Calcutta High Court
Jaideep Halwasiya vs Rasoi Limited & Ors on 26 June, 2008
Author: Sanjib Banerjee
Bench: Sanjib Banerjee
ORDER SHEET IN THE HIGH COURT AT CALCUTTA Ordinary Original Civil Jurisdiction ORIGINAL SIDE G.A.No. 3472 of 2006 G.A.No. 3501 of 2006 G.A.No. 3502 of 2006 G.A.No. 3503 of 2006 G.A.No. 3504 of 2006 G.A.No. 3505 of 2006 G.A.No. 3506 of 2006 G.A.No. 3519 of 2006 G.A.No. 3520 of 2006 G.A.No. 3533 of 2006 G.A.No. 3534 of 2006 G.A.No. 3588 of 2006 G.A.No. 3597 of 2006 G.A.No. 3598 of 2006 G.A.No. 3599 of 2006 G.A.No. 3532 of 2006 G.A.No. 3531 of 2006 C.S.No. 274 of 2006 JAIDEEP HALWASIYA.
-Versus-
RASOI LIMITED & ORS.
Mr. S.B. Mukherjee, Adv. Mr. S.N. Mukherjee, Adv.
Mr. R.R. Sen, Adv. For the plaintiff.
Mr. Aninda Mitra, Adv. Mr. Abhrojit Mitra, Adv. For the defendant No.1 Before:
The Hon'ble Justice SANJIB BANERJEE Date: June 26, 2008.
The Court:
G.A.No.3472 of 2006: This is an application by a share-holder seeking to be added as a defendant. The plaintiff has complained of transactions in the company having been carried 2 on illegally in a manner which is prejudicial to the interest of the first defendant company and its share-holders. The suit appears to be a derivative action.
The defendant company resists the application by referring to a judgment reported at 2005(3) CLT 212 where a Division Bench of this Court held that in a representative suit filed under Order I Rule 8 of the Code of Civil Procedure, a person whose interest is being canvassed by the plaintiff cannot seek to be added as a party to the suit without alleging that the plaintiff may compromise the interests of all whom the plaintiff seeks to represent. Since the present suit is a derivative action which is slightly removed from what a representative action is, the principle would not strictly apply.
A derivative action has now been accepted to be one where a share-holder sues on behalf of all the share-holders of the defendant company except the recalcitrant share-holders who are arrayed as defendants. The real plaintiff in such action is the defendant company itself and the allegation is that the persons in control of the defendant company would not allow the company to sue to vindicate its stand by reason of their numerical control over the share-holding in the company. In such form of action, the reliefs claimed are, really, for the benefit of the defendant company and ordinarily not for the personal benefit of the plaintiff or the other share-holders except in their capacities as share-holders of the defendant company.
The applicant appears to be supporting the plaintiff. The applicant says that the applicant was not permitted to 3 exercise rights at the General Meeting of the company held on September 25-26, 2006.
The applicant is added as added defendant No.12. The department will carry out the necessary amendments within a period of three weeks from the date of issuance of a certified photostat copy of this order.
G.A.No.3472 of 2006 is disposed of without any order as to costs.
G.A.No.3501 of 2006: This is an application similar to other applications filed by share-holders seeking to be added as parties to the suit.
However, it is the undisputed position that the applicant, Hi-tech Designs Pvt. Ltd. has sold its shares in the first defendant company in the meantime. The application is dismissed in view of the applicant no longer being a share-holder of the company. G.A.No.3501 of 2006 is dismissed without any order as to costs.
G.A.No.3502 of 2006: This is an application similar to other applications filed by share-holders seeking to be added as parties to the suit.
However, it is the undisputed position that the applicant, Boast Commercial Pvt. Ltd., has sold its shares in the first defendant company in the meantime. The application is dismissed in view of the applicant no longer being a share-holder of the company. G.A.No.3502 of 2006 is dismissed without any order as to costs.4
G.A.No.3503 of 2006: This is an application similar to other applications filed by share-holders seeking to be added as parties to the suit.
However, it is the undisputed position that the applicant, Kejriwal Finvest Pvt. Ltd. has sold its shares in the first defendant company in the meantime. The application is dismissed in view of the applicant no longer being a share-holder of the company. G.A.No.3503 of 2006 is dismissed without any order as to costs.
G.A.No.3504 of 2006: This is an application similar to other applications filed by share-holders seeking to be added as parties to the suit.
However, it is the undisputed position that the applicant, Everlike Computers Pvt. Ltd., has sold its shares in the first defendant company in the meantime. The application is dismissed in view of the applicant no longer being a share-holder of the company. G.A.No.3504 of 2006 is dismissed without any order as to costs.
G.A.No.3505 of 2006: This is an application similar to other applications filed by share-holders seeking to be added as parties to the suit.
However, it is the undisputed position that the applicant, Doyen Marketing Pvt. Ltd., has sold its shares in the first defendant company in the meantime. The application is dismissed in view of the applicant no longer being a share-holder of the company. G.A.No.3505 of 2006 is dismissed without any order as to costs.5
G.A.No.3506 of 2006: This is an application similar to other applications filed by share-holders seeking to be added as parties to the suit.
However, it is the undisputed position that the applicant, Jupiter Mercantile Pvt. Ltd., has sold its shares in the first defendant company in the meantime. The application is dismissed in view of the applicant no longer being a share-holder of the company. G.A.No.3506 of 2006 is dismissed without any order as to costs.
G.A.No.3519 of 2006: It is submitted by the plaintiff that G.A.No.3519 of 2006 has been withdrawn by the applicant. However, inasmuch as none appears in support of the application, G.A.No.3519 of 2006 should be treated as dismissed.
G.A.No.3520 of 2006: It is submitted by the plaintiff that G.A.No.3520 of 2006 has been withdrawn by the applicant. However, inasmuch as none appears in support of the application, G.A.No.3520 of 2006 should be treated as dismissed.
G.A.No.3533 of 2006: This is an application similar to other applications filed by share-holders seeking to be added as parties to the suit.
However, it is the undisputed position that the applicant, B.S.R. Finance & Construction Ltd., has sold its shares in the first defendant company in the meantime. The application is dismissed in view of the applicant no longer being a share-holder of the company. G.A.No.3533 of 2006 is dismissed without any order as to costs.6
G.A.No.3534 of 2006: This is an application similar to other applications filed by share-holders seeking to be added as parties to the suit.
However, it is the undisputed position that the applicant, ASL Vyapar Pvt. Ltd., has sold its shares in the first defendant company in the meantime. The application is dismissed in view of the applicant no longer being a share-holder of the company. G.A.No.3534 of 2006 is dismissed without any order as to costs.
G.A.No.3588 of 2006: This is an application similar to other applications filed by share-holders seeking to be added as parties to the suit.
However, it is the undisputed position that the applicant, Span Stock Broking (P) Ltd., has sold its shares in the first defendant company in the meantime. The application is dismissed in view of the applicant no longer being a share-holder of the company. G.A.No.3588 of 2006 is dismissed without any order as to costs.
G.A.No.3597 of 2006: This is an application similar to other applications filed by share-holders seeking to be added as parties to the suit.
However, it is the undisputed position that the applicant, Jinay Investment Company Pvt. Ltd., has sold its shares in the first defendant company in the meantime. The application is dismissed in view of the applicant no longer being a share-holder of the company. G.A.No.3597 of 2006 is dismissed without any order as to costs.7
G.A.No.3598 of 2006: This is an application by a share-holder seeking to be added as a defendant.
The applicant appears to be supporting the plaintiff. The applicant says that the applicant was not permitted to exercise rights at the general meeting of the company held on September 25-26, 2006.
For the same reasons as in G.A.No.3472 of 2006 the applicant is added as an added defendant No.13. The department will carry out the necessary amendments within a period of three weeks from the date of issuance of a certified photostat copy of this order.
G.A.No.3598 of 2006 is disposed of without any order as to costs.
G.A.No.3599 of 2006: This is an application by a share-holder seeking to be added as a defendant.
The applicant appears to be supporting the plaintiff. The applicant says that the applicant was not permitted to exercise rights at the general meeting of the company held on September 25-26, 2006.
For the same reasons as in G.A.No.3472 of 2006, the applicant is added as an added defendant No.14. The department will carry out the necessary amendments within a period of three weeks from the date of issuance of a certified photostat copy of this order.
G.A.No.3599 of 2006 is disposed of without any order as to costs.8
G.A.No.3532 of 2006: This is an application by a share-holder of the first defendant company to be added as a party to this suit.
The first defendant company seeks to resist the application on the ground that a misstatement has been made therein. It has been alleged at paragraph 8 of the application that one K.K. Bhartia and another Raj Kumar More had been authorized by the applicant, Teji Mandi Securities Pvt. Ltd., to represent the applicant at the General Meeting of the first defendant company convened to be held on September 25, 2006. It is stated that K.K. Bhartia attended the General Meeting but could not attend the adjourned General Meeting scheduled for the following day where item No.6 of the agenda was to be voted upon and More attempted to represent the applicant on the adjourned date. The first defendant company makes over a copy of the authorization submitted by the applicant with the first defendant company prior to the said General Meeting from which it appears that only Bhartia had been authorized under Section 187 of the Companies Act to represent the applicant at such General Meeting and More had been authorized by the applicant to execute such papers on behalf of the applicant to ensure that Bhartia could represent the applicant at such General Meeting.
It appears that the point urged by the first defendant is of some substance. The first defendant says that when the applicant has come with what appears to be a false statement, such applicant should not be added as a party to the suit. 9
In the form of action that the present one is, the plaintiff does not, ideally, canvass the plaintiff's own cause. As discussed in greater detail in G.A.No.3472 of 2006 it is the defendant company's case that is espoused by the plaintiff or by anyone seeking to be added as a party supporting the plaintiff.
It is for such reason that notwithstanding the apparent misstatement in the application, the applicant Teji Mandi Securities Pvt. Ltd. is added as added defendant No.15 to the suit. The department will carry out the amendments within a period of three weeks from the date of issuance of a certified photostat copy of this order. G.A.No.3532 of 2006 is allowed as above without any order as to costs.
G.A.No.3531 of 2006: This is an application by a share-holder of the first defendant company to be added as a party to the suit. The first defendant company says that the shares held by the applicant have been sold out during the pendency of this application.
G.A.No.3531 of 2006 filed by Jemco Vanijya (P) Ltd. is dismissed without any order as to costs.
Urgent certified photostat copy of this order, if applied for, be given to the parties subject to compliance with all requisite formalities.
(Sanjib Banerjee, J) A/s.