Board-authorised consent is essential for oppression and mismanagement petitions; unauthorised secretary consent fails statutory qualification.

Consent to file a petition under sections 397 and 398 of the Companies Act, 1956 must be validly authorised by the company's board under section 399; a company secretary cannot give such consent without board approval or later ratification. The court distinguished merely signing or verifying pleadings from taking the substantive corporate decision to commence oppression or mismanagement proceedings, and treated unauthorised consent as insufficient to satisfy the statutory qualification. On the merits, the allegations arising from a family control dispute were found not to establish oppression or mismanagement, as the complained-of acts had largely been regularised and no practical basis for relief remained.

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Issues: (i) Whether the petition under sections 397 and 398 of the Companies Act, 1956 was maintainable in the absence of a valid consent under section 399. (ii) Whether any case of oppression or mismanagement was made out on the merits.

Issue (i): Whether the petition under sections 397 and 398 of the Companies Act, 1956 was maintainable in the absence of a valid consent under section 399.

Analysis: The qualification to present a petition under sections 397 and 398 depended on compliance with section 399. The consent relied upon was signed by a company secretary without a board resolution authorising the act and without later ratification. The Court held that the giving of consent to institute proceedings under sections 397 and 398 was not a ministerial or administrative function of a secretary, and that the secretary could not usurp the powers of the board. The statutory scheme and the Companies (Court) Rules, 1959 showed a distinction between merely signing or verifying pleadings and taking the substantive decision to authorise litigation on behalf of a company. In the absence of valid authorisation, the statutory qualification was not satisfied.

Conclusion: The petition was not maintainable for want of valid consent under section 399, and the objection to maintainability succeeded.

Issue (ii): Whether any case of oppression or mismanagement was made out on the merits.

Analysis: The allegations arose out of a family dispute and internal control struggle. The Court, while referring to the subsequent course of events and the interim orders passed during the proceedings, found that the complained-of acts had in substance been regularised. On the materials placed, no sufficient case of oppression or mismanagement was established to justify relief under sections 397 or 398. The proceedings were viewed as lacking practical substance and as having been used to prolong the dispute between factions.

Conclusion: No relief was warranted on the merits, and the allegations of oppression and mismanagement failed.

Final Conclusion: The application failed both on maintainability and on merits, and the company petition was dismissed with costs.

Ratio Decidendi: A consent required to satisfy the qualification under section 399 of the Companies Act, 1956 must be authorised by the company through its board and cannot be validly given by a secretary acting without such authority, because authorising litigation under sections 397 and 398 is a substantive corporate beyond mere ministerial or administrative powers.

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