Withdrawal of company petition defeats maintainability of appeal; merger and delay condonation do not revive the proceedings.

A petition under sections 397 and 398 of the Companies Act, 1956 is representative in character, but withdrawal of the original company petition with leave under rule 88(2) meant the petition ceased to exist. In those circumstances, a consenting shareholder could not maintain or continue an appeal without an independent surviving right to proceed. The doctrine of merger did not apply because the Supreme Court only granted liberty to file an independent appeal and did not disturb the withdrawal orders. Condonation of delay under section 5 of the Limitation Act, 1963 did not create a fiction that preserved the appeal after withdrawal. The proceedings therefore could not survive.

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Issues: (i) Whether the appeal was maintainable after the original company petition and the appeals preferred by the original petitioners had been withdrawn and the Supreme Court had granted liberty to file an independent appeal. (ii) Whether the doctrine of merger or the order condoning delay could preserve the appellant's right to continue the proceedings notwithstanding withdrawal of the original petitioners.

Issue (i): Whether the appeal was maintainable after the original company petition and the appeals preferred by the original petitioners had been withdrawn and the Supreme Court had granted liberty to file an independent appeal.

Analysis: A petition under sections 397 and 398 of the Companies Act, 1956 is representative in character, but rule 88(2) of the Companies (Court) Rules, 1959 permits withdrawal with leave of the Court and does not require notice to a consenting shareholder. The original petitioners withdrew both the company petition and their appeals, and the Supreme Court did not set aside or modify the earlier orders permitting such withdrawal. The original company petition therefore ceased to exist, and without a surviving petition there could be no appeal capable of being maintained by a consenting party who had not independently established a subsisting right to continue the proceedings.

Conclusion: The appeal was not maintainable and the appellant could not continue the proceedings after withdrawal of the original petitioners.

Issue (ii): Whether the doctrine of merger or the order condoning delay could preserve the appellant's right to continue the proceedings notwithstanding withdrawal of the original petitioners.

Analysis: The doctrine of merger applies only where the superior court decides the subject-matter on merits or otherwise interferes with the order under challenge. The Supreme Court's order merely granted liberty to file an independent appeal and left the relevant questions open; it did not set aside or alter the earlier orders. Likewise, condonation of delay under section 5 of the Limitation Act, 1963 extends time only prospectively and does not create a fiction that the appeal was filed before the withdrawal occurred.

Conclusion: Neither merger nor condonation of delay assisted the appellant, and the objections to maintainability succeeded.

Final Conclusion: The proceedings could not survive the withdrawal of the original petitioners, and the appellant had no effective right to press the appeal on the footing adopted in these matters.

Ratio Decidendi: Where the original company petition itself has been withdrawn and no longer exists, a consenting shareholder cannot maintain an appeal in the absence of an independent surviving cause, and a superior court's order that merely leaves questions open does not result in merger of the earlier withdrawal orders.

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