TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
Use comma for multiple locations.
---------------- For section wise search only -----------------
Accuracy Level ~ 90%
of 
Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of Press 'Enter' after typing page number.
Issues: (i) Whether a writ appeal lay against an order of the Single Judge passed in exercise of supervisory jurisdiction under Article 227 of the Constitution of India; (ii) whether the civil suit challenging the rights issue and special resolution was maintainable; (iii) whether the writ petition could be entertained against the civil court's interim injunction order; and (iv) whether the rights issue offended section 81 of the Companies Act, 1956.
Issue (i): Whether a writ appeal lay against an order of the Single Judge passed in exercise of supervisory jurisdiction under Article 227 of the Constitution of India.
Analysis: The intra-court appeal provision under section 5 of the Kerala High Court Act, 1958 was held to extend only to judgments in original jurisdiction. An order passed under Article 227 is supervisory, not original, and therefore does not attract the statutory right of appeal. The fact that the writ petition was framed under Articles 226 and 227 did not alter the position because the impugned judgment expressly proceeded under Article 227.
Conclusion: The writ appeal was not maintainable.
Issue (ii): Whether the civil suit challenging the rights issue and special resolution was maintainable.
Analysis: Civil court jurisdiction under section 9 of the Code of Civil Procedure, 1908 is presumed unless expressly or impliedly barred. The dispute was not one squarely entrusted to the Company Law Board's exclusive jurisdiction, since the challenge was to the legality of the special resolution and the manner of issue of further shares, not to refusal to register shares. Withdrawal of the earlier oppression and mismanagement proceedings did not bar the suit on the pleaded statutory violation.
Conclusion: The civil suit was maintainable.
Issue (iii): Whether the writ petition could be entertained against the civil court's interim injunction order.
Analysis: The supervisory power under Article 227 is wide and may be exercised sparingly to keep subordinate courts within the bounds of their authority. Although an appellate remedy existed, the jurisdiction under Article 227 is not curtailed by the availability of such remedy where the order suffers from manifest illegality or causes grave injustice.
Conclusion: The writ petition was entertainable in supervisory jurisdiction.
Issue (iv): Whether the rights issue offended section 81 of the Companies Act, 1956.
Analysis: Section 81(1)(b) requires notice giving at least fifteen days from the date of offer, and the offer satisfied that requirement. Section 81(1A) begins with a non obstante clause and permits issue of further shares to any persons if authorised by special resolution. In view of the unanimous special resolution, the bank could restrict renunciation of rights shares to existing shareholders, and section 81(1)(c) was overridden to that extent. No illegality in the issue of rights shares was established.
Conclusion: There was no violation of section 81 of the Companies Act, 1956.
Final Conclusion: The appellate court found no ground to interfere with the Single Judge's exercise of supervisory jurisdiction and upheld the setting aside of the civil court's injunction.
Ratio Decidendi: An intra-court appeal does not lie from an order expressly passed under Article 227 of the Constitution of India, and a special resolution under section 81(1A) of the Companies Act, 1956 can validly override the renunciation right under section 81(1)(c) in a rights issue.
TaxTMI 
