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2008 Supreme(Cal) 814
IN THE HIGH COURT AT CALCUTTA
Amit Talukdar & Prabuddha Sankar Banerjee, JJ.
Hungerford Investment Trust Ltd.
Versus
Turner Morrison & Company Ltd. & Ors.
AP.O.T No. 440 of 2007; A.C.O. No. 182 of 2007; A.C.O. No. 26 of 2008; Arising out of C.A No. 493 of 2006 and C. P. No. 33 of 1988
Decided On : August 11, 2008
Advocate Appeared:
N. S. Hoon appeared in person;
Utpal Bose, D. N. Sharma, D. Basak, Aniruddha Roy for the respondents.
A COMPANY PETITION FILED UNDER SECTION 397 OF THE COMPANIES ACT, 1956 IS NOT MAINTAINABLE IF THE PETITIONER CEASES TO BE A SHAREHOLDER OF THE COMPANY.
Headnote:
TURNER MORRISON V. HANGERFORD INVESTMENT TRUST LIMITED - COMPANIES ACT, 1956 - SECTION 155, 397, 399, 402, 403, 405 - SALE OF ENTIRE SHARES OF APPELLANT - MAINTAINABILITY OF COMPANY PETITION - HELD, THE COMPANY PETITION FILED BY HANGERFORD FOR RELIEF UNDER SECTION 397 OF THE COMPANIES ACT, 1956 HAS BECOME INFRACTUOUS AS HANGERFORD CEASED TO BE A SHAREHOLDER OF THE TURNER MORRISON.
Fact of the Case:
APPELLANT HANGERFORD INVESTMENT TRUST LIMITED FILED A COMPANY PETITION UNDER SECTIONS 155, 397, 399, 402, 403 AND 405 OF THE COMPANIES ACT, 1956 AGAINST TURNER MORRISON AND OTHERS ALLEGING OPPRESSION AND MISMANAGEMENT. THE PETITION WAS DISMISSED BY THE SINGLE JUDGE IN 1993. HANGERFORD APPEALED THE DISMISSAL, BUT WHILE THE APPEAL WAS PENDING, TURNER MORRISON SOLD HANGERFORD'S SHARES TO THE INCOME TAX DEPARTMENT TO RECOVER TAXES OWED BY HANGERFORD. HANGERFORD APPEALED THE SALE TO THE COMMISSIONER OF APPEAL, WHO SET ASIDE THE SALE AND DIRECTED THE TAX RECOVERY OFFICER TO PROCEED AFRESH. HANGERFORD THEN FILED WRIT PETITIONS CHALLENGING THE COMMISSIONER OF APPEAL'S ORDER, WHICH WERE DISMISSED BY THE HIGH COURT. HANGERFORD'S APPEAL AGAINST THE DISMISSAL OF THE COMPANY PETITION WAS EVENTUALLY ALLOWED BY THE DIVISION BENCH, BUT THE SUPREME COURT SET ASIDE THE DIVISION BENCH'S ORDER AND DIRECTED THE SINGLE JUDGE TO DECIDE THE QUESTION OF HANGERFORD'S ENTITLEMENT TO PROCEED WITH THE COMPANY PETITION IN VIEW OF THE SUBSEQUENT EVENTS.
Finding of the Court:
THE SINGLE JUDGE HELD THAT HANGERFORD CEASED TO BE A MEMBER OF TURNER MORRISON AND THAT THE COMPANY PETITION HAD BECOME INFRACTUOUS. THE COURT ALSO REJECTED HANGERFORD'S ALLEGATIONS OF FRAUD AGAINST TURNER MORRISON AND ITS LAWYERS.
Issues: 1. WHETHER THE COMPANY PETITION FILED BY HANGERFORD IS MAINTAINABLE IN VIEW OF THE FACT THAT HANGERFORD CEASED TO BE A SHAREHOLDER OF TURNER MORRISON? 2. WHETHER HANGERFORD'S ALLEGATIONS OF FRAUD AGAINST TURNER MORRISON AND ITS LAWYERS ARE SUBSTANTIATED?
Ratio Decidendi: 1. THE COURT HELD THAT THE COMPANY PETITION FILED BY HANGERFORD IS NOT MAINTAINABLE AS HANGERFORD CEASED TO BE A SHAREHOLDER OF TURNER MORRISON. THE COURT RELIED ON THE ORDERS OF THE DIVISION BENCH AND THE SUPREME COURT, WHICH DIRECTED THE SINGLE JUDGE TO DECIDE THE QUESTION OF HANGERFORD'S ENTITLEMENT TO PROCEED WITH THE COMPANY PETITION IN VIEW OF THE SUBSEQUENT EVENTS, INCLUDING THE FACT THAT THE SALE OF HANGERFORD'S SHARES IN TURNER MORRISON HAD REACHED ITS FINALITY. 2. THE COURT HELD THAT HANGERFORD'S ALLEGATIONS OF FRAUD AGAINST TURNER MORRISON AND ITS LAWYERS ARE NOT SUBSTANTIATED. THE COURT NOTED THAT HANGERFORD FAILED TO PRODUCE ANY COGENT EVIDENCE TO SUPPORT HIS ALLEGATIONS.
Final Decision: THE COURT DISMISSED THE APPEAL FILED BY HANGERFORD.
Prabuddha Sankar Banerjee, J.
This appeal is directed against the judgment and order dated June 21, 2007 passed by the learned Single Judge of this Court in connection with C.A No.493 of 2006, C. P. No.33 of 1988.
2. The instant appeal has got a chequered career. The fact leading to filing of the instant appeal may be summed up thus.
3. One company petition under sections 155, 397, 399, 402, 403 and 405 of the Companies Act, 1956 was filed by Hungerford Investment Trust Limited against Turner Morrison and others which was numbered as C.P.No.33 of 1988. In that petition Hungerford who claimed to be a member of Turner Morrison made allegation of oppression and mismanagement. By judgment and order dated June 23, 1993 the said company petition filed by Hungerford was dismissed.
4. Being aggrieved and dissatisfied with the said order of dismissal, Hungerford preferred an appeal before the Division Bench of this Court. While the said appeal was pending; Turner Morrison as per requisition of Income Tax Department sent 22,08.300 Hungerford's shares to the Tax Recovery Officer of the Income Tax Department. Those were requisitioned by the Income Tax Department in connection with the proceeding for recovery of tax payable by Hungerford. Those shares were sold by holding a public auction on 27th May, 1994. After the said shares were sold by the Income Tax Department by holding a public auction, Turner Morrison filed an application in the appeal preferred by Hungerford against order of dismissal dated 23rd June, 1993 for dismissal of the said appeal on the ground that Hungerford was no longer entitled to proceed with the said appeal as the entire shares were sold away. In the meantime, Hungerford preferred an appeal before the Commissioner of Appeal against order of Tax Recovery Officer. The Commissioner of Appeal by order dated 14th November, 1994 allowed the appeal preferred by the Hungerford. The Commissioner of Appeal set aside the order of Tax Recovery Officer by which the shares were sold in public auction. The Commissioner of Appeal directed the Tax Recovery Officer to proceed afresh.
5. Against the order of the Commissioner of Appeal dated 14th November, 1994, three writ petitions were filed by (i) Hungerford (ii) Times Construction and (iii) Sterling Securities which were numbered as W.P. No. 1082 of 1995, W.P. No. 1668 of 1995 and W.P. No. 661 of 1996, respectively. While the said writ petitions were pending, Hungerford's appeal against order dated 23rd June, 1993 was disposed of by the Division Bench. By its order dated 8th October, 1996, Their Lordships were of the opinion that the order appealed against (23rd June, 1993 dismissing the company petition) should be set aside but at the same time there was difference of opinion regarding appellant's entitlement to proceed further with the appeal. As a result the matter was referred to a third Judge who, opined by order dated 16th April, 1998 that Hungerford entitlement to proceed further with the appeal should be decided 'first.
6. Being aggrieved and dissatisfied with the order of the third Judge, Turner Morrison preferred Special Leave Petition which was dismissed summarily by the Hon'ble Supreme Court on 13th July, 1998. It is to be mentioned that during pendency of the appeal preferred by the Hungerford against order dated 23rd June, 1993, the writ petition filed by the Times Construction as mentioned earlier came up for final hearing and the said writ petition was allowed vide order dated 23rd July, 1998. The order of the Commissioner of Appeal was set aside. Two other writ petitions were disposed of accordingly by order dated 11th August, 1998. No appeal was preferred by Hungerford against order of dismissal of W. P. No. 1082 of 1995.
7. However, Hungerford Investment Trust Limited who is appellant before us filed another application for recalling the order dated 23rd July, 1998 and the said application was disposed of by order dated 22nd December, 1999 and the Hon'ble Jud
