Allowed

(O&M)Indian Oil Co-Operation v. Union of India

Punjab & Haryana HC14 Sept 2011RSA/2295/1986

Case brief

AI extract

What is this about?

The High Court allowed an appeal filed by Indian Oil Corporation Ltd. against a lower court's dismissal of a suit for recovery of money. The court set aside technical objections regarding the suit's filing authority and dec</

What did the court decide?

The suit of the appellant is decreed for recovery of Rs.16839.79 with pendente lite and future simple interest at 10% per annum.

(O&M)Indian Oil Co-Operation Vs… — Contract and Commercial Disputes | Punjab & Haryana HC (2011)

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IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH.

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R.S.A. No.2295 of 1986 Date of Decision: 14.9.2011

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M/S Indian Oil Corporation Ltd.

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....... Appellant through Shri Ashish Kapoor, Advocate.

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Versus

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Union of India representing Northern Railways.

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...... Respondent through Shri K.L.Dhingra, Advocate.

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CORAM: HON'BLE MR.JUSTICE VIJENDER SINGH MALIK

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Whether Reporters of Local Newspapers may be allowed to see the judgment?

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To be referred to the Reporters or not?

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Whether the judgment should be reported in the Digest?

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VIJENDER SINGH MALIK,J.

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M/S Indian Oil Corporation Limited, appellant had brought a suit for recovery of Rs.16839.79 Ps. along with interest at the rate of 12% per annum from the date of the suit till realisation thereof against the Union of India representing Northern Railways claiming inter alia, that the suit has been filed through the duly authorised person and that the plaintiff-Corporation booked motor spirit at Panki on 2/3.1.1978 for Patiala vide Railway Receipt No.

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R.S.A.No.2295 of 1986

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500407 of the aforesaid date vide Invoice No.254. The motor spirit loaded was 27200 litres. The wagon on arrival at Patiala was found in leaking condition with its bottom seal missing. The railway authorities certified that at the time of booking of the motor spirit the dip measured 214.5 cms. while at the destination the dip was 169.0 cms., meaning thereby that there was a shortage of 45.5 cms. and when calculated in terms of litres, the loss came to 5382 litres, the value of which is Rs.16839.79Ps. The plaintiff submitted a claim under section 78-B of the Railways Act to the Chief Commercial Superintendent, Northern Railways, New Delhi, but to no effect. Even the notice issued under section 80 of the C.P.C. failed to evoke positive response and hence, the suit.

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The suit had been resisted by the Union of India. Besides denying the authority of the person, through whom the suit had been filed, to bring the suit, the defendant has denied any loss to have occurred to the plaintiff on account of any negligence of the Railways. It is claimed that the loading was done at the siding of the plaintiff by its staff and not by the staff of the Railways. The joint dip certificate is also said to have been issued on `without prejudice' basis. Denying any shortage of motor spirit in the wagon, the suit is prayed to be dismissed. The plea of limitation is also taken to defeat the claim of the plaintiff.

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R.S.A.No.2295 of 1986

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The plaintiff had brought the replication to the written statement and on the pleadings of the parties, learned Sub Judge, Patiala framed the following issues vide order dated 27.1.1982:-

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Whether the suit has been filed by the authorised person?OPP

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Whether the plaintiff has suffered loss due to the negligence, misconduct and carelessness of the defendant?OPP

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To what amount the plaintiff is entitled to recover from the defendant?OPP

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Whether the notices given by the plaintiff are illegal and invalid, if so its effect?OPD

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Relief.

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The parties led their respective evidence, appreciating which in the light of submissions made by learned counsel representing them, learned Sub Judge Ist Class, Patiala dismissed the suit vide the judgment and decree dated 12.9.1984. Learned trial court has held under issue no.1 that the suit has not been filed through an authorised person and so, the same is not maintainable. The plaintiff is held to have suffered no loss on account of negligence, misconduct or carelessness of the defendant under issue no.2. Therefore, the plaintiff has been held not entitled to recover any

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R.S.A.No.2295 of 1986

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amount from the defendant.

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The first appeal preferred by the plaintiff had met the same fate before learned Additional District Judge, Patiala, who had dismissed the same vide the judgment and decree dated 29.3.1986.

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Dis-satisfied with the result of the appeal, the plaintiff has brought this second appeal.

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I have heard Shri Ashish Kapoor, learned counsel for the appellant and Shri K.L.Dhingra, learned counsel for the respondent. I have gone through the record carefully.

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In my opinion, the following questions of law arise for consideration in this appeal:-

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Whether the suit of a public corporation cannot be

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permitted to be defeated on mere technicalities?

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Whether the finding of learned lower courts regarding

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loss of motor spirit on account of negligence or carelessness of the employees of the defendantrespondent is sustainable?

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Learned counsel for the appellant has submitted that learned lower courts have non-suited the appellant on the ground of the suit having not been filed through a duly authorised person. According to him, the resolution of the Board of Directors, copy of which is Exhibit P1, had been authorising Shri Kamaljit Singh to

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R.S.A.No.2295 of 1986

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execute a power of attorney on behalf of the appellant in favour of Shri D.B.Puri. Exhibit P2 is the power of attorney executed in pursuance of the said resolution and not only Shri D.B.Puri was authorised to file the suit, he was further authorised to delegate this power in favour of some one else if he was not in a position to institute the suit himself. Shri D.B.Puri further authorised Shri B.S.Chhikara to file the suit vide document Exhibit P3. According to him, although the power of Shri B.S.Chhikara does not flow from the resolution of the Board of Directors, yet, the suit could not be dismissed on such technicalities. In this regard, he has referred me to a decision of Hon'ble Supreme Court of India in United Bank of India Versus Naresh Kumar and others, 1996(6) S.C.C. 660. It was a recovery suit filed by the bank. The question was as to whether the public interest could be allowed to be defeated on mere technicalities because the suit had been dismissed on the ground that the plaint was not signed and verified by the competent person. Hon'ble Supreme Court has said so in paragraph 10 of the judgment which reads as under:-

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“10. It cannot be disputed that a company like the appellant can sue and be sued in its own name. Under Order 6 Rule 14 of the Code of Civil Procedure a pleading is required to be signed by the party and its pleader, if any.

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R.S.A.No.2295 of 1986

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As a company is a juristic entity, it is obvious that some person has to sign the pleadings on behalf of the company. Order 29 Rule 1 of the Code of Civil Procedure, therefore, provides that in a suit by or against a corporation the Secretary or any Director or other Principal Officer of the corporation who is able to depose to the facts of the case might sign and verify on behalf of the company. Reading Order 6, Rule 14 together with Order 29, Rule 1 of the Code of Civil Procedure it would appear that even in the absence of any formal letter of authority or power of attorney having been executed a person referred to in Rule 1 of Order 29 can, by virtue of the office which he holds, sign and verify the pleadings on behalf of the corporation. In addition thereto and dehors Order 29, Rule 1 of the Code of Civil Procedure, as a company is a juristic entity, it can duly authorise any person to sign the plaint or the written statement on its behalf and this would be regarded as sufficient compliance with the provisions of Order 6, Rule 14 of the Code of Civil Procedure. A person may be expressly authorised to sign the pleadings on behalf of the company, for example, by the Board of Directors passing a resolution to that effect or by a power of attorney being

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R.S.A.No.2295 of 1986

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executed in favour, of any individual. In absence thereof and in cases where pleadings have been signed by one of its officers a Corporation can ratify the said action of its officer in signing the pleadings. Such ratification can be express or implied. The Court can on the basis of the evidence on record, and after taking all the circumstances of the case, specially with regard to the conduct of the trial, come to the conclusion that the corporation had ratified the act of signing of the pleadings by its officer.”

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Exhibit P1 is the copy of the 101st meeting of the Board of Directors of the appellant held on 11.4.1974 whereby the revised power of attorney in favour of Shri D.B.Puri was approved. Exhibit P2 is that power of attorney which provides for delegation of such power by the attorney in favour of some other officer of the appellant if the attorney was unable to file the suit. Empowered by this clause, Shri D.B.Puri executed the power of attorney, a copy of which is Exhibit P3, in favour of Shri B.S.Chhikara. Shri Chhikara himself is a Law Officer of the appellant and in the circumstances of the case, it cannot be said that he has not been duly authorised by the appellant to file the suit. Moreover, as laid down in Naresh Kumar's case (supra), the dismissal of the suit by learned lower courts is on technicalities and public interest, as held above, cannot be allowed to suffer on mere

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R.S.A.No.2295 of 1986

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technicalities.

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Learned counsel for the appellant has submitted that the officials of the defendant have themselves signed the joint dip Exhibit P5 which gives a comparative table of dispatch and receipt particulars. According to him, this document shows that the dip measured 214.5 cms. at the time of dispatch and it measured 169.0 cm. at the time of receipt and, therefore, there was a shortage of 45.5 cms. According to him, this document further proves an admission on the part of the defendant that the bottom seal of the wagon was missing. Learned counsel for the appellant has submitted that when the bottom seal was missing, it was for the defendant-respondent to prove that the loss was not due to any negligence or carelessness on the part of its employees. According to him, no evidence has been led in this regard to prove it. He has submitted that the only witness examined in this case is DW1-Harbant Singh, who has stated in his cross-examination that he did never accompany the wagon from the place of dispatch to the time of arrival at Patiala. Therefore, this is no evidence to establish that there was no negligence or carelessness on the part of the defendant for the loss suffered by the plaintiff.

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Learned counsel for the respondent, on the other hand, has submitted that the loading of motor spirit was done at the siding of the plaintiff. According to him, the loading was not done in the

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R.S.A.No.2295 of 1986

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presence or supervision of any official of the defendant. He has submitted that even railway receipt had been issued on the basis of the representation of the officials of the plaintiff for the purpose of freight. He has referred me in this regard to Exhibit D2 where it is mentioned that the wagon is said to contain the motor spirit as claimed by the officials of the plaintiff. In this view of the matter, it cannot be held proved that the wagon had 27200 litres of motor spirit and that there had been any loss of motor spirit in transit. It is also argued that the factum of presence of the bottom seal is also not verified by the officials of the defendant and that this was also on the representation of the officials of the plaintiff.

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If the factum of presence of seals on the top and bottom of the wagon is not even verified by the booking persons of the defendant, then the negligence in handling the consignment appears to have started from day one. It cannot be allowed to be argued on behalf of the defendant-respondent that the bottom seal was not there at the time of dispatch. The fact of missing of bottom seal is mentioned in the joint dip certificate executed at the time of delivery by the officials of the parties. So, the defendant-respondent can not claim that there was no bottom seal on the wagon at the time of booking and that the missing of bottom seal is not on account of carelessness or negligence of the employees of the defendant.

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R.S.A.No.2295 of 1986

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It is a fact that wagon was not leaking at the time of delivery. However, this fact alone would not prove that the employees of the defendant-respondent were not negligent or careless in handling the consignment. The very fact that the bottom seal was missing would itself prove that the same might have been broken while pilfering the commodity. Otherwise, there is no explanation for the loss of the bottom seal. In these circumstances, the defendantrespondent, who has short delivered the consigned goods to the plaintiff-appellant at the destination station has failed to prove that the loss is not due to any negligence or carelessness on the part of its officials.

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On the basis of the above discussion, the questions of law are decided in favour of the plaintiff-appellant. Consequently, the appeal is accepted with costs, the judgments and decrees of learned lower courts are set aside and the suit of the plaintiff-appellant is decreed for recovery of Rs.16839. 79Ps. along with pendente lite and future simple interest at the rate of 10% per annum till the realisation of the decretal amount.

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September 14,2011 ( VIJENDER SINGH MALIK) “SCM” JUDGE

(O&M)Indian Oil Co-Operation v. Union of India

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(O&M)Indian Oil Co-Operation v. Union of India

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