P PUNNAIAH Vs. JEYPORE SUGAR COMPANY LIMITED

JUDGEMENT

(1.) An application under Section 397/398 of the Companies Act, 1956 can be filed inter alia by "any member or members holding not less than one-tenth of the issued share capital of the Company" -vide clause (a) of sub-section (1) of Section 399. Sub-section (3) of Sec. 399 says that among the members of the Company entitled to make an application by virtue of sub-section (1) "any one or more of them having obtained the consent in writing of the rest, may make the application on behalf and for the benefit of all of them."

(2.) The three appellants in this appeal are the shareholders of the first respondent-company, Jeypore Sugar Company Limited. The respondents are its Directors. The first appellant's daughter Smt. V. Rajeshwari also holds certain shares in the first respondent company. She is married and has been residing in U.S.A. since 1973. Before leaving for the U.S.A., she executed a General Power of Attorney (G.P.A.) in favour of her father, the first appellant herein, on 29th November, 1973.

(3.) On October 25, 1978, the three appellants herein filed an application under Section 397/398 in the High Court of Orissa. To comply with the requirement of one-tenth shareholding, the first appellant gave consent in writing for and on behalf of Smt. Rajeshwari as her G.P.A. holder. If the shareholding of Rajeshwari is taken into account and she is deemed to have consented to the filing of the said application, the requirements of S. 399 are admittedly satisfied. The precise question in this appeal is whether the consent given by her G.P.A. holder for and on her behalf - and not by her personally - is a valid consent within the meaning of subsection (3) of S. 399.