Chhattisgarh HC Sets Aside ₹22.2 Lakh Bus-Hire Decree Against Jai Balaji Industries, Finding Plaintiff Failed To Prove Contract, Bus Engagement Or Authority To Sue

Durg Roadways Pvt. Ltd., through its Managing Director Nemichand Naher, claimed that Jai Balaji Industries Ltd. had hired two buses under an agreement dated 14 August 2013, but failed to pay the agreed hire charges.

Naher sought recovery of ₹24,95,278, including alleged arrears and a security deposit.

The trial court partly decreed the suit for ₹22,20,512 with interest, relying principally on a purported work order, Exhibit P-1, and its finding that the defendant had made part-payments.

Jai Balaji appealed, disputing the proof of the contract and liability and challenging Naher’s authority to sue on behalf of Durg Roadways.

The court applied Order VI Rule 2 CPC, requiring material facts to be pleaded, and the evidentiary principle that pleadings must be proved by evidence.

It relied on LIC v. Ram Pal Singh Bisen, holding that merely marking a document as an exhibit does not prove its execution or contents; and on Punjab Urban Planning & Development Authority v. Shiv Sarswati Iron & Steel Re-rolling Mills, affirming that a plaintiff must succeed on its own case, not on the weakness of the defence.

Under Order XXIX Rule 1 CPC, a corporation’s specified officers may sign and verify pleadings, but that provision does not itself confer authority to institute a suit.

The court also applied Sections 2(20), 2(51), 2(54), and 9 of the Companies Act, 2013, concerning corporate status, managerial roles, and the company’s capacity to sue in its own name.

It relied on Nibro Ltd. v. National Insurance Co. Ltd. and State Bank of Travancore v. Kingston Computers India Pvt. Ltd. for the requirement that authority to institute proceedings on a company’s behalf be established.

The court found that the plaintiff did not produce the alleged agreement and did not adequately identify or prove the signatory to Exhibit P-1; marking the work order as an exhibit was insufficient to establish its execution.

Nor did the plaintiff plead or prove particulars of the buses, their engagement, or relevant permits.

The claimed part-payment of ₹13,79,488 was not supported by admissible documentary evidence; the defendant’s failure to produce bank statements did not discharge the plaintiff’s burden of proof.

Separately, the suit was brought by Naher in his own name, and he produced no corporate resolution, articles of association, or other evidence establishing his authority to sue for the company.

The trial court therefore erred in treating the work order, alleged payments, and absence of a reply to the demand notice as sufficient proof of the claim.

The appeal was allowed, and the trial court’s judgment and decree dated 30 October 2019 were set aside; the parties were directed to bear their own costs.