TaxTMI 
TaxTMI 
1985 (11) TMI 192
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....d for an authorisation in terms of section 399(4) of the Act to enable them to move an application under sections 397 and 398 in the High Court. By an order dated December 18, 1981, the Company Law Board authorised "the applicants" to apply to the court under the above sections in relation to the company. A list of the 45 members who applied to the Central Government other than the three abovementioned is appended to the order and includes Sri V.K. Mathur, the petitioner in this petition. In pursuance of this authorisation, C. P. No. 91 of 1982 was filed on September 4, 1982. The petition sets out the names of the petitioners as "Sri V.K. Mathur, Daryaganj, Delhi, and other supporting petitioners" but no other names were given. In paragraph 25 of the petition, after referring to the above authorisation of the Company Law Board, it was stated : "The petitioners also attach herewith the consent of more members for the filing of this petition." But no such consent was attached. Curiously enough, in addition to certain other respondents, Anil Khanna, Akash Lal and Sunil Dev, who had represented the aggrieved group before the Central Government in making the application under section....
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....ch was in terms granted to 45 members acting through three named representatives in the order". The other, mentioned in the order of the same date in C.P. No. 91 of 1982, was that the "amended petition be taken on record subject to the petitioner's filing a supporting affidavit". This was because though C.A. No. 22 of 1984 was supported by an affidavit of V.K. Mathur, there was no affidavit of his verifying the averments contained in the amended petition as had been filed along with the original petition. No such supporting affidavit has, however, been filed though several specific opportunities for the purpose were given on January 22, 1985, April 10, 1985, May 13, 1985, July 29, 1985, and September 11, 1985. Apparently, V.K. Mathur was no longer interested in the petition. Counsel for the respondents produced a letter addressed to him by V.K. Mathur to this effect but as V.K. Mathur has not withdrawn the vakalat executed by him in favour of Sri K. K. Mehra till today, this letter was not taken on record. Faced with this situation, the petitioner filed C.A. No. 899 of 1985. This purported to be an application under Order 1, rule 10 of the Code of Civil Procedure. It was stated in....
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....ction 399(1)(a) or (b ) and cannot file an independent petition on their own, cannot be permitted to join the petition filed by V. K. Mathur under an authorisation of the Central Government under section 399(4) which does not cover them; (c) that it will indeed be a great irony if Anil Khanna, Akash Lal and Sunil Dev, who obtained the necessary authorisation to proceed against the persons then in management for certain acts, are themselve permitted to be proceeded against, on the basis of the same authorisation ; and (d) that V.K. Mathur, having earlier admitted that he could not procure supporting affidavits or name the petitioners supporting him and having stated that he would prosecute the petition on his own should not now be permitted to lend his name to the petition and permit other total strangers to prosecute a petition which he is no longer really interested in. On the other hand, Mr. Mehra submits (a) that the petition filed by V. K. Mathur (even without any supporting petitioners) under the authorisation given by the Central Government was perfectly valid and in order ; (b) that the amended petition is also in order, as the additional facts alleged therein had been verif....
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....age and purpose of these provisions, it seems to me that it will not be in consonance with the purpose of section 399 or the interests of justice and equity to allow the present petition to continue. The provisions of Chapter VI of the Companies Act enable the court (under sections 397 to 407) and the Central Government (under sections 408 and 409) to interfere with a view to prevent oppression and mismanagement in the affairs of a company and pass such orders as may be appropriate to remedy the. situation. While the powers of the Central Government in this regard are somewhat restricted, the court, under sections 402 and 403, has much wider powers. But both these sets of provisions can be set in motion only when a minimum stipulated number of members of the company (in case of resort to sections 397, 398 and 408) or certain specified managerial personnel, in case of resort to section 409, are aggrieved by the existing or apprehended state of affairs in the company. Taking the provisions of sections 397 and 398, a petition under either of these sections can be moved only if the same is supported by the minimum number of members mentioned in clause (a) or clause (b) of section 399(....
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....the making of the application has not been filed. As I said earlier, the papers on the basis of which the Central Government gave its authorisation are not before me but, in view of the terms of the order itself, it can be assumed that all the persons mentioned in the order and its annexure had consented (I shall also assume, in writing) to the idea of an action under sections 397 and 398 against the persons in power and management in the company. But any consent at that stage was to the application being made to the Central Government. The Central Government may have granted or withheld authorisation and the presentation of the petition in court is a different stage, and a different proceeding. Section 399(3) seems to require that when an application under sections 397 and 398 is intended to be moved by a set of persons and is moved by one of them, the written consent of all of them should be filed with the application. Clearly, this is how Mr. V. K. Mathur himself understood the requirement. According to the cause title, the petitioners are "Mr. V. K. Mathur and other supporting petitioners" and, as per paragraph 25 of the petition, the consent of more members for filing the peti....
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....of the provisions to require, in case there is any such change between the first and second stages, that the change be brought to the notice of the Central Government and a revised authorisation issued in favour only of those who are willing to give their consent in writing to the petition. But, whatever may be the position in a case where written consents of all except a small number of the authorised persons are filed, it seems difficult to accept a petition by only one-in fact it is none, as will be discussed later-of the authorised persons without affidavits of consent from the others as one which fulfils the statutory requirements. The second requirement also is not fulfilled. Apart from the fact that the absence of written consents of all those other than Mr. Mathur itself shows that the petition is not on their behalf, it is also extremely doubtful if it is for the benefit of all of them. One strange feature in this case is that three of the respondents to the petition against whom reliefs are sought were not only persons who joined in the applications to the Central Government but, in fact, were persons who represented the others before the Central Government. It is diffic....