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        Companies Law

        2021 (3) TMI 1222 - HC - Companies Law

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        Locus standi governs recall of amalgamation orders; inherent powers cannot bypass the requirement of being an aggrieved person. A recall or review-like challenge to a company court order sanctioning amalgamation can be maintained only by a person who can show a direct legal ...
                      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.

                          Locus standi governs recall of amalgamation orders; inherent powers cannot bypass the requirement of being an aggrieved person.

                          A recall or review-like challenge to a company court order sanctioning amalgamation can be maintained only by a person who can show a direct legal interest and status as an aggrieved person. Mere invocation of Rules 6 and 9 of the Company (Court) Rules, 1959 read with Section 151 of the Code of Civil Procedure does not cure the absence of locus standi, and inherent powers cannot be used to bypass that threshold. Allegations of fraud do not dispense with the need to demonstrate maintainable standing, and a non-party with no pleaded basis for a public interest-style challenge cannot seek recall of the amalgamation order.




                          Issues: Whether a non-party, not shown to be an aggrieved person, could maintain an application under Rules 6 and 9 of the Company (Court) Rules, 1959 read with Section 151 of the Code of Civil Procedure, 1908, seeking recall of an order sanctioning amalgamation.

                          Analysis: The application sought recall of the order sanctioning the scheme of amalgamation. The applicant was neither a party to the company petitions nor shown to have any direct legal interest in the impugned order. The Court held that locus standi is a precondition even when recall is sought on allegations of fraud or by invoking inherent powers. The applicant's own stand that the application was not under Sections 391 to 394 of the Companies Act, 1956, but only a procedural review, did not cure the defect. The pleadings also disclosed no basis for a public interest-style challenge under the invoked rules. The applicant had not shown himself to be a person aggrieved, and the invocation of inherent powers could not be used to bypass that requirement.

                          Conclusion: The application was not maintainable for want of locus standi and was liable to be dismissed.

                          Ratio Decidendi: Recall or review-like relief against a company court order can be maintained only by a person who is shown to be aggrieved by that order; inherent powers do not dispense with the requirement of locus standi.


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                          ActsIncome Tax
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