TaxTMI 
TaxTMI 
2013 (4) TMI 252
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....f 1991 under Sections 397 and 398 of the Act 1956, before the High Court of Calcutta with the consent of M/s Bhagwati Developers Pvt. Ltd. (4.78% shares) (hereinafter referred to as `the appellant') and Shri R.L. Gaggar (7.61% shares), alleging mis-management and oppression. C. Respondent No. 2 contested the said Company Petition by raising the preliminary issue of maintainability, stating that the valid shares held by the petitioners and consenting parties therein, were valued at less than 10 per cent of the total shareholding, and thus, the petition itself was not maintainable. The Company Court Judge vide order dated 13/14.1.1992, dismissed the said Company Petition as not maintainable, allowing the aforementioned preliminary objection, without entering into the merits of the case. D. Shri Ajit Kumar Chatterjee and Shri Arghya Kusum Chatterjee, both petitioners therein, filed two appeals being Nos. 40 and 35 of 1992 respectively, before the Division Bench of the Calcutta High Court challenging the dismissal of the Company Petition on the ground of maintainability. Both the appeals were consolidated and heard together. E. On 16.11.1993, Shri Ajit Kumar Chatterjee joined the Bo....
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....rt, the appellant preferred appeal Nos. 346 and 347 of 1996, which have been dismissed vide impugned judgment and order dated 24.11.2003. Hence, these appeals. 3. Shri Sunil Kumar Gupta, learned senior counsel appearing on behalf of the appellant, has submitted that the High Court, while dismissing the appeals filed by the appellant, failed to appreciate the judgment and order of this Court dated 26.4.1996, wherein this Court had held, that the issues of limitation and the locus standi of the appellant would not be questioned. The Division Bench of the High Court hence, ought not to have non-suited the appellants on the issue of locus standi. The Chatterjee brothers had withdrawn their appeals, and thus, the High Court has erred in its interpretation of the order of this Court in correct perspective, and has therefore, rendered the appellant remediless. Even if the said Company Petition had been withdrawn, the appellant with whose consent the Company Petition had been filed, was certainly entitled to revive the said Company Petition, and to challenge the order of the Company Court Judge before the Division Bench. It was not permissible for the Division Bench to dismiss the applica....
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.... Chandrasekara Raja & Anr., AIR 2008 SC 1738) 8. In Rajahmundry Electric Supply Corporation Ltd. by its Vice- Chairman, Appanna Ranga Rao v. The State of Andhra, AIR 1954 SC 251, this Court, while dealing with a case under Section 397 of the Act 1956 and Section 153(c) of the Indian Companies Act, 1913, which were analogous to the provisions of Section 397 of the Act 1956, held, that the issue of whether the petitioner had obtained consent of the members of the company in order to meet the requirements of holding 1/10th of the total shares, is to be examined in light of whether such a number was infact attained and maintained on the actual date of presentation of the Company Petition in court, and in the event that a member later withdraws consent, the same would not affect either the right of the applicant-petitioner to proceed with the application, or the jurisdiction of the court to dispose of it on merits. 9. In M/s. Dale and Carrington Invt. (P) Ltd. & Anr. v. P. K. Prathapan & Ors., AIR 2005 SC 1624, this Court dealt with the issue of transfer of shares without seeking the permission of the Reserve Bank etc. and held as under: " On the question of locus standi the learned ....
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....the consent being annexed with the Company Petition. (Vide: P. Punnaiah & Ors. v. Jeypore Sugar Co. Ltd. & Ors., AIR 1994 SC 2258; and J. P. Srivastava and Sons Pvt. Ltd. & Ors. v. M/s. Gwalior Sugar Co. Ltd. & Ors., AIR 2005 SC 83) 11. In view of the above, the case at hand is required to be considered in the light of aforesaid settled propositions of law, which provide that where the Company Petition is filed with the consent of the other shareholders, the same must be treated in a representative capacity, and therefore, the making of an application for withdrawal by the original petitioner in the Company Petition, would not render the petition under Sections 397 or 398 of the Act 1956, non-existent, or non-maintainable. The other persons, i.e., the constructive parties who provide consent to file the petition, are in fact entitled to be transposed as petitioners in the said case. Additionally, in case the petitioner does not wish to proceed with his petition, it is not always incumbent upon the court to dismiss the petition. The court may, if it so desires, deal with the petition on merit without dismissing the same. Further, there is no requirement in law for the shareholder h....
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....lity of the Company Petition on merits. 15. Another Chatterjee brother, namely, Shri Arghya Kusum Chatterjee withdrew his Appeal No. 40 of 1992, vide order dated 18.11.1993. The Court observed, that in view of the order dated 16.11.1993, no order was necessary, for the reason that if one appeal fails, the other cannot be maintained. The court further held: "We place it on record that the appellant No. 2 does not wish to proceed with the above appeals and also prays for dismissal of the applications under Sections 397 and 398 of the Companies Act which stand dismissed by the order passed by the learned Trial judge. So, it is placed on record that both the appellant Nos. 1 and 2 do not wish to proceed with the appeals which were already dismissed by us for non - prosecution on 16th November, 1993. Accordingly, both the applications are disposed of." 16. Immediately after the said withdrawal of the appeals, the present appellant moved an application dated 22.12.1993, to recall the aforesaid orders dated 16.11.1993 and 18.11.1993, and for transposing the appellant in place of the Chatterjee brothers, while making them proforma respondents. The said application was rejected by order ....
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...., the same remained intact. Furthermore, the Court did not examine whether a petition filed in representative capacity can be withdrawn unilaterally by the party before the court, and what effect Order XXIII Rule 1 (5) CPC which provides that court cannot permit a party to withdraw such a case without the consent of the other parties, would have. 20. The courts have consistently held, that a suit filed in representative capacity also represents persons besides the plaintiff, and that an order of withdrawal must not be obtained by such a plaintiff without consulting the category of people that he represents. The court therefore, must not normally grant permission to withdraw unilaterally, rather the plaintiff should be advised to obtain the consent of the other persons in writing, even by way of effecting substituted service by publication, and in the event that no objection is raised, the court may pass such an order. If the court passes such an order of withdrawal, knowing that it is dealing with a suit in a representative capacity, without the persons being represented by the plaintiffs being made aware of the same, the said order would be an unjustified order. Such order theref....
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....is ground alone the present appeals are liable to be dismissed and there is no requirement in the eye of law to enter into the other aspect of the matter touching maintainability of the original Company Petition. 22. In our humble opinion, the Division Bench has gravely erred in taking the aforesaid view, as the same renders the order of this Court dated 26.4.1996, a nullity. This Court had passed the order after hearing the present respondents on the basis of suggestions made, and concessions offered by them. It was in fact, suggested by the learned counsel appearing on behalf of the respondents, that if the appellant prefers such appeals in the High Court even now, the respondents shall not raise any objection on the ground of limitation, and that they would not also object on the ground of the locus standi of the consenting shareholders. Thus, the same makes it clear, that the right of maintenance of an appeal against the judgment of the learned Single Judge dated 2.2.1995, was in fact an offer made by the respondents themselves, with a further undertaking being provided by them with respect to the question of limitation and locus standi of the appellant, stating that the same ....
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....nd again. 26. In City Improvement Trust Board, Bangalore v. H. Narayanaiah etc. etc., AIR 1976 SC 2403, this Court held, that the aforesaid phrase means, "what is not either expressly provided for, or applicable by way of necessary implication, must be excluded". 27. Similarly, in the case of Maktool Singh v. State of Punjab, AIR 1999 SC 1131, this Court held, that this phrase means, that a court/authority can exercise power only to the extent that such powers are applicable. In other words, if there is an interdict against the applicability of the said provisions, the court cannot use such provisions. 28. If the interpretation given by the Division Bench of the High Court is accepted, it would not merely render the appellant remediless at whose instance, this Court had passed the order dated 26.4.1996, but would also defeat the doctrine embodied in the legal maxim, 'Ubi jus ibi idem remedium' (where there is a right, there is a remedy). This Court dealt with the aforesaid doctrine in Dhannalal v. Kalawatibai & Ors., AIR 2002 SC 2572 and held, that "if a man has a right, he must have the means to vindicate and maintain it, and also a remedy, if he is injured in the exercise and ....