the Appellant/Defendant urges before this Court that the common order of the Learned Single Judge passed in Application Nos.7131 and 4527 of 2007 in C.S.No.752 of 2005, dated 07.03.2008, is contrary to law and therefore, it is liable to be set aside.

4. It is the further contention of the Learned Counsel for the Appellant/Defendant that the Learned Single Judge erred in holding that though L.N.Noel Raj, who filed the suit is not a Member of the Company as per the Document No.10, dated 04.01.2003, filed along with the Plaint and Additional Document No.9, dated 30.09.2004, filed during the course of the arguments are set to be by the General Body and that the validity of the Resolution cannot be gone into an Application as per Order 7 Rule 11 of the Civil Procedure Code.

5. Advancing his arguments, it is the submission of the Learned Counsel for the Appellant/Defendant that the Learned Single Judge is not correct in coming to the conclusion that whether the suit is filed by a person who is authorised or not, is a disputed question of fact and the same cannot be decided in the present Interlocutory proceedings.

6. The Learned Counsel for the Appellant/Defendant strenuously contends that the Authority to file a suit is not a technical matter and a person who is neither a Member nor a Director of the Company, cannot file a suit on behalf of the Company.

7. The Learned Counsel for the Appellant/Defendant projects an argument that the Appellant/Defendant has raised a plea relating to the Authority to institute the suit on behalf of the Company and not the manner of verification of the pleadings. As such, the reference made by the Learned Single Judge to the decisions of the Honourable Supreme Court in Ramesh B. Desai and others v. Bipin Vadilal Mehta and others, [(2006) 5 Supreme Court Cases 638] and All India Reporter Ltd., Bombay with Branch Office at Nagpur and another v. Ramchandra Dhondo Datar, [AIR 1961 Bombay 292], are not applicable to the facts of the present case.

8. Expatiating his submissions, the Learned Counsel for the Appellant/Defendant contends that the Learned Single Judge is not correct in holding that the Plaint cannot be rejected on technical objections.

9. Apart from the above, the Learned





















































































































































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