Ambassador Travels (Mumbai) Pvt. Ltd. Vs Otto-AGN International Limited (Bombay High Court)
Summary: The Bombay High Court, in Ambassador Travels (Mumbai) Pvt. Ltd. Vs Otto-AGN International Limited (2026:BHC-AS:44813), held that a company cannot be denied permission to produce a subsequent board resolution in a pending civil suit merely because the resolution was passed more than fifteen years after the institution of the proceedings. The petitioner company had instituted Suit No. 3576 of 2010 against the respondent for recovery of ₹3,50,579 towards outstanding air-ticket charges, along with interest at 24% per annum. The suit was pursued through Mr. Mackenzie Miranda, whose authority to institute proceedings and depose on behalf of the company was challenged by the defendant. After his cross-examination, the petitioner sought permission to produce a board resolution dated 4 August 2025, confirming, approving and ratifying the acts undertaken by him in connection with the suit. However, the City Civil Court rejected the application on 14 October 2025, observing that the resolution had been passed after the representative’s cross-examination and that its production would seriously prejudice the defendant, which had already questioned his authority.
Before the High Court, the petitioner contended that the trial court had adopted an excessively technical approach by refusing to permit production of the board resolution. It was submitted that an authority letter dated 16 March 2023 had already been produced and marked in evidence, and that the subsequent resolution was intended to confirm and ratify the representative’s actions. Reliance was placed on New India Assurance Co. Ltd. v. Sesa Goa Ltd., which recognised that substantive rights should not be defeated by curable procedural irregularities. Conversely, the respondent argued that the absence of a board resolution at the time of filing the suit constituted a foundational defect rather than a procedural irregularity. Referring to State Bank of Travancore v. Kingston Computes India Pvt. Ltd., Schmenger GMBH and Company Leder v. Saddler Shoes Pvt. Ltd., and M. Divya v. Pavani Estates Pvt. Ltd., the respondent maintained that a subsequent resolution could not retrospectively cure the absence of lawful authority to institute proceedings, particularly after admissions concerning the lack of authorisation had been obtained during cross-examination.
The High Court examined Section 291 of the Companies Act, 1956, Order XXIX Rule 1 and Order VI Rule 14 of the Code of Civil Procedure, 1908, explaining that a company, being a juristic person, necessarily acts through human agencies and that the authority to institute a suit is conceptually distinct from the authority to sign and verify pleadings. Referring to United Bank of India v. Naresh Kumar, the Court observed that procedural defects which do not affect the foundation of proceedings should not defeat substantive rights. The Supreme Court had recognised that a corporation may expressly or impliedly ratify actions undertaken by its officers, and that such ratification may be established from the evidence, surrounding circumstances and conduct of the proceedings. The High Court also relied on Sangram Singh v. Election Tribunal, Kotah and Anvita Auto Tech Works Pvt. Ltd. v. Aroush Motors, emphasising that procedural rules exist to advance justice rather than frustrate legitimate claims through rigid technical interpretation. At the same time, the Court acknowledged that the absence of lawful authority to institute proceedings could have substantive legal consequences, as recognised in State Bank of Travancore.
The Court distinguished between permitting a document to be produced on record and determining its admissibility, validity or legal effect. It observed that the immediate question was not whether the board resolution dated 4 August 2025 conclusively established the representative’s authority or retrospectively validated the institution of the suit, but whether the trial court was justified in refusing its production altogether. The High Court held that the trial court’s apprehension of serious prejudice to the defendant was insufficient to reject the application at the threshold. Whether the petitioner had originally authorised Mr. Miranda to institute the suit, whether the subsequent resolution was lawfully passed, whether it could validly ratify earlier actions, and whether the suit was maintainable were questions requiring examination during final adjudication. The Court clarified that the principles laid down in United Bank of India and State Bank of Travancore would operate in their respective spheres and that allowing production of the resolution would not automatically establish the legality of the original proceedings.
Accordingly, the Bombay High Court partly allowed the writ petition, quashed the City Civil Court’s order dated 14 October 2025 and permitted the petitioner to produce the board resolution dated 4 August 2025 on the trial court’s record. However, it expressly left open the questions of whether the resolution could be read in evidence, whether lawful authority existed when the suit was instituted, and what effect the subsequent resolution would have on the maintainability of the proceedings. These issues were directed to be determined independently by the trial court on their merits and in accordance with law. The ruling establishes that the mere passage of a substantial period between the institution of a corporate suit and the adoption of a subsequent board resolution does not, by itself, justify refusing permission to produce that resolution. Nevertheless, permission to produce a subsequent resolution does not amount to automatic recognition of retrospective authorisation or validation of an otherwise unauthorised suit, and the legal effectiveness of such ratification remains subject to judicial determination.
Cases Discussed
- New India Assurance Co. Ltd. v. Sesa Goa Ltd. — 2020 (5) Mh.L.J. 66.
- State Bank of Travancore v. Kingston Computes India Pvt. Ltd. — (2011) 11 SCC 524.
- Schmenger GMBH and Company Leder v. Saddler Shoes Pvt. Ltd. — 2010 SCC OnLine Mad 6539.
- M. Divya and Ors. v. Pavani Estates Pvt. Ltd. — Civil Revision Petition No. 3848 of 2025, 01/07/2026.
- National Small Industries Corp. Ltd. v. Harmeet Singh Paintal — (2010) 3 SCC 330.
- Apple Valley Resort v. H.P. State Electricity Board — (2004) 118 Comp Cas 328.
- United Bank of India v. Naresh Kumar and Ors. — AIR 1997 SC 3.
- Sangram Singh v. Election Tribunal, Kotah and Anr. — AIR 1955 SC 425.
- Anvita Auto Tech Works Pvt. Ltd. v. Aroush Motors and Anr. — 2025 SCC OnLine SC 2181.
FULL TEXT OF THE JUDGMENT/ORDER OF BOMBAY HIGH COURT
1. Rule made returnable forthwith and with the consent of the learned Counsel for the parties, heard finally.
2. By this Petition under Article 227 of the Constitution of India, the Petitioner – Plaintiff takes exception to an order dated 14 October 2025 passed by the learned Judge, City Civil Court, whereby the application (Exh.13) filed in Suit No.3576 of 2010 by the Plaintiff to produce the board resolution on the record of the Court, came to be rejected.
3. Shorn of superfluities, the background facts leading to this Petition, can be summarized as under :
3.1 The Petitioner is a company incorporated under the Companies Act, 1956. The Respondent is also a company registered under the Companies Act, 1956. The Petitioner instituted a suit for recovery of the price of the air tickets procured by the Respondent through the Petitioner. At the instructions of the Defendant, the Plaintiff used to procure tickets and issue bills / invoices. An amount of Rs.3,50,579/- was outstanding as of 31 March 2007. Thus, the Plaintiff instituted a suit seeking recovery of the said amount alongwith interest @ 24% p.a., and, further interest.
3.2 Issues were settled and the trial commenced. After Mr. Mackenzie Miranda (PW1) was cross-examined, the Plaintiff filed an application seeking permission to place on record the board resolution dated 4 August 2025 passed by the Plaintiff’s company, confirming, approving and ratifying all acts, deeds, matters and things done, undertaken or caused to be done by Mr. Mackenzie Miranda in connection with and relating to the institution, conduct and prosecution of Suit No.3576 of 2010 filed against the Defendant.
3.3 The Defendant resisted the application on the ground that the Defendant had already challenged the authority of Mr. Miranda (PW1) to institute the suit and give evidence, by raising specific contentions in the written statement. Since the suit was instituted on 30 March 2010 and the resolution was passed on 4 August 2025, after the conclusion of the cross-examination of Mr. Miranda (PW1), the permission for producing the board resolution could not be granted when the matter was posted for final hearing. 3.4 By the impugned order, the learned Judge, City Civil Court was persuaded to reject the application observing, inter alia, that at the time of filing of the suit, only a simple authority letter was issued and it was a specific defence of the defendant that Mr. Miranda (PW1) had no authority to institute the suit and also an admission was elicited in the cross-examination of Mr. Miranda (PW1) and, therefore, the permission to produce the board resolution would cause serious prejudice to the defendant.
3.5 Being aggrieved, the Plaintiff has preferred this Petition.
4. I have heard Ms. Punita Arora, learned Counsel for the Petitioner, and Mr. Yashpal Jain, learned Counsel for the Respondent, at some length. With the assistance of the learned Counsel for the parties, I have perused the material on record.
5. Arora, learned Counsel for the Petitioner, submitted that, the learned Judge, City Civil Court, took a very hyper-technical view of the matter. It was not the case that no authorization was placed on record. In fact, wp 7782 of 2026.doc alongwith the affidavit in lieu of examination in chief of Mr. Miranda (PW1), the original authority letter issued by the Plaintiff Company dated 16 March 2023 was produced and also marked in evidence. The Plaintiff had already authorized Mr. Miranda (PW1), its Accounts Officer, to institute the suit. Therefore, the resolution passed in the meeting of the directors of the company held on 4 August 2025 to authorize and also to ratify the acts of Mr. Miranda (PW1) in connection with the suit, was sought to be placed on record. Thus, the learned Judge was not at all justified in observing that the production of the resolution could not have been allowed as it would cause serious prejudice to the Defendant.
6. Arora placed reliance on the judgment of the Division Bench of this Court in the case of New India Assurance Co. Ltd. V/s. M/s. Sesa Goa Ltd.1, wherein it was enunciated that, substantive rights should not be allowed to be defeated on account of procedural irregularities which are curable. The omission to produce the board resolution at an earlier point in time was, at least, an irregularity which could be cured.
7. Mr. Jain, learned Counsel for the Respondent – Defendant, stoutly countered the submissions canvassed on behalf of the Petitioner. The thrust of the submission of Mr. Jain was that there is a fundamental distinction between a procedural irregularity and the defect that goes to the root of the matter. In the case at hand, the very action of the institution of the suit was not backed by a board resolution. The Defendant had specifically raised the ground in its written statement that Mr. Miranda (PW1) had no authority to institute the suit. Thus, it was not the case of a mere irregularity of signing and verification of the pleadings which could be cured. On the contrary, there was a foundational defect in the filing of the suit as the board of directors of the Plaintiff company had not resolved to institute the suit. Such a defect cannot be cured by passing a resolution, that too after admissions were elicited in the cross-examination of Mr. Miranda (PW1). If the Plaintiff is permitted to place on record the board resolution which was passed on 4 August 2025 in relation to a suit instituted in the year 2010, the Defendant would be deprived of a valuable defence. Thus, the learned Judge, City Civil Court was fully justified in declining to grant permission to produce the board resolution on record.
8. In order to lend support to the aforesaid submissions, Mr. Jain placed
reliance on the judgment of the Supreme Court in the case of State Bank of Travancore V!s. Kingston Computes India Pvt. Ltd.2; a decision of the Madras High Court in the case of Schmenger GMBH and Company Leder V!s. Saddler Shoes Pvt. Ltd.3 and a judgment of the Telangana High Court in the case of M. Divya and Ors. V!s. M!s. Pavani Estates Pvt. Ltd.4
9. I have given anxious consideration to the aforesaid rival submissions canvassed across the bar. Incontrovertibly, the Plaintiff and Defendant both are corporate entities. The Plaintiff is a company registered under the Companies Act, 1956. Though the company is a legal entity, it can act only through its board of directors (National Small Industries Corp. Ltd. V/s. Harmeet Singh Paintal5).
10. Section 291 of the Companies Act, 1956 in a sense vests authority to exercise the powers and do things by and for the company in the board of directors. Sub-section (1) of Section 291, inter alia, provided that, subject to the provisions of that Act, the board of directors of the company shall be entitled to exercise all such powers and to do all such acts and things, as the company is authorized to exercise and do. Of necessity, the company has to act through human agency.
11. In the context of the institution of suits by or against a corporate entity, Order XXIX of the Code of Civil Procedure, 1908 (“the Code, 1908”), makes provisions. Rule 1 of Order XXXIX, inter alia, provides 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.
12. On plain terms, Rule 1 of Order XXIX deals with the signing andverification of the pleadings on behalf of the corporation. Such pleading can be signed and verified by the secretary or by any director or other principal officer of the company who is able to depose to the facts of the case. Thus, apart from the persons designated by their office, namely, the secretary or director, any other principal officer of the corporation who has knowledge about the facts, may act, sign and verify the pleadings.
13. At this juncture, it may be contextually relevant to note that the provisions contained in Order VI Rule 14 of the Code, 1908. It provides that every pleading shall be signed by the party and his pleader, if any. The proviso to Rule 14 addresses a situation where a party is unable to sign the pleading. In such a situation, the pleading may be signed by any person duly authorized by him to sign the same or to sue or defend on his behalf.
14. In the case at hand, the controversy sought to be raised on behalf of the Defendant revolves around the question of authority to institute the suit. The Defendant had raised a contention that Mr. Miranda (PW1) had no authority to institute the suit. It emerges from the record that the suit was instituted on the basis of a letter of authority given by the executive director of the Plaintiff’s company. In the cross-examination of Mr. Miranda (PW1), it was elicited that no resolution was passed by the board of directors of the company authorizing him to depose. He went on to concede that in the letter of authority (Exh.9) it was not mentioned that the board had passed a resolution authorizing him to depose.
15. In the light of the aforesaid material, and purported admissions elicited in the cross-examination of Mr. Miranda (PW1), it was submitted on behalf of the Defendant that the production of the board resolution purportedly passed on 4 August 2025, a couple of days after the conclusion of the cross-examination of Mr. Miranda (PW1), would be legally impermissible. The production of the board resolution was not a mere removal of a curable defect, but had the propensity to deprive the defendant of a valuable right accrued to it on account of the foundational defect in the institution of the suit.
16. It is trite, the authority to institute the suit and the authority to sign and verify the plaint are conceptually distinct. However, the overarching principle that ultimately governs the procedural matters, cannot be lost sight of. Whether there was indeed authorization for the institution of the suit, is a matter which would warrant adjudication at the trial. At this juncture, the consideration is confined to the question as to whether the learned Judge, City Civil Court was justified in rejecting the prayer to produce the board resolution on record ?
17. The distinction in the matter of authority to institute the suit and authority to sign and verify the pleadings, sought to be strenuously pressed into service by Mr. Jain, to bolster up the submission that the production of the board resolution itself is legally impermissible, appears to be inapposite. If eventually the learned Judge comes to the conclusion that there was no decision and authorization to institute the suit, the consequences in law may follow. That aspect in the considered view of this Court, ought not to have influenced the determination as to whether the production of the board resolution authorizing and ratifying the actions of Mr. Miranda (PW1) can be permitted or not.
18. The decision in the case of State Bank of Travancore (supra), on which heavy reliance was placed by Mr. Jain, turned on the peculiar facts. In that case, the suit was instituted by a corporate entity through Mr. Ashok K. Shukla, who described himself as one of the directors of the company and claimed that he was authorized by Mr. Raj K. Shukla, Chief Executive Officer of the Company to sign and verify the plaint and file the suit for recovery on behalf of the company. In the trial, it transpired that no evidence was adduced to prove that Ashok K. Shukla was appointed as a director of the company and that a resolution was passed by the board of directors of the company to institute the suit and the board had authorized Ashok K. Shukla to do so.
19. In that context, the Supreme Court held that the letter of authority issued by Raj K. Shukla who described himself as CEO of the Company, was nothing but a scrap of paper because no resolution was passed by the board of directors delegating its powers to Raj K Shukla to authorize another person to file a suit on behalf of the company.
20. The aforesaid decision does not squarely govern the facts of the case at hand, as the suit was purportedly instituted on the basis of an authority letter issued by the executive director of the Plaintiff’s company. It would, thus, warrant investigation into facts as to whether there was a lawful authorization to institute the suit.
21. In the case of Schmenger GMBH (supra), the learned Single Judge of the Madras High Court, after referring to the judgment of the High Court of Himachal Pradesh in the case of Apple Valley Resort V/s. H.P.State Elec. Board6 observed that the question of authority to institute an action on behalf of a company is not a technical matter; it has far-reaching effects and it often affects the policy and finances of the company and, therefore, unless a power to institute an action is specifically conferred on a particular Director, he would have no authority to bring an action on behalf of the company. On that premise, the learned Single Judge found that there was no scrap of paper to show as to whether the Liaison officer who had instituted the suit was competent person authorized by the board of directors to verify the plaint and institute the suit and, thus, the said suit was not maintainable.
22. Suffice to note that, the decision turned on its peculiar facts, especially the failure of the Plaintiffs therein to demonstrate that the Liaison Officer who signed and verified the plaint was authorized to do so.
23. In the case of M. Divya and Ors. (supra), a learned Single Judge of the Telangana High Court, expounded the distinction between the procedural irregularity and the foundational defect, in the following words :
“28. There is a marked distinction between a procedural correction of facts and a defect which strikes at the foundation of a pleading or the institution of a suit. There are several instances of defects which can subsequently be corrected/cured. Such instances would include defective verification, defective signing, or even a delayed filing of an authorisation. However, these examples cannot be equated with an absence of authority at the very inception of filing of the document.
29. The present case falls under the latter category, namely, the avowed absence of authority of Mr. Archit Reddy at the time of filing of the Suit on behalf of the respondent/plaintiff. This is by reason of the fact that the subsequent Resolution dated 18.06.2025, for ratifying the earlier Resolution dated 29.08.2016, seeks to replace the original basis of the authority altogether. Hence, this is not a mere substitution or procedural correction but an erosion of the very foundation of the authority on which Mr. Archit Reddy filed the Suit on behalf of the plaintiff in 2016. (underlined for emphasis)
30. The plaintiff had knowledge, at the relevant point of time in 2016, that Mr. Archit Reddy did not have the authority to file the Plaint under the Resolution dated 29.08.2016 since he was not a Director of the Company at that point of time. The Resolution authorising Mr. Archit Reddy was taken by the Board of Directors. Hence, the plaintiff was naturally aware that the Resolution dated 29.08.2016 contained an error in the description of Mr. Archit Reddy as a Director of the plaintiff Company. In other words, this was not a defect which was discovered subsequently or one that occurred through inadvertence in 2016.”
24. The learned Single Judge concluded that the principle remains that a party cannot seek to remove a foundational defect or convert a non-director into a director for the purpose of validating the institution of the suit.
25. In contrast to the aforesaid decisions, the judgment of the Supreme Court in the case of United Bank of India V/s. Naresh Kumar and Ors.7, which was followed by a Division Bench of this court in the case of Sesa Goa Pvt. Ltd. (supra), exposits the approach of the Court in the matter of appraising the procedural defects in instituting proceedings on behalf of a corporate entity. In the said case, the suit was instituted by the bank through one of its officers to recover the money advanced by way of loan to the defendants therein. The authority of the said officer to sign and file the plaint on behalf of the bank was questioned by the defendants. The trial Court returned a finding that the suit was not duly signed and verified by a competent person and, on that count, dismissed the suit. The first Appellate Court confirmed the aforesaid finding of the trial Court. The Second Appeal was also dismissed in limine by the High Court.
26. The only question that arose before the Supreme Court was, whether the plaint was duly signed and verified by a competent person ? The Supreme Court enunciated that the procedural defects which do not go to the root of the matter should not be permitted to defeat a just cause. The Code empowers the Court to ensure that injustice is not done to any party who has a just case. As far as possible a substantive right should not be allowed to be defeated on account of a procedural irregularity which is curable.
27 In addition to delineating the aforesaid approach expected of the Court in construing the procedural provisions, the Supreme Court construed the import of the provisions of Order XXIX Rule 1 of the Code and in terms observed that, dehors the said provisions, as a company is a juristic entity, it can duly authorize any person to sign the plaint or the written statement on its behalf and this would be regarded as sufficient compliance with the provisions of Order VI Rule 14 of the Code. Even in the absence of authorization and in cases where pleadings have been signed by one of its officers a Corporation can ratify the said action of its officer in signing the pleadings. Such ratification can be express or implied. The Court can on the basis of the evidence on record, and after taking all the circumstances of the case, specially with regard to the conduct of the trial, come to the conclusion that the corporation had ratified the act of signing of the plead by its officer.
28. It is true, the aforesaid decision was rendered where a suit was instituted on behalf of the Public Corporation and the Supreme Court has in that context, observed that the public interest should not be permitted to be defeated on a mere technicality. However, the principle underlying the aforesaid enunciation of law cannot be lost sight of.
29. The Supreme Court has observed in clear and explicit terms that, even in the absence of an express resolution of the board of directors or power of attorney where the pleadings have been signed by one of the officers of the company, the company can ratify the said action of its officer in signing the pleadings. Such ratification can be express or implied from the circumstances of the case and the conduct of the trial.
30. It could be urged that the aforesaid decision in the case of United Bank of India (supra), is confined to procedural aspect of signing and verification of the pleadings. That, in the considered view of this Court, would be taking a constricted view of the wider terms in which the Supreme Court has enunciated the law so that the substantive rights of the parties are not scarified at the alter of procedural strictness.
31. A profitable reference can be made to a judgment of the Supreme Court in the case of Sangram Singh Vs Election Tribunal Kotah And Anr,8 wherein the spirit in which the questions about procedure are to be approached and the manner in which rules relating to them are to be interpreted, were expounded in the following words:
“16. N ow a code of procedure must be regarded as such. It is procedure, something designed to facilitate justice and further its ends: not a penal enactment for punishment and penalties; not a thing designed to trip people up. Too technical a construction of sections that leaves no room for reasonable elasticity of inter pretation should therefore be guarded against (provided always that justice is done to both sides) lest the very means designed for the furtherance of justice be used to frustrate it.”
(emphasis supplied)
32. In the case of Anvita Auto Tech Works Pvt Ltd Vs Aroush Motors And Anr,9 the Supreme Court again reiterated that the object of the procedural rules is to advance the cause of justice and not to thwart it and when the rigid adherence to technicalities of procedure causes injustice, Courts have to come to the rescue by adopting a liberal approach. The Courts cannot countenance a situation where substantial justice is sacrificed at the altar of procedural rigidity.
33. Undoubtedly, in the case of State Bank of Travancore (supra), the Supreme Court has enunciated that, where a suit is instituted on behalf of the corporate entity and it fails to establish that there was authorization for the institution of the suit and the person who instituted the suit and signed the plaint was authorized to do so, the suit would fail.
34. However, in a given case, whether such authorization is proved or not is a matter for appreciation at the trial, on the basis of the material produced before the Court, attendant circumstances of the case and the conduct of the trial as a whole. So construed, in the considered view of this Court, both the decisions in the cases of United Bank of India (supra), State Bank of Travancore (supra), would operate in their respective spheres.
35. On the touchstone of the aforesaid legal conspectus, re-adverting to the facts of the case, the view of the learned Judge, City Civil Court that the production of the resolution passed by the board of the Plaintiff company would cause serious prejudice to the Defendant appears to be unsustainable. The board resolution, if permitted to be produced, would indicate that the plaintiff company had passed such a resolution to acknowledge the authorization, further authorize and also ratify the actions taken by Mr. Miranda (PW1) on behalf of the company, in connection with the said suit.
36. Whether the said resolution was lawful and valid ? Whether the company had authorized Mr. Miranda (PW1) to institute the suit, sign and verify the plaint ? If there was no such authorization, whether by the said resolution the Plaintiff company could ratify the actions of Mr. Miranda (PW1) in connection with the said suit, including its institution ? are all matters which would warrant determination at the stage of final adjudication of the suit. Therefore, in the considered view of this Court, the learned Judge, City Civil Court, could not have disallowed the very production of the resolution dated 4 August 2025, at the threshold.
37. For the foregoing reasons, the impugned order deserves to be interfered with and the Writ Petition deserves to be allowed by permitting the Plaintiff to tender the resolution dated 4 August 2025.
38. Hence, the following order :
ORDER
i. The Writ Petition stands partly allowed.
ii. The impugned order stands quashed and set aside.
iii. The Application seeking permission to produce the board resolution dated 4 August 2025 stands allowed.
iv. The Plaintiff is permitted to produce the said resolution on the record of the Court.
v. It is, however, clarified that the questions as to whether the said resolution can be read in evidence, whether there was authorization for the institution of the suit and what is the effect of the said resolution dated 4 August 2025 on the aspect of the maintainability of the suit, shall be decided by the trial Court on merit and in accordance with law.
vi. Rule made absolute to the aforesaid extent.
vii. No costs.
Notes:
1 2020(5) Mh.L.J. 66
2 (2011) 11 SCC 524
3 2010 SCC Online Mad 6539
4 Civil Revision Petition No.3848 of 2025 dt. 1 July 2026
5 (2010) 3 SCC 330
6 (2004) 118 Comp Cas 328
7 AIR 1997 SC 3
8 AIR 1955 SC 425.
9 2025 SCC OnLine SC 2181.
