TaxTMI 
TaxTMI 
2008 (3) TMI 750
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.... is obtained. As on the date of the company petition, namely, 21.12.2006, the Chamber consisted of 1809 members, out of which the admission of 388 members made on or after 30.09.2006 is under challenge and therefore, for the purpose of adjudicating the issue of maintainability of the main petition 1421 members (1809-388) may be taken into account, in which case 284 members would constitute the required strength in terms of Section 399 (1/5th of 1421 = 284). The main petition has been filed by three petitioners and therefore, there must be 281 valid consents to the main petition. The petitioners have purportedly obtained the consent of 318 members, out of which 76 consents are invalid in view of the fact that (i) same persons (4 members) have given multiple consents [3 members signed twice and one member signed thrice (9-4 = 5)]; (ii) some other persons (21 persons) are not members of the Company; (iii) the signatures of 21 members are at complete variance with the specimen signatures maintained with the Company; (iv) 51 members have given letters stating that they have not given consent to file the company petition, out of whom 28 members have again affirmed that they have given co....
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....rom any infirmity. The consent given by 21 persons specified by the Chamber are not of members. There are multiple consents, invalidating five consents. There are four members giving consent, who have been admitted after 30.09.2006. The consent letter has not been signed by two of members which is however only a technical error and must be ignored in view of their seal appearing in the consent letter. The signatures of 21 members vary on account of the fact that the representatives of those members were not available at the time of the company petition and hence consent letter was signed as contemplated in article 10 by the authorised representatives. The respective seal of the members were also put in the consent letters, as borne out by the letters of their representation in this regard. Out of 318 members who have given consent to file the company petition, 51 members reportedly denied having given any consent, whereas 28 members out of the disputed members once again clarified affirming their consent for filing the company petition by means of letters. The company petition made under Section 397/398 could not be rejected only because letters of consent, which is one of the re....
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....ne-tenth of the total number of its members, whichever is less or members holding not less than one-tenth of the issued share capital of the company; and (b) in the case of a company not having a share capital, not less than one-fifth of the total number of its members, shall have the right to apply under Section 397 or Section 398. It is, therefore, far from doubt that Section 399 stipulates minimum qualifications, which members should possess such as their numerical strength or the extent of their share capital. Sub-section (3) of Section 399 provides that any member or more of them having obtained the consent in writing of the rest may make the application under Section 397/398 on behalf and for the benefit of all of them. In the present case, the Chamber not having any share capital, not less than one-fifth of the total number of its members shall have the right to invoke the provisions of Section 397/398. In order to maintain a petition under Section 397/398, it is absolutely necessary to ensure that the applicant satisfy the requirements of Section 399 at the time of filing the petition. There are admittedly 1809 members in the Chamber before me as on the date of the company ....
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....embers maintained by the Chamber. By virtue of Clause 10 of the articles of association, either the member or his representative can represent the Chamber. Accordingly, it is contended on behalf of the petitioners that 21 persons, have signed the consent letters as authorised by the respective members, in support 'of which those members have produced letters subsequent to filing of the company petition reporting that the consent letters have been signed as authorised by them and further reiterated their consent for filing the company petition. It is, therefore, clear that in the case of consent by 21 persons they were not signed by the concerned member themselves, but by their representatives, reportedly authorised by those members. The subsequent letters of the members mentioned hereabove, unequivocally indicate that their representatives were not available on the day of giving the consent letters and therefore the consent letters came to be signed by the signatories, appearing in the consent letters as per the authority given by the members. There is no material whatsoever to establish that the respective members duly authorised the signatories appearing in the consent letter....
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.... Since the representations made by the members in this regard have not been considered, it is now been decided by the undersigned to approach the Hon'ble Company Law Board seeking appropriate and necessary reliefs so as to protect the interests of the Chamber and its members. In pursuance of the same, we the undersigned consent and do hereby authorise 1) Metalex Agencies, 2) Diwakar & Co. and 3) Mr. Niaz Ibrahim, the members of the association to file the necessary petitions before the Hon'ble Company Law Board seeking appropriate reliefs in the above matter. We are giving this consent in terms of the requirements Under Section 399(3) of the Companies Act. There is no doubt that the aforesaid consentors have applied their mind to the issues before them and they have given their consent to the action being taken by the petitioners before the CLB in cases of oppression in the affairs of the Chamber seeking appropriate reliefs to protect the interest of the Chamber and its members. The first sheet containing the consent under Section 399(3) of the Act, does not make any reference to any of the subsequent sheets. Similarly, none of the subsequent sheets does refer to the f....
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....gars Limited (Supra). All the subsequent 35 pieces of sheets would give an impression that the signatories have simply subscribed their signatures, without applying their minds and knowing the purposes for subscription of their signatures, to those sheets. The consent as envisaged under Section 399(3) must be an intelligent consent, which must be given for the purpose of making particular-allegations and for the purposes of claiming appropriate reliefs therein, which are found missing in the present case. In view of this, mere signatures contained in the blank pieces of paper cannot amount to "consent in wilting", since the sheets on which the signatures are found do not by themselves, indicate the purpose of signatures affixed therein. Section 399(3) stipulates that the consent should be in writing, namely, in the form of a document and, therefore, in the present case, pieces of sheets, should indicate why the signatures were affixed. In view of Section 91 of the Indian Evidence Act 1872 no evidence shall be given in proof of the terms of such contract, except the document itself. By merely obtaining the signatures of a number of members on as many as 35 pieces of sheets....