2012 Supreme(Kar) 205

High Court of Karnataka
DILIP B. BHOSALE & B.S. INDRAKALA
M/s. S.M. Kannappa Automobiles Pvt. Ltd. Bangalore & Others
Versus
Bhupinder Rai & Others
OSA No.51 of 2006 c/w OSA Nos.46 of 2006, 45 of 2006
Decided on : 22-03-2012

Headnote:CODE OF CIVIL PROCEDURE, 1908 - Order 1, Rule 10: [Dilip B. Bhosale & B.S. Indrakala, JJ] Impleadment of parties - Appeal against rejection of Application - Held, It is well settled that a necessary party is one without whom no order can be made effectively, and a proper party is one in whose absence, effective order an be made, but whose presence is necessary for a complete and final decision on the question involved in the proceeding. In the present case, PK’s presence is not necessary and that she is not a proper party to these proceedings. The addition of parties is a matter of judicial discretion which, in the present case has been exercised by the Company Judge, and it cannot by termed as arbitrary or contrary to well settled principles governing exercise of discretion.

       COMPANIES ACT, 1956 - Sections 155: [Dilip B. Bhosale & B.S. Indrakala, JJ] Power of the Court to rectify Register of Members - Appeal against order of Company Court allowing petition seeking rectification of Register of Members - Held, The relief under Section 155 of the Act is discretionary. The Court in exercise of the jurisdiction under Section 155 of the Act is competent to decide any question relating to the title of a person claiming to have his name registered and generally to decide all question which may be necessary or expedient to decide for the rectification; Under Section 155, the Court has to examine on facts of each case, whether an application is for rectification or something else. While exercising of power for rectification or something else. While exercising of power for rectification within its field, it is the Company to comply with the directions under the Act. Any matter or dispute which is necessary or expedient to decide, between the persons, raised in connection with the rectification may generally be decided in such Court. Further, Though the jurisdiction under Section 155 of the Act is discretionary in nature, the exercise of jurisdiction cannot be refused on the ground that it involves complicated questions of law and fact. Where the complicated questions such as forgery and fabricated documents arise in a given case, Court may relegate the parties to a civil suit. If it truly is rectification, all matter raised in that connection should be decided by the court under Section 115, and if it finds adjudication of any matter not falling under it, it may direct a party to get his right adjudicated by civil court. On facts, held , merely because remedy of a civil suit under, Section 9 of C.P.C., is also available for determination of the question in respect of rectification of member register, there is no reason to refuse to entertain the application under Section 155 of the Act. The questions raised in the petition for rectification however, need to be determined on the basis of the material available on record. It would be grossly inequitable and be in proper exercise of judicial discretion to turn the petition under Section 155 of the Act away at belated stage e.g., after 20 years to pursue an alternative remedy, available under the general rule; the learned company judge has exercised his discretion vested in him under the Section 155 of the Act. It is well settled that such discretionary order cannot be interfered with unless the order is arbitrary or contrary to well settled principles governing exercise of discretion. The order passed by the learned company Judge exercising the discretion cannot be stated to be arbitrary or contrary to well settled principles governing exercise of discretion.

       COMPANY (ISSUE OF SHARE CERTIFICATE) - Rule 6: [Dilip B. Bhosale & B.S. Indrakala, JJ] Necessity of signature of two Directors to the share Certificate - Held, A glance at rule 6 would show the seal of two directors or person acting on behalf of the directors under a duly registered power of attorney and in addition thereto, the Secretary or some other person appointed by the Board for the purpose. Thus, the two Directors to their attorneys and the Secretary or other person require to sign the Share Certificate. On facts, further Held, The certificate in dispute had been signed by the Managing Director who is also a Member of the Board of Directors and the other Director. Bare perusal of the certificate shows that the first respondent signed it as a Managing Director affixing the common seal of the company and Bharat Narang as Director of the Company. There is no dispute that the first respondent has signed all Share Certificates as a Managing Director affixing the seal of the Company. Further, there is no dispute that he was appointed by the Board for the said purpose as contemplated by Rule 6. It is true that on all other certificates Kannappa had signed as one of the Directors of the Company. The first respondent’s signature can be treated as the signature of one of the Directors as contemplated by Clause (i) of Rule 6, and his signature can also be treated as of a person appointed by the Board. In other words, the first respondent’s signature on Certificate No.9 was in duel capacity, viz., as a Director and as a person appointed y the Board as contemplated by Rule 6. In any appear on the Share Certificate, does not mean that the Share Certificate is bogus or it is a fraudulent document.