JAWAHAR SINGH BIKRAM SINGH Vs. SHARDA TALWAR

JUDGEMENT

(1.) The late Shri Krishan Talwar had instituted proceedings under Section 397 and 398 of the Companies Act, 1956, in respect of M/s. Jawahar Singh Bikram Singh (Private) Ltd. In those proceedings, which were filed before the Companies Tribunal, New Delhi, Shrimati Sharda Talwar the petitioner's wife as well as 'Darshan Singh Pheruman and Jaswant Singh were shown as persons consenting to the petition. Of these, Darshan Singh Pheruman and Shrimati Sharda Talwar had been joined as proforma respondents. The petition was transferred to this High Court from the Companies Tribunal on 29th October, 1966. During the pendency of the proceedings, Shri Kishan Talwar, petitioner died on 22nd February, 1972. It may be mentioned that the original petitioner, Shri Kishan Talwar together with the consenting parties already mentioned, were stated to hold more than one-tenth of the issued share capital of the company. There was an order passed by S. K. Kapur J. on 26th November, 1968 accepting that these persons held the requisite share holdings and thus. the requirements of Section 399 of the Companies Act, 1956 were complied with and the petition was maintainable.

(2.) After the death of the petitioner, his widow Shrimati Sharda Talwar who was shown as a projorina respondent applied to be transposed as a petitioner. No application was made by the legal representatives of the deceased petitioner to be joined as parties. Although Shrimati Sharda Talwar was one of these legal representatives, there is no dispute that there are other legal representatives who are not on record. The application for transposition was contested by the company, but Rangarajan J. passed the order under appeal on 24th November, 1972, rejecting the opposition and permitting the applicant, Shrimati Sharda Talwar to be transposed as petitioner in the proceedings. Against that decision the company has appealed under Section 483 of the Companies Act, 1956.

(3.) It is contended on behalf of the company that the petition under Sections 397 and 398 of the Act had abated by the death of the petitioner, Shri Kishan Talwar and proceedings could not be revived by transposing Shrimati Sharda Talwar. It is submitted that only the legal representatives of the deceased petitioner could have continued the proceedings. It is further submitted that Shrimati Sharda Talwar did not obtain the consent of one-tenth of the shareholders of the company or holders of one-tenth of the share capital of .the company. It is, therefore, submitted that Shrimati Sharda Talwar could not have herself brought a petition under Sections 397 and 398 of the Companies Act, 1956 on the date on which she was transposed. Consequently, it is submitted that the transposition order in effect allows Shrimatt Sharda Talwar to avoid the effect of Section 399 of the Companies Act, 1956, in as much as she does not fulfil its requirements, the petition has become incompetent and the transposition is ineffective. Thus, on these contentions we have to decide whether the petition under Sections 397 and 398 of the Companies Act, 1956 abated at the death of the original petitioner and, secondly, whether the order of transposition could be passed in relation to these proceedings. In respect of these contentions, it is contended by the learned counsel for the respondent-applicant, i.e., Shrimati Sharda Talwar that the petition was originally brought for the benefit of all the consenting shareholders and, therefore, all of them were constructively petitioners even though some of them were mentioned as respondents and one of them was not shown as a party at all. It is also submitted that the learned Single Judge rightly decided that the maintainability of the petition has to be determined on the facts substituting at the time the petition was instituted and not at a subsequent date. For this purpose, the decision of the Supreme Court in Rajamundry Electric Supply Corporation Ltd. V. A. Nageshwara Rao and others, A.I.R 1956 S. C. 213. which was also relied upon in the judgement under appeal has been referred to.