1968 (2) TMI 50 - HC - Companies Law

Petitioner Authorized to Sue, Borrowing Claim Dismissed, Revision Petition Denied

The suit was properly instituted by the petitioner through a person authorized by a resolution passed by the board of directors. However, the claim of ... Meetings and proceedings - Presumptions to be drawn where minutes duly drawn and signed Issues Involved:1. Authority to institute the suit.2. Actual borrowing of the amount by the respondent.Detailed Analysis:1. Authority to Institute the Suit:The petitioner, a joint stock company, argued that the suit was instituted by Shri Labhaya Ram Pahuja, the general manager, who was duly authorized by a resolution passed by the board of directors on October 2, 1953. The petitioner presented evidence including a copy of the resolution (exhibit PW 3/1) and a power of attorney (exhibit P-1) to support this claim. The respondent contended that Shri Labhaya Ram Pahuja lacked the authority to institute the suit, as the resolution was not genuine.The trial judge initially found that the petitioner failed to establish the authenticity of the resolution, noting that the minutes book had loose sheets and the witness, Shri Suraj Bhan, who testified about the resolution, had no personal knowledge of its passing as he joined the company in 1956. The judge also observed that the petitioner did not produce the secretary or any person with direct knowledge of the resolution.However, upon review, it was determined that the trial judge imposed an unreasonable burden of proof on the petitioner. The minutes book, which came from proper custody, was identified by Shri Suraj Bhan as the company's minutes book, and he recognized the signature of R. Sharma, the chairman of the meeting. Given that the minutes book is required to be maintained under the Companies Act and was duly presented, the resolution was deemed genuine. Thus, the suit was properly instituted by a person fully empowered to do so on behalf of the petitioner company.2. Actual Borrowing of the Amount by the Respondent:The petitioner claimed that the respondent borrowed Rs. 1,050 on February 13, 1957, to settle his father's debt, with Rs. 350 repaid, leaving a balance of Rs. 700. The respondent denied borrowing any amount, asserting that the arrangement was temporary and ceased upon his father's return within six months. The trial judge accepted the respondent's version, finding that no amount was actually borrowed and that the payments made were by the respondent's father, not the respondent himself.The petitioner's evidence included testimony from its accountant, Shri P. N. Kakkar, and general manager, Shri Labhaya Ram Pahuja, who both supported the claim of cash payment to the respondent. However, cross-examination revealed that the payments credited to the respondent's account were actually deductions from the commission payable to his father, Shri Jai Chand Sud, as evidenced by vouchers (exhibits P-10 to P-15).The trial judge concluded that the respondent's version was more probable, noting that the document (exhibit P-2) lacked formality and contained inaccuracies. This finding of fact, based on the credibility of evidence and witness testimony, was upheld, as it could not be interfered with in a revision petition.The petitioner also cited a letter dated January 14, 1957 (exhibit P.4), where the respondent acknowledged responsibility for the dues. However, this letter, written before the voucher (exhibit P.2), did not substantiate the petitioner's claim, as it did not indicate substitution of the debtor.Conclusion:The revision petition was dismissed with costs, affirming the trial court's decision that the suit was properly instituted but the claim of actual borrowing by the respondent was unsubstantiated.