Case Note & Summary
The petitioner, Patel Inn and Travels Private Limited, filed a summary civil suit against Bank of India for recovery of Rs. 3,99,736/- with interest. The suit was filed by Mr. Meghjibhai Kunvarjeebhai Khetani, a Director of the petitioner-company, who signed and verified the plaint. During the trial, the petitioner realized that no Board Resolution had been passed authorizing the Director to file the suit. To cure this defect, the petitioner filed an application (Exh.74) under Order VI Rule 17 of the Code of Civil Procedure, 1908, seeking to amend the plaint to place on record a Board Resolution dated 01.06.2024, which retrospectively ratified the filing of the suit. The trial court rejected the application on the grounds that it was filed at a belated stage (after evidence was closed and the matter was posted for judgment) and that allowing the amendment would change the nature of the suit. Aggrieved, the petitioner approached the Gujarat High Court under Articles 226 and 227 of the Constitution. The High Court allowed the petition, setting aside the trial court's order. The court held that the amendment was merely to cure a technical defect in the authority to sue and did not change the nature of the suit. It observed that the Board Resolution could be obtained and placed on record at any stage to ratify the Director's act, and that no prejudice would be caused to the respondent-bank as the suit was already at the stage of judgment. The court emphasized that procedural rules are meant to advance justice, not to defeat it, and that the trial court ought to have exercised its discretion in favor of allowing the amendment. The petition was allowed, and the trial court was directed to permit the amendment and proceed with the suit.
Headnote
A) Civil Procedure - Amendment of Pleadings - Order VI Rule 17 CPC - Curing Defect in Authority to Sue - The petitioner-plaintiff sought to amend the plaint to place on record a Board Resolution ratifying the filing of the suit by its Director, which was initially filed without such resolution. The trial court rejected the application on the ground of delay and that the amendment would change the nature of the suit. The High Court held that the amendment was merely to cure a technical defect in authority and did not change the nature of the suit; the court has inherent power to allow such amendment at any stage to do substantial justice, especially when no prejudice is caused to the opposite party. (Paras 6-9) B) Company Law - Authority to Sue - Board Resolution - Ratification - The suit was filed by a Director of a Private Limited Company without a prior Board Resolution. The High Court held that the Board Resolution can be obtained and placed on record at any stage to ratify the act of the Director in filing the suit. The absence of prior resolution is a curable defect and does not render the suit invalid ab initio. (Paras 7-8) C) Civil Procedure - Summary Suit - Order XXXVII CPC - Amendment - The suit was a summary suit for recovery of money. The High Court observed that the amendment sought was to place on record a Board Resolution, which was necessary to show the authority of the Director to file the suit. The court held that such amendment is permissible even in summary suits, as it does not delay the trial or prejudice the defendant. (Paras 5, 9)
Issue of Consideration
Whether the trial court erred in rejecting an application for amendment to place on record a Board Resolution authorizing the filing of the suit, when the suit was filed by a Director without prior Board Resolution, and whether such amendment can be allowed at a belated stage to cure the defect in authority.
Final Decision
The High Court allowed the petition, set aside the trial court's order dated 17.06.2025, and directed the trial court to permit the amendment and proceed with the suit in accordance with law.
Law Points
- Amendment of pleadings
- Order VI Rule 17 CPC
- Curing defect in authority to sue
- Board Resolution ratification
- Summary Suit
- Recovery suit
- Inherent power of court
- Technical defect
- Prejudice to opposite party
