(Prayer: Civil Revision Petition is filed under Article 227 of Constitution of India to strike out the plaint in O.S.No.86 of 2022 on the file of the District Munsif Court, Valliyoor, Thirunelveli District.)

1. The present Civil Revision Petition has been filed to strike out the plaint in O.S.No.86 of 2022 on the file of the District Munsif Court, Valliyoor, Thirunelveli District.

2. Heard Mr.S.R.Sundar, learned Counsel for the Revision Petitioner. Despite service of notice, none appears for the respondents.

3. The petitioner is the first defendant in the suit and the first respondent is the plaintiff in the suit in O.S.No.86 of 2022 on the file of the District Munsif Court, Valliyoor, Thirunelveli District. The respondents 2 and 3 are the defendants 3 and 4 in the suit. The said suit was filed

                   (a)to declare the letter, dated 17.09.2020, authorising the plaintiff, as power agent to alienate the suit properties, as per the board resolution, dated 10.02.2020;

                   (b)for a permanent injunction to restrain the defendants 1 and 3 from interfering with the plaintiff, who is the authorised person of the first defendant company, to execute a power of attorney of the plaintiff to alienate the suit properties;

                   3)for cost of the suit; and

                   4)for other reliefs.

4. The following submissions were made by the learned Counsel for the petitioner:

                   4.1)The prayer, which was sought in the suit to declare the non-existing Board resolution is binding on the petitioner company is contrary to Section 180 of the Companies Act, 2013 (hereinafter referred to as “the Act”). The suit itself could not be numbered, as there is non-compliance of Sections 117 and 118 of the Act and entertaining of the suit in the absence of minutes of General Body Meeting, which authorising selling and otherwise disposing the immovable properties of the petitioner company, which is nothing but tantamount to the substantial undertaking of the petitioner, is in gross violation of Sections 117, 118 and 180 of the Act.

                   4.2)The first respondent, in collusion with the other respondents, has made an attempt to sell or deal with the substantial properties of the petitioner company by a fabricated and forged letter passed by the Board resolution, which is void in terms of the Act. He also submitted that institution of the present suit is an abuse of process of Court and the same cannot be entertained, as there was statutory violation to Section 180 of the Act.

                   4.3)The first respondent has executed a fraudulent general power of attorney registered as Doc.Nos.4213/2020, 4214/2020, 4215/2020, 4216/2020, 4217/2020, 4218/2020 and 4219/2020. The petitioner Company has lodged a police complaint with regard to these fraudulent registration of general power of attorney and the same is pending investigation. The first respondent has suppressed the factum of the order passed by the District Registrar, Tirunelveli, with regard to the documents registered in Doc.Nos. 4213/2020, 4224/2020 and 4347/2020 and had filed the present suit.

                   4.4.)The original documents/sale deeds of the properties are now with the safe custody of the IDBI Trusteeship Services Limited on behalf of the LIC, which is evident from their letter, dated 04.01.2022. The first respondent has filed a collusive suit in collusion with the respondents 2 and 3 and had made an attempt to usurp the properties of the petitioner company. The letter, dated 17.09.2020, gives authorization to the first respondent to look after the lands of the petitioner company, sale of lands, receive land advance payments, lodge police complaints, revenue patta change, all legal formalities, to approach the Sub Registrar Office, Taluk Office and all Government Offices. Yet another letter, dated Nil, which gives authorization to the first respondent to execute and sign deeds on all other documents. The District Registrar, in his order, dated 25.02.2020, had given his finding to the Question No.5, with regard to the registration of above documents, which is as follows:

                  

                   4.5)The learned Counsel for the petitioner also relies on the letter of the IDBI Trusteeship Services Limited addressed to the District Registrar, Thirunelveli, which confirms the original list of properties with IDBI Trusteeship Services Limited on behalf of LIC, where, the properties of the petitioner company are in the custody of IDBI Trusteeship Services Limited. This authorisation letter ensures that the title deeds are with the Bank. Hence, he prays that the collusive suit filed by the first respondent should be struck out by this Court.

5. This Court considered the submissions made by the learned Counsel for the petitioner and perused the materials available on record.

6. Before going into the merits of the case, it will be useful to extract Section 180(1)(a) and (c) of the Companies Act, which as follows:

                   Section 180: Restriction on powers of Board: (1)The Board of Directors of a company shall exercise the following powers only with the consent of the company by a special resolution, namely:-

                   (a)to sell, lease or otherwise dispose of the whole or substantially the whole of the undertaking of the company or where the company owns more than one undertaking, of the whole or substantially the whole of any of such undertakings.

                   .....

                   (c)to borrow money, where the money to be borrowed, together with the money already borrowed by the company will exceed aggregate of its (paid-up share capital, free reserves and securities premium), apart from temporary loans obtained from the company's bankers in the ordinary course of business:"

7. Section 118(7) of the Act reads as follows:

                   118. Minutes of proceedings of general meeting, meeting of Board of Directors and other meeting and resolutions passed by postal ballot.

                   (1)........

                   (7)The minutes kept in accordance with the provisions of this section shall be evidence of the proceedings recorded therein."

8. Section 117(1)(e) of the Act reads as follows:

                   "117. Resolutions and agreements to be filed.—

                   (1)......

                   (a)......

                   (e)resolution passed by a company according consent to the exercise by its Board of Directors of any of the powers under clause (a) and clause (c) of sub section (1) of Section 180."

9. From the above, it is clear that when a suit is filed and a summon has been issued, the Court ought to have considered to satisfy whether the plaintiff has prima facie made out a case in the plaint in compliance to Sections 117, 118 or 180 of the Act. Section 118(7) of the Act mandates that minutes has to be recorded in the board meeting and the same has to be kept as an evidence to establish the proceedings and as per Section 117 of the Act, the resolution or any agreement in respect of the matters specify in consonance with Section 102 of the Act has to be filed before the Registrar of Companies within 30 days from the date of passing of resolution and Section 117(1)(e) of the Act mandates resolution passed by a Company in exercise of its Board of Directors, which would be in consonance with clause (a) and clause (c) of sub section (1) of Section 180 of the Act. A plain reading of the plaint, the plaintiff does not disclose any of the statutory provisions of Sections 180(1)(a) and (c) along with Section 118(7) and Section 117(1)(e) of the Act.

10. It is pertinent to note that though the learned Counsel for the petitioner relied upon Section 117(1)(e) of the Act, on perusal of the Act, it is seen that Section 117(1)(e) was omitted by the Act 1 of 2018, which came into effect from 07.05.2018. As the plaintiff did not show the compliance of Section 102 of the Act, the non-compliance of Section 117(1)(e) of the Act, which was omitted, will not weaken the case of the petitioner with regard to the main prayer to strike off.

11. The learned Counsel for the petitioner had relied upon the following judgments:

                   (1)Ramrameshwari Devi and others vs Nirmala Devi and others, reported in (2011) 8 SCC 249, wherein, the Hon'ble Supreme Court has held as follows:

                   47. We have to dispel the common impression that a party by obtaining an injunction based on even false averments and forged documents will tire out the true owner and ultimately the true owner will have to give up to the wrongdoer his legitimate profit. It is also a matter of common experience that to achieve clandestine objects, false pleas are often taken and forged documents are filed indiscriminately in our courts because they have hardly any apprehension of being prosecuted for perjury by the courts or even pay heavy costs. In Swaran Singh v. State of Punjab [(2000) 5 SCC 668 : 2001 SCC (Cri) 190] this Court was constrained to observe that perjury has become a way of life in our courts.

                   .....

                   52. The main question which arises for our consideration is whether the prevailing delay in civil litigation can be curbed? In our considered opinion the existing system can be drastically changed or improved if the following steps are taken by the trial courts while dealing with the civil trials:

                   A. Pleadings are the foundation of the claims of parties. Civil litigation is largely based on documents. It is the bounden duty and obligation of the trial Judge to carefully scrutinise, check and verify the pleadings and the documents filed by the parties. This must be done immediately after civil suits are filed.

                   B. The court should resort to discovery and production of documents and interrogatories at the earliest according to the object of the Act. If this exercise is carefully carried out, it would focus the controversies involved in the case and help the court in arriving at the truth of the matter and doing substantial justice.

                   C. Imposition of actual, realistic or proper costs and/or ordering prosecution would go a long way in controlling the tendency of introducing false pleadings and forged and fabricated documents by the litigants. Imposition of heavy costs would also control unnecessary adjournments by the parties. In appropriate cases the courts may consider ordering prosecution otherwise it may not be possible to maintain purity and sanctity of judicial proceedings.

                   D. The court must adopt realistic and pragmatic approach in granting mesne profits. The court must carefully keep in view the ground realities while granting mesne profits.

                   E. The courts should be extremely careful and cautious in granting ex parte ad interim injunctions or stay orders. Ordinarily short notice should be issued to the defendants or respondents and only after hearing the parties concerned appropriate orders should be passed.

                   F. Litigants who obtained ex parte ad interim injunction on the strength of false pleadings and forged documents should be adequately punished. No one should be allowed to abuse the process of the court.

                   G. The principle of restitution be fully applied in a pragmatic manner in order to do real and substantial justice.

                   H. Every case emanates from a human or a commercial problem and the court must make serious endeavour to resolve the problem within the framework of law and in accordance with the well-settled principles of law and justice.

                   I. If in a given case, ex parte injunction is granted, then the said application for grant of injunction should be disposed of on merits, after hearing both sides as expeditiously as may be possible on a priority basis and undue adjournments should be avoided.

                   J. At the time of filing of the plaint, the trial court should prepare a complete schedule and fix dates for all the stages of the suit, right from filing of the written statement till pronouncement of the judgment and the courts should strictly adhere to the said dates and the said timetable as far as possible. If any interlocutory application is filed then the same be disposed of in between the said dates of hearings fixed in the said suit itself so that the date fixed for the main suit may not be disturbed."

                   (2)Rushvi Estate and Investments Private Limited vs Official Liquidator of Shri Ambica Mills Limited, reported in 1998 SCC OnLine Guj 393, wherein, the Gujarat High Court, has held as follows:

                   33. The next question to be considered is whether the alleged power of attorney given by Rajesh Jaykrishna can bind the company. Mr. Shah, learned counsel appearing for the official liquidator, relied upon section 293(1)(a) of the Companies Act which specifically requires that in the event any undertaking of the company is being sold, that will have to be done with the consent of the public company in a general meeting and then only the board of directors can take any such steps. This section 293(1)(a) reads as follows:

                   “293. Restrictions on powers of board.— (1) The board of directors of a public company, or of a private company which is a subsidiary of a public company, shall not, Except with the consent of such public company or subsidiary in general meeting—

                   (a) sell, lease or otherwise dispose of the whole, or substantially the whole, of the undertaking of the company, or where the company owns more than one undertaking, of the whole, or substantially the whole, of any such undertaking.”

                   40. In the circumstances, for the reasons stated above, I hold that the alleged power of attorney given to Rajesh Jaykrishna, does not bind the company in liquidation since it is in breach of the undertaking given to the Hon'ble Supreme Court and for non-compliance with section 293(1)(a) of the Companies Act, 1956, apart from being in breach of the expressed stipulation in the clearance given by the, State Government under the provisions of the ULC Act. No rights can flow therefrom as against the company and the sale deeds executed on, the strength thereof cannot be enforced against the company. The possession by the official liquidator of these properties is perfectly legal and justifiable. In the circumstances, no declaration as sought by the applicants that they are bona fide purchasers can be given nor can the official liquidator be directed to lift his attachment on the company's property. Similarly, no suit can lie to enforce these documents against the company.

                   (3)Coachin Malabar Estates and Industries Limited and another vs P.V.Abdul Khader and another, reported in 2003 SCC OnLine Ker 383, wherein, the Kerala High Court has held as follows:

                   "22.The board of directors could effect sale of the immovable property only with the sanction of the general body under section 293(1) of the Companies Act and sanction was accorded by the general body in its meeting on December 7, 2001. The general body of the company examined the decision taken by the board of directors and felt in the facts and circumstances the only feasible option was to sell some of the immovable properties and utilise the sale proceeds for meeting the financial obligations particularly to the banks and financial institutions. Once necessary sanction has been obtained from the general body and a business decision has been taken by the board of directors, an ordinary shareholder has no power to question the same."

12. When the Civil Revision Petition has been filed to strike out the plaint, notice was issued to the respondents and despite of service of notice and their names were printed in the cause list, none appears either in person or through Pleader.

13. On perusal of the documents, it is seen that the document/general power of attorney registered in the name of the first respondent was cancelled by the proceedings of the District Registrar, Thirunelveli District, dated 25.02.2020, which makes it clear that the first respondent has registered fraudulent document and the order passed by the District Registrar, Thirunelveli, was not challenged and it has reached finality. Similarly, the letter of the IDBI Trusteeship Services Limited addressed to the District Registrar, Tirunelveli confirms that the original documents are in the safe custody of IDBI Trusteeship Services Limited on behalf of LIC.

14. When the Civil Court issued notice to the petitioner, the trial Court ought to have examined whether a prima facie case has been made out to ensure that the plaintiff has presented the case in compliance to Sections 117, 118 and 180 of the Act, which are mandatory in nature and in the absence of any such compliance, issuing summons to the petitioner itself only demonstrates that the plaintiff has filed the suit with a gross abuse of procedure. The petitioner has made out a case that the plaintiff do not made out any prima facie case apart from the statutory none compliance to Sections 117, 118 and 180 of the Act. Resultantly, it is not only an abuse of process of law and also ensures that the general of power of attorney, which was registered by the plaintiff was set aside by the District Registrar, which has become finality and the original documents for the subject matter of the properties are with the IDBI Trusteeship Services Limited on behalf of LIC. All these things only demonstrate that the plaintiff has made all attempts to swindle, stiffen and made an attempt to fraudulently transfer or cheat the properties of the petitioner company. Such blatant gross violation of abuse of process of Court cannot be entertained.

15. In view of the same, the Civil Revision Petition is allowed and the Original Suit in O.S.No.86 of 2022 on the file of the District Munsif Court, Valliyoor, Thirunelveli District, is struck off. No costs. Consequently, connected miscellaneous petitions are closed.