What are the provisions of C.P.C. that apply to suits by or against the corporation?

Question: What are the provisions of C.P.C. that apply to suits by or against the corporation?

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Answer

Order XXIX of the Code of Civil Procedure, 1908 deals with the suits by or against corporations and it contains mainly three rules for the application of these suits.

Rule 1 Order XXIX of Code talks about “Subscription and verification of pleading”

Rule 1 lays down what is subscription and verification of pleading that in suits by or against a corporation, any pleading may be signed and verified on behalf of the corporation by the secretary or by any director or other principal officer of the corporation who is able to depose to the facts of the case.

Rule 2 Order XXIX talks about “Service on a corporation”

Rule 2 deals with how service is to be done on the corporations. It says that subject to any statutory provision regulating service of process, where the suit is against a corporation, there are two ways to serve the summons. So, the service can be made either on the:

• on the secretary, or on any director, or other principal officers of the corporation, or
• by leaving the summon or sending it by post addressed to the corporation at the registered office, or if there is no registered office then at the place where the corporation carries on business.

In the case of Shalimar Rope Works Limited v. Abdul Hussain H.M. Hasan Bhai 1980 AIR 1163, Abdul Hussain (respondent) filed a suit and demanded a sum of Rs. 26,000 due to the non-performance of the act of appellant(petitioner) related to non-delivery of goods.

Summon was served at the registered office of the company, non-arrival of the party made the court declare an exparte decree. The major plea on behalf of the company was that summon was not served to any authorized person. High restored the exparte-decree decision and such further Supreme Court in appeal stated that Rule 2 of Order XXIX is not exhaustive. Summon served to the managing agent is also a valid one.

Rule 3 Order XXIX of Code of Civil Procedure 1908 on “Power to require personal attendance of officer of a corporation”

If the court thinks that the personal appearance of any officer of the corporation is necessary then, the Court has the power to call the required persons before it. For this purpose, the court may, at any stage of the suit, require the personal appearance of the secretary or of any director, or other principal officers of the corporation who may be able to answer material questions relating to the suit.

In the case of Alwar Iron v. Union of India, it was found that there was fraud conducted by the firm as it had disclosed names of those people who were not actually registered members of the firm. The suit got dismissed by providing no-cost relief to the plaintiff.

In the case of Upper India Cable Company v. Bal Kishan A.IR. 1981 SC 1384, the apex court had to determine if an appeal gets abated even if there occurs an absence of heirs or legal representative of the deceased partner of the firm. Proceedings would be free from death and appeal cannot be abated. Due to that, there occurred no question of substituting heirs and legal representatives.

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