ALAK PROKASH JAIN Vs. UNION OF INDIA

JUDGEMENT

(1.) The appellant was a director of several joint stock companies incorporated in India, including a company known as Benett Coleman and Co. Ltd. He claims to have resigned from the directorship of this company on September 13, 1964, but according to the respondent the resignation took effect from September 17, 1964.

(2.) On September 17, 1964, the Union of India (first respondent) filed an application before the Company's Tribunal (respondent No. 2) constituted under Section 10A of the Companies Act, 1956 (hereinafter referred to as " the Act "), against the appellant under Sections 388B and 388E of the Act. The application was also directed against the appellant, his father, Shanti Prasad Jain, and two others, namely, Fian Chand Jain and P.K. Ray. In that application the Union of India prayed for a finding that the respondents in that application were not fit and proper persons to hold the office of directors or any other office connected with the conduct or management of Benett Coleman and Co. Ltd. and/or any other company. There was also a prayer for such further or other orders as the circumstances of the case might require.

(3.) The Tribunal admitted the application and numbered it as Case No. 1 of 1964. A second application was filed before the Tribunal by the first respondent, under Section 388C of the Act, asking for an interim direction upon the petitioner and some other persons not to discharge their duties as directors of Benett Coleman and Co. Ltd. until further orders of the Tribunal. On this application the Tribunal made an order by consent of parties and without prejudice to their rights and contentions and in particular to the respondents' contention that they had properly resigned from the board of directors on September 13, 1964, and September 8, 1964. In that order it was recorded that the appellant gave an undertaking to the Tribunal not to discharge his duties and functions as director of the said company until final disposal of the application under Section 388B of the Act. Two persons, namely, S.R. Bhakil and Dr. R.C. Cooper were appointed directors of the company. The appellant gave an undertaking to approach the shareholders for approval of the appointment of S.R. Bhakil and Dr. R.C. Cooper as directors, if necessary. It was also provided in that order that the application under Section 388C against P.K. Ray was to stand over until further orders of the Tribunal or until disposal of the application under Section 388B of the Act. There were certain further directions with regard to hearing of the application.