Smt. K. Padmasree vs Lotus Aluminium Private Limited

Nooty Ramamohana Rao, J.—This Petition has been moved in terms of Sections 433, 434 and 439 of the Companies Act, 1956, seeking for winding up of M/s. Lotus Aluminium Private Limited and for appointing the Official Liquidator as its Liquidator.

The Respondent Company was incorporated under the Provisions of the Indian Companies Act, on 14-10-1999 with it''s registered office at Secunderabad, Andhra Pradesh. It was established for carrying on business of manufacture, import or for otherwise dealing with Aluminium, Brass, Copper and all non-ferrous metals and their alloys. The authorized share capital of the Company was Rs. 5.00 lacs and the issued, subscribed and paid up share capital as of 31-03-2003, was standing at Rs. 1.00 lac. However, more than Rs. 82.88 lacs is shown as received against allotment of shares. The Petitioner has asserted that at the request of the Respondent Company, between September 1999 to March 2002 she paid a sum of Rs. 3,57,000/- on various dates, through cheques issued on Canara Bank and ING Vysya Bank. The Respondent Company has neither allotted the shares nor did return the money to the Petitioner. It is further stated that after a good deal of persuasion, the Respondent Company issued a cheque, bearing No. 368162 dated 15-04-2004, drawn in a sum of Rs. 3,57,000/- on an account maintained by it with M/s. Manasa Cooperative Urban Bank Limited, towards refund of the monies received from the Petitioner. The Petitioner further asserted that the Company requested time for presentation of the said cheque and, at long last, when the cheque was presented, the same has been returned by its banker with an endorsement that the Directors signature is deferring with its records. It is, therefore, asserted by the Petitioner that a deliberate ploy has been used for avoiding refund of monies for which the Petitioner is entitled to. That action has resulted in criminal case being launched in C.C. No. 1328 of 2004 in Court of the Metropolitan Magistrate, Secunderabad. The request made by the Petitioner for refund of the money having not produced the desired result, the Petitioner has put the Respondent Company on notice on 16-04-2005. The notice was delivered at the registered office of the Respondent Company on 05-05-2005, while the same was delivered at the factory address on 23-04-2005 itself. There was no response from the Respondent and hence, the present Petition has been taken out asserting that the Respondent Company is not in a position to liquidate its liabilities as its net worth has been eroded beyond redemption and it has not started commercial production, as yet.

The Respondent Company, through one of its Directors Sri V. Prem Sagar, contested the above Petition and filed the counter affidavit.

It is stated that Sri K. Srinivasa Rao, husband of the Petitioner in the above Petition, is one of the promoter Directors of the Respondent Company and towards his share capital he has invested certain amount in the Company through various accounts and that he managed the affairs of the Company till he resigned as such and that he made certain false entries in the books of account with a view to gain undue benefit for himself. It is further asserted that the amounts paid through various cheques by the Petitioner, to the Company were all encashed by Sri K. Srinivasa Rao and he appropriated the said funds for himself. It is further pointed out that because of his various acts of commission and omission, the Company has sustained a great loss and in these set of circumstances, he agreed to leave the service of the Company and in turn the Company had agreed to settle a sum of Rs. 32.00 lacs to Sri K. Srinivasa Rao and accordingly, the Company had paid the said money to Sri K. Srinivasa Rao on 10-04-2004 and 16-04- 2004 respectively. Thus, the entire money, which is due and payable to Sri K. Srinivasa Rao has been paid and the said money includes refund of the monies to the Petitioner herein also. It is further asserted that the Company had assets worth more than Rs. 1.00 crore and that it is a debt free Company. The Respondent has further asserted that it is the husband of the Petitioner - Sri K. Srinivasa Rao, in his capacity as the Managing Director of the Company, issued the cheque bearing No. 368162 dated 15-04-2004 in favour of the Petitioner herein and hence, the Petitioner, acting in concert with her husband, has unjustly unleashed this litigation. It is further asserted that the Petitioner never disclosed the fact that her husband was the Managing Director of the Respondent Company till the year 2004 and that he was the promoter Director of the Company and hence, she has approached this Court with unclean hands by suppression of the true and relevant facts. The averment that the Company has not started making commercial production has been stoutly disputed by the Respondent. With these pleadings, the parties went for trial.

On behalf of the Petitioner, her husband Sri K. Srinivasa Rao, was examined as PW-1. In lieu of chief-examination, in terms of Order-XVIII Rule-4 of the Code of Civil Procedure, he filed an affidavit and made himself available for cross-examination. He has reiterated the contents of the above Petition. He has also asserted that the Petitioner executed a Special Power of Attorney in his favour to depose on her behalf in the above Petition. It is asserted that the monies paid by the Petitioner and referred to in the Petition are independent from that of the investments made by himself. Exs.P-1 to P-12, excepting Ex.P-3, are marked and exhibited. Ex.P-3 is received, as, it is, only a typed copy. PW-1 has asserted that the Petitioner made the deposits with the Company towards it''s share capital at the request of the Company. PW-1 has asserted that he has resigned as the Managing Director of the Company on 01-11- 2002 and the necessary information in Form No. 32, in that regard, was submitted by the Company with the Registrar of Companies on 01-07-2004, disclosing that he resigned with effect from 01-11-2002. The Respondent Company has issued the cheque in question to the Petitioner on 15-04-2004 and it was presented for encashment in the first week of August 2004. During the further course of chief-examination, Exs.A-13 and A-14 - the certified copies of the auditors report along with the balance sheet for the years ending on 31-03-2002 and 31- 03-2003, respectively, are got marked. Ex.A-15 - copy of the letter of resignation of the husband of the Petitioner dated 01-11-2002, acknowledged by one of the Directors of the Company, by name, Sri V. Ayodhya Ramulu, is also marked.

Ex.P-1 is the Special Power of Attorney issued by the Petitioner in favour of her husband Sri K. Srinivasa Rao, executed on 19-07-2006. Ex.P-2 is the Memorandum of Articles of Association of the Respondent Company. Ex.P-3 is the typed copy of the balance sheet of the Respondent Company struck as of 31-03- 2002. Ex.P-4 is the cheque bearing No. 368162 dated 15-04-2004 drawn on account No. 469 on the Manasa Cooperative Urban Bank Limited, Secunderabad, signed by Sri V. Ayodhya Ramulu and Ms. Sangeetha - two of the Directors on behalf of the Respondent Company. Ex.P-5 is the cheque-return memo issued by the Manasa Cooperative Urban Bank Limited, returning Ex.P4 cheque, for the reason that the signature of one of the Directors is deferring. Ex.P-6 is the complaint in C.C. No. 1328 of 2004 lodged on the file of the XI Metropolitan Magistrate, Secunderabad, against the Respondent Company and it''s two Directors Sri V. Ayodhya Ramulu and Ms. Sangeetha, who have affixed their signatures on Ex.P-4 cheque. Ex.P-7 is the legal notice dated 16-04-2005. Ex.P-8 is the complaint lodged with the Post Master, Hyderabad Jubilee Post office, Hyderabad, by the counsel, who issued Ex.P-7 notice to find out as to the dates on which the registered letters / notices were delivered. Exs.P-9 and P-10 are the communications from the Customer Care Center of the Hyderabad Jubilee Post Office, informing the dates on which the registered letters have been delivered at the registered office of the Company and at its factory premises. Exs.P-11 and P-12 are the postal receipts of Ex.P-7 legal notice.

On behalf of the Respondent Company Sri v. Prem Sagar - one of the Directors of the Company has been examined as RW-1. He has filed his affidavit in lieu of chief-examination and asserted the contents of the counter affidavit filed in the above Petition. On behalf of the Respondent, Exs.R-1 to R-6, which are the sales tax returns of the Respondent Company filed before the Commercial Tax Officer, have been got marked. He has been cross-examined. RW-1 has admitted that through two separate cheques bearing Nos. 368159 and 368161 dated 1-04-2004 and 15-04-2004, respectively, a sum of Rs. 32.00 lakhs was paid and settled to PW-1. He has admitted that Ex.P-4 cheque has not been signed by PW- 1. He has also admitted that as per the returns filed as on 31-03-2003, current assets of the Respondent Company stand at Rs. 24.62 lacs negative. He has also admitted that Exs.R-1 to R-6 do not reflect the profitability of the Respondent Company. He has also admitted that as per the ledger account of the Respondent Company, a sum of Rs. 3,57,000/- is shown as share application money remitted by the Petitioner in the above Petition, but however, he has disputed that there is any liability for the Company to pay any amount to the Petitioner. Subsequently, he has filed the statement of income for the years ending on 31- 03-2006, 31-03-2005 and 31-03-2004 respectively, which are marked as Exs. R-7, R-8 and R-9. Ex.R-10 is the balance sheet as on 31-03-2004. Ex.R-11 is Form No. 32, lodged with the Registrar of Companies, intimating the date of resignation of PW-1 from the Company. Ex.R-12 is the statement of account of the Petitioner, obtained from Canara Bank, Rashtrapati Road, Secunderabad. Similarly, Ex.R-13 is the statement of account of the Petitioner obtained from the ING Vysya Bank, Sardar Patel Road, Secunderabad. Ex.R-14 is the receipt obtained for Ex.R-11 from the cash counter of the Registrar of Companies. Ex.R- 15 is the Xerox copies of two cheques bearing Nos. 324656 and 324658, bearing dates 20-12-2002 and 20-01-2003 respectively, which were signed by Sri K. Srinivasa Rao as Managing Director and Ms. Sangeetha as the Director. These two cheques have been issued in favour of Hyderabad Metro Water Supply and Sewerage Board and the Assistant Accounts Officer, Electrical Revenue Office, A.P.C.P.D.C.L., drawn in a sum of Rs. 1,685/- and 451/- respectively, towards the consumption charges of water and electricity.

RW-1 admitted that the registered office of the Company was situate, till 2004, at West Marredpally, Secunderabad , in a private building owned by Mr. K. Radhakrishna and Smt. K. Lakshmi Bai. He has also admitted that as per the balance sheet struck as of 31-03-2006, the net current assets of the Company were Rs. 34,33,333-35 ps., in the negative, after taking depreciation into consideration and trial runs.

In the face of this material, the questions to be answered are:

(1) whether the Respondent Company is liable to pay the Petitioner the sum of Rs. 3,57,000/-, for which Ex.P-4 cheque has been issued, or not and (2) whether the Company is unable to pay its debts requiring it to be wound up.

PW-1 has clearly deposed that the Respondent Company has received a sum of Rs. 3,57,000/- from the Petitioner towards share capital. It is further asserted that he has resigned to the Directorship of the Company and that he has not signed Ex.P-4 cheque, but it was signed by Sri v. Ayodhya Ramulu and Ms. Sangeetha - two other Directors of the Company. RW-1 has admitted that in the ledger account a sum of Rs. 3,57,000/- is shown to have been received from the Petitioner. In fact, he has also got marked Ex.R-12 & R-13, the statements of account, issued by the Canara Bank and the ING Vysya Bank, maintained by the Petitioner, from which accounts the money has been paid to the Respondent Company. It is, therefore, clear that the Petitioner paid to the Respondent Company a sum of Rs. 3,75,000/- and it was brought to the books of account of the Company. The Respondent has tried to establish that the PW-1 was paid Rs. 32.00 lakhs, which included the money liable to be paid to the Petitioner also. Further, it was also contended that it is PW-1, who issued the cheque Ex.P-4, unauthorizedly to the Petitioner with a view to gain advantage. While Ex.R-11 Form No. 32 has been lodged with the Registrar of Companies on 06-08-2004, the contents of Column No. 5 thereof, clearly disclose that PW-1 has resigned as Director of the Company with effect from 01-11-2002. Therefore, the onus is on the Respondent Company to show that it has, in fact, paid for the amounts received from the Petitioner. Except trying to discredit PW-1 by showing that he has continued to function beyond 01-11-2002, no credible material is brought on record. Through, Ex.R-15 - the two Xerox copies of the cheques bearing Nos. 324656 and 324658, and the dates 20-12-2002 and 20-01-2003, respectively which bear the signature of PW1, it was sought to be established that PW-1 continued to function as Managing Director of the Company beyond 01-11-2002. In the course of cross-examination, RW-1 has admitted that the registered office of the Respondent Company was located in a building owned by Sri K. Radhakrishna and Smt. K. Lakshmi Bai and the two cheques, subject matter of Ex.P-15, are those, which have been used for paying up the water and electricity consumption charges for the said premises. While it is true that RW-1 has denied the suggestion that the originals of Ex.R-15 are the blank cheques signed by PW-1, which have been misused after his secession with the Company, but, however, it hardly matters, for purposes of ascertaining the fact whether the Petitioner has been repaid her money, as to whether PW-1 continued to discharge any functions for the Company beyond 01-11-2002. At best, it would crate a shadow of doubt as to whether PW-1 did really resign on 01-11-2002 at all or did he function thereafter as well. But, Ex.R-14, the receipt furnished by the Registrar of Companies, clearly demonstrates that by 06-08-2004, the relationship between PW-1 and the Respondent Company has been totally severed, as Form No. 32 has been lodged by that date with the Registrar of Companies. It is clear from the admission of RW-1 that the sum of Rs. 3,57,000/- is reflected in the ledger of the Company as the amount received from the petitioner towards share capital. Two things must emerge; either the Company should be shown to have repaid the said money to the Petitioner or it should have been shown to have allotted her the shares. Neither of these two things was shown to have taken place and on the other hand Ex.P-4 is a cheque, which is issued from out of a cheque book belonging to the Company. Therefore, it is reasonable to infer that Ex.P-4 cheque has been issued with a view to refund the amount paid by the Petitioner and that circumstance lends credence to the claim of the Petitioner, effectively. Ex.P-4 has been returned un-cleared by the banker of the Respondent Company. Ex.P-4 has not been signed by PW-1, but it was signed by two different Directors. Therefore, the Respondent Company has failed to discharge the onus on it to explain as to why Ex.P-4 has come to be issued in favour of the Petitioner herein. The theory set up by the Respondent that the amount of Rs. 3,57,000/- has already been returned to the Petitioner, being part of the amount paid to PW-1, is not simply believable, for, PW-1 has been paid through two separate cheques a sum of Rs. 32.00 lacs. If the amount payable to the Petitioner were also inclusive of the said amount paid to PW-1, then, there would not have been any further necessity to issue Ex.P-4 cheque separately and independently in favour of the Petitioner. The debt due to the Petitioner, therefore, has simply not been discharged.

The learned Counsel for the Respondent Sri D. Srinivas, placed reliance upon the Judgment rendered by a learned single Judge of this Court in Kanadapudi Bharathy, Gudivada and another Vs. Authority Under Section of A.P.S.E. Act-cum-Labour Officer, Machilipatnam and another, and contended that no person holding a Power of Attorney can examine himself as a witness and hence, the evidence brought on record through the Special Power of Attorney holder, viz., PW-1 should be eschewed and since the petitioner has not examined herself, the above petition should be dismissed.

Hence, the question as to whether a Power of Attorney holder can be examined as a witness requires a deeper consideration.

The expression "Power of Attorney" has been defined in the Strouds Judicial Dictionary as an authority whereby one "is set in the turne, stead, or place or another" to act for him. It is generally made by deed poll, but semble, may be by writing unsealed. In the Blacks Law Dictionary; as An instrument granting someone authority to act as agent or attorney-in-fact for the grantor. In The Words and Phrases - Permanent Edition - as: The term "power of attorney" indicates a power or authority under seal. A "power of attorney" is an instrument in writing by which one person, as principal, appoints another as his agent and confers upon him the authority to perform certain specified acts or kinds of acts on behalf of the principal. "Power of attorney" is not contract, but is merely document evidencing to third parties existence of agency relationship and powers of agent. In Corpus Juris Secondum it is stated as; Authority may be conferred on an agent by a written appointment, and if the writing is formal the authority is said to be conferred by letter of attorney and the agent is, an attorney in fact. And in Advanced Law Lexicon as A formal instrument by which one person empowers another to represent him or act in his stead for certain purposes. "Power of Attorney" includes any instrument (not chargeable with a fee under the law relating to Courtfees for the time being in force) empowering a specified person to act for and in the name of the person executing it. American Jurisprudence, noted that, a person may properly appoint an agent to do the same acts and to achieve the same legal consequences by the performance of an act as if he had himself personally acted, unless public policy or the agreement with the principal requires personal performance - Mc Nulty v. Dean 154 Wash. 110 281 para 9, 66 ALR 1417. It was further noted that, the grant of power is not, however, to be frittered away by very nice and metaphysical distinctions; the object and purposes of the parties must always be kept in view, and, where the language will permit, that construction should be carried out that will support instead of defeat the purposes of the instrument - Holladay v. Daily 19 Wall. (U.S.) 606 : 22 L.ed 187. It will be relevant to notice that the donee of a power of attorney, acts on behalf of his/her Principal, hence, the power of attorney is a Special Power of agency, normally, deriving power for the purpose of managing, buying or selling real and personal property or for purposes of carrying on business or for the purpose of securing loans, leases, mortgages and for making investments and for securing insurance cover and also for the purpose of suing and to be sued. Thus, a host of functions, which are otherwise normally liable to be performed in an individual capacity by a particular person, called as Principal, are granted to be performed by another person in the capacity as the agent of such a Principal. This grant of power in writing is what has come to be constituted and recognized as the Power of Attorney. To render the Principal to be bound by all such actions of his agent and with a view to secure the execution of instruments and their sealing, to become lawful and also further to avoid any doubt as to the liability of a donee of a power of attorney, who makes the payments in good faith after the donor of the power of attorney has died or becomes lunatic or becomes insolvent or has revoked the said power, when the fact of such death, lunacy, insolvency or revocation, was not known to the donee at the time of making such payments, the Power of Attorneys Act, 1882, has been made. By granting such power, the donor has notified in rem that he has authorized and granted necessary power to a donee to do all such acts as are required to be performed by him, and when so performed by such donee, the donor, therefore, irrevocably undertakes to ratify all such actions of the donee. Hence, the power of attorney holder can act on behalf of his Principal without any reservations. It would help the Principal to perform all such acts and functions through such an agent, in his own interest.

Section 2 of the Powers-of-Attorney Act, 1882, has dealt with this aspect of the matter in the following manner:

Execution under power-of-attorney.-The donee of a power-of-attorney may, if he thinks fit, execute or do any instrument or thing in and with his own name and signature, and his own seal, where sealing is required, by the authority of the donor of the Power; and every instrument and thing so executed and done, shall be as effectual in law as if it had been executed or done by the donee of the power in the name, and with the signature and seal, of the donor thereof.

Then, what are those acts and actions, which the holder of a power of attorney can perform?

For this purpose one has to bear in mind the distinction between all such actions, which are liable to be performed by a person in his individual capacity as distinct from those, which are liable to be performed in exercise of a Statutory duty or function or such actions, which are liable to be regulated by a Statute itself.

A Full Bench of the Madras High Court in M. Krishnammal Vs. T. Balasubramania Pillai, Power of Attorney Agent of M. Krishnammal, , speaking through the Chief Justice Beasley, has clearly pointed out that a power of attorney holder cannot plead on behalf of his Principal in the following words:

...and he claimed that the power of attorney was of the same force and validity as that of a vakalat and that, unless it was revoked by formal proceedings through Court, no orders could be passed on the petition. Therefore, by reason of the authority given to him in the power of attorney, he claimed the same right as a legal practitioner who has been given a vakalat; and since the power of attorney authorizes him to plead in Court, it follows that he claims that right; and indeed we are informed that either in these proceedings or in some other, Lakshmana Rao, J. allowed him to address the Court. In view of the claim put forward by the respondent in the affidavit referred to, the Master posted the matter before Gentle, J. for orders and he has referred the matter to us and it has been fully argued here by the learned Counsel for the petitioner, Krishnammal, the Bar Council, the Advocates'' Association and the Attorneys'' Association; and we have also heard the respondent in person.

We may say at once that there is an unreported Bench decision of this High Court directly in point on the first question in C.M.P. No. 498 of 1911, where it was held by Benson and Sundara Ayyar, JJ. that a right to appear in Court for his principal given to a recognized agent by Order 3, Rules 1 and 2, Civil P. C, does not include a right to plead, that it means simply that one can take proceedings to submit oneself to jurisdiction that the High Court has under the Letters Patent and the Legal Practitioners'' Act and under Sections 119 and 122, Civil P. C, power to make rules as to who shall plead for parties before the High Court in its original and appellate jurisdiction and in the lower Courts, that Section 10, Letters Patent, makes provision with regard to who alone can plead before the High Court and that others such as recognized agents cannot have the right to plead. There are also two decisions of the Calcutta High Court upon this point, viz. Harchand Ray v. B.N. Ry. Co. AIR (1916) Cal 181 and In re Eastern Tavoy Minerals Corporation, Ltd. AIR (1984) Cal 563. In the former, a recognized power of attorney agent claimed a right to plead in Court on behalf of his principal under Order 3, Rule 1, Civil P.C., but it was held by Jenkins, C.J. and Chaterjea, J. that he bad no right of audience; and in the latter ease, a director of a company holding a power of attorney, authorizing him to appear for and on behalf of the company, to conduct and represent the company in the proceedings, claimed the right of audience on behalf of the company and, applying the ruling in the former case, it was held that he had no right of audience. It is plain from these three cases that Rules 1 and 2 of Order 3, Civil P. C, do not give the recognized agent any right to plead in Court on behalf of his principal either in the appellate or Original Sides of the High Court....

The Full Bench had approvingly noticed the two earlier judgments rendered by the Calcutta High Court reported in Harchand Ray v. B.N. Ry. Co. AIR (1916) Cal 181 and In Re Eastern Tavoy Minerals Corporation, Ltd. AIR (1984) Cal 563 in this context. The Andhra Pradesh High Court in Hari Om Rajender Kumar and Ors. v. Chief Rationing Officer of Civil Supplies, A.P., Hyderabad 1990 (1) ALT 645, held as follows:

Both American and English Courts have adopted the doctrine that a non-lawyer may not appear in Court to represent another person. Outside the court-house, non-lawyers in earlier periods of Armerican history freely performed tasks that today would be called the unathorised practice of law. That general pattern still obtains in England and other countries in Europe where there has been never a prohibition against non-lawyers performing such legal functions as giving legal advice or preparing some kinds of legal documents.

...Now, the Advocates Act, 1961, which is an Act to amend and consolidate the law, repeals the above provisions of the Letters Patent and parts of the Legal Practitioners Act. Section 32 of the Advocates Act uses the word ''appear'' while Sees. 29 and 33 use the expression ''Practice''. The word ''Practice'' includes both acting and pleading, and takes in all the normal activities of a legal practitioner. Though Section 33 of the Advocates Act uses the word ''Practice'', we are here concerned with the word ''appear'' used in Section 32. A non-Advocate, when he seeks permission to ''appear'' cannot, in my view, be permitted to ''address'' the Court on the strength of the power-of-attorney. In Sornam''s case, while observing that he can ''appear'' or ''act'' Natesan, J. observed (p. 211).

As a recognised agent, he can have appearance and he can act; now he wants also to plead the cause before the Court, that is factually to practice the profession of law." Natesan, J, also stated that the Supreme Court in Aswini Kumar Ghosh and Another Vs. Arabinda Bose and Another, , approved the meaning given to the word ''practice'' by Kumaraswami Sastry, J. in the Full Bench case in Re-Powers-of- Advocates ILR (1929) Mad 92 : 55 MLJ 551 : AIR 1928 Mad 1182, to the following effect :

the word ''Practice'' means appear, act, and plead, unless there is anything in the subject or context to limit its meaning." Therefore the word ''appear'' is only one aspect and does not take in the concept of ''pleading'' without which; it cannot be equated to ''practising''. In Thayarammas case AIR 1937 Madras 937 also it was stated that ''Practice'' means drafting, engrossing, filing plaints, Judge''s summons, affidavits and generally issuing legal process, and all that a legal practitioner does. Even one isolated act has, in England, been held to constitute ''acting as a solicitor'' rendering persons guilty of such conduct liable to be dealt with u/s 26 of the Solicitors Act, 1860 for contempt of Court (In Re Ainsworth, Ex parte Incoporated Law Society, 1905 KB 103)....

What the power-of-attorney agent in his case seeks to do is the same as in Tayarammal and Sornam cases -- He wants to be placed in the same position as an advocate; in respect of not merely drafting and filing cases but pleading and arguing in Court.... It is clear therefore, that his acts amount to ''practising'' the profession of law. In fact, the power-of- attorney is executed in 1987 permitting the agent to file, plead and argue all cases of the principals in future and the deed is not confined to this or any particular case. Though this Court has power fo grant permission for non-lawyers to plead/argue cases in certain special circumstances, the present case is obvipusly not one such. Under the guise of seeking permission in each case, the petitioner is continuously pleading and arguing every case for the principals who are Dal Mill owners and in a routine fashion, on the sole ground that the principals have decided never to engage any lawyers before any Court or tribunal. The parties are not seeking permission on any special grounds applicable to this case alone. They obviously want to engage the agent in all cases where normally lawyers should have been engaged. That clearly is hit by Section 33 of the Advocates Act.

In the context of Section 2 of the Powers of Attorney Act, 1882, it is of importance to notice the following statement of law, (made by Full Bench), in Re. The powers of newly enrolled Statutory Advocates under the Indian Bar Councils Act AIR 1928 Mad 1182:

...I am of opinion that where an Act confers rights to a party in general terms and entitles him to perform more than one function, the cutting down of those rights by a rule would make that rule repugnant to the provisions of the Act. The following observations of Wills, J., In Reg. v. Bird Needes Ex parte - [1898] 2 Q.B 340 : 67 L.J.Q.B. 618 : 14 T.L.R. 384 : 62 J.P. 422 : 46 W.R. 528 : 79 L.T. 156 are in point:

I desire in my judgment to adopt a broad principle which is too clear to need cases to be cited for its justification - the principle that where a power to make regulations is given to a public body by statute, no regulations made under it can abridge a right conferred by the statute itself.

In fact, the Supreme Court had authoritatively pronounced its disapproval of allowing the powers of Attorney Holders to plead on behalf of their Principals. The Supreme Court in Harishankar Rastogi Vs. Girdhari Sharma and Another, has set out as to the undesirable effects that are beset in allowing a Power of Attorney holder to plead. Once again the Supreme Court had set at rest all speculative aspects relating there to in T.C. Mathai and Another Vs. The District and Sessions Judge, Thiruvananthapuram, Kerala, , in the following passages:

The work in a Court of law is a serious and responsible function. The primary duty of criminal Court is to administer criminal justice. Any lax or wayward approach, if adopted towards the issues involved in the case, can cause serious consequences for the parties concerned. It is not just somebody representing the party in the criminal Court who becomes the pleader of the party. In the adversary system, which is now being followed in India, both in civil and criminal litigation, it is very necessary that the Court gets proper assistance from both sides.

Legally qualified persons who are authorised to practise in the courts by the authority prescribed under the statute concerned can appear for parties in the proceedings pending against them. No party is required to obtain prior permission of the Court to appoint such persons to represent him in Court. Section 30 of the Advocates Act confers a right on every advocate whose name is entered in the roll of advocates maintained by a State Bar Council to practise in all the Courts in India including the Supreme Court. Section 33 says that no person shall be entitled to practise in any Court unless he is enrolled as an advocate under that Act. Every advocate so enrolled becomes a member of the Bar. Bar is one of the main wings of the system of justice. An advocate is the officer of the Court and is hence accountable to the Court. Efficacious discharge of judicial process very often depends upon the valuable services rendered by the legal profession.

But if the person proposed to be appointed by the party is not such a qualified person the Court has first to satisfy itself whether the expected assistance would be rendered by that person. The reason for the parliament for fixing such a filter in the definition clause [Section 2(q) of the Code] that prior permission must be secured before a non-advocate is appointed by the party to plead his cause in the Court, is to enable the Court to verify the level of equipment of such person for pleading on behalf of the party concerned.

V. R. Krishna Iyer, J. had occasion to deal with a similar matter while considering a plea like this in a chamber proceeding in the Supreme Court. In that case, a party sought permission to be represented by another person in a criminal case. Learned Judge then struck a note of caution in the following terms in Harishankar Rastogi Vs. Girdhari Sharma and Another, :

If the man who seeks to represent has poor antecedents or irresponsible behaviour or dubious character, the Court may receive counter-productive service from him. Justice may fail if a knave were to represent a party. Judges may suffer if quarrelsome, ill-informed or blackguardly or blockheadly private representatives fling arguments at the Court. Likewise the party himself may suffer if his private representative deceives him or destroys his case by mendacious or meaningless submissions and with no responsibility or respect for the Court. Other situations, settings and disqualifications may be conceived of where grant of permission for a private person to represent another may be obstructive, even destructive of justice.

Appellant submitted that he is the duly appointed attorney of the respondent-couple by virtue of an instrument of power of attorney executed by them and on its strength he contended that his right to represent the respondent-couple in the court would be governed by the said authority in the instrument.

In Stroud''s "Judicial Dictionary", power of attorney is described as "an authority whereby one is set in the turne, stead, or place of another to act for him". In Black''s Law Dictionary it is described as the instrument by which a person is authorised to act as an agent of the person granting it. Section 2 of the Powers of Attorney Act, 1882 empowers the donee of a power of attorney to do anything "in and with his own name and signature" by the authority of the donor of the power. Once such authority is granted the said Act recognises that everything done by the donee "shall be as effectual in law as if it had been done by the donee of the power in the name and with the signature of the donor thereof."

Under the English Law, "every person who is sui juris has a right to appoint an agent for any purpose whatsoever, and he can do so when he is exercising statutory right no less than when he is exercising any other right", [vide Jackson and Co. v. Napper (1886) 35 Ch. D. 162 But this Court has pointed out that the aforesaid common law principle does not apply where the act to be performed is personal in character, or when it is annexed to a public office or to an office involving any fiduciary obligation, [vide Ravula Subba Rao and Another Vs. The Commissioner of Income Tax, Madras, ].

Section 2 of the Powers of Attorney Act cannot override the specific provision of a statute, which requires that a particular act should be done by a party in person. When the Code requires the appearance of an accused in a Court it is no compliance with it if a power of attorney holder appears for him. It is a different thing that a party can be permitted to appear through counsel. Chapter XVI of the Code empowers the Magistrate to issue summons or warrant for the appearance of the accused. Section 205 of the Code empowers the Magistrate to dispense with "the personal attendance of accused, and permit him to appear by his pleader" if he sees reasons to do so. Section 273 of the Code speaks of the powers of the Court to record evidence in the presence of the pleader of the accused, in cases when personal attendance of the accused is dispensed with. But in no case can the appearance of the accused be made through a power of attorney holder. So the contention of the appellant based on the instrument of power of attorney is of no avail in this case.

In this context reference can be made to a decision rendered by a Full Bench of the Madras High Court in M. Krishnammal Vs. T. Balasubramania Pillai, Power of Attorney Agent of M. Krishnammal, , when a person, who was the power of attorney holder of another, claimed right of audience in the High Court on behalf of his principal. A single Judge referred three questions to be considered by the Full Bench, of which the one which is relevant here was whether an agent with the power of attorney to appear and conduct judicial proceedings has the right of audience in Court. Beasley, C. J., who delivered the judgment on behalf of the Full Bench stated the legal position thus:

An agent with a power of attorney to appear and conduct judicial proceedings, but who has not been so authorised by the High Court, has no right of audience on behalf of principal, either in the appellate or original side of the High Court.... There is no warrant whatever for putting a power of attorney given to a recognized agent to conduct proceedings in Court in the same category as a vakalat given to a legal practitioner, though latter may be described as a power of attorney which is confined only to pleaders, i.e. those who have a right to plead in Courts.

The aforesaid observations, though stated sixty years ago, would represent the correct legal position even now. Be that as it may, an agent cannot become a "pleader" for the party in criminal proceedings, unless the party secures permission from the Court to appoint him to act in such proceedings. The respondent-couple have not even moved for such permission and hence no occasion has arisen so far to consider that aspect.

In all these cases what has not been allowed to be done or performed by a Power of Attorney holder is, to seek the right of audience in a Court, while at the same time allowing him to sue or be sued on behalf of his principal. From times immemorial, the right of audience in formal court proceedings is granted in favour of a class of trained professionals, who were known as Pleaders or Lawyers or Attorneys. After the advent of the Advocates Act, 1961, the right of audience in formal court proceedings is liable to be confined only to the professional class of advocates, who are admitted as Members and enrolled as such on the rolls by the Bar Council concerned. Therefore, grant of permission for audience is liable to be confined in favour of such class, but not otherwise.

However, the conventional viewpoint that was holding field was that, a party could enter appearance and solicit the right of audience for himself. Our legal system is not allergic to receive the submissions of a party-in-person. Therefore, a party, whether well versed or not, in legal matters and whether trained or not, can enter appearance of himself and seek to be heard, by a Court. That is not forbidden. To this day, right up to the highest Court of our land, some parties, who are confident of their articulative abilities enter appearances on their own and are heard with the same kind of attention a professional lawyer is paid. But however, the holder of a Power of Attorney, being not a party himself, but merely an agent of another person, cannot seek such right of audience. Pleading in formal court proceedings is an aspect, which is now regulated by a Statute. The right to instruct a Lawyer or an Attorney and to settle the pleadings in writing or to affix the verifications for the general truth of the averments is not a prohibitory exercise, but is a legitimate exercise liable to be carried on by an agent. Therefore, the power of attorney holders have always been accorded the necessary permission to set forth the pleadings on behalf of their Principals. 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. Therefore, the contention canvassed by the learned Counsel for the Respondent placing reliance upon a judgment in K. Bharathy, Gudivada and Anr. case cited (supra), is not tenable. It is altogether a different thing that a Power of Attorney holder is not liable to be granted permission to plead in a Court, which is an exercise, regulated by Section 32 of the Advocates Act, while the act of deposing as a witness on behalf of the Principal, is not such a regulated exercise. Therefore, the correct way to understand the judgment in K. Bharathy, Gudivada and Anr. case cited (supra) is that 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. In that case, the learned Judge was dealing with a situation where the Party is seeking to plead as well lead evidence, on behalf of the Principal, before a statutory authority.

The petitioner has pleaded that the respondent company''s net worth has been substantially eroded and it has not commenced its commercial production. He produced Ex.P13 and 14, the certified copy of the Auditor''s report together with the balance sheets for the years 2002 and 2003 to prove his point. RW1 admitted that as per the returns filed as on 31.3.2003 that the assets of the company stand at Rs. 24.62 lakhs in the negative. He also admitted that Exs.R1- R6, Sales Tax Returns do not reflect the profitability of the respondent company while denying that the respondent company has not started it''s commercial production, all that the RW1 would say is that, it is carrying on job works. Hence, the respondent company has failed to discharge the onus that it is a viable company not requiring to be wound up.

Further, the respondent has pleaded that the petitioner has suppressed the fact that it is her husband who was the former Managing Director of the company who carried on it''s business till he resigned as such. Hence, the respondent pleaded that the above petition should be thrown out. It will be relevant to notice that parties to a lis are required to disclose all relevant and material facts and are not supposed to indulge in any suppression of such facts. However, it is not every fact that matters. What matters are those facts, which have a direct bearing upon the issue(s) involved in the case. Since the relationship of the petitioner or her husband with the company, did not have any bearing upon the issue relating to return/refund/repayment of money due by the company to the petitioner, I do not consider that the non disclosure of these facts by the petitioner need to result in dismissing the above petition.

For the aforesaid reasons, the Respondent Company is clearly unable to pay the debt of the Petitioner in a sum of Rs. 3,57,000/-. Noticing this very feature, this Court, by order dated 18-03-2006, while admitting this Petition has granted four weeks time to the Respondent Company to pay up the amount of debt due to the Petitioner herein. The Respondent Company, in spite of providing such a wonderful opportunity, has failed to discharge the debt due to the Petitioner. Thus, it is demonstratively clear that the Respondent Company is unable to discharge its debts. Therefore, it is appropriate that the Company should be wound up.

Accordingly, the Respondent Company - Lotus Aluminium Private Limited, is directed to be wound up and the Official Liquidator attached to this Court is appointed as its Liquidator, in terms of Section 449 of the Companies Act. The Petitioner is directed to lodge a certified copy of this Order with the Registrar of Companies within 30 days from the date it is made available by the Registry of this Court to enable an appropriate minute to be recorded in terms of Section 445 of the Act. The petitioner is also directed to publish the same in Deccan Chronicle, Andhra Jyothi Newspapers.

With this, the Company Petition is allowed. No costs.