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CIVIL APPELLATE JURISDICTION
FIRST APPEAL NO.623 OF 2017
AND
CIVIL APPLICATION NO.2009 OF 2017
IN
FIRST APPEAL NO.623 OF 2017
Horizon Exhibitions And
Events Pvt. Ltd., Through Its
Director Mr. Alok Nagpal having address at C-43, Harmony, Highland
Complex, Charkop Village, Kandivali (W). Mumbai-400 067, At present 501, Arihant Enclave, Opp. Sai Sadan, Chakravarti Ashok Road, Ashok Nagar, Kandivali (E), Mumbai 400 101 … Appellant
ORAL JUDGMENT
1. None for the cross objector. Therefore the cross-objection is dismissed for want of prosecution. 1 of 7
2. In this first appeal, earlier Ms. Kavita Shah was appearing for the respondent. However, subsequently she was discharged. Thereafter, the appellant served the respondent by substituted service. Inspite of the same there is no appearance on behalf of the respondent.
3. The First Appeal is of the year 2017. Therefore, this Court has no option but to proceed with the hearing of the appeal.
4. The appellant and the respondent had entered into an agreement for organizing an event for a consideration mentioned in the agreement dated 24 April 2009. Under the said agreement the appellant paid Rs.20 lakhs to the respondent. However, the event was cancelled and, therefore, the appellant sought refund of the said amount. Since the amount was not refunded, the appellant filed a suit in this court for recovery of the said amount along with interest. The said suit was thereafter transferred to the City Civil Court because of increase in the pecuniary jurisdiction.
5. The City Civil Court by judgment dated 22 March 2017 adjudicated following five issues: Sr. No. Issues Findings
1. Whether the plaintiff proves that the defendant illegally retained the amount of Rs. 20 lakhs advance by the plaintiff contrary to the terms of In the affirmative. 2 of 7 contract as alleged ?
2. Whether the defendant proves that the plaintiff has committed breach of terms of contract dated 24/4/2009 ? In the affirmative.
3. Whether the plaintiff is entitled to recover from the defendants the sum of Rs.31,36,301/- that is Rs. 20 lakhs towards principal and Rs. 11,36,301/- as interest due as on 1/7/2012 with further interest at the rate of 18% per annum as claimed ? In the negative.
4. Whether the suit is barred by limitation ? In the negative.
5. What order and decree ? As per final order.
6. The suit came to be dismissed since as per the learned Trial Court there was no document authorizing Mr. Nagpal to file the suit. Insofar as other issues are concerned all were decided in favour of the appellant.
7. The only issue which arises before this Court is whether the Trial Court was justified in dismissing the suit on the ground that the resolution authorizing Mr. Nagpal to file the suit was not on record.
8. In my view and for the reasons stated hereinafter the reasoning given by the Trial Court cannot be sustained. 3 of 7
9. The issue of maintainability of the suit on the ground of nonfiling the resolution of Mr. Nagpal authorizing him to file the suit was never raised by the respondent in the written statement.
10. In the cross examination of Mr. Nagpal, the respondent for the first time raised a query on this issue and Mr. Nagpal in his cross examination stated that the appellant company had passed a resolution authorizing him to file the suit. However, the respondent did not call upon Mr. Nagpal to produce the same. If the respondent had any doubt on the cross examination of Mr. Nagpal, then they could have called upon Mr. Nagpal to produce the same. In the absence of any question calling upon Mr. Nagpal to produce the resolution, it should be deemed that the respondent was satisfied with the answer that there exists a resolution in favour of Mr. Nagpal, to file the suit.
11. It is also important to note that there were exchange of correspondences between the appellant and the respondent vide letters/email dated 10 November 2009, 12 January 2010 and 24 April 2010 wherein it is clear that the respondent was conscious of the fact that Mr. Nagpal was a director of the appellant-company. If the respondent had the knowledge of Mr. Nagpal being a director then the contention raised and accepted by the learned Trial Court that the suit is not maintainable merely because the resolution was not produced moreso when in the cross-examination it was admitted that there exists 4 of 7 a resolution, such a finding cannot be sustained.
12. The suit filed in the cause title itself states that Mr. Nagpal is a director. In the verification clause also Mr. Nagpal has signed as a director. In the written statement also, there is no denial to this fact by the respondent. Therefore, Mr. Nagpal being a director and authorised to file the suit was never disputed by the respondent in the pleading. The Asst. Registrar of this Court at the time of presentation of the suit has certified that the plaint is properly signed and verified and same could be only when the resolution was seen by the said officer. The copy of the resolution, minutes and memorandum of association when demanded by this Court, have been shown and are annexed to the appeal papers, which shows that Mr. Nagpal is a director and authorised to file the suit.
13. Furthermore, this is a procedural irregularity in the facts of the present case which the Court could have given an opportunity to cure the same. In any case, the respondent could have called the appellant to produce the resolution when Mr. Nagpal in his cross examination admitted that such a resolution exists. The evidence of Mr. Nagpal has not been found to be incorrect but on the contrary, based on the said evidence all other issues have been decided in favour of the appellant. Therefore, the statement made in the cross examination on this issue should also have been accepted by the learned Trial Court. 5 of 7
14. The Hon’ble Supreme Court in the case of United Bank of India vs. Naresh Kumar & Ors.1, has observed that a suit cannot be dismissed on the ground of procedural irregularity so as to ensure that substantive justice is done. In the facts of the present case, the ground of non-filing of resolution is merely a procedural irregularity moreso when the designation and in cross-examination existence of the resolution is proved and the resolution is shown to this Court. Therefore, ratio of the said decision of the Supreme Court squarely applies to the facts of the present case.
15. The following decisions also supports the reasoning given by me on the issue of resolution:
1. Sheth Builders Pvt. Ltd. vs. Michael Gabriel & Ors.2, (paragraph 9 and 10)
2. Palmview Investments Overseas limited vs. Ravi Arya and Ors.[3]
3. National Ability S.A vs. Tinna Oil & Chemicals Ltd. & Ors.[4] (paragraph 18)
16. Recently, the Gauhati High Court in the case of Amprolisa Construction and Marketing Pvt. Ltd vs. Gupta Hardware Private. Ltd.[5]
6 of 7 has discussed whole law on this subject and observed in paragraph 39 as under: “From the decisions discussed above, it is abundantly clear that any initial defect as regards authorization at the time of initiation of the complaint is a curable defect which can be subsequently cured during the course of the trial or even at the appellate stage as held by the Supreme Court in George Joseph (Supra).”
17. In view of above, issue No.3 determined by the Trial Court is answered in the affirmative and the finding of the Trial Court “In the negative” is reversed.
18. Insofar as other issues are concerned since the findings are in favour of the appellant, the same are not disturbed in the present appeal.
19. As per the Trial Court’s order Rs.[5] lakhs was deposited by the defendant. Since the appeal is now allowed, the appellant is entitled to the sum of Rs.[5] Lakhs along with interest till today and same should be refunded within eight weeks of the appellant making an application for refund of the same.
20. Appeal is allowed and cross-objection is dismissed. Consequently, Interim/Civil Application, if any does not survive and is accordingly disposed of. [ JITENDRA JAIN, J. ]