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2023 (7) TMI 444
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....as 'the DDCA') has approached this Court by filing the present Writ Petition under Article 226 of the Constitution of India challenging the notice dated 10.06.2023, issued by the Apex Council of DDCA, for convening the Extra-Ordinary General Meeting (hereinafter referred to as 'the EGM') of the Members of the DDCA on 05.07.2023 at 09:00 AM at the registered office of the DDCA at the Arun Jaitley Stadium, Ferozshah Kotla Ground, New Delhi. 2. Shorn of unnecessary details, the facts, leading to the present Writ Petition are as under: a. DDCA is a company incorporated under Section 8 of the Companies Act, 1956 (hereinafter referred to as 'the Companies Act'). It is the governing body for cricket activities in the State of Delhi and the Delhi Cricket Team. The Apex Council of the DDCA is the principal body of the DDCA tasked with the governance of the affairs of DDCA. b. It is stated that a Notice dated 10.06.2023 was issued by the Apex Council of the DDCA for convening the EGM of the Members of the DDCA on 05.07.2023 at 09:00 AM at the registered office of the DDCA for ratifying its resolution dated 10.04.2023 by which the Apex Council had appointed Justice M M Ku....
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.... be transacted only at the Annual General Meeting of the General Body of the DDCA. He states that Article 10(5)(f) of the AoA provides that the Ombudsman cum Ethics Officer of the DDCA can be appointed only at the Annual General Meeting of the General Body of the Apex Council which is held annually. He then takes this Court to Article 17(2) of the AoA which deals with the composition of the Apex Council of the DDCA. He states that Article 17(2) of the AoA stipulates that the Apex Council shall consist of a total of 18 Directors including the Secretary of the DDCA. Mr. Mehra then takes this Court to Article 18(9) of the AoA to contend that only a Resolution passed by circulation to all members of the Apex Council is valid and effective, furthermore, only a Resolution by circulation to all members of the Apex Council can be ratified at the next meeting of the Apex Council. Mr. Mehra then draws the attention of this Court to Article 18(2) of the Articles of Association to contend that the Apex Council has all the powers of the General Body and has the authority and discretion to do all acts and things except such acts which are expressly directed to be done by the General Body. Exerci....
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....nterim order which it thinks fit for regulating the conduct of the company's affairs upon such terms and conditions as the NCLT feels to be just and equitable. Mr. Nayyar also takes this Court through Section 245(1) of the Companies Act to contend that the NCLT can pass orders restraining a company from committing breach of any provision of the company's memorandum or articles as well as to restrain the company and its directors from acting on such resolution which it thinks are prejudicial to the interests of the company or its members. He further submits that Section 241 of the Companies Act specifically grants power to the NCLT to appoint persons who can conduct the affairs of the company and pass orders to restrain the company from committing breach of any of the company's memorandum or articles. Mr. Nayyar, therefore, contends that in the presence of an equally efficacious alternative remedy to the Petitioner to approach NCLT, this Court must desist from exercising its jurisdiction under Article 226 of the Constitution of India. 5. Mr. Nayyar has also taken this Court through an Order dated 28.02.2020, passed by this Court in W.P.(C) No. 1878/2020, titled as Rajinderr Kumar....
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....her mode prescribed by statute. 9. In Thansingh Nathmal v. Supdt. of Taxes, (1964) 6 SCR 654, the Apex Court has observed as under: "7. ..... Ordinarily the Court will not entertain a petition for a writ under Article 226, where the petitioner has an alternative remedy, which without being unduly onerous, provides an equally efficacious remedy......... .....Where it is open to the aggrieved petitioner to move another tribunal, or even itself in another jurisdiction for obtaining redress in the manner provided by a statute, the High Court normally will not permit by entertaining a petition under Article 226 of the Constitution the machinery created under the statute to be bypassed, and will leave the party applying to it to seek resort to the machinery so set up." 10. In CIT v. Chhabil Dass Agarwal, (2014) 1 SCC 603, the Apex Court has observed as under: "10. In the instant case, the only question which arises for our consideration and decision is whether the High Court was justified in interfering with the order passed by the assessing authority under Section 148 of the Act in exercise of its jurisdiction under Article 226 when an equally efficaciou....
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....] , S.T. Muthusami v. K. Natarajan [(1988) 1 SCC 572] , Rajasthan SRTC v. Krishna Kant [(1995) 5 SCC 75 : 1995 SCC (L&S) 1207 : (1995) 31 ATC 110] , Kerala SEB v. Kurien E. Kalathil [(2000) 6 SCC 293] , A. Venkatasubbiah Naidu v. S. Chellappan [(2000) 7 SCC 695] , L.L. Sudhakar Reddy v. State of A.P. [(2001) 6 SCC 634] , Shri Sant Sadguru Janardan Swami (Moingiri Maharaj) Sahakari Dugdha Utpadak Sanstha v. State of Maharashtra [(2001) 8 SCC 509] , Pratap Singh v. State of Haryana [(2002) 7 SCC 484 : 2002 SCC (L&S) 1075] and GKN Driveshafts (India) Ltd. v. ITO [(2003) 1 SCC 72].] 13. In Nivedita Sharma v. Cellular Operators Assn. of India [(2011) 14 SCC 337 : (2012) 4 SCC (Civ) 947], this Court has held that where hierarchy of appeals is provided by the statute, the party must exhaust the statutory remedies before resorting to writ jurisdiction for relief and observed as follows: (SCC pp. 343-45, paras 12-14) "12. In Thansingh Nathmal v. Supt. of Taxes [AIR 1964 SC 1419] this Court adverted to the rule of self-imposed restraint that the writ petition will not be entertained if an effective remedy is available to the aggrieved person and observed: (AIR p. 1423, para....
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....' 14. In Mafatlal Industries Ltd. v. Union of India [(1997) 5 SCC 536] B.P. Jeevan Reddy, J. (speaking for the majority of the larger Bench) observed: (SCC p. 607, para 77) '77. ... So far as the jurisdiction of the High Court under Article 226-or for that matter, the jurisdiction of this Court under Article 32-is concerned, it is obvious that the provisions of the Act cannot bar and curtail these remedies. It is, however, equally obvious that while exercising the power under Article 226/Article 32, the Court would certainly take note of the legislative intent manifested in the provisions of the Act and would exercise their jurisdiction consistent with the provisions of the enactment.'" (See G. Veerappa Pillai v. Raman & Raman Ltd. [(1952) 1 SCC 334 : AIR 1952 SC 192] , CCE v. Dunlop India Ltd. [(1985) 1 SCC 260 : 1985 SCC (Tax) 75], Ramendra Kishore Biswas v. State of Tripura [(1999) 1 SCC 472 : 1999 SCC (L&S) 295], Shivgonda Anna Patil v. State of Maharashtra [(1999) 3 SCC 5] , C.A. Abraham v. ITO [AIR 1961 SC 609 : (1961) 2 SCR 765], Titaghur Paper Mills Co. Ltd. v. State of Orissa [Titaghur Paper Mills Co. Ltd. v. State of Orissa, (1983) 2 SCC 433 : 1....
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....e remedy by itself cannot exclude the jurisdiction of the High Court under the Constitution. No doubt, it has been a self-imposed restraint which is fairly faithfully adhered to by the High Courts and it is largely a matter of discretion. We find that there are dicta which has held that on the basis of an alternate remedy, a writ petition is not maintainable. We would understand that the position to be that a constitutional remedy cannot be barred or excluded as when the High Court exercises its power under Article 226, it cannot be a case of lack of inherent jurisdiction. No doubt, when High Courts stray outside the limits with reference to certain principles as have been laid down in the decision which we have referred to, it can be corrected. Another factor which is to be borne in mind is that in a case where the High Court has entertained a matter and the matter comes for hearing in this Court in the jurisdiction under Article 136, our woes are compounded by the long passage of time as is demonstrated by the facts of this case. The judgment of the High Court was rendered in the year 2011. This Court is hearing the matter after more than a decade. It is nearly two decades after ....
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....ghts contained in Part III of the Constitution but also for "any other purpose". 15. Under Article 226 of the Constitution, the High Court, having regard to the facts of the case, has a discretion to entertain or not to entertain a writ petition. But the High Court has imposed upon itself certain restrictions one of which is that if an effective and efficacious remedy is available, the High Court would not normally exercise its jurisdiction. But the alternative remedy has been consistently held by this Court not to operate as a bar in at least three contingencies, namely, where the writ petition has been filed for the enforcement of any of the Fundamental Rights or where there has been a violation of the principle of natural justice or where the order or proceedings are wholly without jurisdiction or the vires of an Act is challenged. There is a plethora of case-law on this point but to cut down this circle of forensic whirlpool, we would rely on some old decisions of the evolutionary era of the constitutional law as they still hold the field". (emphasis supplied) 26. Following the dictum of this Court in Whirlpool Corpn. v. Registrar of Trade Marks [(199....
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....te remedy by itself does not divest the High Court of its powers under Article 226 of the Constitution in an appropriate case though ordinarily, a writ petition should not be entertained when an efficacious alternate remedy is provided by law. 27.5. When a right is created by a statute, which itself prescribes the remedy or procedure for enforcing the right or liability, resort must be had to that particular statutory remedy before invoking the discretionary remedy under Article 226 of the Constitution. This rule of exhaustion of statutory remedies is a rule of policy, convenience and discretion. 27.6. In cases where there are disputed questions of fact, the High Court may decide to decline jurisdiction in a writ petition. However, if the High Court is objectively of the view that the nature of the controversy requires the exercise of its writ jurisdiction, such a view would not readily be interfered with."" (emphasis supplied) 13. It is well settled that availability of alternative remedy does not operate as an absolute bar to the maintainability of the writ petition and that the rule which requires a party to pursue the alternative remedy provided by the s....
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....roach the NCLT. Section 241 of the Companies Act reads as under: "241. Application to Tribunal for relief in cases of oppression, etc.- (1) Any member of a company who complains that- (a) the affairs of the company have been or are being conducted in a manner prejudicial to public interest or in a manner prejudicial or oppressive to him or any other member or members or in a manner prejudicial to the interests of the company; or (b) the material change, not being a change brought about by, or in the interests of, any creditors, including debenture holders or any class of shareholders of the company, has taken place in the management or control of the company, whether by an alteration in the Board of Directors, or manager, or in the ownership of the company's shares, or if it has no share capital, in its membership, or in any other manner whatsoever, and that by reason of such change, it is likely that the affairs of the company will be conducted in a manner prejudicial to its interests or its members or any class of members, may apply to the Tribunal, provided such member has a right to apply under section 244, for an order under this Chapter. ....
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....be just and equitable in the circumstances of the case; (f) the termination, setting aside or modification of any agreement between the company and any person other than those referred to in clause (e): Provided that no such agreement shall be terminated, set aside or modified except after due notice and after obtaining the consent of the party concerned; (g) the setting aside of any transfer, delivery of goods, payment, execution or other act relating to property made or done by or against the company within three months before the date of the application under this section, which would, if made or done by or against an individual, be deemed in his insolvency to be a fraudulent preference; (h) removal of the managing director, manager or any of the directors of the company; (i) recovery of undue gains made by any managing director, manager or director during the period of his appointment as such and the manner of utilisation of the recovery including transfer to Investor Education and Protection Fund or repayment to identifiable victims; (j) the manner in which the managing director or manager of the company may be appointed su....
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....mpanies Act which stipulates the rights of a member of the company to file an application under Section 241 of the Companies Act reads as under: "Section 244. Right to apply under section 241. (1) The following members of a company shall have the right to apply under section 241, namely:-- (a) in the case of a company having a share capital, not less than one hundred members of the company or not less than one-tenth of the total number of its members, whichever is less, or any member or members holding not less than one-tenth of the issued share capital of the company, subject to the condition that the applicant or applicants has or have paid all calls and other sums due on his or their shares; (b) in the case of a company not having a share capital, not less than one-fifth of the total number of its members: Provided that the Tribunal may, on an application made to it in this behalf, waive all or any of the requirements specified in clause (a) or clause (b) so as to enable the members to apply under section 241. Explanation.--For the purposes of this sub-section, where any share or shares are held by two or more persons jointly....
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....g its resolution dated 10.04.2023. 20. Though Section 244(1)(b) of the Companies Act provides that an application under Section 241 of the Companies Act can be entertained only if it is supported by one-fifth of the total number of members of the company but the NCLT has power to waive of this requirement. The Petitioner, therefore, ought to have approached the NCLT and if the NCLT would have refused to waive off the stipulated requirement of support of one-fifth members of the company then it was always open for the Petitioner to approach this Court by contending that no equally efficacious alternative remedy is left to him. It cannot be said that if this Court does not exercise its jurisdiction under Article 226 of the Constitution of India an irreversible damage would be caused to the DDCA and the same cannot be rectified by the Courts or that the DDCA will be subjected to an irreparable loss which needs urgent restraint orders. 21. Article 41 of the AoA of DDCA deals with Ombudsman and the same reads as under: "41. THE OMBUDSMAN 1. The Company shall appoint an Ombudsman at the Annual General Meeting for the purpose of providing an independent dispute res....