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Issues: (i) whether the application under section 153C was maintainable in view of the objection as to the number of consenting shareholders and the alleged withdrawal of consent; (ii) whether the facts disclosed a case for winding up under section 162(vi) and therefore justified action under section 153C; and (iii) whether the appointment of administrators under section 153C was invalid as an interference with internal management.
Issue (i): whether the application under section 153C was maintainable in view of the objection as to the number of consenting shareholders and the alleged withdrawal of consent
Analysis: The requisite consent had to exist at the time of presentation of the application. The objection regarding the identity and number of consenting shareholders was not pressed at the trial, and in any event the pleadings, even if accepted, still left sufficient consent to satisfy the statutory requirement. Subsequent withdrawal of consent could not defeat an application that was valid when instituted, there being no statutory provision making later withdrawal decisive.
Conclusion: The application under section 153C was maintainable and the objection failed.
Issue (ii): whether the facts disclosed a case for winding up under section 162(vi) and therefore justified action under section 153C
Analysis: The expression "just and equitable" was not confined by the rule of ejusdem generis to the preceding clauses. Mismanagement by itself may not always justify winding up, but where there is gross mismanagement, lack of probity, depletion of funds, disorder in the company's affairs, and shareholder impotence, the court may properly direct winding up. Section 153C could be invoked only where circumstances existed on which a winding-up order could be made, and the facts found by the courts below satisfied that standard. Section 162(v) failed for want of proof of commercial insolvency, but section 162(vi) was attracted.
Conclusion: The facts justified winding up under section 162(vi), and action under section 153C was competent.
Issue (iii): whether the appointment of administrators under section 153C was invalid as an interference with internal management
Analysis: The rule against judicial interference in internal management applies to a running concern managed within the articles. Once a case for winding up is made out, the court may intervene to protect the company and its stakeholders, and administrators may be appointed under section 153C. The order was therefore not open to challenge on the ground of internal management.
Conclusion: The appointment of administrators was valid.
Final Conclusion: The appellate challenge failed in full, and the order directing management intervention and related reliefs was sustained.
Ratio Decidendi: For purposes of winding up on the "just and equitable" ground, the court is not confined by ejusdem generis to the preceding clauses; where proven misconduct and surrounding circumstances show lack of confidence, loss of probity, and the need to protect shareholders, winding up and consequential management intervention may be ordered.
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