S P JAIN Vs. UNION OF INDIA

JUDGEMENT

(1.) This appeal arises out of an order of the Companies Tribunal, New Delhi (Camp, Bombay), dismissing Application No. 37 of 1965 Union of India v. Benett Coleman & Co. Ltd. (1965) 35 Comp. Cas. 673 (C.T.) made by the appellant (original respondent No. 2 to the petition) on 20th April, 1965. In this application, the appellant had prayed that Petition No. 9 of 1964 be forthwith dismissed, or in the alternative, the said application be rejected and that all orders so far made in Petition No. 9 of 1964 be vacated.

(2.) Facts in brief are: By a petition under section 396 read with sections 401 and 403 of the Companies Act (1 of 1956) (hereinafter referred to as the Act), the Union of India filed a petition before the Companies Tribunal on 30th September, 1964. The respondents to this petition were the Bennett Coleman & Co. Ltd. and nine other persons. Respondents Nos. 2,3,4,6,7,8,9 and 10 were either diretors or ex-directors of the company. Respondent No. 5 was at the material time its general manager. It is not necessary to set out the various allegations of fraud, mismanagement, misconduct and misappropriation of the company's funds, on the part of the respondents. The petitioner, Union of India, had in the petition prayed for an order removing respondents Nos. 6,7,8,9 and 10 and all of then from the board of the company, for an order restraining respondent No. 3 and other respondents from interfering and intermeddling in the affairs of the company had its conduct and management; for an order removing respondent No. 5 from his employment and for a further direction to restrain him from acting in the course of his employment; for an order restraining respondent No 5. from acting or functioning in any capacity under the company and from interfering or intermeddling with the affairs of the company; and for an order directing the appointment of a special officer to manage and conduct the affairs of the company. The petitioner also prayed for certain interim reliefs pending the final disposal of the petition. This petition has been registered as Petition No. 9 of 1964, and it is relating to this petition that original respondent No. 2 had made the said Application No. 37 of 1965.

(3.) It is necessary to state a few facts relating to the period prior to the filing of the said Petition No. 9 of 1964. On 7th September, 1964, the Union of India filed a petition before the Companies Tribunal, praying that a finding be recorded that Shri Shanti prasad Jain (respondent No. 2 to Petition No. 9 of 1964) was not a fit person to act as a director of M/s. Bennett Coleman & Co. Ltd. or any other company. For the purposes of this appeal, it is not in dispute that the allegations, on the basis of which this finding was invited, were substantially identical with the averments made in Petition No. 9 of 1964. The aforesaid petition of 17th September, 1964 under section 388B was admitted on 18th September, 1964, and that has been registered as Case No. 1 of 1964. Within a short time, i.e., on 30th September, 1964, Petition No. 9 has been filed by the Union of India against the aforesaid respondents. The affidavit in verification of Petition No. 9 of 1964 has been sworn by one Mr. D.S. Dang, Deputy Secretary, Government of India, Ministry of Finance (Department of Revenue and Company Law). The verification is in the following terms: