High Court Of Delhi
V.K.MATHUR - Appellant
Versus
K.C.SHARMA - Respondent
Civil 899 of 1985
Decided On : 11/30/1985
COMPANY LAW - Petition under Sections 397 and 398 of the Companies Act, 1956 - Maintainability - Authorisation by Central Government under Section 399 (4) - Requirements - Written consent of all authorised members - Petition to be on behalf of and for the benefit of all authorised members - Petition filed by only one authorised member without written consents of others - Not maintainable.
Fact of the Case:
A petition was filed under Sections 397 and 398 of the Companies Act, 1956, by one of the members of a company authorised by the Central Government under Section 399 (4) of the Act. The petition was not supported by the written consents of the other authorised members and was also not filed on their behalf or for their benefit. Some of the authorised members were made respondents to the petition.
Finding of the Court:
The petition was not maintainable as it did not fulfil the requirements of Section 399 (3) of the Act. The written consent of all the authorised members should have been filed with the petition and the petition should have been on behalf of and for the benefit of all of them.
Issues: Whether a petition under Sections 397 and 398 of the Companies Act, 1956, filed by only one authorised member without the written consents of the other authorised members is maintainable.
Ratio Decidendi: The provisions of Section 399 (3) of the Companies Act, 1956, require that when an application under Section 397 or 398 is intended to be moved by a set of persons and is moved by one of them, the written consent of all of them should be filed with the application. This requirement is mandatory and a petition filed without the written consents of all the authorised members is not maintainable.
Final Decision: The petition was dismissed as not maintainable.
( 1 ) A very interesting situation has developed in this company petition filed as far back as 4th September, 1982 under Sections 397 and 398 of the Companies Act, 1956 (hereinafter referred to as "the Act" ).
( 2 ) THE Delhi and District Cricket Association Ltd. (hereinafter referred to as the company ) was incorporated as a company limited by guarantee having no share capital. Though incorporated as a company, its affairs are managed by a general committee consisting of a President, two Vice-Presidents, three Secretaries, a Treasurer and eight committee members. There are also two Government nominees on the committee. A group of members of the company was apparently dissatisfied with the management of the company s affairs. About 45 members, "represented by Anil Khanna, Afash Lal and Sunil Dev", applied to the Company Law Board ( clb ) for an authorisation in terms of Section 399 (4) of the Act to enable them to move an application under Sections 397-398 in the High Court. By anorder dated 18-12-1981, the CLB authorised "the applicants" to apply to the Court under the above sections in relation to the company. A list of the 45 members who applied to the Central Government other than the three above mentioned is appended to the order and includes Shri V. K. Mathur, the petitioner in this petition.
( 3 ) IN pursuance of this authorisation, C. P. 91/82 was filed on 4th September, 1982. The petition set out the names of the petitioners as "sri V. K. Mathur, Daryaganj, Delhi and other supporting petitioners" but no other names were given. In paragraph 25 of the petition, after referring to the above authorisation of the CLB, it was stated :- "the petitioners also attach herewith the consent of more, members for the filing of this petition". but no such consent was attached. Curiously enough, in addition to certain other respondents. Anil Khanna, Akash Lal and Sunil Dev, who had represented the aggrieved group before the Central Government in making the application under Section 399, were three of the ten respondents to the petition. In support of the averments contained in the petition was filed an affidavit of Sri V. K. Mathur dated the 27-8-1982.
( 4 ) WHEN the petition came up, after some adjournments and interim orders, on 7-10-1983, Khanna, J. pointed out that there was no list or names of the "other supporting petitioners" who were moving the petition. After some more adjournments, the learned Judge observed, on 23-3-1984 ; "it has been found that the petitioners have not clarified who are supporting the petitioners in terms of the order dated 7-10-1983. I am afraid this petition may have to be stayed in case that clarification does not come. Respondents cannot meet the case without knowing who are agitating this petition. Now final opportunity is given to do the needful. To come up on 25-4-1984".
ON the next date of hearing counsel for the petitioner stated that the petition could be treated as one brought by V. K. Mathur only arid that he did not want to file any list of the names of the other supporting petitioners as was mentioned in the petition and about which the order dated 7-10-1983 was made. This belated request was acceded to and the learned Judge directed the petition to proceed accordingly.
( 5 ) IN the meantime, on 11-1-1984, the petitioner had filled C. A. 22/84 under Order 6, Rule 17 of the Code of Civil Procedure seeking permission to amend the body of the petition by incorporating a reference to certain subsequent developments that had taken place in the affairs of the association. This application was supported by an affidavit of V. K. Mathur dated 16th December, 1983 and accompanied by the proposed amended petition. This application was once dismissed for default on 17-5-1984 and then restored on 7-8-1984. The C. P. had to be adjourned from time to time to await disposal of the amendment application. On 13-11-1984, Anand, J. allowed the amendment subject to two reservations. One of th
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