VIJAY SOLVEX LTD Vs. BABU LAL DATA

JUDGEMENT

(1.) Instant Company Appeal raises an interesting issue as to whether a petition preferred before the Company Law Board jointly by eight petitioners would be held to be not maintainable on account of affidavit having been filed in support of the petitioner by petitioner no.1 alone. The Company Law Board on demurrer filed by the respondents has held the company petition to be defective, which could be cured, holding that a subsequent ratification of earlier authorization violates filing of the petition by petitioner no.1 on behalf of the other petitioners. Aggrieved thereof, the present company appeal has been preferred by the appellants.

(2.) Learned counsel for the appellants submits that the petition under under Section 397 & 398 of the Companies Act, 1956 (hereinafter referred as the 'Act of 1956') could be preferred only by those who had the right to apply in terms of Section 399 of the Act of 1956. While a joint petition could be filed by the shareholders. He submits that in terms of Section 399(3) any one or more of them can have a right to apply provided they have obtained in writing the consent of the rest of the petitioners (respondents herein) . It is submitted that no such contention was raised in the petition preferred before the Company Law Board and the affidavits of the other petitioners (respondents herein) were not placed on record. It also does not contain any authorization letter or power of attorney on behalf of the other petitioners (respondents herein) . Learned counsel further has taken to this Court to the order dated 22/12/2014 passed by the Company Law Board to submit that once the Company Law Board reached to the conclusion that on the date of filing of the petition there was an inherent defect in the petition, the petition was required to be rejected as not maintainable. He submits that in terms of the Company Law Board Regulations, 1991, the procedure for filing a petition has been laid down under Regulation 14 and as there was a defect which is admittedly inherent, the Company Law Board has committed fally in treating the defect to have been cured on the basis of a power of attorney submitted subsequently in the year 2014. Learned counsel has pointed out that the Company Petition was preferred in 2009 and the power of attorney has been executed by the petitioners no.2 to 8 (respondents no.2 to 8 herein) on 22/07/2014. Learned counsel relies on the judgment passed by the High Court of Calcutta in the case of Bengal Luxmi Cotton Mills Ltd. (Company Petition No.111/1964) , decided on 22/09/1964. He also taken this Court to the order passed by the Company Law Board, Delhi Bench, New-Delhi in the case of Shri Abid Hussain Khan Vs. M/s. Himalayan Petro Products and Allied Works (P) Ltd and ors. [Company Petition No.69(ND) /2010], decided on 18/12/2012, where the concerned Judge has taken a different view, to contend that a different view could not have been adopted by the same Judge of the Company Law Board in the present case.

(3.) Per-Contra, learned counsel for the respondents has taken this Court firstly to the affidavit filed in support of the Company Petition before the Company Law Board wherein the respondent no.1 herein has stated that he has been authorized to file the affidavit for and on behalf of the other-respondents. He further submits that the respondent no.1 herein has also stated that he is duly authorized and competent to swear and affirm the affidavit. Learned counsel submits that all the respondents are closely related members of the same family with petitioner no.1 being HUF i.e. son and has also filed petition before the Company Law Board in his own name, in the name of his wife and in the name of HUF that is son and wife. Thus it is submitted that the present appeal is wholly frivolous. Learned counsel has also pointed out that the power of attorney filed on the objection raised by the appellants specifically mentions of previous power of attorney executed by the respondents jointly in favour of respondent no.1 which is misplaced and/or not traceable. He further states that the Company Law Board has rightly treated the defect having been cured in view of the power of attorney dated 22/07/2014 which has subsequently ratified the earlier authorization in favour of the respondent no.1.