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Second Appeal No. 21 of 1958, decided on 22nd July 1960,
Manager when can file suit on behalf of company‑Civil Procedure Code (V of 1908), O. VI rr. 14,45.
Manager, if authorised by the Articles of Association is entitled to file suits on behalf of the company.
‑Misdescription of plaintif's (company's) name‑Name of agent used instead of company's corporate name‑Suit may be treated in substance to be one by company if relief is really sought by company and not by agent.
It is the general rule that a company must sue or be sued, not in the names of its agents or servants but in its own corporate name but where relief is really sought by or against the company and the error is merely one of misdescription a suit, though nominally by or against the agent, may be treated in sub stance to be one by or against the company.
A I R 1924 Oudh 309 rel.
B. C. Das for Appellant.
B. K. De for Respondent.
The defendant is the appellant and the appeal arises out of a suit filed by the plaintiff‑respondent. The suit was for arrears of rent for the period from November 1952, to March 1954, in respect of five suits of a building recorded as separate holdings and being Holding Nos. 52, 56, 59, 60 and 61, according to the Municipal records. It was alleged that the defendant took lease of those holdings and was in arrears for the aforesaid period.
2. The defendant resisted the suit on the ground of non -maintainability. He also pleaded that since 1950 there has been separation of the liability and realization of rent was accordingly being made from the occupier of each of the flats separately and that the defendant had thus no concern with any of said Holdings except that No. 61, regarding which also he put forward a plea of payment. It was further contended that there was a reciprocal promise and that the plaintiff having failed to fulfill his part of the promise was not entitled to recover the rental claimed. Ultimately the learned Munsif dismissed the plaintiff's claim with respect to Holding No. 52, on the finding that the defendant did not actually take lease thereof. With respect to the other four Holdings, however, the suit was decreed in part. Against that there was an appeal which was ultimately heard by the learned Subordinate Judge of the First Court at Pabna. He dismissed the appeal and affirmed the judgment and decree passed by the trial Court. It is in these circumstances that the defendant came up to this Court in second appeal.
3. Mr. B. C. Das has appeared on behalf of the appellant and Mr. B. K. De has appeared on behalf of the respondent.
4. The first point urged by Mr. Das is that the learned Courts below were wrong in holding that the suit was maintain able. He based his attack in this behalf on two grounds. In the first place it was contended that one suit for arrears of five holdings is not maintainable. In other words his contention is that the plaintiff ought to have brought five different suits, instead of one. It may be pointed out that out of the five Holding to which the suit originally related, a decree has been granted in respect of four only, and the claim with respect to the fifth was dismissed as the alleged lease in respect of the same could not be proved. So far as the other four are concerned, both the Courts below have found that the defendant is a lessee under the plaintiff in respect of the same. Thus the finding arrived at by the learned Munsif in this behalf is:‑
"It has also been proved by P. W, 1 that the defendant is a lessee in respect of these holdings. This is also borne out by the petitions [Exhs. 1 to 1 (c) ]. Further it is clear from the case sought to be made out by the defendant at the time of trial that he took lease of these holdings as alleged. Consider ing what I have said above I find that the defendant is a tenant of the plaintiff in respect of Holdings 56, 59, 60 and 61".
The learned Subordinate Judge too has noticed that the defendant himself admitted that he originally held these four flats and that his plea was that in 1950 the plaintiff at his instance made direct engagement with the occupier of each flat as a result of which he was not liable for any Holding other than No. 61 actually occupied. Considering the evidence the learned Subordinate Judge held that the defendant failed to prove this plea of separation of liability and agreed with the Munsif that he was liable for the rents of these four Holdings. This being a question of fact does not admit of any challenge at this stage. The position, therefore, is that the defendant is a tenant of the plaintiff in respect of the four Holdings, regarding which a decree has been passed, and that being so, the plaintiff is legally entitled to sue the defendant for the arrears of those holdings in one single suit as provided under Order II, rule 3 sub‑rule 1 which lays down:
"Save as otherwise provided, that the plaintiff may unite in the same suit several causes of action against the same defendant or the: same defendants jointly; and any plaintiff having causes of action in which they are jointly interested against the same defendant or the same defendants jointly may unite each cause of action in the same suit".
5. The contention that the suit is not maintainable for misjoinder for causes of action, has therefore, no force or substance at all.
6. The next ground relating to maintainability of the suit urged by Mr. B. C. Das is that the landlord being a registered company, the suit ought to have been filed by the company, as such, so that the present suit filed not by the company but by one Bhabani Prosad Saha as Managing Director cannot be maintained. This objection was raised in the Courts as well, but was over ruled on two grounds. In the first place the Courts below considered the objection as too technical and were of the opinion that suit was really filed in the name of Shaha Estate Ltd. from its Pabna branch, the words "Bhabani Prosad Saha on behalf of the company" being redundant. Secondly they also found that Bhabani Prosad was authorised under the Articles of Association of the plaintiff company to file suits on its behalf and that as such the present suit as filed by him on the basis of that authority was maintainable.
7. There appears to be nothing wrong in the above view taken by the learned Courts below. It is no doubt the general rule that a company must sue or be sued, not in the names of its agents or servants but in its own corporate name but where, how ever relief is really sought by or against the company and the error g is, merely one of mis-description a suit, though nominally by or against the agent, may be treated in substance to be one by or against the company. Thus it was held in A I R 1924 Oudh 309 that where in a suit by a Municipal body the plaintiff was described as "A. B.‑Chairman of the Municipal Board of . . " but the intention was clear that it was Municipal Board that was suing, it was held that the defect was merely one of form and could not be a ground in appeal for reversal of the decree.
8. Again according to the decision reported in A I R 1936 Lah. 321 where the manager of a company is authorised by the Articles of Association, to file suits with the previous sanction is un-authorised and the fact that the act of the Manager is ratified after the period of Limitation by a resolution of the Board of Directors is of no avail. This shown that the Manager, if authorised by the Articles of Association is entitled to file suits on behalf of the company. It would thus appear that the contention that the suit is not maintainable because of its having been filed not in the name of the company itself but by its Managing Director Bhabani Prasad has no substance.
9. The next point urged on behalf of the appellant is that the Courts below were wrong is not allowing Rupees 12 per month, for the costs incurred by the defendant for the failure of the plaintiff to keep up water supply. It appears that it was urged before the trial Court that the contract between the parties consisted of reciprocal promise and that since there was no obligation the suit could not be maintained. Regarding this the learned Munsif found that no case of reciprocal promise was actually alleged in plaint, while the learned lower Appellate Court has observed that in the written statement there is no complaint that the plaintiff discontinued any of the facilities shown at para. (2) of the plaint. It was accordingly held by the learned Subordinate Judge that the learned lower Court rightly rejected this flimsy contention of the pleader of the defendant that there was a reciprocal contract between the parties and further that the plaintiff failed to perform his part of the contract. In view of these findings the argument put forward on behalf of the appellant that remission ought to have been allowed on account of cost incurred by him for engaging a water carrier cannot at all be entertained.
10. Lastly it was contended that the Courts below were wrong in finding that the defendant was liable for the rent of the four holdings in respect of which a decree has been granted. As already indicated above both the Courts have found that the defendant was actually a lessee in respect of the four holdings in question. That being so, his liability for rent of the same is unquestionable. It was that the tenancy was in existence from long before the period to which the suit related. That was not disputed by the defendant either. The contention put forward by him on the other hand was that sometime in 1950, there was a separation of liability in the sense that the plaintiff made direct engagements with different occupiers to collect their respective rents from them direct. This story of separation of liability in the year 1950 could not be established according to the Courts below. So the suit appears to have been rightly decreed against the defendant.
11. Mr. B. C. Das further made a grievance that the Courts below approached the question from a wrong angle and proceeded on the basis whether the defendant succeeded in establishing that there was separation of liability instead of proceeding on the basis whether the plaintiff could prove the factum of the alleged lease. I find it difficult to subscribe to this argument. As already indicated above, the defendant did not dispute that he was a lessee in respect of the four holdings in question. That was practically admitted. The contention put forward on the other hand was that there was separation of liability sometime in the year 1950. So where the existence of the tenancy was admitted and the defendant only took a special plea of a change in the terms by reason of the plaintiff's direct engagement with different occupiers it was for the defendant to prove his plea and the Courts below appear to have approached the point correctly and dealt with same properly.
Thus there is no substance in the appeal which is dismissed with costs. The judgment and decree of the learned Courts below are affirmed.
S. B./A. H.
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