Maintainability under section 399(3) requires proper factual enquiry; summary rejection was set aside and remitted for fresh consideration.

Maintainability objections under section 399(3) of the Companies Act, 1956 cannot be conclusively decided without proper enquiry where the record raises disputed issues of consent, the link between draft and filed petitions, disputed signatures, and the authority of the person presenting the petition. The High Court held that such matters involve substantial questions of fact and should be examined by the statutory forum rather than finally determined on a summary record. The orders rejecting the petition under sections 397, 398 and 402 at the threshold were set aside, and the matter was remitted to the Company Law Board for fresh consideration in accordance with law.

---

---

Issues: Whether the preliminary objection to maintainability under section 399(3) of the Companies Act, 1956 could be finally determined on the existing record, and whether the matter ought to be remitted to the Company Law Board for fresh consideration.

Analysis: The petition under sections 397, 398 and 402 of the Companies Act, 1956 had been rejected at the threshold on the basis of the alleged invalidity of the consent relied on under section 399(3). The record showed that the Company Law Board disposed of the maintainability objection in a summary manner without objective consideration of the factual controversies, including the adequacy of consent, the alleged nexus between the draft petition and the filed petition, the disputed signatures, and the authority of the person presenting the petition. The Court found that these matters involved substantial questions of fact requiring proper enquiry and that the appellate court should not itself undertake a final factual adjudication in place of the statutory forum.

Conclusion: The orders under challenge were set aside and the matter was remitted to the Company Law Board for fresh consideration in accordance with law.

---