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        Companies Law

        1964 (10) TMI 103 - HC - Companies Law

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        Company consent and possession under Section 9: invalid transfer did not negate attributable corporate consent. Under Section 9 of the Specific Relief Act, interference in revision is limited to exceptional cases such as a clear misapprehension of law, and no such ...
                      Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.

                          Company consent and possession under Section 9: invalid transfer did not negate attributable corporate consent.

                          Under Section 9 of the Specific Relief Act, interference in revision is limited to exceptional cases such as a clear misapprehension of law, and no such ground was made out here. The court also held that, for Section 9, the decisive question is whether possession was taken without the plaintiff's consent in fact, not whether the underlying transfer was valid. In the case of a company, consent given by those controlling its directing mind and will is attributable to the company. As the directors and general manager had authorised and controlled the transfer arrangements, the possession could not be treated as taken without the company's consent, and the suit was not maintainable.




                          Issues: (i) Whether the revision should be interfered with when an alternative remedy by way of a regular suit was available under Section 9 of the Specific Relief Act. (ii) Whether possession delivered by the directors and the general manager of a company under an invalid transfer transaction could be treated as possession taken without the company's consent for the purposes of Section 9 of the Specific Relief Act.

                          Issue (i): Whether the revision should be interfered with when an alternative remedy by way of a regular suit was available under Section 9 of the Specific Relief Act.

                          Analysis: Revision under Section 9 of the Specific Relief Act was treated as exceptional, and interference was considered justified only in special circumstances such as a clear misapprehension of law or a case otherwise calling for immediate correction. The circumstances did not disclose any such exception, and the lower court had understood the scope of Section 9 correctly.

                          Conclusion: The revisional court declined to interfere on this ground.

                          Issue (ii): Whether possession delivered by the directors and the general manager of a company under an invalid transfer transaction could be treated as possession taken without the company's consent for the purposes of Section 9 of the Specific Relief Act.

                          Analysis: Section 293 of the Companies Act, 1956 restricts the board's power to sell, lease or otherwise dispose of the whole or substantially the whole of an undertaking without consent in general meeting, but the absence of such consent affects the validity of the transaction rather than the factual question whether possession was taken with the company's consent. For Section 9 of the Specific Relief Act, the material question was whether the persons controlling the company represented its directing mind and will. Since the board and general manager had authorised and controlled the transfer arrangements, their consent was attributable to the company even if the transaction was ultimately invalid.

                          Conclusion: The possession was not without the company's consent for the purposes of Section 9, and the suit was not maintainable.

                          Final Conclusion: The revision failed because the company could not establish dispossession without its consent within the meaning of Section 9 of the Specific Relief Act, and the order dismissing the suit was left undisturbed.

                          Ratio Decidendi: For the purpose of Section 9 of the Specific Relief Act, the relevant inquiry is whether possession was taken without the plaintiff's consent in fact, not whether the underlying transaction was valid; in the case of a company, consent of those constituting its directing mind and will is attributable to the company.


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