1976 (1) TMI 179 - HC - Indian Laws

Valid Power of Attorney Shifts Burden of Proof to Defendants: Importance of Authentication

The Court held that the power of attorney granted to Mr. Keeble by the banking company was valid and duly authenticated by a Notary Public, shifting the ... Presumption under Section 85 of the Evidence Act - judicial notice of notary's seal under Section 57 of the Evidence Act - authentication by foreign notary public - production of original power of attorney shifting burden of proof - division and recasting of issue to place burden on defendantsPresumption under Section 85 of the Evidence Act - authentication by foreign notary public - judicial notice of notary's seal under Section 57 of the Evidence Act - The Court must presume that a document purporting to be a power of attorney executed before and authenticated by a notary public was so executed and authenticated; that presumption extends to powers authenticated by a foreign notary public. - HELD THAT: - Section 85 of the Evidence Act compels the Court to presume that a document in form of a power of attorney and showing execution before and authentication by a notary public was duly executed and authenticated. Section 57 requires judicial notice of notaries' seals. The Court rejected the contention that 'notary public' in these provisions is limited to notaries appointed under the Notaries Act, 1952, and held that recognition of notaries of foreign countries is consistent with the objects of the provisions and necessary for international commerce. The Supreme Court precedent cited in the judgment (Jugraj Singh v. Jaswant Singh) supports that a power of attorney authenticated before a foreign notary satisfies Section 85 and related registration requirements. Accordingly, on production of an original power of attorney bearing a notary's seal and signature, the statutory presumption arises in favour of its due execution and authentication. [Paras 9, 10, 11]The Court held that the power of attorney bearing the notary's seal and signature is to be presumed duly executed and authenticated, and that this presumption legitimately extends to a notary public of a foreign country.Production of original power of attorney shifting burden of proof - division and recasting of issue to place burden on defendants - Effect of production of the original power of attorney on the burden of proof regarding authority to institute the suit, and consequential procedural step taken by the Court. - HELD THAT: - Once the plaintiff produced the original power of attorney showing on its face that the attorney was empowered to institute suits and it bore the notary's seal and signature, the statutory presumption under Section 85 arose and the evidential burden shifted to the defendants who contested execution or authority. Rather than requiring the defendants to particularise their objections under Order XIV Rule 5 and Order VI Rule 5, the Court exercised its discretion to divide the previously framed issue into two parts so that the burden of proving lack of authority to institute the suit rests on the defendants. The Court therefore recast Issue No.1 into (A) whether plaint was signed and verified by a duly authorised person (plaintiff onus) and (B) whether the suit was not instituted by a duly authorised person (defendants' onus). The application seeking this relief was allowed to that extent and the original power of attorney was returned to plaintiff's counsel. [Paras 6, 8, 11, 12]The Court directed that Issue No.1 be divided and framed so as to place the burden of proving want of authority to institute the suit on the defendants, and allowed the application accordingly.Final Conclusion: The Court presumes the authenticity and due execution of the original power of attorney bearing a notary's seal (including a foreign notary) under Section 85 read with Section 57 of the Evidence Act; upon production of that original document the evidential burden shifts to the defendants, and the Court accordingly divided and recast Issue No.1 to place on the defendants the onus of proving want of authority, allowing the plaintiff's application to that extent. Issues:- Suit filed for recovery of money based on hypothecation, mortgage, guarantees, and indemnity.- Dispute regarding the authority of the plaintiff's attorney to file the suit.- Authentication of the power of attorney by a Notary Public.Analysis:1. The suit was filed by a banking company against the defendants for recovery of money based on various legal grounds. The defendants raised an issue regarding the authority of the plaintiff's attorney to file the suit, questioning the validity of the power of attorney.2. The plaintiff's attorney, Mr. John Herbert Keeble, claimed to be duly authorized to file the suit on behalf of the banking company. The defendants contested this claim, arguing that no suit could be instituted without a special resolution from the plaintiff company's Board of Directors.3. The plaintiff later amended the name of the plaintiff-Bank to Grindlays Bank, and the defendants filed a written statement challenging the authority of Mr. Keeble to institute the suit.4. The Court framed an issue to determine whether the plaint had been properly signed, verified, and instituted by a duly authorized party, highlighting the crucial aspect of the attorney's authority in initiating the legal proceedings.5. The plaintiff submitted a photostat copy of the original power of attorney granted to Mr. Keeble by the banking company, which was denied by the defendants despite the authentication by a Notary Public.6. The Court examined the original power of attorney, which bore the necessary seals and authentications by the Notary Public, in accordance with Section 85 of the Evidence Act, which presumes the validity of documents executed and authenticated before a notary public.7. The defendants argued that the term 'Notary Public' in the Evidence Act should be limited to notaries appointed under the Notaries Act 1952 in India. However, the Court rejected this argument, emphasizing the international recognition of notaries public for authentication purposes.8. Based on the evidence presented, the Court held that the power of attorney in favor of Mr. Keeble was duly executed and authenticated, shifting the burden of proof to the defendants to rebut this presumption.9. Consequently, the Court divided the main issue into sub-issues, focusing on whether the plaint was signed and verified by a duly authorized person and whether the suit was instituted by a duly authorized person, placing the burden on the defendants to prove otherwise.10. The Court allowed the plaintiff's application, returning the original power of attorney to the plaintiff's counsel and directing the parties to appear for further directions in the suit.Conclusion:The judgment clarified the validity of the power of attorney in initiating legal proceedings, emphasizing the presumption of authenticity under the Evidence Act. It highlighted the importance of proper authentication by a Notary Public and placed the burden of proof on the defendants to challenge the authority of the plaintiff's attorney. The Court's decision to divide the main issue and shift the burden of proof signified a crucial development in the case, ensuring a fair assessment of the attorney's authority in filing the suit.