Can a Company sue as an indigent person under Order XXXIII of the CPC?

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This is the short question that this post seeks to address. Fortunately, this question has already been addressed by a 2001 SC judgment and we need not therefore, re-invent the wheel, and can safely ride on the shoulder of this giant (a Supreme Court judgment).

The judgment under discussion is : Union Bank Of India vs Khader International (2001 SC) and can be accessed here. 

The facts of the case are pretty straightforward and lie in a narrow compass:

  • The Application : An application was filed by a public listed company seeking permission to sue as an indigent (in forma pauperis) in exercise of right under Order XXXIII of the CPC.
  • The Objections of the opposite party :
    • The opposite party raised objections and contended that the plaintiff being a public limited company was not a ‘person’ coming within the purview of Order XXXIII, Rule 1 CPC, and the word ‘person’ referred to therein applies only to a natural person and not to other juristic persons.
    • Order XXXIII, Rule 1 is followed by an Explanation to provide for as to who shall be considered an ‘indigent person’; and for this purpose an ‘indigent person’ is one who is not possessed of sufficient means [other than property exempt from attachment in execution of a decree and the subject-matter of the suit] to enable him to pay the fee prescribed by law for the plaint in such suit; or where no such fee is prescribed, if he is not entitled to property worth one thousand rupees other than the property exempt from attachment in execution of a decree, and the subject-matter of the suit.
    • It was argued that : what is important to note is that prior to the amendment of Rule 1 of Order XXXIII, CPC, an ‘indigent person’ was mentioned in the Explanation to Rule 1 of Order XXXIII as a person who is not entitled to property worth one hundred rupees other than his necessary wearing apparel and the subject-matter of the suit. This, it was argued, indicated the ‘person’ mentioned in Rule 1 of Order XXXIII which refers only to natural person and not other juridical person.
    • It was also submitted by the appellant’s counsel that under Rule 3 of Order XXXIII, the application to sue as an indigent person shall be presented to the Court by the applicant in person unless he is exempted from appearing in court in which case the application may be presented by an authorised agent.
    • Placing reliance on the above, it was argued that a public limited company being a juristic person cannot present an application in accordance with Rule 3 of Order XXXIII.
    • Further, it was argued that under Rule 3, the person who is presenting the application must be such person who can answer all material questions relating to the application and therefore, the scheme of Order XXXIII of the CPC envisages only a natural person to file a suit as an indigent person.
  • Rebuttal : 
    • It was argued in rebuttal that Order XXXIII is a benevolent provision intended to help the litigants who are unable to pay the court fee at the initial stage and that the said provision is to be construed liberally.
    • It was argued that when a company, firm, deity, etc. are permitted to file a suit in their juristic capacity, there is no reason why they should not be allowed to sue as an indigent person.
    • Further, and most importantly, the definition of the word ‘person’ contained in the General Clauses Act will apply and that extended meaning is to be attributed to the word ‘person’ referred to in Order XXXIII. This is important since CPC does not define a “person”.

Court’s Reasoning and acceptance of the proposition that a Company is a person for the purpose of Order 33 CPC and, therefore, in a position to sue informa pauperis: 

  • Order XXXIII, CPC is an enabling provision which allows filing of a suit by an indigent person without paying the court fee at the initial stage. If the plaintiff ultimately succeeds in the suit, the court would calculate the amount of court fee which would have been paid by the plaintiff if he had not been permitted to sue as an indigent person and that amount would be recoverable by the State from any party ordered by the decree to pay the same.
  • It is further provided that when the suit is dismissed, then also the State would take steps to recover the court fee payable by the plaintiff and this court fee shall be a first charge on the subject matter of the suit.
  • So there is only a provision for the deferred payment of the court fees and this benevolent provision is intended to help the poor litigants who are unable to pay the requisite court fee to file a suit because of their poverty.
  • Explanation I to Rule 1 of Order XXXIII states that an indigent person is one who is not possessed of sufficient amount (other than property exempt from attachment in execution of a decree and the subject matter of the suit) to enable him to pay the fee prescribed by law for the plaint in such suit. It is further provided that where no such fee is prescribed, if such person is not entitled to property worth one thousand rupees other than the property exempt from attachment in execution fo a decree, and the subject matter of the suit he would be an indigent person.
  • Prior to the passing of the CPC (Amendment) Act 104 of 1976, the term “indigent person” had a slightly different Explanation. In that Explanation, it was stated that a person is a pauper when he is not possessed of sufficient means to enable him to pay the fees prescribed by law for the plaint in such suit, or where no such fee is prescribed, if he is not entitled to property worth one hundred rupees other than his necessary wearing apparel and the subject matter of the suit. The expression ‘other than his necessary wearing apparel’ was deleted by CPC Amendment Act No. 104 of 1976. These words had assumed some importance in attributing the meaning ‘natural person’ to the word ‘person’ mentioned in Order XXXIII. A company, idol or other juristic person cannot have the wearing apparel. However, as these words are now deleted by the Amending Act No. 104 of 1976, the present Explanation I need alone be taken to construe the meaning of the term ‘person’ in Order XXXIII. In the CPC, though the term ‘person’ occurs in several other parts, it is not defined in the Code. Therefore, GC Act needs to be resorted to, where “person” includes a juristic person” 
  • The Court repelled the contention that since an application is required to be moved by the indigent himself/herself/itself, a company cannot be construed as “person” since it cannot present the application itself. This was held to be an incorrect reading. A Company can very well file a suit through its Authorised representatives etc. A company being a juristic person, it would be represented by a person competent to represent it. It is enough that a person competent to represent a company need present the application under Rule 3 of Order XXXIII. Minors, lunatics or persons under any disability are also entitled to file suit either represented through a guardian or next friend. They can also maintain an application under Order XXXIII. Under such circumstances, the real petitioner is not the person to present the application, but the guardian or the next friend who is competent to represent such petitioner to present the application under Rule 3, Order XXXIII. Therefore, to give meaning to the word ‘person’, the procedure prescribed under Rule 3 has no significance.
  • Finally, the court decided the issue in favour of ‘Company’ being a person for the purpose of Order 33 CPC in the following words: 

“Therefore, the word ‘person’ has to be given its meaning in the context in which it is used. It refers to a person who is capable of filing a suit and this being a benevolent provision, it is to be given an extended meaning. Therefore, we are of the view that a public limited company, which is otherwise entitled to maintain a suit as a legal person, can very well maintain an application under Order XXXIII, Rule 1 CPC. We hold that the word ‘person’ mentioned in Order XXXIII includes not only a natural person but other juridical persons also. The appeal is, therefore, without any merit and dismissed without any order as to costs”

 

4 comments

  1. Thank you Sir. Your blogs are very helpful in understanding concepts and solving applied questions. Specially, concepts which are latent to the provision.

    Like

  2. On 25-Dec-2017 5:53 pm, “Rahul’s IAS – The Official Blog” wrote:

    > TheJurist posted: “This is the short question that this post seeks to > address. Fortunately, this question has already been addressed by a 2001 SC > judgment and we need not therefore, re-invent the wheel, and can safely > ride on the shoulder of this giant (a Supreme Court judg” >

    Like

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