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of <h1>Composite application under Companies Act: Separate relief petitions not allowed, but two causes of action can be joined.</h1> The court held that a composite application filed under sections 397 and 398 of the Companies Act, 1956, is not permissible as it offends against the ... Oppression and mismanagement, Winding up - Appeals from orders Issues Involved:1. Preliminary objection to the composite application under sections 397 and 398 of the Companies Act, 1956.2. Competence of the appeal under clause 15 of the Letters Patent.3. Permissibility of a composite application under sections 397 and 398.Detailed Analysis:1. Preliminary Objection to the Composite Application:The respondents raised a preliminary objection to the composite application filed under sections 397 and 398 of the Companies Act, 1956. They argued that such a composite application is not tenable based on rule 88 of the Companies (Court) Rules, 1959, which provides different forms for applications under sections 397 and 398. The court noted that rule 11 enumerates various applications to be made by a petition, with item (12) relating to section 397 and item (13) to section 398, indicating the need for separate applications. The court emphasized that section 397 deals with relief in cases of oppression, while section 398 deals with relief in cases of mismanagement, making the subject matter distinct and separate. The court concluded that the composite application filed by the applicant offends against the provisions of rules 11 and 88, and thus, separate applications should be filed for relief under sections 397 and 398.2. Competence of the Appeal under Clause 15 of the Letters Patent:The court addressed the preliminary objection raised by Mr. Phadke regarding the competence of the appeal under clause 15 of the Letters Patent. The court referred to the definition of 'judgment' formulated in Justices of the Peace for Calcutta v. Oriental Gas Company, where it was stated that a judgment means a decision that affects the merits of the question between the parties by determining some right or liability. The court noted that the order made by the learned judge must clearly result in denying the applicant reliefs either under section 397 or 398 of the Companies Act, and thus, the judgment under appeal satisfies the condition of being a final judgment.3. Permissibility of a Composite Application under Sections 397 and 398:The court examined whether a composite application under sections 397 and 398 is permissible. It noted that while section 153C of the Indian Companies Act, 1913, contained subject matters of both sections 397 and 398, the present Act separated them into two sections. However, the court observed that section 399 requires the same qualifications for those making an application under either section 397 or 398, and the procedural part of giving notice to the Central Government is also the same. The court highlighted that the reliefs available under sections 397 and 398 are the same, and the power to pass interim orders under section 403 is also the same. Therefore, the court concluded that merely because the two causes of action are separated, it does not necessarily mean that separate applications must be made.The court also referred to the Rules framed under the Companies Act, particularly rules 11 and 88, and noted that these rules do not necessarily intend that relief under sections 397 and 398 must be by separate petitions. The court emphasized that rule 6 of the Companies (Court) Rules, 1959, states that the practice and procedure of the court and the provisions of the Civil Procedure Code shall apply to all proceedings under the Act and these Rules. Under Order II, rule 3, of the Civil Procedure Code, a plaintiff is permitted to unite several causes of action in the same suit against the same defendant. Therefore, the court held that the applicant is entitled to join the two causes of action in one petition.The court also noted that there have been cases where such composite petitions have been made and entertained by the court, such as In re Hindusthan Co-operative Insurance Society Ltd. and Mohan Lal v. Punjab Company Ltd. The court concluded that a composite petition is competent and set aside the order under appeal, giving two months' time to the respondents to file their answers to the application.
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