Collective shareholding and saving provisions preserve maintainability of oppression petitions and pending company proceedings under the Companies Act.

Under section 399(3) of the Companies Act, 1956, an oppression and mismanagement petition may be presented by one or more members with the written consent of the rest, and the one-tenth shareholding threshold is satisfied collectively by the petitioners and consenting members. A consent letter confirming that the shareholder had read the petition and agreed to it is valid for this purpose. The Companies (Amendment) Act, 1988 transferred jurisdiction over such matters to the Company Law Board, but its saving provision preserved company petitions already pending before court, which therefore continue to be heard and decided under the unamended Act.

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Issues: (i) Whether, for an application under sections 397 and 398 of the Companies Act, 1956, the petitioners themselves must hold one-tenth of the issued share capital notwithstanding written consent from other shareholders; (ii) whether the court's jurisdiction to entertain the pending company petition was taken away by the Companies (Amendment) Act, 1988.

Issue (i): Whether, for an application under sections 397 and 398 of the Companies Act, 1956, the petitioners themselves must hold one-tenth of the issued share capital notwithstanding written consent from other shareholders.

Analysis: Section 399(3) permits one or more members, after obtaining the written consent of the rest, to present the application on behalf and for the benefit of all of them. The statutory phrase "where any members of a company are entitled" covers the petitioners and the consenting shareholders together. If the petitioners alone had to satisfy the one-tenth requirement, the provision for written consent would be redundant. Where the consent letter shows that the consenter had perused the petition and consented to it, the consent is valid. On the facts, the shareholding of the petitioners and the consenting member together satisfied the statutory threshold.

Conclusion: The objection based on section 399 was rejected and the application was maintainable on this ground.

Issue (ii): Whether the court's jurisdiction to entertain the pending company petition was taken away by the Companies (Amendment) Act, 1988.

Analysis: Although jurisdiction over applications under sections 379 to 399 was transferred to the Company Law Board with effect from 31 May 1991, section 68(1) of the Companies (Amendment) Act, 1988 saves matters and proceedings already pending before a court and requires them to be continued and disposed of by that court under the unamended Act. Since the petition was already pending when the amendment came into force, the court retained jurisdiction.

Conclusion: The jurisdictional objection failed and the court continued to have authority to decide the petition.

Final Conclusion: The preliminary objections to maintainability were overruled and the company petition was held to be properly maintainable before the High Court.

Ratio Decidendi: Under section 399(3), the one-tenth shareholding requirement may be satisfied collectively by the petitioners and the consenting members, and pending company petitions remain triable by the court under the saving provision in the amendment statute.

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