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Sankamma Hengsu Vs. H. Anantha Kamath and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtChennai
Decided On
Reported inAIR1940Mad882; (1940)2MLJ309
AppellantSankamma Hengsu
RespondentH. Anantha Kamath and ors.
Cases ReferredIrvine v. Union Bank of Australia
Excerpt:
- - in other words, the power given to the liquidator to indorse promissory notes is a power given by the statute, and it is a well-established principle that a statutory power cannot be delegated in the absence of a statutory provision for such delegation. 1041 must fail as no question of ratification, such as is raised in the other revision petition, arises in this case. it follows therefore that this revision petition (1042 of 1936) also must fail......a mere ministerial act the validity of which does not rest on any statutory prevision. no such case was set forth by the petitioner in the lower court, and there is certainly no material available which would justify a finding to the effect that before the assignment by the agents the liquidators themselves had applied their minds to the question and had decided to make the assignment. it follows therefore that this revision petition (1042 of 1936) also must fail. both the revision petitions are accordingly dismissed with costs.
Judgment:

Pandrang Row, J.

1. These connected Revision Petitions arise out of two connected Small Cause Suits instituted by two different persons claiming to be assignees or indorsees of two different promissory notes under indorsements purporting to have been made by Rao Saheb P.U. Narayana Aiyar and P. Ramayya Alva as joint holders of a power-of-attorney granted to them by the liquidators of the National Livestock Registration Bank, Ltd., Madras. The suits were dismissed mainly on the ground that the indorsements were not valid and conveyed no interest to the assignees. In one of these revision petitions, namely, C.R.P. No. 1041 of 1936, the only question that arises is whether the indorsement by the agents of the Liquidators is valid in law. This very point arose in connection with a similar case in C.R.P. No. 22 of 1934 in which it was held by Sir Owen Beasley, C.J., that the liquidators had no power whatever to delegate their powers to any one else. The power of the liquidators themselves is derived from Section 179 of the Indian Companies Act and so far as indorsements of promissory notes are concerned, from Clause (f) of that section. In other words, the power given to the liquidator to indorse promissory notes is a power given by the statute, and it is a well-established principle that a statutory power cannot be delegated in the absence of a statutory provision for such delegation. It is not pretended that there is any such statutory provision for delegation in a case of this kind, and it is clear, as was held in C.R.P. No. 22 of 1934, that the indorsement by the agents appointed by the liquidators conveys no title in law to the assignees. It follows from this that C.R.P. No. 1041 must fail as no question of ratification, such as is raised in the other revision petition, arises in this case.

2. The question of ratification also can be disposed hi briefly. It is said that on the 15th May, 1932, all the previous indorsements made by the power-of-attorney agents were ratified by the sole liquidator, the other liquidator having resigned his office. Mr. Sitarama Rao relied on Irvine v. Union Bank of Australia (1877) 2 A.C. 366 and particularly on the observations at page 375. I am however of opinion that those observations really do not bear on the present case. They show that though the original act would have required the sanction of a majority of the entire body of shareholders, nevertheless, an act done by a Director in excess of his authority may be ratified by a majority vote of the shareholders actually present at an extraordinary meeting conveyed with the express object of ratifying the act that was done in excess of authority, due notice of which having been given. In other words, that case is an authority for the proposition that in every case it is not necessary that the very authority which could have validly authorised the act at its inception could alone ratify such act. It does not in any way take away the force of the general rule which is embodied in Article 25 in Bowstead on Agency at page 47, eighth edition, to the effect that it is only an act which is capable of being done by means of an agent that can be ratified by the person in whose name or on whose behalf it was done. In other words, if, as in this case, the liquidator could not validly in law appoint an agent to assign promissory notes by means of a general authority, no subsequent ratification of what was ah initio void could make that act valid. It has been argued that a distinction must be drawn between this case and a case where the principal himself has decided the matter or in other words, decided to make the particular assignment or indorsement, and merely leaves it to his power-of-attorney holder to sign the indorsement on his behalf. But in this case there is nothing to show that at the very inception the liquidator had decided to assign the promissory note in question and merely employed his power-of-attorney agents to sign on his behalf. If that was the case, there would have been no necessity to plead ratification at all because the original act itself would have been valid, the mere affixing of signature on behalf of the principal being a mere ministerial act the validity of which does not rest on any statutory prevision. No such case was set forth by the petitioner in the lower Court, and there is certainly no material available which would justify a finding to the effect that before the assignment by the agents the liquidators themselves had applied their minds to the question and had decided to make the assignment. It follows therefore that this revision petition (1042 of 1936) also must fail. Both the revision petitions are accordingly dismissed with costs.


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