TaxTMI 
TaxTMI 
2010 (8) TMI 165
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....directing the maintenance of status quo in respect of the shares of the company being the subject-matter of the dispute. 5. During the pendency of the said company petition the original applicant, predecessor-in-interest of the present appellants, died and substitution was duly made. It further transpires that some of the substituted heirs also expired and an application to such effect was made. 6. While the said company petition was pending before the Hon'ble High Court one Ajit Kumar Agarwal initiated proceeding before the Company Law Board for recording his name as a shareholder of the company. Amidst pendency of the said company petition, the parties thereto settled their disputes and compromise was effected in the form of Memorandum of Understanding on 26-2-2007. 7. Pursuant to such Memorandum of Understanding, so entered into, the appellants took out a judge's summon for an order that the company petition No. 252 of 1985 be treated as withdrawn and affidavit in support of the judge's summon was filed and registered as company application No. 302 of 2007. 8. By an order dated 12-4-2007 the company court dismissed the company application No. 302 of 2007 as not pressed, a ce....
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....rt of an order dated 11-3-2010 by which an application for correction was rejected by the Hon'ble First Court and other appeal filed by Ajit Kumar Agarwal being ACO No. 41 of 2010 challenging the other part of an order dated 11-3-2010 so far as it relates to the dismissal of their application for addition. 15. Though we do not wish to hear the appeal filed by Ajit Kumar Agarwal being ACO No. 41 of 2010 as the fate of the said appeal is in some way dependant upon the decision that would be passed in the present two appeals but for the purpose of doing the complete justice we have allowed the learned Counsel appearing on behalf of the said Ajit Kumar Agarwal, appellant in ACO No. 41 of 2010 to address this court in the aforesaid two appeals as well. 16. Thus we confined ourselves to the only question as emerges from the respective submissions of the counsels and stated in the first paragraph of this judgment. We are not deciding any right of the said Ajit Kumar Agarwal to be added as a party in the said company petition in the instant appeal. 17. Mr. S.B. Mukherjee, learned Senior Counsel appearing on behalf of the appellants submitted that the impugned judgment cannot be sustaine....
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....ctrine "Actus curiae neminem gravabit", the act of court could do no harm to litigant. Mr. Mukherjee contends that such a mistake which is a mistake apparent on the face of the record is allowed to stand would occasion grave injustice to the litigant, and should be resorted to the position he would have occupied but for that mistake he relies upon a decision in Jang Sing v. Brij Lal AIR 1966 SC 1631, Jai Berham v. Kedar Nath Marwari AIR 1922 PC 269, Union of India v. Kamal Kumar Goswami AIR 1974 Cal. 231. 23. Mr. S.B. Mukherjee, learned Senior Counsel further cited a judgment in Hongo India (P.) Ltd.'s case (supra) that the High Court possesses all powers to correct the errors apparent on the face of the record. Apart from the power it is a duty of the High Court to correct any apparent error in respect of any order passed by it. He thus, submitted that the error committed by the court is to be rectified nunc pro tunc. 24. Mr. S.N. Mukherjee, learned Senior Counsel appearing for the said company, i.e., Nischintapur Tea Co. Ltd. adopts the arguments advanced by Mr. S.B. Mukherjee, learned Senior Counsel and further contended that mistake which occurred in an order dated 12-4-2007 ....
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....sy and/or disputes and/or a decision as to what the rights intended or did not intend to do. 29. Mr. Chatterjee further relies upon a judgment in Salil Dutta v. T.M. (P.) Ltd. [1993] 2 SCC 185 that if the court finds that the client is an innocent litigant, he cannot suffer for the negligence and/or misdemneour of the advocate but the said principle can be extended to a restrict villager but not to a private limited company having head office in metropolitan city and administered and managed by the educated persons. 30. He further argues that an application under sections 397 and 398 of the Companies Act, 1956 is maintainable at the instance of the legal representatives of the deceased member whose name is still on the register of the members of the company and relies upon a judgment in World Wide Agencies (P.) Ltd. v. Mrs. Margarat T. Desor AIR 1990 SC 737. He further relies upon a judgment of the Madras High Court in L.RM.K. Narayan v. Pudhuthotam Estates Ltd. [1992] 74 Comp. Cas. 30 for the proposition that once a petition under sections 397 and 398 of the Companies Act, 1956 is validly presented any shareholder can ask for his substitution even though he does not hold the req....
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....lication which is primarily an application for withdrawal of the main company petition No. 252 of 1985. 34. The said company application No. 302 of 2007 appeared before the Hon'ble First Court and by an order dated 12-4-2007 as it appears from the recording made therein, that the said company application No. 302 of 2007 itself was dismissed as not pressed and not the company petition No. 252 of 1985. 35. The controversy which needs to be decided and the parties are not ad idem is whether the said company petition No. 252 of 1985 was intended to be dismissed as not pressed or the said company application No. 302 of 2007 was in fact dismissed as not pressed. 36. The Court of Appeal while dealing with the situation where the court below have recorded the happenings of the event occurred on the day of passing of the order which is reflected in the order itself, should not embark on an inquiry and find out the veracity of such happening. The Appellate Court is bound to accept the statement of the judges recorded in their judgment as to what transpired in the court and contradiction to such statement made by the judge should not be allowed by affidavit or other evidences. The judge st....
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....te-on-Record for moving the said application and for withdrawal of CP No. 252 of 1985 and all applications connected thereto. The intention of the applicants was to withdraw the petition and to have all interim orders vacated so as to give effect to the Memorandum of Understanding as they had no further interest in the said company matter. 7. We say that an order was passed on the said application on 12th April, 2007. A copy of the said order dated 12th April, 2007 is annexed hereto and marked "B". The applicants after 12th April, 2007 had not given any further attention to the orders and was under the impression that the company petition being CP No. 252 of 1985 and all applications connected thereto had been dismissed as withdrawn. 8. We say that all of a sudden, in or about 30th January, 2010 the applicants were contacted by the present directors of the respondent company and the applicants were shocked to know that in connection with another proceedings, it has been contended that CP No. 252 of 1985 and the applications in connection thereto has been shown pending in the Case Status Information System of this Hon'ble Court. A copy of the Case Status Information System of this....
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....petition alive and/or pending. 40. The correction as embodied under section 152 is a correction of such nature which on bare look does not require any submission and/or argument to be advanced we are afraid that such is not the situation herein. The said company application No. 302 of 2007 has three fates. One is if allowed shall make the said company petition No. 252 of 1985 dismissed as withdrawn. Secondly the said application may be dismissed in view of the original proceeding being in representative character and the court refuses to grant leave under Rule 88(2) of the Companies (Courts) Rule, 1959 and thirdly dismissal of the said application as being not pressed at the statement of the parties. The Hon'ble Court was not unmindful of the mandatory provisions contained in Rule 88(2) of the Companies (Courts) Rule, 1959 and was pleased to observe : "Rule 88(2) of the Companies (Court) Rules instructs that a dismissal or a withdrawal of a petition under section 397/398 of the Companies Act needs to be made upon application of mind. The order of April 12, 2007 was a run of the mill of order of dismissal that does not reveal any application of the mind to the matter as it ought t....
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....t, on the part of the court but even if it was submitted that the petition was not to be proceeded with, it was incumbent on the part of the petitioners to draw the attention of the court that it was a petition under section 397/398 of the Act. It is, indisputably, the duty of the Judge to go through the papers before pronouncing an order and take responsibility therefor. It has also come to pass, undesirable as it may be, in this docket-fatigued system where the sheer number of matters sits heavy on every judicial officer, that upon a prayer for dismissal simpliciter of an action being made, a casual order is made for dismissal. The essence of the matter is as to whether the court intended to dismiss the petition or permit the withdrawal thereof but erroneously recorded the dismissal of the application. If it can be said that the intention was one and the recording another then there would be a mistake that can be rectified at any time, subject to equitable considerations as rights having accrued to others on the basis of the erroneous recording. But if it does not appear that the order intended to dismiss the petition and erroneously recorded the dismissal of the application, it....
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....etitioners' bidding. A formal application was taken out by the surviving petitioners with apparent knowledge that dismissal of the proceedings was not a matter of course. If the applicants in CA No. 53 of 2010 had said that they intended to withdraw the petition without having made a formal application for withdrawal, the court may not have lent any credence to such submission. There was, indeed, a formal application for withdrawal of the petition and in its head and body and tail, the application had "leave for withdrawal" written all over." [Emphasis supplied] 44. Let us now deal with the judgment cited by Mr. S.B. Mukherjee, learned Senior Counsel in support of such contention the judgment in Jai Berham's case (supra) where the Privy Council has laid down that the act of the court does not injure to any of the suitors and the expression 'the act of the court' is used it does not mean merely the act of the primary court or of any intermediate Court of Appeal. The same principle was reiterated in a case of Jang Sing (supra). 45. There is no quarrel with such proposition of law such is not the case where the appellant can take shelter under the act of the court. The appellants we....