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2010 Supreme(Ori) 814

IN THE HIGH COURT OF ORISSA
V. Gopala Gowda, I. Mahanty, JJ.
EIMCO ELECON (INDIA) LTD. - APPELLANT
Versus
MAHANADI COAL FIELDS LTD. AND OTHERS - RESPONDENT
Writ Petition (C) No. 2334 of 2010
Decided On : 16-07-2010

The authority to represent a company in court proceedings must be conferred in accordance with the statutory provisions of the Companies Act, and the representative must be a legal person capable of maintaining the petition to enforce fundamental rights.

Headnote:

Companies Act - Representation of Company in Court Proceedings - Sections 198, 269, 309, 310 - Order 29, Rule 1 CPC - Article 226 of the Constitution of India

Fact of the Case:

The Sales Manager of a company filed a writ petition on behalf of the company based on a Power of Attorney given by the Director. The validity of the documents and the authority of the Sales Manager to file the petition were contested.

Finding of the Court:

The Court found that the Power of Attorney and the Resolution passed by the Board of Directors did not support the Sales Manager's authority to file the petition. It held that the Sales Manager, representing the company based on the Power of Attorney, was not a legal person who could maintain the writ petition to enforce fundamental rights.

Issues: The main issue was whether the writ petition filed by the Sales Manager on behalf of the company was maintainable in law.

Ratio Decidendi: The Court ruled that the Power of Attorney and the Resolution passed by the Board of Directors did not confer the authority on the Sales Manager to file the petition. It also held that the Sales Manager, representing the company based on the Power of Attorney, was not a legal person who could maintain the writ petition to enforce fundamental rights.

Final Decision: The writ petition was dismissed.

JUDGMENT :

1. After dictation of the order on 7.7.2010, Mr. S.D. Das, learned Asst. Solicitor General, requested this Court to give him an opportunity to produce the original Power of Attorney executed in favour of the Sales Manager of the Company by its Director and thereafter this Court may pass necessary order. Therefore, on that day we adjourned the matter for the above purpose to the next date i.e. 8.7.2010. On 8.7.2010 Mr. Das produced the original Power of Attorney executed in favour of the Sales Manager by the Director of the Company, who has authorized him to represent the Company in the Court proceedings. On that date, the Court: further directed Mr. Das to produce the Resolution passed by the Board of Directors of the Company. Pursuant to the said order, on 14.7.2010, Mr. Das has filed a Misc. Case along with four documents including the Resolution of the Board of Directors. Mr. Das has placed strong reliance upon the Resolution under Annexure-3 regarding re-appointment of whole time Director under Sections 198, 269, 309 and 310 of the Companies Act. In support of the aforesaid legal submission made by Mr. Das, learned Senior Advocate who substantiates the same that the petition filed by the Sales Manager as the Power of Attorney Holder of the Director in whose favour the Company has passed resolution to institute he proceedings on behalf of the Company is maintainable. He has placed reliance upon the decision of the Supreme Court in the case of Sarguja Transport Service Vs. State Transport Appellate Tribunal, M.P., Gwalior and Others, in support of his contention that the provisions of the Order 29, Rule 1 CPC are not applicable to the writ petition filed by the Company. Therefore, the decision of the Delhi High Court in the case of M/s. Nibro Limited Vs. National Insurance Co. Ltd. relied upon by the learned counsel for the opposite party no.4 is misplaced.

2. On the other hand learned counsel for the opposite party No.4 has seriously questioned the said documents under Annexure-3 contending that the same is not legal and valid and it is not in exercise of the power u/s 291 of the Companies Act. He placed reliance upon the decision of the Delhi High Court in the case of Nibro Ltd. Vs. National Insurance Co. Ltd., wherein it has been held as under:

Order 29, Rule 1 CPC does not authorize persons mentioned therein to institute suits on behalf of the Corporation...........It is well settled that u/s 291 of the Companies Act except where express provision is made that the powers of a company in respect of a particular matter are to be exercised by the company in general meeting and in all other cases the Board of Directors are entitled to exercise all its powers.

3. Relying on the aforesaid judgment, learned counsel for opposite party No.4 submitted that on the basis of the said documents the Sales Manager can not file a writ representing a Company.

4. Learned counsel for opposite party No.4 submitted that the principle enshrined in the C.P.C. is applicable to the writ proceedings and therefore the decision of the Delhi High Court referred to supra can be applied to the fact situation of the present case. He has also placed strong reliance upon the decisions of the Supreme Court in the case of The Calcutta Gas Company (Proprietary) Ltd. Vs. The State of West Bengal and Others, ; Chiranjit Lal Chowdhuri Vs. The Union of India (UOI) and Others, ; and in the case of The State of Orissa Vs. Madan Gopal Rungta wherein the Apex Court succinctly aid down the law as to who can be a person to file a writ to enforce his legal and fundamental rights and also held that the right that can be enforced under Article 226 shall ordinarily be the personal or individual right of the petitioner himself. Pleading reliance upon the aforesaid judgments, the learned counsel for the opposite party No.4 vehemently contended that the Sales Manager, representing the Company on the basis of a Power of Attorney given by the Director of the Company, is




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