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State Bank of India Versus Kashmir Art Printing Press, Sirsa

1981 (2) TMI 248 - PUNJAB AND HARYANA HIGH COURT

Civil Regular Second Appeal No. 2997, 2979 and 401 of 1980 and Civil Revn. No. 2357 and 2358 of 1980 - Dated:- 12-2-1981 - G. C. Mital, J. ORDER 1. One of the important points involved in these four cases (R. S. A. No. 2997 of 1979. R. S. A. No. 401 of 1980. Civil Revision No. 2357 of 1980 and Civil Revision Mo. 2358 of 1980) is whether the Branch Manager, State bank of India (concerning disputes arising in his Branch) in the absence of a resolution in his favour passed by the Directors of the S .....

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ions arise, took up the plea that the Branch Manager had no authority to sign and verify the plaints and to institute the suits and, therefore, the same cannot proceed. The trial Judge (Judge, Small Cause Court) overruled the objection on the basis of Regulations 76 and 77 of the State Bank of India, General Regulations, 1955(hereinafter called the Regulations) and decreed the suits after giving a finding that the amounts claimed in the suits were due. The judgment debtors filed Civil Revision w .....

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other two suits, out of which R. S. A. No. 2997 of 1979 and R. S. A. No. 401 of 1980 arise, the objections of the defendants were that the Branch Manager had no locus standi to file the present suits as he had no authority to sign and verify the pleadings, and that the suits were time barred. The suit, out of which R.S. A. No. 2997 of 1979 arises, was held to be within time against the principal debtors and was held to be time barred against the surety, whereas the suit, out of which R. S. A. No .....

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cus standi to bring the suit. The State Bank of India filed appeals which were dismissed by the Additional District Judge and second appeals have been filed in this Court. Since the point of locus standi was common in all the four cases, they were ordered to be heard together. 4. In order to appreciate the point whether the Branch Manager of a local Branch of State Bank of India has the power to sign and verify the pleadings and to institute and defend the legal proceedings in a court, it will b .....

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uted was to be a body corporate with perpetual succession and was to sue and could be sued in that name as provided by Section 3(2) of the Act. According to Section 16(1) of the Act, the Central Office of the State Bank was to be at Bombay, and according to sub-section(2) local head offices in Bombay, Calcutta and Madras and at such other places in India as the Central Government may provide in consultation with the Central Board. It deserves to be mentioned here that a local head office was con .....

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the Act. Local Boards are to be constituted at places where the State Bank has a local head office, which are to consist of the members mentioned in the section. The 'Local Board' has been defined in Section 2(dd) to mean a Local Board constituted under Section 21. Section 21B defines the powers of the Local Board in respect of the area served for which local head office is constituted and according to this section. Local Board is to exercise all powers and perform all functions and dut .....

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Under Section 30 of the Act, the Central Board has been authorised to constitute an Executive Committee or other Committees and delegate to the Executive Committee or other Committees such powers as the Central Board may consider necessary. This Section deals with the delegation of powers of the Central Board to the Executive Committee or other Committees. Under Section 43(2). The Central Board has been authorised to delegate such powers and duties as it deems proper, to the officers, advisers .....

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regulations of the Central Board under this provision and shall have force accordingly until they are amended or repealed. 5. In exercise of the powers conferred by Sub-section (3) of Section 50 of the Act, the Reserve Bank of India, with the previous sanction of the Central Government, made certain regulations. Regulation 77, which is relevant, deserves to be noticed for the decision of the point involved in these cases and is as follows:- "77. Plaints, written statements, petitions, and a .....

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ments, petitions and applications can be signed and verified and similar other documents including documents connected with legal proceeding could be made and completed on behalf of the State Bank by the Chairman or by an officer or an employee empowered by and under Regulation 76. A reading of Regulation 76 shows that the power of signing the documents has been given to the Vice Chairman, the Managing Directors, the Deputy Managing Directors, the Chief General Managers and such other officers o .....

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egulation 77 an agent would be entitled to sign the pleadings, verify the documents etc. and also to sign generally all other documents connected with the legal proceedings on behalf of the State Bank. Later on, the designation of Agents was re-designated as Branch Managers by virtue of notification dated 231st June, 1972, published in the Government of India Gazette part III Section 4 dated 26th August, 1972, which came into force with effect from 1st September, 1972. The resultant effect was t .....

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that a Branch Manager had the authority not only to sign the pleadings and verify them, but had the authority to sign a Wakalatnama to authorise an Advocate to file suit or to file the same himself. This is amply borne out by the looking t the entire scheme of the Act and particularly Section 50(2) (m) and (n) coupled with Regulations 76 and 77. According to the counsel for the respondents-defendants, regulations could be framed on three matters as enumerated in clause (m), that is, to make a p .....

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out the purposes of the Act, Section 50(1)provides for making of regulations under the Act and under clauses (m) and (n) specific powers have been given for making regulations in regard to the conduct of the legal proceedings and about other details and conduct of the officers of the State Bank. In furtherance of the aforesaid power, Regulations 76 and 77 were framed and according to the learned counsel, these regulations have to be liberally construed so as to convey that whatever was provided .....

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t been mentioned in Regulation 77. Something might have been said for the defendants. But the use of the aforesaid words clearly goes to show that the authorised officer has been given power to sign all documents connected with the legal proceedings and one of the documents would be a Wakalatnama which the concerned officer could sign in favour of an Advocate. It cannot be disputed that a Wakalatnama is a document connected with the legal proceedings and when, admittedly, in the present cases, t .....

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s Trichy, ILR (1975) 2 Mad 486; United Bank of India v. Prabhas Ch. Deb. AIR 1977 Cal 55; and a decision of the Delhi High Court in Suit No.653 of 1974. State Bank of India v. Swahney Finance Company decided on 25th Oct. 1978. 8. The counsel for the defendants in support of their contention wanted to place reliance on decisions of the Court in Municipal Committee, Ludhiana v. Surinder Kumar, 1970 Cur LJ 631; and Garib Chand v. Municipal Committee, Budhlada, 1979 Rev LR 341. These judgments are c .....

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v. Traders Bank Ltd., Jammu, AIR 1954 J&K 45, and I am in agreement with the distinction pointed out therein. There also reliance was placed on the same Lahore authorities. 9. Even apart from the aforesaid reasoning, I am of the view that the larger authority granted to the Branch Manager to sign the plaints, written statements, petitions and applications and all other documents connected with the legal proceedings, should include the power to file suit, written statements and other document .....

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rred because I do not think it would be possible to get instructions from the Central Board or the Local Board to institute an appeal within the period of thirty days. 10. For the reasons recorded above, I hold that the suits were not only properly filed and instituted by the Branch Managers but they had the authority to engage a counsel and sign the Wakalatnamas and the presentations of the plaints by the Advocates is proper institution of the suit. Accordingly the findings to the contrary reco .....

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correct. The facts of the case are that the Branch Manager allowed the defendants the benefit of Cash Credit Account with a limit of ₹ 5000. A copy of the running Account has been produced on the record as Exhibit P. 5, which shows that the persons who were allowed the benefit of Cash Credit Account had been withdrawing and repaying amounts up to the limit of ₹ 5000/- from time to time and on the debit balance, interest was accruing. For such a running account, the limitation is prov .....

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hree years would start. The facts of the present case show from Exhibit P.5 that the last entry is of 11th November, 1975, whereas the suit was filed on 18th November 1975, i.e. within a week of the last entry. Hence the entire suit even against the surety, was within limitation. The Courts below fell in error in following Federal Bank of India (Punjab) Ltd. V. Som Dev Grover, AIR 1956 Punj 21, on the facts of the present case, which is clearly distinguishable. That was a case of ordinary debtor .....

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ars that the payments made by the principal debtor were relied upon by way of acknowledgements and that is how the courts below proceeded to decide the case on that basis. Accordingly, I reverse the findings of the Courts below on the point of limitation and hold that the suit against the surety was also within limitation. 12. One more point arises in R. S. A. No. 2997 of 1979 under issue No.8. The Courts below have held that since no notice was given to the surety under section 98 of the Negoti .....

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