M C DURAISWAMI Vs. SAKTHI SUGARS LIMITED

JUDGEMENT

(1.) THIS is an appeal preferred by the petitioner in Company Petition No. 9 of 1976 against the order of Ramaprasada Rao J., as he then was, dated 25th August, 1977, dismissing the said petition. That petition was purported to be one under ss. 397 and 398 of the Companies Act, 1956, hereinafter referred to as "the Act", and it prayed for the following reliefs : (a) an order suspending the powers of the board of directors of the company and the appointment of an administrator to take charge of the affairs of the company (b) to order an investigation into the affairs of the company as to the diversion of the funds of the company into the several organisations mentioned therein (c) to order an investigation into the fraudulent inducement (") of the funds belonging to the canegrower-ryots who supplied sugarcane to the company into shares of the companies named therein (d) to order an investigation into any matter into the affairs of the company as the court may deem fit (e) to direct such persons as the court may find responsible for the loss occasioned to the company to make good the same (f) to direct the shifting of the registered office of the company to Erode or to Appakkadal (g) to pass such orders on the basis of the result of investigation and (h) to order costs of the petition.

(2.) THE appellant herein purported to file along with the petition, a letter of consent signed by 147 shareholders similar to the appellant herein, in order to satisfy the requirements of s. 399 of the Act. One of the objections taken by the company in the nature of preliminary objection was that the present petition under ss. 397 and 398 of the Act was not maintainable as it violated one of the conditions precedent prescribed in the statute itself not only for its validity but also for its maintainability. In support of this objection, 73 affidavits sworn to by 73 out of 147 persons whose signatures found a place in the annexure to the petition were filed. THE contention in those affidavits was that they were asked by the appellant herein that, as an extraordinary general meeting was to be called for in connection with the fixation of cane price, they should sign a letter or statement of consent to that effect and that it was in that context that they signed the paper placed before them by the appellant herein that they never gave consent to a company petition being instituted by the appellant herein that they had signed the annexure on misrepresentations and that there was no consensus as between them and the appellant in the matter of the real scope and content of the petition. In some of the affidavits it was also stated that they understood the appellant to mean that an extraordinary general meeting was being called for the purpose of requesting the company to review the cane price and that it was in pursuance of such representation that they affixed their signatures on the document. THE learned judge, after taking into account these affidavits as well as the requirements of ss. 397, 398 and 399 of the Act, held that the petition was not maintainable and dismissed the same. It is the correctness of this conclusion that is challenged before us.Sections 397, 398 and 399 of the Act read as follows :

(3.) FROM the very nature of the case, "consent in writing" contemplated in s. 399(3) of the Act is a consent to the filing of a particular petition with a particular allegation for a particular relief under s. 397 or s. 398 or under both. There cannot be a blanket consent like a certain member or members consenting to some other member filing a petition under s. 397 or s. 398 or under both. In this particular case, the annexure to the petition filed by the appellant contains the following statement :