CHARANJIT KHANNA Vs. KHANNA PAPER MILLS LTD

JUDGEMENT

(1.) The present appeal has been filed under Section 10F of the Companies Act, 1956 (for short the Act ) challenging the order dated 24th November, 2010 passed by the Company Law Board (for short CLB ) in Company Application No. 213/2007 in Company Petition No. 61/2007 whereby the said petition was dismissed as not maintainable. However, the appellants were given liberty to file a petition for rectification of the register of members under Section 111A of the Act and in the event of their being successful in the said petition, they were granted further liberty to file a petition under Sections 397/398 of the Act.

(2.) The relevant facts of the present case are that appellants are real brothers, nephews and nieces of Mr. Brij Mohan Khanna, respondent no. 2 and respondent no. 1 is a family company. The appellants filed a company petition under Sections 397 and 398 of the Act being Co. Pet. No.61/2007 before CLB against respondents on the ground of oppression and mismanagement. Per contra, respondents filed Company Application No.213/2007 challenging the maintainability of the petition. The appellants in response moved an application bearing CA No.313/2008 for amendment of the Company Petition 61/2007 by incorporating relief under Section 111A of the Act. However, the CLB dismissed the appellants petition on the ground that since the names of appellants no longer appear in the register of members, they were lacking in requisite eligibility under Section 399 of the Act to maintain such a petition. As stated hereinabove, the appellants were granted liberty to file a petition under Section 111A of the Act for rectification of the register of members.

(3.) Mr. Salil Sagar, learned senior counsel for appellants submits that when the company petition was filed before CLB, appellants were not aware that their names had been removed from the register of members. He states that it was only when the maintainability issue was raised by the respondents that the appellants came to know the said fact and accordingly, appellants applied for amendment of the petition. He further contends that neither any document nor any evidence was produced by respondents to show that prior to filing of Company Application No. 213/2007 before CLB, appellants were aware that their names had been removed from the register of members.