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High Court Of Delhi
HARISH BANSAL - Appellant
Versus
MOTI FILMS PRIVATE LIMITED - Respondent
Decided On : 08/18/1983
COMPANY - WINDING UP - JUST AND EQUITABLE - SCOPE AND POWER OF THE COURT - APPEAL - MAINTAINABILITY - NECESSARY PARTIES - DIRECTORS - FIDUCIARY RELATIONSHIP - ORDER DELETING THE NAMES OF THE PARTIES - APPEALABILITY - SECTION 483 OF THE COMPANIES ACT, 1956 - ORDER 1 RULE 10 (2) OF THE CODE OF CIVIL PROCEDURE, 1908 - SECTION 443 OF THE COMPANIES ACT, 1956 - SECTION 397 OF THE COMPANIES ACT, 1956 - SECTION 210 OF THE COMPANIES ACT, 1956.
Fact of the Case:
The appellants filed a petition under Section 433 of the Companies Act, 1956, seeking the winding up of the respondent company on just and equitable grounds. The respondents, who are one family, filed a reply admitting the sale of a flat belonging to the company to respondent No. 5, the mother of respondent No. 2 and wife of respondent No. 3. The learned single judge, by the impugned order, directed the deletion of the names of respondents 2 to 5 from the array of respondents in the winding up petition, holding that in a winding up petition under Section 433 of the Act, the only order that can be passed is either to wind up the company or not, and that no other order in terms of relief against the Directors or anybody else can be passed.
Finding of the Court:
The court held that the learned single judge erred in holding that in a winding up petition under Section 433 of the Act, the only order that can be passed is either to wind up the company or not, and that no other order in terms of relief against the Directors or anybody else can be passed. The court further held that respondents 2 to 5 are necessary parties to the petition because in their absence no real finding could have been given by the Company Judge. Their presence, was thus absolutely necessary so that the matters could be effectually and properly decided.
Issues: 1. Whether an appeal lies against the order of the learned single judge deleting the names of respondents 2 to 5 from the array of respondents in the winding up petition? 2. Whether respondents 2 to 5 are necessary parties to the winding up petition?
Ratio Decidendi: 1. An appeal lies against the order of the learned single judge deleting the names of respondents 2 to 5 from the array of respondents in the winding up petition because such an order affects the rights of the appellants and is not a mere matter of procedure. 2. Respondents 2 to 5 are necessary parties to the winding up petition because in their absence no real finding could have been given by the Company Judge. Their presence, was thus absolutely necessary so that the matters could be effectually and properly decided.
Final Decision: The appeal was allowed and the order of the learned single judge deleting the names of respondent 2 to 5 from the petition was set aside.
( 1 ) THIS is an appeal against the order of the learned single judge by which be directed the deletion of. the name of respondents 2-to 5 in a petition for winding up filed under Section 433 of the Companies Act against Respondent No. I a Private Limited Company. Respondents are one family; namely respondent No. 3 is the father of, respondent No. 2. Respondent No. 4 is the wife of respondent No. 2 and respondent No. 5 is the mother of respondent No. 2.
( 2 ) IT is pleaded in the petition that the company was floated and incorporated by the appellants along with Ramesh Kumar Bhandari, respondent No. 2 who was a fast friend of the appellants. The petition is filed by one set of husband and wife as petitioners Nos. I and 2 and petitioners Nos. 3 and 4 as another set husband and wife. It is claimed that the company was floated to give equal preference to the three groups as all three of them were good friends. Respondent No. 3 was said to be ] conversant with business and that is why it was decided to entrust the work of the incorporation to him.
( 3 ) RESPONDENT: No. 4 is said to have started drawing a salary of Rs. 1500 per month. Respondent Nos 2. 3 and 4 are directors of the company. Allegations are made that respondent No. 2 Ramesh Kumar Bhandari allotted 670 shares to his own family rather than amongst the three groups, 0ns of the persons to whom 310 shares are said to have been allotted is his own wife, respondent No. 4. It is further alleged that respondent No. 2 is trying to sell to respondent No. 5 his mother a flat which was said to have been acquired at Bombay by the society for a sum of Rs. 1,55,000 whereas the appellant/petitioners are even willing to m^ke an offer of Rs. 3 lakhs for the same. On this as well as other various allegations the petition was filed seeking the winding up of the company on just and equitable ground and also on account of the inability of the company to pay its debts, and also praying for any other order that may be made on the premises that shall be just.
( 4 ) IN the reply apart from the other objections It was admitted that the flat at Bombay which had been acquired by the Company for Rs. one lakh and on which it was stated that Rs. 20,000 had been spent by company had been sold to respondent No. 5, the wife of respondent No. 3 and the mother of respondent No. 2. The justification given for this transaction is that it was necessary to sell it as that funds were required by the-company. Grievance was made that the appellants have stood in the way of registration by obtaining an ex-parte order and that the company, therefore is not able to avail of the sum of Rs. 87,594 which is outstanding from this sale amount. The sale in favour of respondent No. 5 is stated to be an act of good management.
( 5 ) WE are not concerned in the present proceedings with the merits or otherwise of the present petition which is. still to be disposed of. The only short question concerning us in this appeal is to see the correctness of order of upholding the objection that respondent Nos. 2 to 5 were not necessary parties and ordering their names to be deleted from the array of respondents in winding up petition. The reascn why the learned single judge has directed the deletion of names of respondents 2 to 5 is because he has held that in the winding up petition under section. 43 3 of the Act the only order that can bepassed is either to wind up the company or not and that no other order in terms of relief against the Directors or anybody else can be passed. Hence apart from the company no body else is a necessary or a proper party. The appellant seriously challenges the basis of the order for deleting of respondents 2 to 5. According to them respondents 2 to 5 are certainly proper if not necessary parties to the petition filed under Section 433 of the Act, It is also disputed that apart from either granting or dismissing awinding up petition no order giving any other relief is permissible on winding
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