In order to obtain relief under Section 397 of the Companies Act for just and equitable winding up, the petitioner must show that winding up the company would unfairly prejudice him and that otherwise, the facts would justify the making of a winding-up order on the ground that it was just and equitable that the company should be wound up.

( 1 ) WE have heard at length an appeal and a cross appeal from the judgment of the court below which was delivered on March 22, 1993, some two years after conclusion of arguments there.

( 2 ) THE matter was first opened and heard before another learned judge, who unfortunately retired, and then before the learned judge the case was heard out again ; the matter was also sometimes mentioned, which went on from time to time and ultimately the judgment was delivered.

( 3 ) THE application which was disposed of was an application made both under Section 397 and Section 398 of the Companies Act, 1956. At that time the High Court had jurisdiction to decide these matters and the substitution of the Company Law Board in the place of the High Court had not then come. Such substitution occurred in 1991.

( 4 ) THE arguments made on behalf of the appellants, being M. L. Bagri and his group, ranged for about a day and half in the beginning after which we called upon Mr. Nag to argue the case of the petitioner in the court below who, along with his family being wife and daughter are the cross appellants before us. Mr. Nag argued for some 15 days. In reply we could not hear Mr. Poddar, appearing for the appellant, for more than even one day in all, because we felt that the judgment appealed from has gone astray on such a basic and elemental matter, that hearing the parties any further would be a sheer wastage of time. We felt this matter to be very unfortunate that although the papers before us today run into several thousands of pages and although the most laborious arguments and counter arguments were prepared both in the court below and for our assistance, yet one of the essential and basic characteristics of the very sections upon which the application was founded was never paid any due attention by any of the persons involved in the matter of deciding the case.

( 5 ) WE propose to indicate outright the elementary and essential point upon which we feel, there has been a serious and unbridgeable gap left, which disentitles the company petitioners from any relief at all.

( 6 ) SUB-SECTION (2) of Section 397, as it stands today is set out below :" (2) If, on any application under Sub-section (1), the Company Law Board is of the opinion : (a) that the company's affairs are being conducted in a manner prejudicial to public interest or in a manner oppressive to any member or members ; and (b) that to wind up the company would unfairly prejudice such member or members, but that otherwise the facts would justify the making of a winding up order on the ground that it was just and equitable that the company should be wound up ; the Company Law Board may, with a view to bringing to an end the matters complained of, make such order as it thinks fit. "

( 7 ) THE substitution of the Company Law Board for the court came by the Companies (Amendment) Act, 1988, and it has operated with effect from May 31, 1991.

( 8 ) THUS, for our case, which started in 1988, the word "court" should be read in the place of the words "company Law Board" in the above sub-section. A bare reading of the said sub-section shows that under Sub-clause (b) of the above sub-section, two matters must be positively made out. These are as follows : (i) that to wind up the company would unfairly prejudice the member or members who have the grievance and are the applicants before the court ; and (ii) that otherwise, the facts would justify the making of a winding up order on the ground that it was just and equitable that the company should be wound up.

( 9 ) IT does not take much learning or much legal art to see that a petitioner to be successful under Section 397 has to make out a case for just and equitable winding up. If that case cannot be made out, if the facts fall short of the case upon which the company court, which is a court of equity feels that the company should be wound up on just and equitable grounds, then and in that event no relief can be had by the petitioners

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