TADI ADINARAYANA REDDY Vs. UNION OF INDIA

JUDGEMENT

(1.) THE learned single judge [see page 376 supra. ] has dismissed the writ petition mainly on the ground of maintainability and on being persuaded that the issues which are sought to be raised in the writ petition are raised before the Company Law Board. Having gone through the contents of the affidavit filed in support of the writ petition, we are, prima facie, of the view that one pertinent ground raised, for which an objection has been filed to add the Company Law Board as a party respondent in the petition, will be whether the Company Law Board has in any manner derelicted in the discharge of its duties in not disposing of the petition raising many serious issues as to the falsification of the accounts of the public limited company. Learned counsel for the respondent-company, however, has contended that a writ seeking a direction to the Central Government to appoint one or more competent persons as inspectors to investigate the affairs of a company and to report thereon, is not maintainable under article 226 of the Constitution. Without, however, deciding this question finally, we may express prima facie that this court's extraordinary jurisdiction shall not be inhibited and in any case it will not be unreasonable if a wider meaning is given to the expression "the court" in section 237 (a) (ii) of the Companies Act, 1956, and exercise of the powers in such a situation is not denied until facts are investigated and the court is prima facie satisfied whether there are any acts of the concerned company which jeopardise public interest or adversely affect public interest. While the court may be slow in entertaining allegations coming from a member of the company, which is in the nature of a grievance of an individual or group of individuals of acts of oppression by the majority shareholders in any company or the members of the board of management of the company, once public interest is involved and there are such allegations in the writ petition that one will have to think twice before holding that no public interest is involved, it will not be appropriate to dismiss the writ petition at the threshold holding that it is not maintainable. We accordingly hold, for the purposes of deciding all the issues involved in the instant proceeding including the question whether the court shall entertain any writ petition in the matter as above and relief, if any, can be granted by way of a writ, order or direction or not to decide to admit the writ petition and give opportunity to the respondents to show cause, if any, and also to order addition of parties as prayed for on behalf of the petitioner-appellant, the writ petition shall be posted for hearing before a Division Bench. Issue notice in the writ petition, returnable in four weeks, calling upon the respondents to show cause, if any. Let a direction issue to the Central Government to make its own verification of the allegations in the writ petition and place its response with respect to the allegations therein at the next hearing of the writ petition.

(2.) THE writ appeal, to the extent as above, is allowed.