Oppression and mismanagement petitions require valid supporting membership and informed written consent at filing.

A company petition alleging oppression and mismanagement must satisfy the section 399 threshold through a valid supporting membership base and informed written consent filed with the petition. Where the alleged share transfers are disputed and the record does not reliably establish that the supporting persons are shareholders, statutory eligibility is not proved. A consent that is not specific to the petition and operates only as a blanket approval is defective. On these facts, the petition failed to meet section 399 and was not maintainable.

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Issues: Whether the company petition alleging oppression and mismanagement was maintainable in the absence of valid written consent and the requisite shareholding under section 399 of the Companies Act, 1956.

Analysis: The petition rested on the support of alleged consenting shareholders, but the ownership of the shares said to have been transferred and the genuineness of the supporting consents were disputed. The record did not reliably establish that the alleged transferees were shareholders, and the material produced did not satisfactorily prove compliance with the statutory threshold. The written consent placed on record was also found to be defective because it did not disclose an informed and specific consent for the petition and, in substance, amounted to a blanket consent. The statutory scheme requires a valid supporting membership base and written consent at the time of filing so as to prevent frivolous proceedings.

Conclusion: The petition failed to satisfy the requirements of section 399 and was not maintainable.

Ratio Decidendi: For a petition under sections 397 and 398, the supporting members must satisfy the statutory qualifying threshold and the consent relied upon must be a valid, informed written consent accompanying the petition at the time of filing.

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