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        Companies Law

        2021 (6) TMI 916 - HC - Companies Law

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        Corporate authorisation and proof of execution of sale deed determine maintainability and title in a company land dispute. A company suit was validly instituted because a director signed and verified the pleadings under board authorisation, and the company's restoration meant ...
                        Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
                          Provisions expressly mentioned in the judgment/order text.

                            Corporate authorisation and proof of execution of sale deed determine maintainability and title in a company land dispute.

                            A company suit was validly instituted because a director signed and verified the pleadings under board authorisation, and the company's restoration meant it was treated as continuing in existence under the statutory deeming provision. The absence of a specific challenge to the director's authority also supported maintainability. On title, however, a registered sale deed was not enough where execution was specifically denied. The plaintiff had to prove due execution through admissible evidence, and the failure to examine the scribe or attesting witnesses was material. Mutation entries and limited admissions could not substitute for proof of title. The suit was maintainable, but title to the land was not proved.




                            Issues: (i) Whether the suit filed by the company was duly instituted by an authorised person and remained maintainable; (ii) Whether the plaintiff proved title and right over the suit land on the basis of the registered sale deed.

                            Issue (i): Whether the suit filed by the company was duly instituted by an authorised person and remained maintainable.

                            Analysis: The company was represented by a director who signed and verified the pleadings. The Board resolution authorised him to institute legal action and sign the plaint. The company had been struck off from the register, but a subsequent restoration order and the statutory deeming provision treated it as having continued in existence. The pleadings did not contain a specific challenge that the director lacked authority, and the requirements governing corporate pleadings were satisfied.

                            Conclusion: The suit was duly instituted by an authorised director and was maintainable.

                            Issue (ii): Whether the plaintiff proved title and right over the suit land on the basis of the registered sale deed.

                            Analysis: The plaintiff relied on a registered sale deed to establish title, but the defendant specifically denied the purchase and execution. In such a situation, production of the document alone was insufficient. The burden remained on the plaintiff to prove due execution, and the absence of testimony from the scribe or attesting witnesses was material. Mutation entries and the defendant's admissions were not enough to prove title, and the presumption attached to a registered document did not dispense with proof in the face of a specific denial.

                            Conclusion: The plaintiff failed to prove title and right over the suit land.

                            Final Conclusion: The suit was maintainable, but the plaintiff did not establish title to the property, so the substantive reliefs claimed could not be granted.

                            Ratio Decidendi: In a suit by a company, a duly authorised director may validly institute proceedings when corporate authorisation and statutory deeming provisions support the company's continued existence; but where execution of a registered sale deed is specifically denied, title must be proved by admissible evidence of execution, and registration or mutation by itself is not sufficient.


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                            ActsIncome Tax
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