Tuesday, 12 February 2019

Whether it is mandatory for court to frame issue that suit filed without execution of power of attorney is not tenable?

 Therefore, in the present case, when the defendant has taken an objection in the written statement that Surender Kumar had no authority to sign the plaint and verification and in the cross-examination the said Surender Kumar has admitted that on the date of signing the plaint and verifying the same, he had no special power of attorney, the trial Court should have framed an issue with regard to the maintainability of the suit, which has to be decided in the first instance. Even though the trial Court has failed to frame an issue in the first instance, on the basis of the evidence adduced by DW1 that he had no power of attorney at the time of signing the plaint and verification and subsequent to the filing of the suit, the power of attorney was executed in his favour, in accordance with Rule 5 of Order 14, before passing a final decree, the trial Court has got the power to frame issues. When the defendant took an objection that Surender Kumar has no power of attorney to sign the plaint and on the other hand, though he has got letter of authority and that he is entitled to sign the plaint and verification, the trial Court should have framed an issue where one proposition of fact is affirmed by one party and denied by the other. Therefore, keeping this in mind, the trial Court should have exercised the power contemplated under Rule 5 by framing an issue with regard to authority of Surender Kumar to sign the plaint, inasmuch as this issue goes to the root of the matter. Without framing issue with regard to the maintainability of the suit and the authority of the deponent to sign the plaint and verification, trial Court should have not given a finding that deponent has got letter of authority to sign the plaint.
IN THE HIGH COURT OF ANDHRA PRADESH AT HYDERABAD

CCCA No. 153 of 1987

Decided On: 30.10.2000

 Unitech Industrial Corporation  Vs. Arvind Engineering Co., Hyd.

Hon'ble Judges/Coram:
E. Dharma Rao, J.

Citation: AIR 2001 AP 177

1. This appeal was filed against the judgment and decree dated 26-10-1987 in O.S. No.1486 of 1984 on the file of the I Addl. Judge, City Civil Court, Hyderabad, whereby the learned Judge decreed the suit with costs filed for recovery of money.

2. The said judgment is assailed in this appeal on the ground that the lower Court has not correctly appreciated the pleadings in the case, the issues framed and the evidence adduced in relation thereto, that the trial Court has erred in holding that Ex.A1 was issued to the defendant and the goods were in fact supplied to him, the trial Court erred in rejecting the plea of the defendant in this regard and the evidence adduced, that the lower Court erred in holding that Ex.A2 bills were delivered to defendant and the cheques were paid towards the said bill and that an amount of Rs.25,058.15 ps., is still due, the lower Court failed to see that there is no signature on Ex.A2, that there is no proof of defendant having received it, that there is no delivery receipt or acknowledgment of receipt of goods, that the learned trial Judge has avoided referring to the evidence adduced by the plaintiff and therefore, the judgment and decree passed by the trial Court is liable to be set aside. It is further contended that the trial Court committed mistake in holding that the defendant is liable for A3 bill which' was admittedly issued to Shimoga National College of Engineering, that the goods were sent to them and there is absolutely no plea and no proof of the defendant acting as an agent, that there is no signature of defendant and that Rs.13,000/- was paid by defendant or that the college did not pay the balance, and, therefore, prayed to set aside the judgment and decree passed by the trial Court.

3. The brief facts of the case are that the second defendant is the proprietor of the first defendant, the plaintiff manufacturers and suppliers of Survey Instruments, drawing office equipments etc., and supplied material to the defendants on credit bills at the request of the defendant under (1) Bill No.AEC/25/83-84, dated 20-6-1983 for Rs.577/-; (2) Bill No.AEC/ 40/83-84 dated 1-8-1983 for Rs.25,048.25 ps. and (3) Bill No.AEC/56/83-84, dated 12-9-1983 for Rs.11,790.00. According to the plaintiff, the bill amounts have to be paid within one month and in default 24% interest has to be paid on the amount due from the date of default as per trade and business custom, that the defendants have to pay a sum of Rs.26,925.25 ps., as on 12-9-1983 against the credit bills as per the account of the defendant standing in the books of account of the plaintiff. Though the plaintiff requested several times the defendant to settle the accounts and pay the amounts due with interest, but the defendant did not pay the amount and the plaintiff sent notice dated 10-11-1983 under registered post demanding to pay the amount within 10 days of the receipt of the notice, though the defendant received the notice on 15-11-1983, but did not reply. Since the defendant did not pay the due amount even after several demands, therefore, the plaintiff filed the suit for recovery of amount of Rs.26,925.25 ps.

4. The defendant filed written statement denying the material allegations made in the plaint. It is stated that the suit is not maintainable in law or on facts. The plaintiff is put to strict proof that the person who signed the plaint is competent and authorised to sign the plaint. It is further stated that the person who signed the plaint has no authority to do so and the authorisation, if any, is not in accordance with law, and the plaintiff is put to strict proof that Sri Surender Kumar, who signed the plaint is the authorised agent of the plaintiff as defined under Order III, Rule 2 of the Code of Civil Procedure, that the first defendant is not a proprietary concern, but it is a partnership concern. The defendant also denied the liability for the amounts mentioned in the plaint much less interest at 24% per annum as per the business and custom. It is further submitted that the defendant is not liable to pay a sum of Rs.25,925.25 ps., or interest whatsoever when there is no contract for the interest and, therefore, when the defendant is not liable to pay any amount, there cannot be any question or demand by the plaintiff and as such the demand notice is illegal and improper.

5. Based on the above pleadings, the trial Court framed following issues:

1. Whether the plaintiff is entitled for the said amount?

2. Whether the interest claimed is not correct?

3. Whether the defendants are not liable to pay instalments as contended in the written statement?

4. To what relief?

6. On behalf of the plaintiff, PW1 was examined and Exs.A1 to A10 are marked while on behalf of the defendant DW1 was examined and no documents are marked.

7. The plaintiff company, which manufactures and suppliers of the survey instruments, drawing office instruments, etc., filed the suit against defendants for recovery of an amount of Rs.34,996.95 ps. on the ground that the said amount is due from the defendant in the suit towards the value of the goods received by the defendant and the second defendant is the sole proprietor. The plaintiff company has supplied material covered under Exs.A1 to A3 bills to the defendant No.1 and the material covered by Ex.A3 bill to Jawaharlal Nehru National College of Engineering, Shimoga as per the directions of the first defendant and as per the three bills, a sum of Rs.26,925.25 ps. was due after deducting the amounts paid by the first defendant i.e., a sum of Rs. 15,000/- and Rs. 10,000/- under Ex.A2 and that it is entitled to interest at 24% per annum.

8. The case of the defendants is that the materials covered by Exs.A1 to A3credit bills were not supplied to the first defendant by the plaintiff company, more precise, the materials covered under Exs.A1 and A2 were not supplied by the plaintiff company to the defendant No.1 and that the materials covered under Ex.A3 were supplied to first defendant but was supplied to Jawaharlal Nehru National College of Engineering, Shimoga, and as such the defendants are not liable to pay any amount.

9. In support of the contention of the appellant, a stand was taken in paragraph No.2 of the written statement that the person who signed the plaint has no authority to do so, that authorisation, if any, is not in accordance with law and the plaintiff is put to strict proof that Sri Surender Kumar, who signed the plaint, is the authorised agent, as defined under Order III, Rule 2 CPC. Even though a specific stand has been taken by the appellants in the written statement, the trial Court has not framed any specific issue to the effect and dealt with the same in the judgment, which is not in consonance of the established principles of law. While deposing the said Surender Kumar has stated that he is working as Manager in the plaintiff company and he filed the special power of attorney executed by plaintiff company in his favour, which is marked as Ex.A8. In the cross-examination, he stated that at the time of filing the suit, he was not having power of attorney and he had only letter of authority and Ex.A8 is signed only by his son who is the Managing Partner of the plaintiff.

10. On the other hand, the defendant deposed that the goods mentioned in Exs.A1 to A3 were in fact not supplied to them, that Ex.A1 bears his signature and he signed on it only to accommodate the plaintiff Corporation. It is further stated that the goods mentioned in Ex.A2 were not received and he is not at all liable to pay the bill under Ex.A2.

11. The learned Counsel for the appellant contends that as per Order 14, Rule 1 of the Code of Civil Procedure, the trial Court should have framed an issue on the basis of the plea taken by the defendants in their written statement that the suit is not maintainable on the ground that the deponent Mr. Surender Kumar had no special power of attorney on the date of signing the plaint and verification and the said Special Power of Attorney was executed subsequent to the date of filing of the suit. As such the suit is not maintainable and without framing an issue, the finding given by the trial Court that Surender Kumar as Manager was empowered to sign the plaint and verification is erroneous and therefore, the trial Court committed an error in not framing an issue with regard to the maintainability, which goes to the root of the matter irrespective of the fact that the plaintiff has merit in the case. It is mandatory on the part of the trial Court to frame an issue with regard to the maintainability of the suit, but the trial Court has erred in giving a finding in the absence of any issue framed to that effect. Therefore, on these two grounds, the judgment and decree of the trial Court are liable to be set aside.

12. In support of his contention, he relied on the Full Bench Judgment of this Court in Aziz Ahmed Khan v. I.A. Patel, MANU/AP/0059/1974 : AIR1974AP1 . The facts therein are that the suit was filed for recovery of amount together with interest thereon alleged to have been advanced to the defendant by way of accommodation on two occasions for which two separate receipts were obtained. The issue raised in that judgment was, where in a suit relating to loan the defendant questions the very maintainability of the suit under Section 9 of A.P. (Telangana Area) Money Lenders Act (5 of 1349 Fasli) on the ground that the plaintiff is a money lender and he is carrying on business without obtaining a licence under the Act. Therefore, the Court held that framing of the issue in this regard and decision thereon is mandatory on the part of the Court and the decree passed without consideration of this main question is illegal, whether or not the plaintiff is successful in proving his case is immaterial. The Full Bench in that case was not at all satisfied with the manner in which the case was dealt with by the trial Court. It is observed that one of the important functions of the trial Court is to settle all necessary issues, whether of fact or of law, arising out of the pleadings. If a question is raised that the suit is not maintainable under certain provision of law, the Court cannot afford to lose sight of this material proposition which goes to the root of the matter. The Court has to necessarily frame an issue in that behalf. It is surprising that the trial Court failed to notice that the plaint itself elicits that question and the written statement pointedly raises that issue and the statute referred to enjoins that the Court shall frame and decide the issue. Therefore, the Full Bench ultimately held that in the facts and circumstances of the case, the trial Court was not justified in passing a decree in favour of the plaintiff for the reason that when the ground under the Money Lenders Act was raised, unless it be proved that the said Act had no application or if applicable the plaintiff had complied with the requisite provision, the Court could not go into the merits to pass a decree in favour of the plaintiff. And also for the reason that even when the plaintiff had no brought on record material which is legal and admissible evidence, no decree could be passed in his favour.

13. The learned Counsel for the appellants further relied on a decision of Allahabad High Court in Suit. Kaniz Fatima (Deceased) and another v. Shah Naim Ashraf AIR 1983 All. 450. That was a matter which arose out of a suit filed by Shah Naim Ashraf, inform pauperis, seeking declaration to the effect that he is the legally appointed Sajjada Nashin of the Sajjada of Shah Ali Hasan Saheb and the latters Imambara, including Khangah in its northern portion and other moveable properties.

14. On the facts and circumstances of the case, the Division Bench held that the issues which were framed do not cover all the pleadings on which their claims were based. Where no issue has been framed on a question, which arises out of the pleadings of the parties, the Court cannot proceed to record a finding on that point and no decree can be passed upon that finding. The object of framing the issue is to direct the attention of the parties to the main questions of fact and law to be decided and the duty of framing and recording the proper issues has been placed on the Court by the Code of Civil Procedure. It is expected that in framing the issues the Courts of law should exert themselves so as to make them sufficiently expressive of the matters which they desire to consider under such issues. The provision contained in Rule 5 of Order 14 further indicates that in case any relevant issue has been left out to be framed, the Court may at any time, before passing the decree, amend the issues or frame additional issues on such terms as it thinks fit and all such amendments or additional issues, as may be necessary for determining the matter in controversy between the parties, shall be made or framed. It is thus evident that the proper determination of the matters in controversy between the parties, a duty is cast on Court to frame proper issues before embarking upon to record a decision on the point. The Court would not be justified in the absence of a definite issue, in going into the question and recording a finding on a point, although the same may appear to be very material for recording proper decision in the case.

15. It is evident from the judgment of the trial Court that no issue was framed with regard to the stand taken by the defendants in the written statement that at the time of filing of the suit, Sri Surender Kumar had any power of attorney to sign the plaint, as such, to decide his authority to sign the plaint, has to be decided by framing an issue to that effect. On the other hand, the trial Court has given a finding in paragraph 14 of the judgment stating that the defendants in the suit have taken a plea in their written statement filed in the suit that the person who signed the plaint and verified the same, is not competent person to sign the plaint on behalf of the plaintiff company, and so such there is no valid presentation of the plaint. In respect of the said plea, the Court has not framed the issue arising out of the said plea. Whatever that be, the plaintiff in the suit filed a power of attorney executed by the plaintiff company in favour of its Manager, Surender Kumar, which empowers the said Surender Kitmar, the Manager of the plaintiff company to file suits on behalf of the plaintiff. It is stated that it is said Surender Kumar in whose favour the plaintiff company executed the power of attorney and he verified the plaint and filed the suit on behalf of the company. As such it is futile on the part of the defendants to contend that there is no valid presentation of plaint filed in the suit and that the person who signed and verified the plaint filed in the suit is not competent to do so on behalf of the plaintiff company.

16. As seen from the above discussion, the trial Court has held that the plaintiff company has executed power of attorney in favour of Surender Kumar enabling him to sign and verify the plaint. But it appears, the trial Court has conveniently forgotten that the said power of attorney was executed in favour of Surender Kumar only after filing of the suit. Before filing the suit, there was only a letter of authority from the plaintiff company to sign the plaint. In view of these circumstances, the observations arrived at by the trial Court are contrary to the admissions made by Surender Kumar.

17. As seen from the decision of the Full Bench in Aziz Ahmed Khan's case (supra) the defendant questioned the very maintainability of the suit under Section 9 of the A.P. (Telangana Area) Money Lenders Act, 1349 Fasli, on the ground that the plaintiff is a money lender and he is carrying on his business without obtaining licence under the Act, the trial Court did not frame issue whether the suit is maintainable or not and disposed of the matter, then the Full Bench has held that framing of an issue in this regard and decision thereon is mandatory on the part of the Court and the decree passed without consideration of this main question is illegal. The Division Bench of Allahabad High Court in Smt. Kaniz Fatima's case, has held that where no issue has been framed on a question which arises out of the pleadings of the parties, the Court cannot proceed to record a finding on that point and no decree can be based upon that finding.

18. A reading of Order 14, Rule 1 contemplates that issues arise when a material proposition of fact or law is affirmed by one party and denied by the other, that the material propositions are those propositions of law or fact which a plaintiff must allege in order to show a right to sue or a defendant must allege in order to constitute his defence and each material proposition of law affirmed by one party and denied by the other shall form the subject of a distinct issue. Sub-rule (4) thereof contemplates that issues are of two kinds viz., issues of fact and issues of law. Sub-rule (5) of Rule contemplates that at the first hearing of the suit, the Court shall, after reading the plaint and the written statements, if any, and after examination under Rule 2 of Order X and after hearing the parties or their pleaders, ascertain upon what material propositions of fact or of law the parties are at variance, and shall thereupon proceed to frame and record the issues on which the right decision of the case appears to depend. Rule 2 of Order 14 contemplates that a case may be disposed of on a preliminary issue, the Court shall, subject to the provisions of sub-rule (2), pronounced judgment on all issues. Sub-rule (2) of this Rule contemplates that where issues both of law and of fact arise in the same suit and the Court is of opinion that the case of any part thereof may be disposed of on an issue of law only, it may try that issue first if that issue relates to the jurisdiction of the Court or a bar to the suit created by any law for the time being in force; and for that purpose may, if it thinks fit, postpone the settlement of the other issues until after that issue has been determined and may deal with the suit in accordance with the decision on that issue. Rule 3 contemplates that the Court may frame the issues from all or any of the following material i.e., allegations made on oath by the parties, or by any persons present on their behalf or made by the pleaders of such parties; allegations made in the pleadings or in answers to interrogatories delivered in the suit and the contents of documents produced by either party. Rule 5 contemplates that the Court may at any time before passing a decree amend the issues or frame additional issues on such terms as it thinks fit, and all such amendments or additional issues as may be necessary for determining the matters in controversy between the parties shall be so made or framed and the Court may also, at any time before passing a decree, strike out any issues that appear to it to be wrongly framed or introduced.

19. Therefore, in the present case, when the defendant has taken an objection in the written statement that Surender Kumar had no authority to sign the plaint and verification and in the cross-examination the said Surender Kumar has admitted that on the date of signing the plaint and verifying the same, he had no special power of attorney, the trial Court should have framed an issue with regard to the maintainability of the suit, which has to be decided in the first instance. Even though the trial Court has failed to frame an issue in the first instance, on the basis of the evidence adduced by DW1 that he had no power of attorney at the time of signing the plaint and verification and subsequent to the filing of the suit, the power of attorney was executed in his favour, in accordance with Rule 5 of Order 14, before passing a final decree, the trial Court has got the power to frame issues. When the defendant took an objection that Surender Kumar has no power of attorney to sign the plaint and on the other hand, though he has got letter of authority and that he is entitled to sign the plaint and verification, the trial Court should have framed an issue where one proposition of fact is affirmed by one party and denied by the other. Therefore, keeping this in mind, the trial Court should have exercised the power contemplated under Rule 5 by framing an issue with regard to authority of Surender Kumar to sign the plaint, inasmuch as this issue goes to the root of the matter. Without framing issue with regard to the maintainability of the suit and the authority of the deponent to sign the plaint and verification, trial Court should have not given a finding that deponent has got letter of authority to sign the plaint.

20. Viewed from any angle, the trial Court has committed an error in not framing an issue with regard to the maintainability of the suit under Order 14, Rules 1 and 5 CPC and also giving a finding without there being any issue to that effect. Therefore, the trial Court has committed an error of law in delivering the judgment.

21. Accordingly the judgment and decree passed in OS No.1486 of 1984 on the file of I Addl. Judge, City Civil Judge, Hyderabad, on 26-10-1987 is liable to be set aside and accordingly set aside and the matter is remanded to the trial Court for framing necessary issues and to dispose of the matter afresh according to law. No costs.
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