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1984 Supreme(Pat) 51

PATNA HIGH COURT
S.S.Sandhawalia and Lalit Mohan Sharma JJ.
Rai Mathura Prasad
Versus
Hanuman Prasad Bhagat
Letter Patent Appeal No. 21 of 1975 ;
Decided On : FEBRUARY 02, 1984

Headnote:Companies Act, Sec. 398 - Company Court Rules, Rule 6 -

       Transposition of opposites parties to the application as petitioners- Proceeding under the section are for the benefit of the interest of the public or a group of share holder - Application by one of the share holder is an act in the nature of a representative capacity - On the death of the petitioners any one in the group can represent the interest - Parties can be transposed in the interest of justice. (Paras 9, 10 & 11)

       

Judgment

Lalit Mohan Sharma, J.

1. This appeal under Clause 10 of the Letters Patent is directed against the order of a learned, single judge of this court rejecting the plea of the appellant (opposite party No. 2) that the applica tion filed under Sec.398 of the Companies Act, 1956 (hereinafter referred to as " the Act"), and registered as Company Petition No. of 1974 abated on the death of the original applicant.

2. The application giving rise to Company Petition No. 9 of 1974 was filed on August 24, 1974, by one Banarsi Lall Bhagat who claimed to be a member of Krishak Cold Storage Ltd., incorporated under the provisions of the Indian Companies Act, 1913, and entitled to apply to the court under, Sec.398 of the present Act by virtue of Sec.399. He complained that the affairs of the company were being conducted in a manner prejudicial to the interest of the members. It was also stated that a sale deed was illegally executed by opposite parties Nos. 1 and 2 in favour of opposite party No. 11. A prayer was made to set aside the transfer.

3. In paragraph. 6 of the application, the applicant stated that he was filing the application on his own behalf as also on behalf of a number of the members of the company entitled to challenge the impugned sale deed. He appended their written authority as annexure B .

4. The petitioner, Banarsi Lall Bhagat, died on December 24, 1974, and two of the signatories (annexure B) and several other shareholders who were all impleaded in the proceeding as opposite party filed a petition on March 19, 1973, for being transposed to the category pi the applicant for the purpose of prosecuting the proceeding. The present appellant (opposite party No. 2) filed a counter-affidavit objecting to the prayer. The learned single judge overruled the objection and transposed the petitioners to the category of the applicant and allowed them to proceed with the case. The present appeal is directed against this order.

5. Mr. S.C. Ghose, appearing in support of the appeal, contended that on the death of the original applicant, the application abated and since there remained no proceeding in the eye of law, the petitioners could not lawfully be allowed to proceed with the application. Emphasis was laid by the learned counsel on the fact that none of the petitioners is an heir or legal representative of the original applicant, Banarsi Lall Bhagat. The remedy of the petitioners, if at all, was by way of an independent application which, if filed on the date on which the prayer for transposition was made, would have been barred, by limitation. The learned single judge was, therefore, not right in passing the impugned order.

6. It is common ground that the CPC does not apply to the proceeding by virtue of its own force. Sec. 643 of the Act empowers the Supreme Court to make rules in relation to several matters including the procedure applicable to applications under the Act, and, accordingly, the. Companies (Court) Rules, 1959 (hereinafter referred to as " the Rules "), were framed. The language in the section as also of the Rules indicates that the CPC so far as may be applicable shall be followed. The relevant portion of Sec. 643 is in the following terms:

" 643. Power of Supreme Court to make rules :-

- (1) The Supreme Court, after consulting the High Courts,--... and (b) may make rules consistent with the Code of Civil Procedure, 1908 (V of 1908)..."

Rule 6 is in the following terms :

"6. Practice and procedure of the Court and provisions oj the Code to apply.--Save as provided by the Act or by these Rules, the practice and procedure of the Court and the provisions of the Code as far as applicable, shall apply to all proceedings under the Act and these Rules. The Registrar may decline to accept any document which is presented otherwise than in accordance with these Rules or the practice and procedure of the court."

As defined in Rule 2(4), "Code" means the Code of Civil Procedure, 1908. Rule 9 saves the inherent powers














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