M/S. RAM CHAND AND SONS SUGAR MILLS PVT. LTD. versus KANHAYA LAL. BHARGAVA & ORS .

Citation: [1966] 3 S.C.R. 856 · Decided: 10-03-1966 · Supreme Court of India · Bench: K. SUBBA RAO · Disposal: Appeal(s) allowed
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Judgment (excerpt)

856 
MjS. RAM CHAND AND so:-;s St:GAR MILLS PVT. LTD. 
v. 
KANHAYA LAI. llHARGAVA & ORS . 
. \larch 10. 1966 
[K. SCBl!A RAO A!'D V. RA\tASWA.,11, JJ.j 
Code of Civil Procedure (Act 5 of 1908), s. 151 and O.XXIX r. 3-
l)irector of Company summoned to answer material quertions--Company 
when responsible for his non-appearance-Inherent powers of court to 
prevent abuse of process of court-Scope of. 
A 
B 
'!he first respondent filed a suit against the appellant company and 
C 
one R for recovery of a sum of money. The coun acting under OXXIX 
r. 3 of the Code of Civil Procedure dirc-ctcd J one of the directors of 
the company to appear before it and answer certain material questions in 
relation to the suit and when he did not appear the appellant waa directed 
to produce him, with the same result. 
The Coun after gi•ing notice to 
the appellant struck off ils defence in purported exercise of its inherent 
powers under s. 151 of the Code. The High Court dismissed the appel-
lant's re,ision petition whereupon it appealed to this coun by special 
leave. 
It was contended on behalf of the appellant that inherent power 
could not be invoked in the circumstances of the case. 
HELD : 
( i) Whatever limitations are impooed by construction on tho 
provi•ions of s. 151 of the Code. they do not 
control 
the 
ullAloobte<l 
power of the court conferred under s. 151 of the Code to make a suit-
able order to prevent the abuse of the process of the Court. (860) 
Padam Sen v. Stare of VIiar Pradesh, [1961] I S.C.R. 884, MQJtOhltr 
Lal Chopra v. Rai Bahadur Ron Raja Ser/a !lira/al, (1962) Supp. I S.C.R. 
450 and Arjun Singh v. Moliindra Kumar, (1964) 5 S.C.R. 946, applied. 
(ii) There is nothing in O.XXIX of the Code which expr..,.ly or by 
neca<sary implication, precludes the exerci,., of the inherent power of tho 
Coon under s. 151 of the Code. In a case of default made by a director 
who failed to appear in conn when he was "° required under the afor"'3id 
rule, tho conn can make a suitable con.sequential order under '· 
151 
of the Code as may be necessary for the ends of justice or lo prevent the 
abu"" of the process of the Coon. [861 EJ 
D 
E 
F 
(iij) 'Any director' in O.XXIX r. 3 need not be the same director 
who has signed and verified a pleading or on whom summons had been 
served. 
He can be any one of the directors who will be in a position to 
G 
answer malorial questions relating to the suit. (861 A-BJ 
(iv) In the prc<cnt case the coon was justified in &triking off tho 
defence of the appellant company. 
Unless there was a finding of collu-
sion between the appellant and the director in that the former prevented 
the latter from appearing in court it was difficlt to make the company 
constructively liable for the default of one of its directo"-
A director'a 
act.s outside the scope of his powers could not bind the company and it 
wa• nor possible to hold that the director in refus:ng to respond to the 
notice given by the court was acting within the scope of the power9 con-
ferred on him. [861H-862 DJ 
11 
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A 
B 
c 
RAMCHAND MILLS v. K. L. BHARGAVA (Subba Rao, J.) 857 
CIVIL APPELLATE JURISD!Cl!ON : Civil Appeal No. 166 of 1966. 
Appeal by special leave from the order dated August 27, 1965 
of the Punjab High Court (Circuit Bench) at Delhi in Civil Revision 
No. 289-D of 1965. 
S. N. And/ey, Rames/mar Nath, Mahinder Narain, for the appel-
lants. 
A. K. Sen. B. Sen, B. P. 
.Maheshwari, P. D. B!wrgava and 
M. S. Narasimhan, for the respondents . 
The. Judgment of the Court was delivered by 
Sobba Rao. J.-This appeal by special leave is directed against 
the order of the Punjab High Court confirming that of the Subordi-
nate Judge, Delhi, striking out the defence of the appellant under 
s. 151 of the Code of civil Procedure, hereinafter called the Code. 
Kanhaya Lal Bhargava, the 1st respondent, 
filed a suit on 
April 27, 1962, in the Court of the Subordinate Judge, First Class, 
D 
Delhi, against Messrs. Ram Chand & Sons Sugar Mills Private 
Limited, the appellant, and one Ram Sarup for the recovery of a 
sum of Rs. 45,112.94. 
Pending the suit, on October 27, 1964, the 
!st respondent filed an application in the said court under O.Xl, 
r. 21, of the Code, read with O.XXIX, r. 3, thereof, for striking off 
the defence or in the alternative for directing Jugal Kishore, a 
E 
director of the Appellant-company, to appear in court on December 
14, 1964. On December 3,
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