Tag Archives: agent

Power of Attorney Holder – Entitlement to Plead

An agent is always allowed and permitted to make and set forth the pleadings on behalf of his Principal in India. Therefore, deposing on behalf of the Principal in a court being part of exercise of tendering evidence is not a forbidden exercise to be indulged in by an agent. Such persons are entitled to be cross examined as the act and art of cross examination being essentially to ascertain the veracity of the statements/submissions made by a witness and in that process, extract the whole of the truth. Section 18 of the Evidence Act, clearly permits and allows evidence to be collected even from an agent.

The power of attorney holder is not entitled to plead on behalf of the Principal, but he can only lead evidence or settle the pleading in the form of a plaint or written statement or petition. Smt. Shilpa Chaudhary v. Principal Judge, Family Court, Muzaffarnagar, 2016 (116) ALR 206.

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Electricity Dues – Liability of Directors

In a recent Judgment of the Allahabad High Court – Piyush Kumar v. State of U.P., it was held as under:
“A company is an artificial person and can only contract through agents. The normal mode of signing is to use the words ‘on behalf of the Company’ and if the Director, as an agent of the company signs the contract for the company, no personal liability is attached to him. The Directors thus under Section 46 of the Companies Act, 1956 can sign the contracts for the Company, which binds the Company, unless the Articles of Association of the Company or any resolution of the Board of Directors restricts or takes away such authority. The Directors are not personally liable, unless it appears that they take personal liability. The Directors may be made personally liable in damages, where they act beyond their powers; act by making negligent misrepresentation; acts in violation of the provisions of the Companies Act such as Section 77 or plays fraud representing the company.
Clause 4.3 (f) (iv) of The U.P. Electricity Supply Code, 2005 provides that outstanding dues will be first charge on the assets of the company and the licensee shall ensure that this is entered in the agreement with the new applicant. Sub-clause (v) provides that recovery proceedings against the defaulting consumer, and where the consumer is a company, from the directors of the Company, shall be ensured.
It is only after the assets of the Company are unable to meet the demand of the department then recovery proceedings may be initiated against the Directors of the Company. Clause (v) of Para 4.3 (f) of the Supply Code provides that where a financial institution has auctioned the property without consideration to licensee’s charge on assets, claims may be lodged with the concerned financial institution with diligent pursuance. The Directors manage the company for its shareholders. They are in charge of the management and the business of the Company for the benefit of the shareholders. They are not liable for the dues of the company on the ground that they have signed an agreement on behalf of the company, unless there is specific provision, or when they agree under the agreement or execute personal guarantees or bonds for due payment of the amount.”

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Possession – Does not give any right or interest in the property

In Sham Lal v. Rajinder Kumar, (1994) 30 DRJ 596, on the question of possession, the Court in Para 13, held as below:

“Possession is flexible term and is not necessarily restricted to mere actual possession of the property. The legal conception of possession may be in various forms. The two elements of possession are the corpus and the animus. A person though in physical possession may not be in possession in the eye of the law, if the animus be lacking. On the contrary, to be in possession, it is not necessary that one must be in actual physical contact. To gain the complete idea of possession, one must consider:

(1)    The person possessing,

(2)    The things possessed and,

(3)    The persons excluded from possession.

A man may hold an object without claiming any interest therein for himself. A servant though holding an object, holds it for his master. He has, therefore, merely custody of the thing and not the possession which would always be with the master though the master may not be in actual contact of the thing. It is in this light in which the concept of possession has to be understood in the context of a servant and a master.”

The ratio of this judgment is that merely because the plaintiff was employed as a servant or chowkidar to look after the property, it cannot be said that he had entered into such possession of the property as would entitle him to exclude even the master from enjoying or claiming possession of the property or as would entitle him to compel the master from staying away from his own property.

Principles of law which emerge in this case are crystallized as under:

(1)    No one acquires title to the property if he or she was allowed to stay in the premises gratuitously. Even by long possession of years or decades such person would not acquire any right or interest in the said property.

(2)    Caretaker, watchman or servant can never acquire interest in the property irrespective of his long possession. The caretaker or servant has to give possession forthwith on demand.

(3)    The courts are not justified in protecting the possession of a caretaker, servant or any person who was allowed to live in the premises for some time either as a friend, relative, caretaker or as a servant.

(4)    The protection of the court can only be granted or extended to the person who has valid, subsisting rent agreement, lease agreement or licence agreement in his favour.

(5)    The caretaker or agent holds property of the principal only on behalf of the principal. He acquire no right or interest whatsoever for himself in such property irrespective of his long stay or possession. Maria Margarida Sequeira Fernandes and others v. Erasmo Jack De Sequeira (dead) through Lrs. (2012) 5 SCC 370.

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