Analysis of Order III Rule 2 CPC

The Ambit of 'Recognised Agents' under Order III Rule 2 CPC: A Judicial Disquisition on the Powers and Limitations of Power of Attorney Holders in Indian Civil Litigation

Introduction

The Code of Civil Procedure, 1908 (CPC) provides a comprehensive framework for the conduct of civil proceedings in India. Central to this framework is Order III, which governs the appearance of parties and their representation by recognised agents or pleaders. Specifically, Order III Rule 2 delineates who may be considered 'recognised agents' capable of acting on behalf of a party. Among these, persons holding a Power of Attorney (PoA) feature prominently. The utility of a PoA holder in civil litigation is undeniable, offering flexibility and convenience, particularly for parties unable to personally attend to court matters. However, the precise scope of "appearances, applications and acts" that a PoA holder is authorised to make or do under Order III Rule 2(a) has been a subject of considerable judicial scrutiny. This article undertakes a scholarly analysis of Order III Rule 2 of the CPC, focusing on the powers and, more significantly, the limitations of PoA holders as expounded by the Indian judiciary. It will trace the evolution of judicial interpretation, highlighting the critical distinction drawn between procedural representation and the substantive act of adducing evidence, especially concerning matters within the principal's personal knowledge. The judicial endeavor has been to balance the facilitation of justice through agency with the fundamental requirements of a fair trial, including the sanctity of personal testimony subject to cross-examination.

The Statutory Framework: Order III Rules 1 and 2 of the Code of Civil Procedure, 1908

Order III of the CPC begins by laying down the general methods by which a party can engage with the court. Order III Rule 1 states: "Any appearance, application or act in or to any Court, required or authorised by law to be made or done by a party in such Court, may, except where otherwise expressly provided by any law for the time being in force, be made or done by the party in person, or by his recognised agent, or by a pleader appearing, applying or acting, as the case may be, on his behalf: Provided that any such appearance shall, if the Court so directs, be made by the party in person."

This provision establishes three primary modes of engagement: personal appearance, appearance through a recognised agent, or appearance through a pleader. The concept of 'recognised agent' is then elaborated in Order III Rule 2, which provides:

"The recognised agent of parties by whom such appearances, applications and acts may be made or done are—

  • (a) persons holding powers-of-attorney, authorising them to make and do such appearances, applications and acts on behalf of such parties;
  • (b) persons carrying on trade or business for and in the names of parties not resident within the local limits of the jurisdiction of the Court within which limits the appearance, application or act is made or done, in matters connected with such trade or business only, where no other agent is expressly authorised to make and do such appearances, applications and acts."

This article primarily concerns itself with clause (a) of Order III Rule 2, pertaining to PoA holders. The legislative intent is clearly to enable parties to delegate certain functions related to litigation, thereby ensuring that their inability to be personally present does not impede access to justice or the progress of their case.

Judicial Interpretation of "Appearances, Applications and Acts" by Recognised Agents

The phrase "appearances, applications and acts" in Order III Rule 2(a) is expansive, yet its interpretation has been nuanced by courts to prevent misuse and uphold the integrity of judicial proceedings. The judiciary has distinguished between various types of acts a PoA holder can perform.

General Authority for Procedural Conduct

It is well-established that a PoA holder can undertake a wide array of procedural actions on behalf of the principal. This includes signing and verifying pleadings, filing applications, instructing counsel, and generally managing the litigation process. The Supreme Court in United Bank Of India v. Naresh Kumar And Others[1], while dealing with Order XXIX Rule 1 CPC (concerning suits by or against corporations), touched upon the principle of presumed authority and ratification, which is analogous to the authority vested in a PoA holder. If a corporation allows a suit to proceed, it is deemed to have ratified the authority of the signatory, a principle that can extend to acts by PoAs.[1]

The Supreme Court in Shankar Finance And Investments v. State Of Andhra Pradesh And Others[5] held that a complaint under Section 138 of the Negotiable Instruments Act, 1881, can be filed by a PoA holder on behalf of the payee. The Court clarified that the PoA holder acts as an agent, and their actions in initiating proceedings are tantamount to those of the principal, provided the PoA is valid and authorizes such acts.[5] This underscores the competence of PoA holders in initiating legal proceedings.

Furthermore, procedural defects related to representation by an agent, such as an improperly executed vakalatnama or issues with the PoA itself, are generally considered rectifiable. In Uday Shankar Triyar v. Ram Kalewar Prasad Singh And Another[7], the Supreme Court emphasized that procedural defects, if not deliberate and curable, should not overshadow substantive justice, allowing for amendments to ensure proper representation.[7]

The Demarcation: Acting on Behalf v. Deposing as a Witness

The most contentious aspect regarding the powers of a PoA holder under Order III Rule 2 has been whether the term "acts" includes the act of deposing (giving evidence) in court on behalf of the principal. The judiciary has, through a series of landmark pronouncements, clarified this issue significantly.

An early and influential view was expressed by the Rajasthan High Court in Shambhu Dutt Shastri v. State Of Rajasthan And Ors.[3]. The Court held that while a general PoA holder can appear, plead, and act on behalf of a party, they cannot become a witness *on behalf of* that party. The PoA holder can only appear in their own capacity and testify to facts within their personal knowledge; they cannot delegate the power to appear in the witness box on behalf of the principal.[3] This distinction between acting as an agent for procedural matters and acting as a witness for substantive testimony became a cornerstone of subsequent jurisprudence.

The Supreme Court definitively addressed this issue in Janki Vashdeo Bhojwani And Another v. Indusind Bank Ltd. And Others[8]. The Court unequivocally held that Order III Rules 1 and 2 of the CPC do not empower a PoA holder to depose *for* their principal. It was clarified that the word "acts" in Order III Rule 2(a) refers to acts done by the PoA holder in the exercise of powers granted to them by the instrument but does not include deposing in place of and instead of the principal.[8] The Court reasoned that if the principal does not appear in the witness box to state their own case and does not offer themselves for cross-examination, an adverse inference may be drawn. A PoA holder cannot depose on matters which are within the exclusive personal knowledge of the principal.[8]

This position was reiterated and further clarified by the Supreme Court in A.C Narayanan v. State Of Maharashtra And Another[4], [19]. The Court, affirming Janki Vashdeo Bhojwani[8], held that a PoA holder can file a complaint (e.g., under Section 138 of the NI Act) and can also depose on behalf of the principal. However, this is subject to the crucial condition that the PoA holder must have witnessed the transaction as an agent or must possess due knowledge of the facts. The PoA holder must explicitly assert this personal knowledge in the complaint or deposition.[4], [19] The Court emphasized that a PoA holder cannot depose for the principal in respect of matters of which only the principal can have personal knowledge and in respect of which the principal is liable to be cross-examined.[4], [19]

The Supreme Court in S. Kesari Hanuman Goud v. Anjum Jehan And Others[6] also reinforced these limitations, noting that a PoA holder cannot depose on behalf of the principal for matters outside the scope of the authority granted or on matters requiring the principal's personal testimony.[6]

The Kerala High Court in Ratheesh Kumar v. Jithendra Kumar T. Lodhaya[20], following the Supreme Court's dicta, provided a detailed analysis, concluding that the term "acts" in Order III Rule 2 would not include deposing in place of and instead of the principal, especially for acts done by the principal or matters within the principal's exclusive knowledge.[20]

The "Personal Knowledge" Caveat for PoA Holders

While a PoA holder cannot step into the shoes of the principal to give evidence on matters exclusively known to the principal, they are not entirely barred from the witness box. A PoA holder can depose in their own capacity regarding:

  • Acts performed by them personally in pursuance of the PoA.
  • Facts of which they have direct, personal knowledge.
This was clearly articulated in A.C. Narayanan[4], [19], where the requirement of personal knowledge and its assertion was made paramount for a PoA holder to depose. The Andhra Pradesh High Court in Randhi Seethamma v. Silla Venkata Ramana[16] also observed that Order III CPC does not exhaustively deal with the power of a PoA holder to depose and suggested that a PoA holder could depose regarding acts performed by them under the authority of the PoA, as these would be within their personal knowledge.[16] This aligns with the principle that any witness must testify to facts within their own knowledge.

Specific Applications and Procedural Nuances

Signing, Verification, and Presentation of Pleadings

The authority of a PoA holder to sign, verify, and present pleadings is generally accepted, provided the PoA document grants such authority. However, the scope of the PoA is critical. In Church Of Christ Charitable Trust & Educational Charitable Society v. Ponniamman Educational Trust[2], the Supreme Court noted that a PoA presented was not expressly authorized to execute a sale agreement, highlighting the importance of specific authorization for particular acts.[2]

The High Courts of Telangana and Andhra Pradesh, in Mrs. Ruhina Khan And Another Petitioners v. Abdur Rahman Khan And Others S[14], [15], dealt with the presentation of plaints by PoA holders and compliance with local Civil Rules of Practice (such as Rules 32 and 33, which may require an affidavit from the PoA holder or the principal). It was observed that the presentation of a plaint, signed and verified by a PoA holder, coupled with the PoA itself, might be sufficient. Importantly, defective presentation of a plaint by a PoA holder is generally considered a curable irregularity and does not automatically lead to rejection under Order VII Rule 11 CPC.[14], [15] The principal can also ratify the acts of the agent, including the filing of a suit.[15]

The Overruled Perspective: Humberto Luis

For a period, there was a divergent view, notably from the Bombay High Court in Humberto Luis And Another v. Floriano Armando Luis And Another[18]. In this case, the High Court held that the provisions of Order III Rule 2 CPC could not be construed to disentitle a PoA holder from deposing on behalf of their principal, suggesting that the word "act" appearing in Order III Rule 2 CPC included the act of "deposing".[18]

However, this interpretation was explicitly disapproved and overruled by the Supreme Court. In Janki Vashdeo Bhojwani[8], the Supreme Court stated, "We are unable to agree with this view taken by the Bombay High Court in Floriano Armando". This position was reaffirmed in A.C. Narayanan[4], [19]. The Kerala High Court in Ratheesh Kumar[20] and the Madras High Court in Shanthi v. Kolandaivel Others[24] also noted the overruling of the Humberto Luis[18] perspective.

Conclusion

The jurisprudence surrounding Order III Rule 2 of the CPC, particularly concerning Power of Attorney holders, has evolved to a settled position. Recognised agents, including PoA holders, play an indispensable role in facilitating civil litigation by performing various procedural "appearances, applications and acts" on behalf of their principals. This includes the institution of suits, signing and verification of pleadings, and other procedural steps, provided they are duly authorized.

However, the judiciary has drawn a clear line of demarcation: a PoA holder cannot act as a proxy for the principal in the witness box to depose on matters that are within the exclusive personal knowledge of the principal. The term "acts" in Order III Rule 2(a) does not encompass such substitutionary evidence. A PoA holder may depose only to facts within their personal knowledge, including acts performed by them under the PoA, and must explicitly assert such knowledge. This judicial stance harmonizes the procedural convenience afforded by agency representation with the fundamental principles of evidence, which demand personal testimony for matters requiring direct knowledge and for effective cross-examination. The clarity and specificity of the Power of Attorney document remain crucial in defining the scope of the agent's authority, while the courts retain the discretion to direct the personal appearance of the party when deemed necessary.

References

  1. United Bank Of India v. Naresh Kumar And Others (1996 SCC 6 660, Supreme Court Of India, 1996)
  2. Church Of Christ Charitable Trust & Educational Charitable Society v. Ponniamman Educational Trust (2012 SCC 8 706, Supreme Court Of India, 2012)
  3. Shambhu Dutt Shastri v. State Of Rajasthan And Ors. (1986 WLN 2 713, Rajasthan High Court, 1985)
  4. A.C Narayanan v. State Of Maharashtra And Another (2014 SCC 11 790, Supreme Court Of India, 2013)
  5. Shankar Finance And Investments v. State Of Andhra Pradesh And Others (2008 SCC 8 536, Supreme Court Of India, 2008)
  6. S. Kesari Hanuman Goud v. Anjum Jehan And Others (2013 SCC 12 64, Supreme Court Of India, 2013)
  7. Uday Shankar Triyar v. Ram Kalewar Prasad Singh And Another (2006 SCC 1 75, Supreme Court Of India, 2005)
  8. Janki Vashdeo Bhojwani And Another v. Indusind Bank Ltd. And Others (2005 SCC 2 217, Supreme Court Of India, 2004)
  9. State Bank Of Patiala v. Chandermohan (Delhi High Court, 1996)
  10. M/S. Hindusthan Steel Ltd. v. Prakash Chand Agarwal And Another (Orissa High Court, 1969)
  11. Om Prakash Agarwal Since Deceased Through Legal Representatives And Others v. Vishan Dayal Rajpoot And Another (Supreme Court Of India, 2018)
  12. Namcleo Sakharam Meshram v. Motila Udaichand Jain . (Bombay High Court, 1974)
  13. M/S. Kuvarp Industries And Another v. State Bank Of Mysore . (Karnataka High Court, 1984)
  14. Mrs. Ruhina Khan And Another Petitioners v. Abdur Rahman Khan And Others S (Telangana High Court, 2018)
  15. Mrs. Ruhina Khan and anot v. Abdur Rahman Khan and ot (Andhra Pradesh High Court, 2018)
  16. Randhi Seethamma v. Silla Venkata Ramana (Andhra Pradesh High Court, 2009)
  17. Sadguru Saran v. Nagar Mahapalika And Another (Allahabad High Court, 2018)
  18. Humberto Luis And Another v. Floriano Armando Luis And Another (Bombay High Court, 1999)
  19. A.C Narayanan v. State Of Maharashtra And Another (2014 SCC 11 790, Supreme Court Of India, 2013) [Duplicate of Ref 4, as provided]
  20. Ratheesh Kumar v. Jithendra Kumar T. Lodhaya (2005 SCC ONLINE KER 178, Kerala High Court, 2005)
  21. N. Suresh v. N. Ranjani (2014 SCC ONLINE MAD 125, Madras High Court, 2014)
  22. Bengal Waterproof Limited v. Bombay Waterproof Manufacturing Company And Another (1997 SCC 1 99, Supreme Court Of India, 1996)
  23. Wing Cdr. Megh Raj Gupta (Retd.) v. Wing Cdr. K.K. Gupta (Retd.) (1996 SCC ONLINE DEL 352, Delhi High Court, 1996)
  24. Shanthi v. Kolandaivel Others (Madras High Court, 2009)