BHASKAR PUBLICATION Vs. KISHORIES PVL LTD

JUDGEMENT

(1.) This appeal under section 483 of the Companies Act, 1956 filed by the appellants is directed against the order of the learned Company Judge dated 13th September, 2010 in M.C.C. No. 63 of 2010 whereby the company petition of the respondents (C.P. No. 2/88) dismissed in default for non-prosecution vide Court's order dated 7th September, 2005 read along with the order of the Registrar dated 28th June, 2006, has been restored for hearing on merits after condoning the delay of 1309 days in filling of the restoration application.

(2.) Briefly stated the fact of the case giving rise to this appeal are that appellant No. 1 Company "M/s Bhaskar Publication and Allied Industries Private Limited" is a company incorporated under the Companies Act, 1956 and is stated to be engaged in the business of publication of a newspaper "Dainik Bhaskar" situated at Gwalior. The respondents along with Bishambhar Dayal Agrawal (dead), Dwarka Prasad Agrawal (dead) and appellants No. 2, 3 and 5 were stated to the Directors of the appellant company at the time the respondents had filed Company Petition (C. P. No. 02/1988) against the appellants under sections 397, 398, 402 and 403 of the Companies Act, 1956 read with Rule 9 of the Companies (Court) Rules, 1959. The said petition was filed by them in the High Court on 7th April, 1988. It was alleged in the petition that appellant No. 2 had fraudulently increased the authorised share capital of the company from Rs. 3,39,700/- to Rs. 10,00,000/- and the said increased authorised capital was illegally allotted by the company to appellant No. 2 without convening any meeting and without any consideration. It was further alleged that the said fraudulent allotment of shares to respondent No. 2 was done to reduce the share holding of the respondents into the minority and gain control over the management of the company and to oust the respondents from the management of the company. It was also alleged in the petition that the appellant No. 2 had not paid off the loans, which were raised in favour of the company against personal FDRs of the respondents No. 1 and 2 from various Nationalised Banks. On the basis of the facts pleaded by the respondent in their company petition, they had prayed for the following reliefs in their Company Petition filed in the High Court on 7th April, 1988 :

(3.) Shortly after the abovementioned company petition was filed by the respondents in the High Court, the Companies Act, 1956 was amended by Companies (Amendment) Act, 1988 and the amendment became effective from 10th lune, 1988. As per amended provisions contained in section 67 of the Companies (Amendment) Act, 1988, powers of the High Court to deal with company petitions under sections 397 to 405 of the Companies Act, 1956 were transferred to the Company Law Board. It was provided that after the date of amendment, any petition to be filed under sections 397 to 405 of the Companies Act, 1956 shall be filed before the Company Law Board. However, section 68 of the Companies (Amendment) Act, 1988 contains a transitional provision according to which any matter or proceedings under the Companies Act, 1956 pending in the High Court immediately prior to the commencement of the Companies (Amendment) Act, 1988 were to continue and disposed of by the Court in which those proceedings were pending.