Bhagwati Developers Pvt. Ltd vs Peerless Gen.Finance ...

2. Facts and circumstances giving rise to these appeals are that:

F. The appellant filed two applications before the Division Bench on 22.12.1993 for the purpose of recalling the order of dismissal of the said appeals, and for the transposition of the Chatterjee brothers as proforma respondents, whilst substituting the appellant as the sole appellant therein. The Division Bench, vide order dated 2.2.1995 dismissed the said application by a detailed judgment, labelling the appellant as a stranger having no locus standi whatsoever, and observing that as the appeal was no longer pending, the question of transposition of parties did not arise. Moreover, it was observed that there had been an inordinate delay in the filing of such an application.

G. Aggrieved, the appellant preferred S.L.P.(C) Nos. 19193 and 19217 of 1995 before this court, challenging the order dated 2.2.1995. This Court entertained the said petitions, granted leave, and disposed of the appeals vide judgment and order dated 26.4.1996, observing that the appellant may prefer independent appeals, challenging the judgment and order dated 13/14.1.1992, passed by the learned Single Judge, further stating that if such an appeal was infact filed, the same would not be dismissed by the Division Bench on grounds of limitation or locus standi. However, it would be open for Respondent No.2 to contend, that the ground upon which the Company Court Judge had dismissed the Company Petition, was indeed just, i.e. the respondent could defend the order passed by the Company Court Judge. Further, the effect of withdrawal of the appeals by Chatterjee brothers on the appeals filed by the appellant, would also be examined. Additionally, the dismissal of the appeals as withdrawn, preferred by Chatterjee brothers, would not come in the way of the appellant raising such contentions as are permissible and available to it in law. This Court disposed of the said appeals without expressing any opinion on merit.

H. In pursuance of the order dated 26.4.1996 passed by this Court, the appellant preferred appeal Nos. 346 and 347 of 1996, which have been dismissed vide impugned judgment and order dated 24.11.2003.

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 himself, to give consent in writing. Such consent may even be given by the power of attorney holder of the shareholder. If the shareholder who had initially given consent to file the Company Petition to help meet the requirement of 1/10th share holding, transfers the shares held by him, or ceases to be a shareholder, the same would not affect the maintainability and continuity of the petition.

12. The Company Court Judge dismissed the petition on merits, vide judgment and order dated 13/14.1.1992. Appeals were preferred, and the first appeal was withdrawn by Shri Ajit Kumar Chatterjee, vide order dated 16.11.1993.

14. The aforesaid order makes it clear that the Division Bench has reasoned, that if a party is allowed to withdraw from the appeal, and it is evident that in the absence of such party, the petition itself could not be maintainable, then the entire petition and/or the appeal shall fail, and cannot be proceeded with under the law. Such an observation has been made by the Division Bench without examining the issue of maintainability of the Company Petition on merits.

18. In view of the above, the appellant preferred the appeals which were dismissed vide impugned judgment and order dated 24.11.2003, relying upon an observation made by the Division Bench earlier, to the effect that, in view of the fact that the Chatterjee brothers had withdrawn their appeals, and that the Company Petition had been declared as not maintainable by the Company Court Judge, the question of entertaining any appeal with respect to the same, could not arise. After the withdrawal of the said appeals by the Chatterjees, the appellant did not have any right to proceed with the original application by any means, whatsoever.

25. We do not agree with such an interpretation, particularly with respect to a phrase, which has been considered by this Court time and again.

30. In view of the above, we are of considered opinion that the Division Bench erred in holding that after the judgment of this Court dated 26.4.1996, it was permissible for the High Court to hold that the Company Petition under Sections 397/398 of the Act 1956, was non- existence in the eyes of law while placing reliance on the earlier judgments of the Division Bench of the High Court dated 16.11.1993 and 18.11.1993.

Thus, the appeals are allowed, the impugned judgment and order of the High Court dated 24.11.2003 is hereby set aside and the matters are remanded to be decided by the High Court of Calcutta afresh giving strict adherence to judgment of this Court dated 26.4.1996. While deciding the case afresh, the Division Bench shall not take note of the earlier judgments of the High Court dated 16.11.1993 and 18.11.1993.

As the matters are pending since long, in the facts and circumstances of the case, we request the Hon’ble High Court to decide the appeals expeditiously preferably within a period of six month from the date of filing of certified copy of this judgment and order before the High Court. There shall be no order as to costs.

April 4, 2013.