TaxTMI 
TaxTMI 
2004 (8) TMI 384
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....ring for the appellant-company submits that a company petition can be filed only by a contributory or a member of a company, and the respondents being stand members and not the members of the appellant-company under article 3(a), have no locus standi to file the petition. He submits that the learned Company Judge has erred in invoking the 'just and equitable' clause, and therefore the impugned order is liable to be set aside. He also submits that section 433(f) of the Act for winding up of a company can be invoked on 'just and equitable' grounds, but the same is not attracted in the facts of the given case and present set of circumstances, merely on the ground that stand members are deprived of voting rights as per the Articles of Association, which is illegal. Learned counsel relying upon the decision in Hind Overseas (P.) Ltd. v. Raghunath Prasad Jhunjhunwalla AIR 1976 SC 565 argued that the 'just and equitable' clause can be invoked as a last resort. He submits that the respondents have not exhausted the alternative remedy under sections 397 & 398 of the Act. He submits that the learned Company Judge, merely on basis of the averments, erred in observing that the contentions requ....
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....vestment Corpn. of Uttar Pradesh v. North India Petro Chemical Ltd. [1994] 3 SCC 348. He submits that the decision in Miland Exports (P.) Ltd.'s case (supra) was rendered on 27-11-1992 and later on the Apex Court had an occasion to consider the issue in Pradeshiya Industrial & Investment Corpn. of Uttar Pradesh's case (supra) wherein it was held that an order of admission has serious civil consequences and has to be followed by an advertisement and therefore an appeal under section 483 of the Act would lie, and ultimately, the Apex Court entertained the appeal and set aside the High Court order by which the petition was admitted. He submits that the decision in Pradeshiya Industrial & Investment Corpn. of Uttar Pradesh's case (supra) was rendered on 9-2-1994 and being a later decision is applicable to the facts of the present case and impliedly overrules the earlier decisions, and therefore this appeal is maintainable. He also submits that the respondents made an application to become stand members and were admitted as such and now they cannot make a grievance that they should be regarded as club members, and not being the members for the purposes of the Act cannot seek winding up ....
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.... decision in Pradeshiya Industrial & Investment Corpn. of Uttar Pradesh's case (supra) was rendered on 9-2-1994. Under the circumstances, the argument of the learned counsel for the respondents is not acceptable, and it cannot be said that the appeal is not maintainable. 9. Now, we shall proceed to consider the case of merits. There is a provision in the Act for winding up of the company and section 433 deals with it. As per clauses (a) to (e) of section 433 of the Act any of the conditions prescribed has to be satisfied and fulfilled for winding up of the Company, but at the same time this Court is not bound to make an order for winding up even though the condition required for filing an application for winding up of a company may exist. This Court can also recall the order of admission of a company petition if an application is moved by the interested party and the same depends on the facts of a given case. So far as clause (f) of section 433 of the Act, i.e., the clause 'just and equitable' is concerned, no definite condition is prescribed and it leaves the entire matter to the wide and wise judicial discretion of the Court and there is no straight-jacket formula, but each case....
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....s herein contained. The proviso to section 29 also empowers a company to include any additional matters in the articles. The additional matter in the articles relates to stand members who are not members of the company at all. Therefore, the contention of the respondents is wholly unsustainable. 12. It is not disputed that the appellant, the Bangalore, Turf Club Ltd., was incorporated as company under the Act on 1-3-1962 under Certificate of Incorporation No. 1449/1962, having its registered office at Race Course, Race Course Road, Bangalore. It is also seen that the respondents knowing fully well that the rights of the stand members are not identical to the rights of club members applied for becoming stand members, acquiesced in and conducted themselves in that manner for several years. Nothing has been placed on record to show that any of the respondents had submitted any representation to the Company at any point of time. However, as alleged one N.M. Lingaraju made a representation dated 15-7-1997 and 13-8-1997 to the Chairman of the appellant-Company to consider the stand members also as club members and to extend the same privileges and rights which are extended to the club m....
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.... 433(f) of the Act on the ground that as per article 2(e) they are members of the Company according to the context and under Article 14 of Table C of the First Schedule they have voting rights. As stated, the Articles of Association is clear that the stand members are not members of the Company for the purpose of the Act and also do not have any voting rights in the company. 16. A reference can also be made to the Supreme Court decision in Needle Industries (India) Ltd. v. Needle Industries Newey (India) Holdings Ltd. AIR 1981 SC 1298 wherein the Supreme Court at para 49 pointed out that every illegality committed by a Company or persons in its management need not be oppressive and that every act of oppression need not be illegal, and observed as follows : "49. The question sometimes arises as to whether an action in contravention of law is per se oppressive. It is said, as was done by W.H. Bhagwati, J. in S.M. Ganapatram v. Sayaji Jubilee Cotton & Jute Mills Co. [1964] 34 Comp. Cas. 777 at pp. 830-81 that 'a resolution passed by the directors may be perfectly legal and yet oppressive, and conversely a resolution which is in contravention of the law may be in the interests of the....