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of <h1>Joint Company Application Valid under Companies Act Sections 391 & 394: Court Clarifies Procedure</h1> The Court held that a joint application by multiple companies under sections 391 and 394 of the Companies Act is maintainable, provided each company is ... Compromise and arrangement Issues Involved:1. Maintainability of a single/common application by multiple companies under sections 391 to 394 of the Companies Act, 1956.2. Interpretation of section 394A and clause (b)(vi) to sub-section (1) of section 394 of the Companies Act.3. Applicability of Order I Rule 1 of the Code of Civil Procedure (CPC) to company petitions.4. Precedential value and binding nature of coordinate Bench decisions.5. Concept of per incuriam in judicial decisions.Detailed Analysis:1. Maintainability of a Single/Common Application by Multiple Companies:The judgment addresses whether multiple companies can file a joint application under sections 391 to 394 of the Companies Act, 1956. The office raised an objection citing that a single application with separate numbers is not maintainable for six companies. The Court examined prior judgments, including the decision in Electro Carbonium (P.) Ltd., which held that separate petitions must be filed by transferee and transferor companies. However, the Court also considered a contrary view from Kirloskar Electric Co. Ltd., which suggested that joint petitions are permissible. Ultimately, the Court concluded that a joint application is maintainable, provided each company is separately numbered, pays separate court fees, and publishes separate notices for meetings and hearings.2. Interpretation of Section 394A and Clause (b)(vi) to Sub-section (1) of Section 394:The judgment clarifies that section 394A requires notice to the Central Government for every application under sections 391 or 394, but it does not mandate separate applications for each company. Similarly, clause (b)(vi) of section 394(1) requires a report from the Registrar regarding the conduct of the company's affairs but does not necessitate separate applications. The Court emphasized that the Central Government and Registrar must provide reports for each company involved, regardless of whether a joint or separate application is filed.3. Applicability of Order I Rule 1 of the Code of Civil Procedure (CPC) to Company Petitions:The judgment highlights that Company Rule 6 incorporates the practice and procedure of the CPC, making Order I Rule 1 applicable to company petitions. Order I Rule 1 allows multiple plaintiffs to join in one suit if their right to relief arises from the same transaction and common questions of law or fact would arise. The Court found that in petitions under sections 391 and 394, the scheme of arrangement or amalgamation involves common questions of law and fact, justifying a joint application.4. Precedential Value and Binding Nature of Coordinate Bench Decisions:The judgment discusses the principle that decisions of coordinate Benches should generally be followed unless there are compelling reasons to differ. The Court cited Supreme Court precedents, emphasizing that conflicting decisions should be resolved by referring the matter to a larger Bench rather than ignoring an earlier decision. The Court noted that the earlier judgment in Electro Carbonium (P.) Ltd. was not considered in the subsequent judgment in Kirloskar Electric Co. Ltd., leading to conflicting views.5. Concept of Per Incuriam in Judicial Decisions:The judgment explains that a decision is per incuriam if it is rendered in ignorance of a binding precedent or statutory provision. The Court found that the judgment in Electro Carbonium (P.) Ltd. was rendered without considering Order I Rule 1 of CPC, making it per incuriam and not binding as a precedent. The Court cited various authorities, including the Supreme Court and Halsbury's Laws of England, to support this conclusion.Conclusion:The Court overruled the office objection and held that a joint application/petition by the transferor and transferee companies is maintainable under sections 391 and 394 of the Companies Act. The judgment emphasized the need for separate numbering, court fees, and notices for each company involved in the joint application to avoid confusion and ensure compliance with procedural requirements.
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