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Showing contexts for: Forgery of document in Gulabrai Kalidas Naik And Ors. vs Laxmidas Lallubhai Patel Of Baroda And ... on 6 May, 1977Matching Fragments
10. Now, on a conspectus of various clauses of section 155, it becomes crystal clear that when an application for rectification of register is made, alleging that the petitioner is a shareholders and in respect of his holding, his name is required to be entered in the register of members, or that his name has been omitted without sufficient cause, and in such an application, if a dispute if raised, that the petitioner is not entitled to the shares, or the petitioner's title disputed, then not only the court can examine the question of title, which examination must involve assertion of the petitioner as to how he claims title to the shares, and grounds on which respondents deny the title to the petitioner. A clear controversy about title of the share is bound to arise. More often when, in a special statues, there is special forum on which limited jurisdiction is conferred, a question is more often raised : whether such a forum created by a special statute, with a special limited jurisdiction, court decide the question incidentally arising while exercising the limited jurisdiction. To thwart such a controversy, it is made crystal clear that not only the court can examine the question of title that may arise in an application under section 155, but it would also have the jurisdiction to decide other questions which may arise as ancillary of incidental to the main controversy and the court cannot be asked not to decide them on the ground of lack or want of jurisdiction because the statute specifically confers such wide jurisdiction. There was definite purpose behind enacting sub-clause (b) to sub-section (3), namely, to thwart any suggestion that the court cannot clutch at jurisdiction and decide the question which do not directly fall under section 155, or, for that matter, under any other provisions of the Companies Act. In order to make section 155 an effective remedy for a relief, for placing one's name on the register of members or for compelling the company to omit some name, which name has been wrongly placed, not only the Companies Act has conferred right on aggrieved person, to move the court under section 155, but created a forum, namely, the court hearing matters under the Companies Act, and widened the jurisdiction by conferring power on the court not only to decide the question of title, but also to decide all questions which are ancillary and incidental to the main question. Even there, Parliament did not use the well-known expression "questions which are ancillary or incidental to the main question", but used the expression of wider amplitude when it leaves to the court "to decide all and every questions that may arise in such a petition and which the court considers necessary or expedient to decide in connection with application for rectification". When it is said that the court may decide the question ancillary or incidental to the main dispute, while exercising jurisdiction conferred by a special statute, it would always be necessary to decide whether other questions are ancillary or incidental to the main question. You cannot exercise collateral jurisdiction for collateral purpose. But sub-clause (b) of sub-section (3) confers a much wider jurisdiction when it leaves to the court's discretion to decide all those questions which the court considers necessary or even expedient to decide in connections with application for rectification. In other words, jurisdiction conferred by section 155(3) is comprehensive jurisdiction which enables the court in application under section 155 to examine all questions, complex, intricate or otherwise, relating to the title to the shares, and further enlarges the jurisdiction of the court set up under the Companies Act to decide all those questions, which the court considers necessary or expedient to decide in connection with application for rectification. In the words, when an application for rectification of register is made, it would be open to the court while considering the main relief to decide all questions that may arise in such an application on rival contention. To illustrate, if a petitioner asserts title to the shares and the respondent contends that title was acquired by a forged document, forgery would be put in issue and it would be necessary to decide the issue of forgery before the main prayer for rectification of register can be granted. Take another illustration, if a petitioner claims that he is the owner of certain number of share and his name must appear on the register of members and the respondents come and contend that the transfer is be name or without consideration or in fraud of creditor, all those questions will have to be determined before the main relief is granted. To look at the problem other way would be to deny jurisdiction of such a widest amplitude conferred on the court. If a mere assertion on the part of the respondent that the issue of fraud will have to be decided or the issue of forgery will have to be determined, or the issue of want of consideration will have to be examined or the issue as to conspiracy will have to be examined, by mere assertion in the affidavit-in-reply these persons would be able to oust the jurisdiction of the court because it can be safely stated that these questions are bound to arise and the court cannot examine them in an application under section 155. If the jurisdiction under section 155 is limited to those case where there is not much of a dispute, where parties agree, where there is consent, where there is formal objection, what purpose was there to be achieved introducing sub-section (3) in which it is made abundantly clear that a question relating to the title of person claiming share being put in issue can be examined by court and Parliament did not stop at that, but went further and said that not only examine the question of title which the court would have jurisdiction to examine, but the court may also examine all those questions which the court considers necessary and expedient to decide in order to grant or refuse the main relief. If any given respondent were to come and say that the transfer form lodged by the petitioner who claims to be a member is a forged one, such mere assertion itself would be sufficient to throw out the petitioner, because an issue as to forgery would raise intricate or complex questions of civil law and cannot be examined in a petition under section 155. I am afraid, such a jurisdiction of wide amplitude would be rendered fruitless and nugatory, and the purpose behind introducing a section like 155 would stand defeated. It would be a teasing illusion of doubtful legal utility. This becomes crystal clear for it can be said that if the company admits the dispute, why force the petitioner to come to the court. If the claim is lodged with the company, board of directors is absolutely powerful to decide the issue, and if the company through its board of directors accepts the claim lodged by the petitioner, nothing further is required to be done. Would it be a fair proposition to assert that a mere dispute is sufficient to oust the jurisdiction of the court under section 155 ? Answer must obviously be in the negative.
19. Turning now to the decisions, in Jayashree Shantaram Vankudre v. Rajkamal Kalamandir [1960] 30 Comp Cas 141 (Bom), the petition was made prior to 1st October, 1959, because the date of the court's judgment is 19th January, 1959, meaning thereby prior to the enactment of the Companies (Court) Rules, which made it obligatory to commence action for rectification by way of a petition. The matter till then was governed by the Original Side Rules of the Bombay High Court. The petitioner had sought rectification of register in respect of 251 shares in respect of which the company had registered a transfer in favour of respondent No. 2. Petitioner and respondent No. 2 were wife and husband at some point of time in their life, though possible they had parted company when the dispute came to the court. Transfer was made pursuant to a resolution adopted at a meeting of the board of directors, which found its place in the minute book, and it was urged that the minute book in respect of the relevant entry is fabricated. It was also urged that the transfer deed was a fabricated document. Mr. Mehta said that in that case the two important allegations were that the minute book was fabricated and transfer deed was forged and that these contentions are identical with those which arise in the petition before me and that in such a situation, the Bombay High Court declined to entertain the petition and directed the party to a suit. In reaching this conclusion, the court first referred to the question set out above from the earlier edition of Halsbury's Laws of England. After examining the quotation and decision in Matheran Steam Tramway Co. v. B. N. Lang [1931] 1 Comp Cas 206 (Bom), the learned judge came to the conclusion that the matter is entirely in the discretion of the court to examine the contention or to direct a party to regular suit. This decision is not an authority for the proposition that the court has no jurisdiction to entertain a petition when complex and intricate questions of title are raised. Mr. Mehta fairly conceded that it is not his submission that the court has no jurisdiction, but the court in its discretion and wisdom should decline to exercise the jurisdiction. That is entirely a different thing from saying that the court in such a situation has no jurisdiction under section 155 of the Act. If may also be borne in mind that while declining to entertain the petition, it was observed in that case that in all matters arising under the Companies Act the rules provide that the application must be by a petition and, therefore, it is not envisaged that complicated questions of facts must be tried on a petition where remedy for action is available to a party. Now, with great respect, it is difficult to understand how it could have been said at the relevant time that an application for rectification ought to have been made by a petition. Such a provision was not there. The distinction between the matter brought before the court by a judge's summons and matter brought before the court by a petition did not fall for consideration. But it was further observed that the English decisions in this connection are relevant and that where discovery and inspection are necessary and complicated questions such as forgery and fabricated documents arise, that summary procedure of trial by petition under section 155 should not be allowed to be pursued. With respect, it is crystal clear from the English practice pointed out in the earlier portion of this judgment that where action is brought by way of petition, discovery and inspection can be asked and taken and evidence may have to be offered, may be by way of affidavit or parole evidence as the exigency of the case requires. Therefore, it cannot be said that wherever discovery and inspection are necessary or complicated questions arise, they by themselves should be sufficient to come to the conclusion that the court should deny to itself jurisdiction under section 155. To say that party has remedy by way of a suit is to ignore the special provisions of the Companies Act, and special forum created by the Companies Act for enforcement of right conferred by the Companies Act and to read into these special provisions a limitation or fetter is to bring in something which is not in the section. Where a special statute creates right, also sets up a forum and provide a procedural method for enforcing the right and obtaining relief, that forum and remedy has to be preferred to the normal remedy of suit which any one can institute and it should all the more be so where technical questions arising under the Companies Act may have to bedside which a judge exercising company jurisdiction may be expected to examine and decide with a specialised knowledge which may not be readily available to ordinary civil courts before whom hardly questions under the Companies Act would arise. Therefore, this decision while recognising the discretion in the court, does not lay down the proposition that in such a situation as discussed in that case, the court must decline itself jurisdiction to entertain and dispose of the petition.