TaxTMI 
TaxTMI 
1995 (12) TMI 266
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....ia (SEBI) have issued instructions to all the companies that with a view to protect the interest of investors, the letter of offer for 'right issue' be sent to the shareholders by registered post. 3. The petitioners submitted that they did not get a notice of 15 clear days as contemplated under section 81, and consequently the petitioners have been deprived of their valuable rights in respect of right issue as well as warrants and debentures. The petitioners submit that at no time the said company as well as Registrar of Issue sent the letter of offer relating to the right issue either at the foreign addresses or at the Bombay address. 4. It is further submitted that Petitioner No. 1 had telephoned Shri Ashok Chaturvedi, Chairman and managing director on 14-10-1994 from London that the petitioners had not received the original offer forms from the company. The company sent duplicate forms at the Bombay address, i.e., Manish C/o 609, Jagannath Shanker Shet Road, Singapuri Building, 2nd floor, Bombay-400002. The envelope containing the dupli-cate forms was delivered to Manish Mehta C/o Sanjay Scientific Corpn., Ground Floor, Singapuri Building, Bombay. Manish Mehta in turn gave the....
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....ffer for rights issue be also issued to shareholders by registered post in future. 7. Mr. Ram Panjwani, the learned counsel for the petitioners has placed reliance on Smt. Arati Dutta v. Eastern Tea Estate (P.) Ltd. AIR 1988 SC 325. In this case, the Supreme Court has held that in respect of the orders passed by the Single Judge of the High Court under sections 397 and 398, the provisions of section 483 of the Act would be attracted and an appeal would lie to the Division Bench. The appeal lies to the same High Court irrespective of the powers under the Letters of Patent, meaning thereby that the jurisdiction which the Court exercises on the company side is akin to the jurisdiction exercised by the Court on the original civil side. The orders passed on the original civil side are appealable. Similarly, orders passed by the company Judge in exercise of his jurisdiction are also appealable to the Division Bench of the same High Court. 8. The learned counsel for the petitioners has submitted that this Court under rule 9 of the Companies (Court) Rules has inherent powers. Rule 9 is reproduced as under: "9. Inherent powers of Court-Nothing in these Rules shall be deemed to limit or o....
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....nt, engagement, etc. The expression 'relating to* means inter alia stand in some relation, to have bearing on concern, to pertain, to refer to bring into association with or connection with." 12. It is submitted that if the matter relates to a company, then, the jurisdiction has to be conferred to the High Court and under section 10, it has to be the High Court where the registered office of the company is situated. 13. The learned counsel for the petitioners has relied on a Division Bench judgment of the Madhya Pradesh High Court, reported as Nava Samaj Ltd. v. Civil Judge, Class /AIR 1966 MP 286, and has drawn attention of this Court, particularly on the following passage of para 8 of the judgment, the relevant part of that para reads as under: "The necessary implication of section 3 of the Act of 1913, as also of section 10 of the Act of 1956, is to exclude jurisdiction of other Courts in regard to matters covered by the Companies Act. In connection with the exclusion of jurisdiction of other Courts, the line of inquiry is not whether there is any provision besides section 10 in the Companies Act giving the Company Court exclusive jurisdiction in company matters. But it is wh....
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....ase has no relevance in the facts and circumstances of this case. 16. Mr. Panjwani has also cited the case of Maharaja Exports v. Apparels Exports Promotion Council [1986] 60 Comp. Cas. 353 (Delhi). In this case Chawla J. of Delhi High Court has held that the High Court has jurisdiction unless it expresses that the High Court has no jurisdiction. 17. In R. Prakasam v. Narayana Dharma Paripalana Yogam [1980] 50 Comp. Cas. 611 Kerala High Court had held that except in cases where the Companies Act, confers jurisdiction on the company Court or some other authority like the Central Government or the CLB, either expressly or by implication, all other disputes pertaining to a company are to be resolved through the forum of civil court when the disputes are kept on being resolved by them. Where wrong is done to an individual member, he can insist, by recourse to a civil suit, on "strict observance of the legal rules, statutory provisions and provisions in the memorandum and articles of association which cannot be waived by a bare majority of shareholders". Similar view was taken in a judgment reported as Panipat Woollen & General Mills Co. Ltd. v. R.L. Kaushik [l969] 39 Comp. Cas. 249 (....
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....an industrial dispute, nor does it relate to enforcement of any other right under the Act the remedy lies only in the civil court. (2) If the dispute is an industrial dispute arising out of a right or liability under the general or common law and not under the Act, the jurisdiction of the Civil Court is alternative, leaving it to the election of the suitor concerned to choose his remedy for the relief which is competent to be granted in particular remedy. (3) If the industrial dispute relates to the enforcement of a right or an obligation created under the Act, then the only remedy available to the suitor is to get an adjudication under the Act. (4) If the right which is sought to be enforced is a right created under the Act such as Chapter VA then the remedy for its enforcement is either section 33C or the raising of an industrial dispute, as the case may be." (p. 446) 21. The learned counsel has also placed reliance on another celebrated judgment of the Supreme Court reported as N.P. Ponnuswami v. Returning Officer, Namakkal Constituency [1952] SCR 218, Mr. Panjwani submitted that every right must have a corresponding remedy to enforce it. He has particularly drawn the attent....
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.... had observed that it is well understood in all systems of civilised jurisprudence that where there is a right, there is a remedy. 24. Mr. Panjwani submitted that under section 81, time of 15 days mean that there should be interval of 15 days from the date of receipt and date of closing. In the present case, the company had never sent original offer under section 81(1)(b) to the petitioner. The fraud has been alleged against the company. It has also been alleged that the company has acted mala fide and illegally. It is also alleged that action of the company is oppressive. 25. Mr. Haksar, the learned counsel for the respondent-company in reply had taken a threshold objection that this petition before this Court is not maintainable. He submitted that though this petition has been filed under section 81(1)(b)(10), whereas allegations and averments when properly comprehended clearly make out 8 cases under sections 397 and 398. Mr. Haksar had also drawn attention of the Court to the averments of the petition where fraud has been alleged against the company. It has also been alleged that the company has acted mala fide and illegally. He also pointed out from the averments of the petit....
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....fered to any person whether or not those persons include the persons referred to in clause (a) of sub-section (1) in any manner whatsoever- (a )if a special resolution to that effect is passed by the company in general meeting, or (b) where no such special resolution is passed, if the votes cast (whether on a show of hands, or on a poll, as the case may be) in favour of the proposal contained in the resolution moved in that general meeting (including the casting vote, if any, of the chairman) by members who, being entitled, so to do, vote in person or where proxies are allowed, by proxy, exceed the votes, if any, cast against the proposal by members so entitled and voting and the Central Government is satisfied, on an application made by the Board of directors in this behalf, that the proposal is most beneficial to the Company. (2) Nothing in clause (c) of sub-section (1) shall be deemed- (a )to extend the time within which the offer should be accepted, or (b)to authorise any person to exercise the right of renunciation for a second time, on the ground that the person in whose favour the renunciation was first made has declined to take the shares comprised in the renunciation.....
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....Manish Mehta in place of Manish Shah. There is nothing remains of the said delivery of the duplicate form and as such respondent's liability was to properly address and pre page the envelope to the company in the application form in compliance and it was done with full and meticulous compliance of the law and accordingly the respondent is not liable or answerable for the non-receipt of the registered letter or for the alleged delay in delivery of the duplicate. It would have been received by Credit Lyonnais in Delhi on Monday, 17-10-1994 which could have been accepted. 33. It is also mentioned in the reply that the Credit Lyonnais, Bombay was right in refusing to accept the application inasmuch as only the New Delhi Branch of Credit Lyonnais was only entitled to receive the above application. The petitioners had to work according to instructions which were contained in the application form. It is submitted that request made by the petitioners is not bona fide inasmuch as they did not tender the application at Bombay only. It is also submitted that the respondent ought to have accepted the same at Bombay. 34. The learned counsel for the respondent submitted that allotment of right....
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....sions of the Act and the High Court does not have any general plenary or residuary jurisdiction to deal with all matters and all questions arising under the Companies Act." (p. 834) 38. Mr. Haksar has also placed reliance on Satish Chandra v. Union of India AIR 1995 SC 138. In this case the Amendment Act 31 of 1988 by which the jurisdiction to CLB had been challenged. The court observed: "The winding up power has more serious consequences the same has been retained with the High Court while clothing the Board with a less drastic power visualised by section 397. The difference does provide a good ground of distinction. The argument of lack of intelligible and acceptable differentia in having two for the aforesaid two purposes is therefore not tenable. The provision cannot also be assailed on ground that the minority shareholders who would normally like to invoke power of section 397 would be required to approach Benches of the Board which do not function in all the States as do the High Courts and therefore minority shareholders would not be able to obtain relief against the oppression by the majority. Regulation 7 of the Company Law Board Regulations, 1991 which provides for pla....
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....tter like this. 43. Mr. Haksar also cited R.R. Rajendra Menon (No. 2) v. Cochin Stock Exchange Ltd [1990] 69 Comp. Cas. 256 (Ker.). In this case the relevant portion is set out as under: "No provision in the Act has been brought to our notice as specifying expressly or impliedly that an application to compel a company to comply with the requirements in section 257 will lie in the company court. The Act specifies certain questions or disputes to be resolved by the Central Government, certain others by the Company Law Board and certain matters to be dealt with by the company court. Only such matters as are specified in the Act or in the rules to be dealt with by the Court could the company court deal with. The jurisdiction of the ordinary civil court can be regarded as impliedly barred in respect of those matters specified in the Act to be dealt with by the Court. It cannot be held that the jurisdiction of the civil court in respect of all other matters relating to a company is barred. The corollary is that, unless a particular matter is specified in the Act to be dealt with by the company court, it cannot exercise jurisdiction merely because it is also a matter which relates to a ....