DUROFLEX LIMITED Vs. SHRI JOHNNY MATHEW

JUDGEMENT

(1.) IN the company petition filed by Johnny Mathew ("the petitioner") under Sections 397 and 398 of the Companies Act, 1956 ("the Act") seeking reliefs for certain alleged acts of oppression and mismanagement in the affairs of the M/s Duroflex Limited ("the Company"), the Company filed the present application (C.A. No. 135 of 2003) raising the plea of maintainability of the company petition, upon which, this Board by an order dated 24.02.2004 came to the conclusion that the company petition is maintainable and further directed the parties to file counter affidavit for further consideration. The Company aggrieved thereby preferred an appeal (Company Appeal No. 17 of 2004), wherein the High Court of Kerala while upholding the finding of this Board that the main company petition is not barred by the principles of resjudicata, remanded the matter to consider the issue whether the petitioner herein is estopped from filing the company petition for the reason that the first company petition was withdrawn without reserving the right to file a fresh petition on the same cause of action in the light of the principles of Or.23 R.1 of the Code of Civil Procedure.

(2.) ACCORDING to Shri B.C. Thiruvengadam, learned Counsel, the acts of oppression and mismanagement alleged in the present company petition have already been urged before the Company Law Board by Mr. Tommy Mathew, brother of the petitioner in C.P. No. 68 of 2000. The petitioner herein attempted to get himself impleaded in C.P. No. 68 of 2000, but failed in his attempt. Thereafter, the petitioner had filed a similar petition through Tommy Mathew invoking the provisions of Section 397/398, in the affairs of the Company on the very same grounds set out in the present company petition. The petitioner had subsequently withdrawn the earlier company petition, without obtaining any liberty to file a fresh petition on the same cause of action and, therefore, the present company petition on the identical grounds and for the same reliefs cannot be entertained. The Madras High Court in Jacob Cherian v. K.N. Cherian (1973) Vol 43 CC 235 held that if a petition filed under Sections 397 & 398, is unconditionally withdrawn, the petitioner is precluded, by virtue of Or.23 R.1 of the Code of Civil Procedure, from instituting a fresh petition on the allegations upon which the earlier petition was founded, which would apply to the proceedings before the CLB. The apex court held in T. Aravindanam v. T.V. Satyapal that if a litigation is manifestly vexatious, meritless and bogus, it can be shot down at the earlier stage. The petitioner, thereafter, filed yet another company petition in C.P. No. 18 of 2003 invoking the jurisdiction of the CLB under Section 397/398, which was rejected in September 2003 on account of certain inherent defects, without however prejudice to the rights of the petitioner to claim any remedy under Section 397/398 in accordance with law. The petitioner cannot file again a petition on the same cause of action, after withdrawal of the first petition, without any liberty to file a fresh petition and therefore, the petitioner is precluded, by virtue of order 23 R.1 of the Code of Civil Procedure from instituting the present company petition founded on the very same allegations.

(3.) I have considered the arguments of learned Counsel. The short issue before me is whether the petitioner herein is estopped from filing the present company petition on the sole premise that the first company petition was withdrawn without reserving any right to file a fresh petition on the same cause of action, in the light of the principles of Or.23 R.1 of the CPC.