011-SLLR-SLLR-1989-V-1-SCIENCE-HOUSE-CEYLON-LIMITED-v.-I.-P.-C.-A.-LABORATORIES-PRIVATE-LIMITED.pdf
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•Science House (Ceylon) Limited v. I. P..C. A Laboratories
Private Limited (Tambiah. J.)155
SCIENCE HOUSE (CEYLON) LIMITEDV.
P. C. A. LABORATORIES PRIVATE LIMITED
SUPREME COURT.
TAMBIAH J.. SENEVIRATNE J. & FERNANDO J.
S. C. APPEAL NO: 4/87.
CA/LA NO: 147/82.■
D. C. COLOMBO NO: 32689/S.
NOVEMBER 21. 1988.
DECEMBER 01,. 08 and 09. 1988. •-
Civil Procedure' — Summary procedure (on liquid claims) under Chapter LIU of-the Civil Procedure Code'— Ss.-25.703.704.705 and 706 (1) CPC -e Attorney—Recognised Agent — Companies Ordinance S. 34 (1)—. Security.
In a suit byway of'surhmary procedure underChapter Llll of the Civil ProcedureCode for recdvery of monies due on two Bills of Exchange on a :saleof-drugs,the plaintiff a company incorporated in India filed plaint through its Attorney inSri Lanka who-held a power of attorney from it. To the plaint was annexed anaffidavit from the'said Attorney stating, inter alia, that the sums claimed in theplaint were justly and truly due to the plaintiff.
The defendant-company asked for unconditional leave to appear and defendthe action on the ground that part of the drugs were of poor quality and haddeteriorated and had to be destroyed and the plaintiff had failed to contributetowards the.remuneration and expenses of two medical representatives. Furtherthere had been delay in presentment for payment and the monies were thereforenot recoverable. At the hearing the defendant-company took up the position thatas the plaintiff was a companyit could not avail itself of the summary procedureon liquid claims provided by Chapter Llll of the Civil Procedure Code in that itcould not make-an affidavit as required by S- 705 (1) of the Code.-The DistrictJudge held that S. 34 (1) of the Companies-Ordinance permitted any documentrequiring authentication by a company to be signed by a Director. Secretary orother officer of the.Company and therefore the affidavit filed along-with the■plaint fulfilled the requirements of S. 705 (1) of the C. P. C. In thecorrespondence between the parties the defendant company had notcomplained that any quantity of the drugs had to be.destroyed owing to poorquality or deterioration or that the plaintiff had failed to contribute towards theexpenses and disbursements on account of Medical Representatives'and theDistrict Judge concluded the defence was not .'prima facie sustainable and hehad reasonable dpubt as to its good faith. He ordered the defendant-company todeposit Rs. 400.000/- as security. In appeal the Court o.f Appeal held with theDistrict Judge.
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Held
The District Judge's'conclusions that the defence was not. prima faciesustainable and that he had reasonable doubt as to its good faith are justifiableand should be upheld'.
A Corporation or a Company can avail itself of the special procedure inChapter Llll of the Civil Procedure Code and it can make an affidavit as requiredby S. 705 (1) of the Civil Procedure Code through one of its principal officers.
The. Plaintiff-Company's Attorney in Colombo was a "recognised agent"within the meaning of S. 25 (b) of the Code and his affidavit was sufficient andsatisfied the requirements of S. 705(1) of the Code.
. Section 34(1) of the Companies Ordinance permits juristic persons to fileaffidavits in proceedings under Chapter Llll of.the CPC.
Sections 704 and 706 of the CPC.stipulate that only the sum mentioned inthe summons could be ordered as security. The'Security of Rs. 400.000/- is.inexcess^.of the amount that could be ordered. No more, than the amountmentioned in the.summons cari be ordered as security.
Cases referred to:—
.1.. The Bank of Madras v. Ponnesamy — 9 SCC 169.
2. The Bank of Montreal v. Cameron —. LR 2 QBD 536.
'3. Royal Crown Derby Porcelain Co, Ltd.v. Russell [ 1949] 1 All ER 749.
4. Martin Perera.v. Madadombe — 73 NL.R 25. 34…. .
5.,. Collettes Ltd. v. Bank of Ceylon [ 1 984] — 2 SRI LR — 243. 314.
H. L. Bolton (Engineering) Co. Ltd. v. T. J'. Graham'S Sons Ltd] 1 956] — 3.ALL ER 624.'630.' 1..
(The] Bank of Madras v. Ponnesamy (supra)'not followed)
APPEAL from judgment of the Court of Appeal.
Pi Nagendran P.C. " with S.- Mithrakrishnan and J- Salwatura for'Defendant-Appellant. ’*•
K.'k Choksy P/C.'with S. A. Parathaiirigam:‘Mrs. C. D. ^merasinghe and Mrs. D.Wimaiadharma~6i the Plaintiff-Respondent..
Cur. adv. vult.
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Science House (Ceylon) Limited v. I. P. C, A.-Laboratorles
Private Limited (Tambiah, J.)157
January 20. 1989TAMBIAH. J.
The plaintiff-respondent (hereinafter ^alled: the plaintiff-company) on – or about 19.3.1982 instituted action underChapter. Ull of the -Civil- Procedure Code in the District Court' ofColombo against the defendant-appellant (hereinafter called thedefendant7cbmpany) for the recovery of Rs. 1 22.967/42 due ona Bill of Exchange marked "A" filed with the plaint, and anothersum of Rs. 195.030/17 due on-a second Bill of Exchangemarked "B" filed with the plaint. The plaintiff-company, alsoclaimed interest at 1 5% per annum from'1:0.1 .T979 on the firstBill of.Exchange and from 5.1.1979 on the second Bill ofExchange. The. plaintiff-conripany,' which, was a Company,incorporated under the Laws of India, annexed to its.plaint ahaffidavit by its attorney in Sri Lanka under a Power of Attorneystating, inter alia, that the sums, clairned in the plaint were justlyand truly due to the..plaintiff-company.
Upon service of summons, the defendant-company, filed anaffidavit of.one of its Directors and requested that the defendent-company be granted unconditional leave'to appear and defendthe'action. In -this', affidavit; it -was stated on behalf of. thedefendant-company, that 'part of the, drugs purchased from the.plaintiff-company to thewalue of Indian Rupees 34.861 /- had to-be destroyed because of deterioration and poor quality, and thatanother Rs.{:5.000/-(lndian Rupees) worth of stock was also ofpoor quality and: had deteriorated; that although the plaintiff-company'had agreed to contribute towards the remunerationand expenses of twd medical representatives in Sri Lanka, topopularise'their'products, it had failed’to do so and’there wasdue and owing to the defendaht-compahy ‘Rs. 57',000/-''(lndianRupees); from the plaintiff-company; that the defendant:compafiywas entitled to set off these sums of Rs. 34,86 T/-, Rs. 5',000/:and Rs. 57.000/- (Indian Rupees) which in Sri Lankan Rupeesamounted to Rs.' 215.032/53. It was also the defendant-company's position that th.e two Bills of Exchange were payableon sight, but there had been a delay in presentment for payment' and had been presented only on 4.4..1981, and hence the
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plaintiff-company cannot recover the monies on the said twoBills of Exchange.
However, when the application for unconditional leave toappear and defend came up for hearing, it was submitted onbehalf of the defendant-company that the plaintiff-company,being a Company, it could not avail itself of the summaryprocedure on liquid claims provided by Chapter LIU of the CivilProcedure Code, in – that, it could not make an affidavit asrequired by s. 705 (1) of the Code.
The learned District Judge by his order dated 24.9.1982 tookthe view that s. 34 (1) of the Companies Ordinance permittedany document requiring authentication by a Company to besigned by a Director. Secretary, or other officer of the Companyconcerned. As the affidavit in the case has been made by theCompany's attorney, in Sri Lanka, the learned District Judge heldthat the plaintiff-company had filed a good and valid affidavit asrequired by.s. 705 (1) of the Civil Procedure Code.
The correspondence between the parties does not bear out the .defendant-company's claim that the goods were of poor qualityand were destroyed because of its deterioration and poor quality;nor. does it bear out the claim of the defendant-company withregard to expenses and'disbursements on account of Medical■Representatives. The correspondence further establishes that thedefendant-company throughout accepted liability in the amountclaimed by the plaintiff-company. Having examined thecorrespondence, the learned District Judge concluded that the■ defence was not prima .facie, sustainable and that he had ■reasonable doubt as to its good faith, and ordered thedefendant-company to deposit a. sum .of Rs. 400,000/- assecurity in the. case.- .. ' .
On appeal, the Court, of Appeal by: its judgment dated.18.1 2…1 986 affirmed the judgment of the learned District Judgeand. dismissed the appeal with costs., but granted leave to thedefenda'nt-company to appeal to this Court' on the followingquestions oflaw:-
SCScience House (Ceylon) Limited v. I. P. C. A. Laboratories
Private Limited (Tambiah. J.)159
Whether a. Corporation or a Company is precluded bythe terms of Chapter 53 of the Civil Procedure Codefrom utilizing the provisions of that Chapter relating tosummary procedure on liquid claims as that Chapter
'"does not' specifically provide for such -a. Company orCorporation making an affidavit. '
Whether the' provisions for the institution ofproceedings by way. of summary; procedure 'underChapter 53 of the Civil Procedure Code permit anaffidavit authenticated in terms of Section* 3>4 (1) of theCompanies Ordinance being admitted as fulfilling therequirements of Section 705 (1) of the Civil Procedure'Code.
■ In the District Court arid the Court'of Appeal and also before:this Court', learned Presidents Counsel ;for the defendant–company relied-strongly on the decision i n Trie Bank of Madras v.Ponnesamy (1): In this case, which was decided on 30th June.1891, the. plaintiffs, a banking corporation constituted andregulated’under the Indian Presidency Bank Act, 1876, sued the.defendant as endorser to them of twenty-two promissory.notes.The plaintiffs proceeded summarily bnder Chapter LIU of,the CivilProcedure Code and in terms of-s. 705 ,(1) filed an affidavit frorhthe Colombo Manager of the Bank and'obtained summons ohthe defendant. It. was contended for the defence that such anaffidavit does'not satisfy the requirements of s. 705 (1) whichreads:
"The plaintiff who so sues and obtains such summons asaforesaid must on presenting the plaint produce to theCourt'the instrument on which he sues, and he must make' affidavit that the sum which he claims is justly due to himfrom the defendant thereon." (emphasis is rnine).
Clarence J. said (p i 7-1):
The words of s. 705 are 'he must make affidavit that', etc. Acorporation cannot,make'affidavit. It is capable of satisfying
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a court by the affidavit of some individual person, where thecourt is at liberty to accept such an affidavit, but it is notcapable itself of .making an affidavit. Therefore if we are togive the words of s. 705 their plain and ordinary meaningthe affidavit of Mr. Noble offered in the present case doesnot satisfy the requirement.
In another chapter of the Code. Chapter XLVII dealingwith provisional remedies, certain applications made by aplaintiff are required to be 'supported by his own affidavit':and s. 655 makes this special provision for corporationplaintiffs and others — that 'when the action is brought by acorporation, board, public body, or company, then anyprincipal officer of such corporation, board, public body or. .company may be allowed by the court to make an affidavitin these matters instead of the plaintiff. There is no similarprovision in Chapter LIU. I see no alternative but to concludethat the legislature has not extended to corporations thesummary procedure under Chapter Uil. I certainly arrive atthis .conclusion with regret and not without surprise. Thecorporate' banks which carry on business in Ceylon are'Probably the largest holders of the class, of instruments forvvhich this summary procedure is designed, and one canconceive of no – possible reason why they should beprecluded from so proceeding. We have .however nooption‘ open to us, and must, to borrow Lord Bramwelfs words, 'letthe oversight, if it be one, .be set right by the properauthority' — i.e., in this case, the legislature."
and Dias, J. said (p. 1 72):.
■ "The judgment, in-favour, of the plaintiffs was .passed■j' under s. 705 of the CivijProcedurejCode. To entitle plaintiffto a judgment under this section, .he, the plaintiff 'mustmake affidavit.that the sum which he claims is justly due tohim from the defendant,' and according to the plain, meaning of this sentence the affidavit must be made by theplai.ritiff personally and not by. agent, and there is nothing ins. 705 or.in any part of Chapter Llll which would justify theinference, that.the plaintiff could do by proxy what he could
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Science House (Ceylon) Limited v. I. P. C. A. Laboratories
Private Limited (Tambiah. J.).1.61
do himself. S. 705 gives the plaintiff an advantage over the.defendant, who can only defend the action under thecircumstances set forth in sections 706, and we are boundto strictly construe s'. 705. the plaintiffs, in this case are' abanking company and the affidavit was sworn b.y the localmanager, and I very' much regret to be obliged to hold thatthe plaintiffs' cannot avail themselves of the summaryprocedure laid down in the 53rd Chapter of. the Code: I donot believe the legislature had any intention to' exclude,corporations from the benefit of the Code—it is a mereoversight — but it can only be rectified by the legislature."'
Both learned Judge's were.greatly influenced by the decision inthe English case of'The Bank of Montreal v'Cameron (2). In thatcase, the'Judges had to construe'rule 1 under Order 14 of therules under the. Judicature Act. Th.e words of the'rule are: "wherethe defendant appears on a writof summons specially endorsedunder Order .3-. rule 6', the plaintiff may, bn affidavit verifying thecause, .of action and swearing that in his- belief there’ is -nodefence to the action, call on the defendant" etc. The plaintiffswere a bafiking corporation and the affidavit1 was sworn by thesecretary of the company and the Judges held that the specialprocedure was not open to a corporation because a corporationcannot be a plaintiff capable of.swearing to his belief.
I find.that the. submission- made by learned Counsel fbr'the.plaintiffs in'the Bank of Madras case that s'. 24 of the-CivilProcedure Code enables a recognised agent of a party to makeor do any appearance, application, or act required to be made ordone by a party himself and that the. plaintiffs' manager inColombo was the. Bank's recognised agent- and therefore hisaffidavit was sufficient..was not considered at all by either of the.two learned Judges.■> '■ •
• 'Learned-President's Counsel for the defendant-company wenton to submit that it was this judgment-which led the Legislatureto amend'the'Civil Procedure Code by Ordinance'No. 12 of-1 895, and, by s: 1 1 of the. said Ordinance, to enact s. 829A (3)'which stated .that "the provisions of s: 655 in respect of' the
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affidavit of the plaintiff required by sections 65.0 and 653 shallextend to affidavits required by s. 705 in actions instituted under.Chapter LIU of this Ordinance to District Courts and Courts ofRequests": that Chapter LXVI of the Civil Procedure Code, inwhich s. 829A (-3) was found,'was repealed by s, 1 24 of the CivilProcedure Code (Amendment) Law. No. 20 of 1977. and thusthere is. now' no provision similar to -s'. 829A(3) in the CivilProcedure Code which was reintroduced to the Statute Book in1 977. He, therefore, submitted that we are now back in the sameposition as in 1891. and the judgment' in the Bank of Madrascase is applicable. He cited- a passage from Bindra's. "Interpretation of Statutes" (6th Edn. p- 1 97):
-^"There-is a presumption that the Legislature, when it repeatsin substance in a later Act an earlier enactment, that hasobtained a settled meaning by judicial construction, intends
■-.the words to mean what they meant before."
-Learned'President's Counsel also-referred us: to the Report of.the Committee appointed by the Minister of Justice on the "Lawand Practice relating to Debt Recovery" published in .1 985. TheC.pmmittee in its Report observed that one of the main reasons.for the reluctance of creditors to invoke the procedure under-Chapter LIU "is thefacuna in the law which precludes a Companyor an .unincorporated association from coming into Court underthis Chapter" and recommended the "inclusion of a provision forthe plaintiffs affidavit where the plaintiff is not an'individual asrequired by s. 705 (1) as welt as for the. defendant’s affidavit asrequired by s. 706.",.■
. Learned-. President's Counsel for the • plaintiff-companysubmitted that the decision in the Bank of Madras case-waswrong and that there is no lacuna in the law: that the learned•Judges, who decided that case did not consider the provisions of-' s. 703-Which is the governing sectipn and which empowered aCompany orother-iCorporate Body to'institute an action underChapter 53 of the.Civil Procedure Code:, that s. 705'must beread. With s, 703: nor did .they consider the other relevantprovisions.of.Jhe__Cod,e;ithat, ou.r-legal-•system'c'ontemplates botha natu.ral -and a- legal' person being either a plaintiff or a
SCScience House (Ceylon) Limited v. I. P. C. A. Laboratories
,Private Limited (Tambiah. J.)‘.163
defendant-in a civil proceeding; that a Company . or otherCorporate Body can apply to Court for relief by way of summary,procedure and support its application with written evidence, thatis, an affidavit sworn to or .affirmed by its principal officers^
I am inclined to agree with 'the' submissions of learnedPresident's Counsel for the plaintiff-company. In my view thedecision in the Bank of Madras ease was. erroneous.
It is'a well settled rule of construction that when a Statute isrepealed and re-enacted and words in the repealed Statute arereproduced in the new Statute,'they should be interpreted in thesense'which had been 'judicially p'ut’on them iri the repealed-Act..becauselhe Legislature is'presumed to be acquainted with theconstruction vyhiclv'the Courts have put'upon the words, andwhen they repeat the 'same. words,, they must be-taken to' haveaccepted the interpretation put on them'- by the Court as .correctlyreflecting the legislative mind. This opinion'was discussed by theCourt; of Appeal in Royal -Crown Derby Porcelain- Co. Lid. v.Russell (3), where it was argued that certain words contained ins. 5(1.) of. the increase of Rent and Mortgage Interest(Restrictions) Act 1 9.20. and^re-enacteO.iri the amending'Act of1 933 having been judicially construed by the Divisional!Colift in192 5, must bear that construction .in the 1 933 Act. The Court ofAppeal'decided that the construction placed upon the words'bythe Divisional Court was erroneous and Denning L.-J. said(p. 7551; ''
"I -do- not believe that whenever' Parliament re-enacts , aX provision of a .Statute it-thereby gives statutory authority toevery erroneous interpretation which has been put.upon.it. .
The ,ti;ue vi.e,w-, is.-that the Court will be slow to ^overrule a•. previous decision when it has.been long acted on.and it willbe more th.an usuallyslowdo do so when Parliament has.since.the decision, re-enacted a Statute in the same terms,but if a decision is in fact shown to be erroneous, there isno .rule of law which prevents it being overruled."
•’ Maxwell t'oS in ,his "Iriterpfetaft.ion of''Stat.utes": (1 2th Edri. pp.71( 7.2) points out: ‘
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"This is not a canon of absolute obligation, but merely apresumption that Parliament intended that the Languageused by it in.the subsequent Statute should be given themeaning which meantime has been judicially atttributed toit. The Court may find that the previous judicial constructionwas erroneous, and in any event that construction is notconclusive, but is merely one factor to be taken intoconsideration."
In Martin Perera.v. Madadombe (4) H. N. G. Fernando. C. J.pointed out the circumstances in which a Court will be reluctantto overrule a previous judicial interpretation of a Statute— (1)where the interpretation affects property and disagreeing with it"would thereby be shaking rights and titles which have beenfounded through so many-years upon the conviction that thatinterpretation is the legal and proper one, and is one which willnot be departed from." (2) "a decision of long standing on thebasis ,of which many'persons will in course of time have arrangedtheir affairs." ■
It'can hardly.be said that debtors or borrowers have acquiredrights and titles or would have arranged their affairs on the basis•■that a corporate plaintiff was-not entitled to-institute an actionunder Chapter LIN of the Civil Procedure Code,
The Judgment in the Bank of Madras case was based on thedecision in the Bank of Montreal case which considered theprocedural provisions of Order 14 Rule 1. This provisionrequired of the plaintiff an "affidavit verifying the cause of actionand swearing that in his belief there is no defence to the action"(emphasis is mine). The English Judges therefore held that theprocedure was not op'en' to a Corporation, because aCorporation cannot be,a plaintiff capable of swearing to hisbelief. S. 705 (1)’of our Civil Procedure Code’does not containthe words "in his belief", but the words "the plaintiff who so suesmust make affidavit".
Clarence. J. in.the Bank of Madras case was also influenced bythe fact that under Chapter XLVII of the Civil Procedure Code, s.655 (b) makes special provision where action is brought by a
SC ' Science House (Ceylon) Limited v. I. P. C. A. Laboratories
Private Limited (Tambiah. J.)165
Corporation or a Company, for the principal officer of suchCorporation or Compnay to make an affidavit instead of theplaintiff, and that Chapter LI 11 contained no similar' provision.Here too it must be noted that s. 650 which deals with the arrestof'the defendant before judgment, and s. 653 .which deals withsequestration of property before judgment, contain the words"plaintiff on petition supported by his own affidavit" (emphasisis mine). The word "Own" is used ih these-two sections because•they deal with extreme and severe remedies of 'arrest andsequestration of property before judgment. Before a Court grantseither of these remedies, it must.have- material before it that adebtor is about to quit the Island under circumstances rendering,it improbable that the debt would be paid or that the defendant isalienating his property to avoid .plaintiffs claim, s. 655 (b)' merelyrequires that such material by way of affidavit, shall be made by aresponsible, person like, the principal officer of the Corporation orCompany because of the extreme, nature of the remedy. Thewords "his own affidavit" are not found i,n s,.7Q5 (1) of the.Code.
S. 1 1 of the CiyiJ Procedure Godeistates that "all persons may.be joined-as plaintiffs in whom ,the right'to any relief, claimed is-alleged to exist-, whether jointly, severally, or in the alternative, in.respect of the same cause of action," s. 2(e) of the Interpretation• Ordinance defines'a "person" to include any body of'.persons' corporate'or-incorporate. The-word "persons"- in the Openingsentence of.s. -11 of the Code read with s.. 2 (f) 'of theInterpretation Ordinance would therefore include a naturalperson or a Corporate Body. Similarly, under s. 1. 4 of the Code, .a-natural person or a Corporate.Body, can be defendant.
S'. 470 of the Code provides-'.generally that in actions by oragainst corporations, the'plaint or-'answer may. be subscribed onbehalf of the corporation by any member, director, secretary,manager or other'principal officer who is able to. depose to the. facts of-the case. S, .70.3 empowers a Corporate Body, in,ease it'desires totproceed under. Chapter Llll of the Code, to instituteaction by presenting a plaint. S. 7 states that the procedure in ahaction may .be'i either "regular" on "summary" and summary.
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procedure is explained in the illustration thus: "In actions ofwhich the procedure is summary, the applicant simultaneouslywith preferring his application supports with proper evidence thestatement of fact made therein."
The question arises, how does a Company or other CorporateBody furnish the evidence to support its application? S. 7G5 (1)of the Code requires the plaintiff to make affidavit that the sumwhich he claims is justly due to him. In Collettes Ltd. v. Bank ofCeylon (5) Sharvananda. J. (as he then was) quoted withapproval what Denning. L. J.. said in H. L. Bolton (Engineering)Co. Ltd. v. T. J. Graham & Sons Ltd. (6)
"A Company may in many ways be likened to a human body.They have a brain and nerve centre which controls whatthey do. They also, have hands which hold the tools and actin accordance with directions from the centre. Some of thepeople in the Company are mere servants and agents whoare nothing more than hands to do the work and cannot besaid to represent the mind or will. Others are directors andmanagers who. represent the directing mind and will of the.company, and control what they do. The state of mind ofthese1 managers is the state of mind of the company and istreated by law as such."
.Sharvananda. J. (at p.. 285) also quoted -with approval a• passage from Atiyah in. his "Vicarious liability in the Law ofTorts":
"However in the case of companies and other corporations,knowledge of directors and managers and other'responsible officials' is normally treated, in accordance withmodern principles of company law. as knowledge of thecompany itself."
So, it seems to me that a Company or other Corporate Bodycan supportats plaint by written evidence on oath or affirmation,that is. an-affidavit through its principal officers like a ManagingDirector. Director. Secretary or a responsible officer, and whenthey do so. it becomes an affidavit of the Company pr otherCorporate Body itself.
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Science House (Ceylon) Limited v. I. P. C. A. Laboratories
Private Limited (Tambiah, J.).7 67
Learned President’s, Counsel for the defendant-companyconceded that a Company .or other Corporate Body cap be aplaintiff/ in an action by summary procedure on liquid claims interms of s. 703 of the Code; but maintained that it cannot makeaffidavit because s. 705 (1) plainly and expressly says "he, must;make affidavit"; he contended that the use of the pronoun "he,”permits only a natural 'person to. make affidavit.and excludes* ajuristic person.
S. 705 (1.) opens .with the words "The plaintiff” and goes on tosay "he must make .affidavit", that is. "he" the plaintiff. I find thatthe pronoun "he” is used three, times in s. 705- (1), and thepronoun "him" Once. As was correctly pointed out by-learned'President’s'Counsel for the plaintiff-company, the draftsmaninstead- of indulging in monotonous repetition1'of the word- "plaintiff” Used the pronoun-"he". Otherwise', the word "plaintiff"'would have had to be used three times over again, wherever thepronoun "he" is used.’
Unde? s. '704 of the Code, the defendant can be a CorporateBody. In. this section too'. after the use of the word "defendant”,the pronoun, "he" ‘ had been used. This method and style of ',draftsmanship appears throughout the Civil Procedure Code. Forexample. In sectipns 1 1/34 (2}. .50. 51 and 52. every one ofwhich is applicable to a Company,or o|hervCorpp.rate Body.', afterthe initial use of the word "plaintiff", thereafter the pronoun."he"is used.
If. as contended for the defendant-company, a Company’cannotmake affidavit, there are" provisionsin the Companies Act, No. 1 7.of 1982. which cannot be worked and given effect to. 5. 68(1)contemplates an _application by the Company.-,to the DistrictCourt for. an order confirming the. reduction of share capital. S.441(1) sets out the. procedure that the;applicatio.n shall be by
w.ay.©^petition and affidavit. Sections 210 an^ 21 T contemplate,an application to the District Court,against the Company,fpr the-prevention/of- oppression and . mismanagement. • S- 213.contemplates.an application for ex-parte-interim,orders againstthe-iCompany; and .s'. 21.3 (3) states,.that the,.application by the*
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Company for the revocation or variation of the exparte interimorder shall be by petition supported by affidavit. The legislature isproceeding on the basis that a Company can make affidavit andhow does it do so except through its principal officers who arenatural persons? •
The answer to the first question of law on which leave toappeal to this Court was granted is that a Corporation or aCompany could avail itself of the special, procedure in ChapterLlll of the Civil. Procedure Code, and it could make an affidavit asrequired by s.. 705' (1) of the Code through one' of its principalofficers.'•.
• In the present case, the attorney of the plaintiff-company, onoath has stated that he can depose to the facts of the case fromhis personal knowledge and from the particulars acquired fromthe papers and correspondence in his possession; on oath, hehas.also deposed to the fact that the monies are justly and trulyowing from the. defendant to the plaintiff. He holds a Power ofAttorney from the plaintiff-company which is incorporated inIndia. .The term' ''Power'of Attorney" is not defined in the CivilProcedure Code,
■ '"Broadly, speaking, it is;."a formal instrument by which-authority is conferred on an agent. Such, an-instrumentshould be construed strictly and as giving only suchauthority as it confers expressly or by necessaryimplication."
("Code of Civil. Procedure" by Ch'italey &"'Rao, 3rd Edn. Vol.
■ ,hz p. 7398). ";"■
■ -The Stamps-'Ordinance in' s. 94 defines "Power of Attorney:"Power – of-Attorney includes am ihstrument empowering aSpecified person to "act for and 'in the 'name of the personexeboting-it." In shortfa person Holding a'Power of Attorney is anaren't appointed uhd’er a writing-by a Principal td act'for him. As-such he cannot be considered a principal officer – of theGp'mpany and'-put'ih'-fh'e same class or'category as the Directors..Managers1 and other responsible officers of a Company or otherCorporate Body, (emphasis is mine).
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Science House (Ceylon) Limited v. I. P. C. A. Laboratories
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169.
Does S. 25 (b) of the Civil Procedure Code enable an attorney,under a power of attorney, to make an affidavit on behalf of theplaintiff-company, for satisfying the requirements of S. 705(1)?S. 24 of the Code enacts that an appearance, application Or actin or to any Court may be done by a party in person Or by hisrecognised agent etc. A person holding a general power of'attorney is a, recognised agent in terms.of S. 25 (b).
Learned President's Counsel for the -defendant-company,however, contended that S. 24 of-the Code be read with FormsNo. 6 and No. 7 contained in the First Schedule to the CivilProcedure. Code and that the Forms which set out a summary ofthe acts that can be done by a recognised agent exclude the.making of an affidavit on behalf of a party to an action. I cannotagree.
The words in S. 24 – of the -Code are "any appearance,application or act in or-.to any Court”. In case the plaintiff desiresto proceed under Chapter LIU,, he applies to Court.for- relief byway of summary procedure by presenting to Court a plaintsupported by.an affidavit. It is an "application to Court" whichcan be made by the. party to an action or by his recognisedagent. Where an "application" to Court is required to be made byplaint and affidavit (and not by plaint alone), the word"application" in S. 24 comprises both such plaint and affidavit.The plaintiff:company's attorney?in Colombo vyas a "recognisedagent" within the meaning of S. 25 (b) of the Code and hisaffidavit was sufficient and satisfied the requirements of S. 705
of the Code.
The second question'that arises for consideration is whether S.34 (1) of the Companies Ordinance permitted juristic persons tofile, affidavits in proceedings under Chapter Llll of the CivilProcedure Code. $-'34 (i) reads: "A document or proceeding •requiring authentication, by a Company may be signed by-adirector, secretary,-or other authorised officer of'the Company,and need not be under common seal." ■"
Learned • President's Counsel' for the defendant-companyContended that, the: term'"authenticate" in S; 34 (T) means
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nothing more than this — that one holds out that the documentis genuine but not that what is stated in the document is true:while in the case of an affidavit, the person who swears or affirmsan affidavit not only states the facts, but also states that the factsare true to his personal knowledge.
Learned-President's Counsel for the plaintiff-company referredus to the meaning given to "authenticate" in the Dictionaries. Hereferred us to Black's "Law Dictionary" (4th Edn.) which definesthe term "authentic" as "genuine, true, reliable, trustworthy,credible, reliable as evidence", and submitted that when onesigns an affidavit, one holds out that an affidavit is reliableevidence-. '‘ v-
Learned President's Counsel also referred us to the OxfordEnglish Dictionary (Vol. .1; 1933) wherein "authenticate" isdefined,'as. inter alia, "to establish the title to credibility and. acceptance of a statement", "to establish the genuineness of":"authenticated" is defined as "invested with, correctness, truth,genuineness"; "authenticator" is defined as "he who guaranteesa thing as valid, trueor reliable", "the quality of being.entitled toacceptance", and "as being in accordance with fact, as beingtrue-in substance."
Applying these definitions, learned President's Counselsubmitted- that when one signs an affidavit and presents it toCourt, he asks' Court to accept it as being in accordance withfact. .
..S. 34 (1) of the Companies Ordinance contains the word
"proceeding". Learned President's Counsel also submitted thatwhen a plaintiff .files an action by way of summary procedure, it. is’a.'prpceeding. He must present the plaint and'the instrumentsued'upon to.’Court; and also make affidavit that the sum whichhe. Claims is justly due to" him from the defendant. The plaintiffauthenticates the proceeding by filing an affidavit: .
,Qn thisjnatter, the learned District Judge stated that S. .34 (1)permits any document requiring authentication by a Company to.' be signed by a Director. Secretary or other authorised officer of
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Science House (Ceylon) Limited v. I. P. C. A. Laboratories
Private Limited (Tambiah. J.)171
the Company concerned; that the affidavit in this case has beensubscribed on its behalf by its attorney in Sri Lanka and theplaintiff, therefore, has filed a good and valid affidavit as requiredby S. 705(1) of the Code.
The plaintiff-company's attorney in Sri Lanka, cannot be classedas an "other authorised officer" of the Company.
The Court of Appeal stated that "authenticated" according tothe Oxford Dictionary means "to establish the truth of. or makevalid, or prove to be genuine, prove beyohd doubt the origin orauthorship by oath"; that it is reduced to vyriting… signed andsworn; that an affidavit is also a written statement, signed” aridconfirmed by oath. They both mean the same thing".
The definition in the Dictionary does not go to. the extent ofsaying that authenticate'means, to establish the.truth of etc. "byoath".'•,
I am inclined to agree with the submission of learnedPresident's Counsel for'the defendant-company.
S. 34 of the Companies Ordinance appears among a group ofsections which tell us when a document requires the affixing ofthe seal of the Company arid when the mere signature of aperson on a document acting under the Company's authority.would'Suffice. Written contracts, which if made between privatepersons'would be'by law required to be iri writing, have to bemade under the comhnon.seal of the Company, and where theiaw requires a writirig signed, by! the parties, the contract can bemade by a person authorised by the Company-by merely signing.Parol contracts neither need the seal of the Company nor thesignature of the person authorised to make such contract (S 30)..In the case of deeds executed abroad, the attorney executing thedeed must be empowered to do so by. a writing under thecommon'seal in order to bind the Company (S'. 32)! So also, adocument or. a proceeding requiring authentication by aCompany need, not be under the common seal of the Companyand can be sighed by the principal officers mentioned inS,34(1).
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Affidavit means a solemn assurance of a fact known to theperson who states it and sworn to as his statement beforesome, person in authority such as a Justice of the Peace. Aperson acquainted with the facts must make the affidavit andthe contents must be read over to the deponent and vouched-by him to be correct. I do not think that the Legislature had inmind an affidavit when it. enacted S. 34 (1) of. the CompaniesOrdinance. ..
The Companies – Ordinance by S. 118 required that aCompany entered in the Minute Book, the proceedings ofgeneral meetings and meetings of its Directors. An extractfrom the Minute Book of the proceeding of a particularmeeting signed by a Director or the Secretary of a Companywill be a "document" authenticated by him; it may also beconsidered a "proceeding" of a meeting, authenticated by him.Suppose, such a document is signed and produced in a Courtof Law years later by a present Director or Secretary, who wasnot a Director or Secretary when the meeting was in fact held.The utmost he can do is to sign and certify that the extract is atrue copy from the Minute Book, and it may be evidence of theproceedings,, but, he cannot hold out that what is statedtherein is true to his personal- knowledge. The answer, to thesecond question of law on which leave to appeal to this Courtwasgranted. is in the negative. ,
The learned District Judge ordered the defendant-companyto deposit, a sum of Rs. 400.000/- as security. The Court ofAppeal has affirmed this Order. Sections .704 and 706 of theCivilf Procedure Code stipulate that only the sum mentioned inthe summons could be ordered as security. LearnedPresident's Counsel for the defendant-company stated that thelearned District Judge has ordered a sum in excess of .the .amount stated in the summons. This is not disputed by learned• President's Counsel for the plaintiff-company. This Court madeofder calling for the Record in order to ascertain the sumstated in the summons and has been informed that the Recordis missing and is being traced. I. therefore, have no alternativebut to make order reducing the amount of the security to thesum mentioned in the-summons.
SCScience House (Ceylon) Limited v. /. P. C. A. Laboratories
..■Private Limited (Tambiah. Jj •',173
Subject to this, variation-, the appeal is dismissed'with; costs.
SENEVIRATNE, J. —.I agreeFERNANDO, J. —I agree
-!l:
Security Varied — subject to this Appeal dismissed