Panchanan Dhara & Ors. vs. Monmatha Nath Maity (Dead) through LRS and Another (2006) 5 SCC 340

Facts

An agreement for sale was entered into by three directors on behalf of the company and executed in name of company. Later the company refused to execute and register the deed of sale. The company before the trial court never denied or disputed the correctness or otherwise of the contents of the agreement nor raised any plea that it was not binding on company or the same was illegal.

Held

The Hon’ble Apex Court held as under:

1. An oral agreement for sale is permissible in law. The company has not denied the execution of the agreement.

Thus, even in the absence of a resolution by the company the contract could not have been held to be invalid or illegal.

2. Section 46 of the Companies Act, 1956 merely lays down the mode of signing the contract on behalf of the company. Once a deed is executed on behalf of the company, it is the company and not the persons signing who can sue or be sued on the contract if the evidence is clear that the signature was only that of the company.
    

3. So far as the question of putting of the seal of the company is concerned, it was held that even in the absence of a seal, the company may still be held to be liable having regard to the nature of transaction and the authority of those who had executed it. If the act of the Directors is not ultra vires or against public policy, the parties acting thereupon cannot be left at large.

Anil Rishi vs. Gurbaksh Singh 2006 (5) SCC 558

Facts

An agreement to sell was entered into by and between the parties hereto. A sale deed was executed pursuant to the said agreement to sell. However, a suit for declaration was filed by the respondent-plaintiff alleging that the said sale deed was forged, fabricated and was a void document.

The question that arose before the Supreme Court was whether the trial court, had correctly placed the initial onus of proof on the appellant-defendant.

Held

The Hon’ble Apex Court held as under:

1. A party in possession of a document can always be directed to produce the same by the Court.
    

2. A distinction exists between ‘burden of proof’ and ‘onus of proof’. The right to begin follows onus probandi. It assumes importance in the early stage of a case. The question of ‘onus of proof’ has greater force, where the question is, which party is to begin.

‘Burden of proof’ is used in three ways: (i) to indicate the duty of bringing forward evidence in support of a proposition at the beginning or later; (ii) to make that of establishing a proposition as against all counter-evidence; and (iii) an indiscriminate use in which it may mean either or both of the others.

The elementary rule in section 101 of Evidence Act is inflexible. In terms of section 102 of the Act the initial onus is always on the plaintiff and if he discharges that onus and makes out a case which entitles him to a relief, the onus shifts to the defendant to prove those circumstances, if any, which would disentitle the plaintiff to the same.

3. Burden of proof lies upon a person who has to prove the fact and which never shifts.

Onus of proof shifts. Such a shifting of onus is a continuous process in the valuation of evidence.

4. When a person is in a fiduciary relationship with another and the latter is in position of active confidence, the burden of proving the absence of fraud, misrepresentation or under influence is upon the person in the dominating position. However, before a presumption of undue influence against a person in position of active, confidence is drawn the factum of active confidence should be established.

In view of the above the Hon’ble Apex Court held that the trial court and High Court erred in placing the burden of proof on the appellant defendant.

Hero Vinoth vs. Seshammal 2006 (5) SCC 545

Held

The Hon’ble Apex Court held as under:

1. The High Court should be satisfied that the case involves a substantial question of law, and not a mere question of law. A substantial question of law has to be distinguished from a substantial question of fact.
    

2. The phrase “substantial question of a law”, as occurring in the amended section 100 CPC is not defined in CPC. The word substantial, as qualifying “question of law”, means – of having substance, essential, real, of sound worth, important or considerable. It is to be understood as something in contradistinction with – technical, of no substance or consequence, or academic merely.
    

3. A question of law having a material bearing on the decision of the case (that is, a question, answer to which affects the rights of parties to the suit) will be a substantial question of law, if it is not covered by any specific provisions of law or settled legal principle emerging from binding precedents, and, involves a debatable legal issue.
    

4. The question of law raised will not be considered as a substantial question of law, if it stands already decided by a larger Bench of the High Court concerned or by the Privy Council or by the Federal Court or by the Supreme Court.
    

5. A substantial question of law will also arise in a contrary situation, where the legal position is clear, either on account of express provisions of law or binding precedents, but the court below has decided the matter, either ignoring or acting contrary to such legal principle.
    

6. The substantial question of law on which a Second Appeal shall be heard need not necessarily be a substantial question of law of general importance. But a substantial question of law which was involved in the case.

Note: Under section 260A of the Income-tax Act, 1961 an appeal lies to the High Court only or substantial question of law.

Standard Chartered Bank Ltd. vs. Dr. B.N. Raman (2006) 5 SCC 727

Held

1. The Consumer Protection Act, 1986 provides for formation of the National Commission, the State Commission and the District Forums which are remedial agencies. Their functions are quasi-judicial. The purpose of these agencies is to decide consumer disputes.
    

2. Activities relating to non-sovereign powers of statutory bodies are within the purview of the Act. The functions of such statutory bodies come under the term “service” under section 2(1)(o) of the Act. Banking is a commercial function. “Banking” means acceptance, for the purpose of lending or investment of deposit of money from the public, repayable on demand or otherwise [Section 5(b) of the Banking Regulation Act, 1949].
    

3. The intention of the 1986 Act is to protect consumers of such services rendered by the banks. Banks provide or render service/facility to its customers or even non-customers. They render facilities/services such as remittances, accepting deposits, providing for lockers, facility for discounting of cheques, collection of cheques, issue of bank drafts, etc. Relying on the decision of Vimal Chandra Grover vs. Bank of India 2000 (5) SSC 122 it was held that banking is business transaction between the bank and the customers. Such customers are consumers within the meaning of section 2(1)(d)(ii) of the Act.

Prem Singh & Ors. vs. Birbal & Ors. 2006 (5) SCC 353

Held

The Hon’ble Apex Court observed that there is presumption that a registered document is validly executed. A registered document, therefore, prima facie would be valid in law. The onus of proof, thus, would be on a person who leads evidence to rebut the presumption.