ORISSA TEXTILE MILLS LTD Vs. CHINTAMANI SAHU BROTHERS

JUDGEMENT

(1.) THIS appeal is directed against the order dated February 17, 1972, passed by our learned brother, Mr. Justice Patra, as company judge in Company Act Case No. 5 of 1970. The opposite parties Nos. 1 and 3 in the Company Act case are the appellants and all other parties have been impleaded as respondents. This appeal purports to be under Clause 10 of the Letters Patent of the Patna High Court read with Clause 4 of the Orissa High Court Order, 1948. Though in the cause title of the memorandum of appeal, it had also been shown to be under the Companies Act of 1956 and the Rules made thereunder, Mr. Patnaik for the appellants concedes that no appeal against the impugned order would lie under the Act or its Rules.

(2.) COMPANY Act Case No. 5 of 1970, was instituted in this court on August 18, 1970, and was one under Sections 397 and 398 of the Companies Act. 129 persons were shown as petitioners. The company and several of its directors entered contest and took the stand, inter alia, that the petition had not been filed in accordance with the Companies (Court) Rulesand it was not verified properly. On the 17th of February, 1972, the matter stood posted before the learned company judge for considering applications for direction regarding production of records. On that day, before the hearing was taken up, a copy of an application in Company Act Case No. 5 of 1970, labelled under Sections 397, 398, 402 and 403 of the Act, was served on counsel for the appellants. On the said application, counsel endorsed objection and indicated that he intended a counter to be filed. A copy of that application was also served upon counsel for opposite party No. 2 (now respondent No. 130). During the hearing of the case relating to direction for production of documents, the said application was presented before the court. Thereupon, the following order was passed :

(3.) IN this appeal it is contended that the order dated February 17, 1972 (as clarified by the subsequent order), brought Company Act Case No. 5 of 1950 to a close and there came into existence a new case which has now been numbered as Company Act Case No. 1 of 1972. Under Rule 88(2) of the Companies (Court) Rules, a petition under Section 397 and/or 398 shall not be withdrawn without leave of the court. In view of the fact that the old case (Company Act Case No. 5 of 1970) has now been brought to a close and has been withdrawn from the registry of this court except for the purposes indicated in the impugned order, such a situation could have been brought about either by granting permission to withdraw the application or by its dismissal. If the application had been ready for hearing there could be a third eventuality - -the application being allowed. It is next contended that serious objections had been raised regarding maintainability of the petition and they were matters which go to the root of the question of maintainability. The learned company judge without deciding that question should not have received a fresh petition on the same cause of action. Even if a fresh petition was filed, the old case should not have been permitted to be merged in the new case for any purpose and the second case should have been registered as an independent application whose maintainability should have been left to be examined separately. By merging the two petitions, the opposite parties before the learned company judge have been prejudiced. The third contention raised is that the application was not one for amendment and, therefore, it could only be treated as an independent application. In that event it had to be a complete application by itself and the device which was sought to be adopted by the petitioner of the Company Act Case could not have at all been permitted. It is next contended that the new application was not ready for disposal as copies thereof had not been served on all contesting opposite parties and counsel for opposite parties Nos. 1 and 3 had stated thereupon that he intended to file an objection. Before we proceed to consider these contentions, an objection to the maintainability of the appeal raised by the respondent No. 1 must be disposed of. That objection is on the basis that the impugned order is not a ' judgment ' in terms of Clause 10 of the Letters Patent of the Patna High Court and, therefore, no appeal lies against it before a Bench of two judges of the same court. In fact when the matter was placed before us for admission, we were of that view also and with a lot of hesitation and reluctance, we had issued a notice to the respondents. We shall, therefore, first deal with the question of maintainability.