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SUPREME COURT OF INDIA
Dr. B.S. CHAUHAN, FAKKIR MOHAMED IBRAHIM KALIFULLA, JJ.
Bhagwati Developers Private Ltd. – Appellant
Versus
The Peerless General Finance Investment Company Limited & Ors.
– Respondents
CIVIL APPEAL NOs. 361-362 of 2005
Decided On : 04-04-2013
AIR 2008 SC 1738; AIR 1954 SC 251; AIR 2005 SC 1624 - Relied upon
(b) Companies Act, 1956 - Section 399 - Consent of a share holder - Personal consent is not mandatory - It can be given through Power of Attorney. (Para 10)
AIR 1994 SC 2258; AIR 2005 SC 83 - Relied upon
(c) Companies Act, 1956 - Section 397 and 398 - Company petition filed with consent of other share holders - Must be treated as in representative capacity - Withdrawing such petition by original petitioner - Would not render company petition non-existent or non-maintainable - Consenting parties entitled to be transposed as petitioner - Additionally, even upon withdrawal petition by original petitioner Court not bound to dismiss the company petition - It can be heard on merits. (Para 11)
(d) Code of Civil procedure, 1908 - Order XXIII Rule 1 (5) - Suit filed in representative capacity - Cannot be withdrawn by plaintiff alone without consent of other parties - Order allowing such withdrawal will be without jurisdiction. (Para 20)
AIR 1922 Pat. 489; AIR 1934 All. 4; AIR 1950 Bom. - Cited with approval
(e) Interpretation of Judgment - Division Bench of High Court passing two orders permitting withdrawal of appeals and later dismissing application for recall of that order - Supreme Court asking the appellants to file appeal before High Court - Impliedly therefore the Division Bench orders had been set aside - In absence of express words to that effect, High Court misinterpreting the Supreme Court judgment and rendering it a nullity. (Para 22)
(f) Interpretation of Statute - Phrase "so far as applicable" - Means "what is not either expressly provided for, or applicable by way of necessary implication, must be excluded" - Provisions of CPC will be applicable to Companies Act and Rules - Rule 88(2) of the Rules 1959 and Order XXIII, rule 1(5), CPC. (Para 27)
AIR 1976 SC 2403; AIR 1999 SC 1131 - Relied upon
(g) Interpretation of Judgment - High Court not considering implication of Supreme Court judgment - Such interpretation leaving the appellant remediless - Defeating the doctrine Ubi jus ibi idem remedium (where there is a right, there is a remedy) - Supreme Court permitting respondent no. 1 to file appeal against Company Court order accepting his suggestion - It was therefore not open to him to raise issue of survival of the Division Bench orders for the Supreme Court had not expressly set them aside - Maxim Actus Curiae Neminem Gravabit i.e. an act of Court shall prejudice no man. (Para 29)
AIR 2002 SC 2572; AIR 1974 SC 1126; AIR 2001 SC 1084; (1996) 6 SCC 100 - Relied upon
Facts of the case:
This case related to maintainability of case u/ss 397 and 398 of the Companies Act, 1956.
Finding of the Court:
The High Court erred in law and misinterpreted the Supreme Court order.
Result : Appeals allowed.
JUDGMENT
Dr.B.S.Chauhan, J.
1. These appeals have been preferred against the judgment and final order dated 24.11.2003 passed by the High Court of Calcutta in APO Nos. 346 and 347, by way of which the High Court rejected the claim of the appellant to maintain the Company Petition filed under Sections 397 & 398 of the Companies Act, 1956 (hereinafter referred to as the ‘Act 1956’).
2. Facts and circumstances giving rise to these appeals are that:
A. Shri S.K. Roy (Respondent No. 2) issued and allotted 30,000 shares of the Respondent No. 1 company to himself and his relatives, and being the majority share holder therein, hence acquired control over the respondent-company.
B. Shri Ajit Kumar Chatterjee (3.66% shares) and Shri Arghya Kusum Chatterjee (1.01% shares) filed Company Petition No. 222 of 1991 under Sections 397 and 398 of the Act 1956, before the High Court of Calcutta with the consent of M/s Bhagwati Developers Pvt. Ltd. (4.78% shares) (hereinafter referred to as `the appellant’) and Shri R.L. Gaggar (7.61% shares), alleging mis-management and oppression.
C. Respondent No. 2 contested the said Company Petition by raising the preliminary issue of maintainability, stating that the valid shares held by the petitioners and consenting parties therein, were valued at less than 10 per cent of the total shareholding, and thus, the petition itself was not maintainable. The Company Court Judge vide order dated 13/14.1.1992, dismissed the said Company Petition as not maintainable, allowing the aforementioned preliminary objection, without entering into the merits of the case.
D. Shri Ajit Kumar Chatterjee and Shri Arghya Kusum Chatterjee, both petitioners therein, filed two appeals being Nos. 40 and 35 of 1992 respectively, before the Division Bench of the Calcutta High Court challenging the dismissal of the Company Petition on the ground of maintainability. Both the appeals were consolidated and heard together.
E. On 16.11.1993, Shri Ajit Kumar Chatterjee joined the Board of Directors of the company and filed applications for withdrawal of the appeals. The Division Bench of the High Court, vide order dated 16.11.1993 allowed the said applications, and dismissed his appeal as withdrawn. A similar order was passed by the Division Bench on 18.11.1993 while allowing a similar application filed by Shri Arghya Kusum Chatterjee, and therefore, his appeal was also dismissed as withdrawn.
F. The appellant filed two applications before the Division Bench on 22.12.1993 for the purpose of recalling the order of dismissal of the said appeals, and for the transposition of the Chatterjee brothers as proforma respondents, whilst substituting the appellant as the sole appellant therein. The Division Bench, vide order dated 2.2.1995 dismissed the said application by a detailed judgment, labelling the appellant as a stranger having no locus standi whatsoever, and observing that as the appeal was no longer pending, the question of transposition of parties did not arise. Moreover, it was observed that there had been an inordinate delay in the filing of such an application.
G. Aggrieved, the appellant preferred S.L.P.(C) Nos. 19193 and 19217 of 1995 before this court, challenging the order dated 2.2.1995. This Court entertained the said petitions, granted leave, and disposed of the appeals vide judgment and order dated 26.4.1996, observing that the appellant may prefer independent appeals, challenging the judgment and order dated 13/14.1.1992, passed by the learned Single Judge, further stating that if such an appeal was infact filed, the same would not be dismissed by the Division Bench on grounds of limitation or locus standi. However, it would be open for Respondent No.2 to contend, that the ground upon which the Company Court Judge had dismissed the Company Petition, was indeed just, i.e. the respondent could defend the order passed by the Company Court Judge. Further, the effect of withdrawal of the appeals by Chatterjee brothers on the appeals filed by
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