Food Corporation of India Vs. Central Co-operative Wholesale Stores Ltd. - Court Judgment

SooperKanoon Citationsooperkanoon.com/384082
SubjectCivil
CourtKarnataka High Court
Decided OnSep-22-1992
Case NumberR.S.A. No. 632 of 1981
JudgeK.A. Swami, Ag. C.J. and ;A.B. Murgod, J.
Reported inILR1992KAR3443
Acts Code of Civil Procedure (CPC) , 1908 - Order 29, Rule 1
AppellantFood Corporation of India
RespondentCentral Co-operative Wholesale Stores Ltd.
Appellant Advocate U.L. Narayana Rao, Sr. Adv.
Respondent Advocate T.S. Ramachandra, Adv.
DispositionAppeal allowed
Excerpt:
civil procedure code, 1908 (central act no. 5 of 1908) - order 29 rule 1 - secretary, director or principal officer to sign & verify pleadings on behalf of corporation - district manager declared principal officer, whether authorised or prior approval obtained, matter of internal administration.;in the case of a corporation, order 29 rule 1 of the code of civil procedure enables the secretary or any director or any other principal officer of the corporation to sign and verify the pleadings on behalf of the corporation. it also further states that such principal officer must be able to depose to the facts of the case... when it is declared by the corporation that the district manager is the principal officer of the corporation, if follows that he is entitled to sign and verify the pleadings as provided by order xxix rule 1 of the code of civil procedure. whether he is authorised for filing the suit or whether prior approval has been obtained, is a matter concerning internal administration of the corporation. - indian contract act (9 of 1872) section 20: [arali nagaraj, j] void agreement - defendant, under belief that virtue of allotment order itself he had authority to sell away property, which he got allotted from development authority-allotment order showed by defendant to plaintiff and the latter believed that defendant had authority to sell away said property in her favour and under that belief she agreed to purchase same-both plaintiff and defendant proceeded with transaction under amistake as to fact that defendant had authority under said allotment order to sell property and, therefore, they entered into said agreement of sale-said mistake of fact was mutual between both parties besides being essential for said agreement by virtue of provisions of section 20 said agreement of sale became void and unenforceable in law. - 9. paragraph 6 of the office manual of the corporation, which was also relied upon by the plaintiff during the course of trial as well as in the appeal, states that the district manager is the principal officer of the corporation. 12. as far as the defendant is concerned, when the district manager is the principal officer of the corporation and he has signed the pleadings and verified them, order xxix rule 1 of the code of civil procedure is satisfied.k.a. swami, ag. c.j.1. this appeal is preferred against the judgment and decree dated 15th december 1980 passed in r.a.no. 4 of 1979 by the district judge, uttar kannada, karwar, confirming the judgment and decree dated 30th march 1979 passed in o.s.no. 4 of 1977 by the civil judge, uttar kannada, karwar.2. this second appeal came to be admitted on 4.9.1981 to consider the following question of law:'having regard to the facts and circumstances established in the case whether the finding on issue no. 9 is justified in law.'on 8th july 1991, when the appeal came up for hearing, murlidher rao, j; (as he then was), having regard to the importance of the question of law involved in the case, has referred it to a division bench. the order referring the appeal to a division bench reads thus:'the question that arises for consideration is: whether in a suit filed by the food corporation of india, whether the plaint signed by district manager can be construed as valid in view of the provisions under order 29 rule 1 c.p.c. which required that the pleadings should be signed and verified on behalf of the corporation by the secretary or by director or by any 'principal officer' of the corporation? sri u.l. narayana rao contends that the district manager is the 'principal officer' of the corporation and therefore the plaint filed by him is a valid plaint.it is also submitted that a similar question is involved in r.f.a. 136/80 now pending before the division bench. in exercise of the powers under section 9 of the high court (act), i refer this matter to the division bench to be heard along with r.f.a.136/80.since question of law arises, production of paper books is dispensed with.' this is how, this appeal is before us.2.1. it may be pointed out that r.f.a.no. 136/80 has been disposed of without going into the question raised in the order of reference.3. the plaintiff is the appellant and the defendant is the respondent the suit was filed by the plaintiff on 21.7.1977 for recovery of a sum of rs. 11,277.55 found to be due from the defendant on accounts. the defendant resisted the suit on various grounds. having regard to the defence raised by the defendant, the trial court framed the following issues:1. whether plaintiff proves that an amount of rs. 11,277.50ps is due from the defendant in respect of the suit transaction?2. whether defendant proves that the plaintiff is liable to pay godown rent at the rate of rs. 300/- per month for the period mentioned in para no. 4 of the w.s. and that a sum of rs. 9,106.45ps is due to the defendant from the plaintiff?3. whether plaintiff has not adjusted the amount sent by the defendant and if so, to what extent?4. whether this court has jurisdiction to entertain this suit?5. whether the suit claim is barred by limitation?6. whether defendant proves the counter claim of rs. 9,106.45ps as alleged in the w.s. para no. 4?7. what amount is due to the plaintiff?8. whether the defendant is entitled to counter decree?9. whether the plaint has been properly signed as required by order 29 r.1 cpc?4. the plaintiff examined one sri v. ramamurthy, assistant manager of the plaintiff - corporation as p.w.1. the defendant examined one sri prabhakar subraya hegde, in-charge accountant, sirsi, as d.w.1 the plaintiff produced six documents which were marked as exhibits p1 to p6 whereas the defendant produced 9 documents which were marked as exhibits d1 to d9. on the basis of the evidence on record and in the light of the arguments advanced, the trial court answered issue no. 1 partly in the affirmative and allowed the claim of the plaintiff only to the tune of rs. 6,730.70ps. the trial court also answered issue nos. 2, 5 and 9 in the negative and issue nos. 3 and 4 in the affirmative; issue no. 6 partly in the affirmative and partly in the negative. on issues 7 and 8, it held that they did not survive. accordingly, having regard to the finding on issue no. 9, the trial court dismissed the suit.4.1 being aggrieved by the judgment and decree of trial court, the plaintiff went up in appeal. the first appellate court raised the following points for determination:1. what is due to the plaintiff by the defendant?2. whether the plaint has been properly signed as required by order 29 rule 1 cpc.on point no. 1, the first appellate court held that the defendant had to pay to the plaintiff to the tune of rs. 6,730.70. however, on point no. 2 it held that the plaint had not been signed by the principal officer of the plaintiff - corporation as required by order 29 rule 1 c.p.c. therefore, it dismissed the appeal.5. the point that arises for consideration now having regard to the facts found by the lower appellate court is whether the plaint was signed by the principal officer of the plaintiff - corporation.6. it is not in dispute that the plaint was signed and filed by the district manager of the plaintiff, unkal, hubli. order 29 rule 1 of the code of civil procedure reads thus:order xxixsuits by or against corporations (1) in suits by or against a corporation,any pleading may be signed and subscription and verifiction verified on behalf of the corruption of pleading ation by the secretary or by anydirector or other principal officerof the corporation who is able todepose to the facts of the case.' from the aforesaid provision, it is clear that in the case of a corporation, pleadings may be signed by the secretary or by any director or other principal officer of the corporation who is able to depose to the facts of the case. the question for consideration is whether the district manager of the plaintiff - corporation, unkal, hubli, was the principal officer of the plaintiff - corporation.7. the courts below have proceeded on the basis that even though he was the principal officer of the plaintiff - corporation, as per paragraph-6 of the office manual, he should have obtained prior permission before signing the plaint and therefore, he had no authority to verify the plaint and institute the suit. during the course of the appeal, ex post-facto sanction was obtained and produced. however, the first appellate court held that such ex post-facto approval did not validate the verification of the plaint and institution of the suit which had been done without such approval. it is not possible to agree with the reasoning of the court below.8. as already pointed out, in the case of a corporation, order 29 rule 1 of the code of civil procedure enables the secretary or any director or any other principal officer of the corporation to sign and verify the pleadings on behalf of the corporation. it also further states that such principal officer must be able to depose to the facts of the case. the contention is that the district manager is not the principal officer and he has not been authorised by the corporation to institute the suit.9. paragraph 6 of the office manual of the corporation, which was also relied upon by the plaintiff during the course of trial as well as in the appeal, states that the district manager is the principal officer of the corporation. the said paragraph reads thus:'6. the concerned district manager will be deemed as the principal officer of the corporation. he will be the principal officer for the purpose of signing and verifying the pleadings and filing thereof in the concerned court within the meaning of order xxix rule 1 of civil procedure code. but it is necessary to keep in mind that before signing and verifying the pleadings on behalf of the corporation and filing the same in the court, the district manager should ensure that approval and authorisation of the competent administrative authority under the statement of delegation of powers in his favour, is invariably obtained. please see circular no. 5/82 (file no. 21(4)/80-legal) dated 29.3.1982 issued in this regard at appendix iii.'10. the office manual in its 'preface' discloses that one of the objects is to provide guidance to conduct legal affairs and that the experience gained has necessarily led the corporation to improve its procedures for and approach towards handling of litigation and other legal issues. it also further states that 'a scrupulous adherence to the instructions contained herein by all concerned will go a long way not only in improving the processing of legal matters but also in the handling of problems arising in other fields as there is no department in the corporation which is not concerned with the implementation of some important statutory provision'. thus the manual governs the functioning of the corporation in the matter of legal proceedings.11. when it is declared by the corporation that the district manager is the principal officer of the corporation, it follows that he is entitled to sign and verify the pleading as provided by order xxix rule 1 of the code of civil procedure. whether he is authorised for filing the suit or whether prior approval has been obtained, is a matter concerning internal administration of the corporation.12. as far as the defendant is concerned, when the district manager is the principal officer of the corporation and he has signed the pleadings and verified them, order xxix rule 1 of the code of civil procedure is satisfied. therefore, we are of the view that the courts below were not justified in holding that the district manager of the corporation was not competent to sign the plaint and verify the pleadings as he had not obtained prior approval of the corporation. paragraph 6 of the office manual declares that the district manager is the principal officer of the corporation, which is sufficient for the purpose of order xxix rule 1 c.p.c. therefore, we are of the view that the plaint was signed and verified by the principal officer of the corporation, namely, the district magistrate, and it was also validly presented by him as he was the principal officer of the corporation.13. for the reasons stated above, the point raised is answered in the affirmative.14. the next question for consideration is as to the rate of interest to be allowed on the amount decreed. the transaction in question is a commercial transaction, therefore we are of the view that the interest can be awarded at the current rate, i.e., more than 6% per annum. during the relevant period, the current rate of interest was 12% was above. therefore, we are of the view that it is just and proper to award interest at the rate of 12% per annum. accordingly, we award interest at the rate of 12% per annum from the date of suit till the date of realisation.15. in the result, the appeal is allowed, the judgments and decrees of the courts below are set aside and the suit is decreed for a sum of rs. 6,730.70 with interest at 12% per annum from the date of suit till the date of realisation.16. the plaintiff is entitled to costs proportionate to its successthroughout.
Judgment:

K.A. Swami, Ag. C.J.

1. This Appeal is preferred against the Judgment and decree dated 15th December 1980 passed in R.A.No. 4 of 1979 by the District Judge, Uttar Kannada, Karwar, confirming the Judgment and decree dated 30th March 1979 passed in O.S.No. 4 of 1977 by the Civil Judge, Uttar Kannada, Karwar.

2. This Second Appeal came to be admitted on 4.9.1981 to consider the following question of law:

'Having regard to the facts and circumstances established in the case whether the finding on Issue No. 9 is justified in law.'

On 8th July 1991, when the Appeal came up for hearing, Murlidher Rao, J; (as he then was), having regard to the importance of the question of law involved in the case, has referred it to a Division Bench. The Order referring the Appeal to a Division Bench reads thus:

'The question that arises for consideration is:

Whether in a suit filed by the Food Corporation Of India, whether the plaint signed by District Manager can be construed as valid in view of the provisions under Order 29 Rule 1 C.P.C. which required that the pleadings should be signed and verified on behalf of the Corporation by the Secretary or by Director or by any 'Principal Officer' of the Corporation? Sri U.L. Narayana Rao contends that the District Manager is the 'Principal Officer' of the Corporation and therefore the plaint filed by him is a valid plaint.

It is also submitted that a similar question is involved in R.F.A. 136/80 now pending before the Division Bench. In exercise of the powers under Section 9 of the High Court (Act), I refer this matter to the Division Bench to be heard along with R.F.A.136/80.

Since question of law arises, production of paper books is dispensed with.'

This is how, this Appeal is before us.

2.1. It may be pointed out that R.F.A.No. 136/80 has been disposed of without going into the question raised in the Order of Reference.

3. The plaintiff is the appellant and the defendant is the respondent The suit was filed by the plaintiff on 21.7.1977 for recovery of a sum of Rs. 11,277.55 found to be due from the defendant on accounts. The defendant resisted the suit on various grounds. Having regard to the defence raised by the defendant, the trial Court framed the following issues:

1. Whether plaintiff proves that an amount of Rs. 11,277.50ps is due from the defendant in respect of the suit transaction?

2. Whether defendant proves that the plaintiff is liable to pay godown rent at the rate of Rs. 300/- per month for the period mentioned in para No. 4 of the W.S. and that a sum of Rs. 9,106.45Ps is due to the defendant from the plaintiff?

3. Whether plaintiff has not adjusted the amount sent by the defendant and if so, to what extent?

4. Whether this Court has jurisdiction to entertain this suit?

5. Whether the suit claim is barred by limitation?

6. Whether defendant proves the counter claim of Rs. 9,106.45ps as alleged in the W.S. para No. 4?

7. What amount is due to the plaintiff?

8. Whether the defendant is entitled to counter decree?

9. Whether the plaint has been properly signed as required by Order 29 R.1 CPC?

4. The plaintiff examined one Sri V. Ramamurthy, Assistant Manager of the plaintiff - Corporation as P.W.1. The defendant examined one Sri Prabhakar Subraya Hegde, In-charge Accountant, Sirsi, as D.W.1 The plaintiff produced six documents which were marked as Exhibits P1 to P6 whereas the defendant produced 9 documents which were marked as Exhibits D1 to D9. On the basis of the evidence on record and in the light of the arguments advanced, the trial Court answered issue No. 1 partly in the affirmative and allowed the claim of the plaintiff only to the tune of Rs. 6,730.70Ps. The trial Court also answered issue Nos. 2, 5 and 9 in the negative and issue Nos. 3 and 4 in the affirmative; issue No. 6 partly in the affirmative and partly in the negative. On issues 7 and 8, it held that they did not survive. Accordingly, having regard to the finding on issue No. 9, the trial Court dismissed the suit.

4.1 Being aggrieved by the Judgment and decree of trial Court, the plaintiff went up in appeal. The first appellate Court raised the following points for determination:

1. What is due to the plaintiff by the defendant?

2. Whether the plaint has been properly signed as required by Order 29 Rule 1 CPC.

On Point No. 1, the first appellate Court held that the defendant had to pay to the plaintiff to the tune of Rs. 6,730.70. However, on Point No. 2 it held that the plaint had not been signed by the Principal Officer of the plaintiff - Corporation as required by Order 29 Rule 1 C.P.C. Therefore, it dismissed the Appeal.

5. The Point that arises for consideration now having regard to the facts found by the lower appellate Court is whether the plaint was signed by the Principal Officer of the plaintiff - Corporation.

6. It is not in dispute that the plaint was signed and filed by the District Manager of the plaintiff, Unkal, Hubli. Order 29 Rule 1 of the Code of Civil Procedure reads thus:

ORDER XXIX

SUITS BY OR AGAINST CORPORATIONS

(1) In suits by or against a corporation,any pleading may be signed and subscription and verifiction verified on behalf of the corruption of pleading ation by the secretary or by anydirector or other principal officerof the corporation who is able todepose to the facts of the case.' From the aforesaid provision, it is clear that in the case of a Corporation, pleadings may be signed by the secretary or by any director or other principal officer of the Corporation who is able to depose to the facts of the case. The question for consideration is whether the District Manager of the plaintiff - Corporation, Unkal, Hubli, was the principal officer of the plaintiff - Corporation.

7. The Courts below have proceeded on the basis that even though he was the principal officer of the plaintiff - Corporation, as per paragraph-6 of the Office Manual, he should have obtained prior permission before signing the plaint and therefore, he had no authority to verify the plaint and institute the suit. During the course of the Appeal, ex post-facto sanction was obtained and produced. However, the first appellate Court held that such ex post-facto approval did not validate the verification of the plaint and institution of the suit which had been done without such approval. It is not possible to agree with the reasoning of the Court below.

8. As already pointed out, in the case of a corporation, Order 29 Rule 1 of the Code of Civil Procedure enables the Secretary or any Director or any other principal officer of the Corporation to sign and verify the pleadings on behalf of the Corporation. It also further states that such principal officer must be able to depose to the facts of the case. The contention is that the District Manager is not the principal officer and he has not been authorised by the Corporation to institute the suit.

9. Paragraph 6 of the Office Manual of the Corporation, which was also relied upon by the plaintiff during the course of trial as well as in the Appeal, states that the District Manager is the principal officer of the Corporation. The said paragraph reads thus:

'6. The concerned District Manager will be deemed as the Principal Officer of the Corporation. He will be the Principal Officer for the purpose of signing and verifying the pleadings and filing thereof in the concerned Court within the meaning of Order XXIX Rule 1 of Civil Procedure code. But it is necessary to keep in mind that before signing and verifying the pleadings on behalf of the Corporation and filing the same in the Court, the District Manager should ensure that approval and authorisation of the competent administrative authority under the statement of delegation of powers in his favour, is invariably obtained. Please see circular No. 5/82 (file No. 21(4)/80-Legal) dated 29.3.1982 issued in this regard at APPENDIX III.'

10. The Office Manual in its 'preface' discloses that one of the objects is to provide guidance to conduct legal affairs and that the experience gained has necessarily led the Corporation to improve its procedures for and approach towards handling of litigation and other legal issues. It also further states that 'a scrupulous adherence to the instructions contained herein by all concerned will go a long way not only in improving the processing of legal matters but also in the handling of problems arising in other fields as there is no department in the Corporation which is not concerned with the implementation of some important statutory provision'. Thus the Manual governs the functioning of the Corporation in the matter of legal proceedings.

11. When it is declared by the Corporation that the District Manager is the Principal Officer of the Corporation, it follows that he is entitled to sign and verify the pleading as provided by Order XXIX Rule 1 of the Code of Civil Procedure. Whether he is authorised for filing the suit or whether prior approval has been obtained, is a matter concerning internal administration of the Corporation.

12. As far as the defendant is concerned, when the District Manager is the Principal Officer of the Corporation and he has signed the pleadings and verified them, Order XXIX Rule 1 of the Code of Civil Procedure is satisfied. Therefore, we are of the view that the Courts below were not justified in holding that the District Manager of the Corporation was not competent to sign the plaint and verify the pleadings as he had not obtained prior approval of the Corporation. Paragraph 6 of the Office Manual declares that the District Manager is the Principal Officer of the Corporation, which is sufficient for the purpose of Order XXIX Rule 1 C.P.C. Therefore, we are of the view that the plaint was signed and verified by the Principal Officer of the Corporation, namely, the District Magistrate, and it was also validly presented by him as he was the Principal Officer of the Corporation.

13. For the reasons stated above, the Point raised is answered in the affirmative.

14. The next question for consideration is as to the rate of interest to be allowed on the amount decreed. The transaction in question is a commercial transaction, therefore we are of the view that the interest can be awarded at the current rate, i.e., more than 6% per annum. During the relevant period, the current rate of interest was 12% was above. Therefore, we are of the view that it is just and proper to award interest at the rate of 12% per annum. Accordingly, we award interest at the rate of 12% per annum from the date of suit till the date of realisation.

15. In the result, the Appeal is allowed, the judgments and decrees of the Courts below are set aside and the suit is decreed for a sum of Rs. 6,730.70 with interest at 12% per annum from the date of suit till the date of realisation.

16. The plaintiff is entitled to costs proportionate to its successthroughout.