TaxTMI 
TaxTMI 
TaxTMI 
2017 (3) TMI 1393
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....e be granted to the petitioners to serve a copy of the emended company petition (without annexures) upon the respondents; (g) Such further and/or other consequential orders be passed as this Hon'ble Tribunal may deem fit and proper.' 2. It may be stated that the applicants herein, as the petitioners, have filed a company petition under Sections 111A. 235, 397, 398 and 402 of the Companies Act, 1958 (hereinafter referred to as the 'Act of 1956') alleging that respondents therein, viz, respondent Nos. 2-14 have conducted the business of the company, namely, Doloo Tea Co. (India) Ltd. (hereinafter referred to as the 'company') in such a manner which resulted in huge mismanagement besides subjecting the minority shareholders to oppression. 3. Notice of the proceeding was served upon the respondents therein. The respondents entered appearance and objected the petition on various grounds and also questioned the maintainability of the same. The Company Law Board, Kolkata (in short 'CLB' Kolkata) on hearing the parties refused to grant interim relief, sought for by the petitioners in company petition No. 994/2011 but was pleased to conclude on the face of....
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....representatives of petitioner No. 1 on their own had the requisite share qualification to prefer the company petition in terms of section 399 of the Act of 1956. This is because of the fact that at the time of death of the Petitioner No. l, his shareholding in the company was only in decimals. On this count also the application seeking substitution of legal representative(s) of petitioner No. l in his place in the petition is required to be rejected. 9. It has further been contended that the applicants fail to satisfy that on the death of petitioner No. l in company petition No. 994/2011, right to sue survives in favour of the surviving petitioners. This is because of the fact that the cause(s) of action which gave rise to the disputes in proceeding in hand is common to all the petitioners and such cause(s) of action cannot be separated from one another. therefore, the entire proceeding stands abated on the death of the petitioner No. 1. 10. Even if one assumes for the sake of argument that right to sue survives in favour of the surviving petitioners, yet, for non-substitution of the legal representative of the deceased petitioner No. 1 in time the proceeding in question stood ab....
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....igent in prosecuting his claim or if he is found that his application is based on falsehood and fabrication or if he is found to prefer such application for mala fids reason, the court is duty-bound to reject such application. 15. In support of such contention, the non-applicants/respondents have relied on the decision of the Apex Court in the case of Balwant Singh v. Jagdish Singh [2010] 8 SCC 685, the decision of Honble Calcutta High Court in the case of Corporation of Calcutta v. Murari Chum Law AIR 1976 Cal. 299 (FB), in the case of Renuka Dhar v. Pravat Kumar Jana 2016 (3) CHN (Cal.) 490, in Balwant Singh (supra), Hon'ble Apex Court held as follows: '31. .......... The provisions of Order 22 Rule 9, CPC has been the subject matter of judicial scrutiny tor considerable time now. Sometimes the Courts have taken a view that delay should be condoned with a liberal attitude, while en certain occasions the Courts have taken a stricter view and wherever the explanation was not satisfactory, have dismissed the application for condonation of delay. Thus, it is evident that it is difficult to state any straightjacket formula which can uniformly be applied to all cases without ....
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....ting circumstances and when viewed from the reasonable standard of practical and cautious men. The sufficient cause should be such as it would persuade the Court, in exercise of its judicial discretion, to treat the delay as an excusable one. These provisions give the Courts enough power and discretion to apply a law in a meaningful manner, white assuring that the purpose of enacting such a law does not stand frustrated. 36. We find it unnecessary to discuss the instances which would fall under either of these classes of cases. The party should show that besides acting bona fide, it had taken all possible steps within its power and control and had approached the Court without any unnecessary delay. The test is whether or not a cause is sufficient to see whether it could have been avoided by the party by the exercise of due care and attention. (Advanced Law Lexicon, P. Ramanatha Aiyar, 3rd Edition, 2005) 37. We feel that it would be useful to make a reference to the judgment of this Court in Perumon Bhagvathy Davaswom (supra). In this case the Court, after discussing a number of judgments of this Court as well as that of the High Courts, enunciated the principles which need to be ....
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....urts do not expect the appellant to be diligent. Where an appeal is admitted by the High Court and is not expected to be listed for final hearing for a few years, an appellant is not expected to visit the court or his lawyer every few weeks to ascertain the position nor keep checking whether the contesting respondent is alive. He merely awaits the call or information from his counsel about the listing of the appeal."' 16. Similar view was rendered by Calcutta High Court in the case of Corporation of Calcutta (supra) as well as the decision rendered by same High Court in the case of Renuka Dhar (supra). In Renuka Dhar (supra), Hon'ble Calcutta High Court held that the explanation for condoning the delay in filing an application for setting aside the abatement of appeal against the deceased respondent has to be reasonable or plausible, so as to persuade the Court to believe that the explanation offered is not only true but is worthy of exercising jurisdiction discretion in favour of applicant. 17. The arguments, so canvassed from the side of the respondents, were, however, disputed by the learned counsel for the applicants citing some alleged inherent infirmity therein. In ....
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....ent of the petition, even then, certain matters, such as, application seeking condonation of delay in preferring various applications/petitions/appeals/revisions etc. are to be interpreted liberally and the technicalities of law must not be allowed to defeat the justice since the laws of procedures are meant to regulate effectively, assist and aid the object of doing substantial and real justice and not to foreclose even an adjudication on merits of the substantial rights of citizen under personnel, property and other laws. 23. In support of such contention, the decision of the Apex Court in the case of Sardar Amarjit Singh Kalra v. Smt. Pramod Gupta [2003] 3 SCC 272 as well as the decision in Government of Andhra Pradesh v. Pratap Karan [2015] 10 SCALE 584 are relied on. In Govt. of Andhra Pradesh (supra), Hon'ble Apex Court reiterated the decision in Sardar Amarjit Singh Kalra (supra). 24. The learned counsel for the respondents/non-applicants, however, submits that above decisions have no application to the case in hand since the facts and circumstances in the cases, relied upon by the learned counsel for the applicants, are materially different from one we have been seize....
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....rt had ample power to add other worshippers (the suit being under section 92 of the Code of Civil Procedure) as parties under Order 1. Rule 10 of the Code of Civil Procedure as the suit did not abate. In Koshnaswami Iyer v. Soetholakshmi Ammul AIR 1919. Madras 479, a reversioner had instituted a suit to challenge an alienation made by a widow. On his death the next reversioner was permitted to continue the suit. The order of abatement passed in the suit was treated as a nullity and it was held that the next reversioner could continue the proceedings and an application in this behalf was governed by Article 181 of the Limitation Act. These cases are representative of a large body of case law governing cases brought under order 1. Rule 8 of the Code of civil procedure as representative suits. Although the actual plaintiffs before the court may be very few in number, they in fact represent a much larger body of persons. On the death of one or more of the parties before the court other persons who are not on record are permitted to continue the proceedings. This procedure is permissible on account of the fact that even originally the suit had been brought on their behalf and not for th....
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....not properly arise." There does not seem to be any reason why this reasoning should not be equally applicable to the proceedings before the court under Secs. 397 and 398 of the Companies Act, 1956. It must, therefore, be held that Shrimati Sharda Talwar was constructively a petitioner to the original petition and she was therefore, entitled to continue the proceedings as a petitioner. It equally follows that when proceedings have been brought under Section 397 and 398 of the Companies Act. 1956. It is not necessary that the ordinary legal representatives should be brought on record. The normal legal representatives are the heirs of the estate of the deceased. However, for the purpose of petitions u/ss. 397 & 398 of the Companies Act, 1956, it is only necessary that members who are already constructively before the Court should continue the proceedings. This will not of course debar the legal representatives from themselves wanting to continue the proceedings as heirs of the deceased petitioner they also fulfil the requirements of being members of the company." 27. In Gees Marine Products (P.) Ltd. (supra) CLB, Chennai states quite clearly that a proceeding under section 397/398 o....
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....a valid petition has been presented, any shareholder can ask for substituting himself as the petitioner" In the above circumstances, the CLB, in example of the inherent power under Rule 44 of the Company Law Board Regulations, 1991 is empowered to substitute the applicant in the place of the second petitioner for further prosecuting the company petition, subject to its validity. The plea of Shri Seshadri that there are no enabling provisions as in the case of Section 405 of the Act or Rule 101 of the Companies (Court) Rules, 1999 for substitution of any shareholder as a petitioner to any application under Section 397 or 398 will have no application in the facts of the present case. Accordingly, the application is allowed substituting the applicant in the place of the second petitioner, who is allowed to withdraw from prosecuting the company petition, Ordered accordingly. With these directions, the company applications in CA 153/2004 and 154/2004 stand disposed of.' The above decisions make it more than dear that petition u/s. 397/398 of the Act of 1956 is representative in nature where the petitioner(s) legally represents the grievances of people who are very similarly situat....
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....rring substitution petition in time or whether the right to sue survive in favour of surviving petitioners etc. become wholly redundant. But then, on the face of (he materials on record, it needs to be concluded that conduct of the surviving petitioners in seeking substitution of the deceased petitioner by his legal representatives is found to be far from satisfactory. 34. In those factual backgrounds, let us consider the contention that the petition seeking substitution is required to be rejected since on the date of filing of substitution application, the applicants did not have requisite share qualification to file the company petition in terms of law laid down in Sec. 399 of the Act of 1956. In that connection, we can peruse gainfully the decision in Rajahmundry Electric Supply Corporation Ltd. (supra) 35. In Rajahmundry Electric Supply Corporation Ltd. (supra), it was held that validity of the petition must be judged on the facts as they were at the time of its presentation, and a petition which was valid when presented cannot, cease to be maintainable by reason of events subsequent to its presentation. The decision of Rajahmundry Electric Supply Corporation Ltd. (supra) was....