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Documents citing The Barium Chemicals Ltd. And Anr vs The Company Law Board And Others on 4 May, 1966

Nita Puri vs Union Of India on 28 August, 2025

71. The existence of "relevant circumstances" is sine qua non as for the purpose of formation of opinion under Section 212(1)(c) of the Act, 2013. As held by the Supreme Court in Barium Chemicals Limited vs. Company Law Board (supra), Rohtas Industries vs. SD Aggarwal (supra) and Rampur Distillery vs. Company Law Board, (supra), and reiterated by the Bombay High Court in Parmeshwar Das Agarwal (supra), the existence of the relevant circumstances has to be "demonstrable". Exercise of power under Section 212(1)(c) in a casual or perfunctory manner, seriously undermines the statutory provision itself and the safeguards implicit thereunder. The use of boilerplate language and/or extrapolations from third party documents, without consideration of all the "relevant circumstances", reflects a disregard for procedural propriety. It can hardly be emphasized Signature Not Verified Digitally Signed By:ROHIT KUMAR PATEL Signing Date:30.08.2025 W.P.(C) 261/2025 Page 47 of 48 05:22:43 enough that the power under Section 212(1)(c) must be exercised with circumspection and deliberation. In the present case, the impugned order under Section 212(1)(c) appears to have been issued in a rather casual manner, unmindful of the statutory pre-requisites therefor.
Delhi High Court Cites 47 - Cited by 0 - S Datta - Full Document

Major Atul Dev Retd & Ors vs Union Of India Mca & Ors on 21 October, 2024

"For the reasons stated earlier we agree with the conclusion reached by Hidayatullah and Shelat, JJ. in Barium Chemicals case [Barium Chemicals Ltd. v. Company Law Board, 1966 Supp SCR 311 : AIR 1967 SC 295] that the existence of circumstances suggesting that the company's business was being conducted as laid down in sub- clause (1) or the persons mentioned in sub-clause (2) were guilty of fraud or misfeasance or other misconduct towards the company or towards any of its members is a condition precedent for the Government to form the required opinion and if the existence of those conditions is challenged, the courts are entitled to examine whether those circumstances were existing when the order was made. In other words, the existence of the circumstances in question are open to judicial review though the opinion formed by the Government is not amenable to review by the courts. As held earlier the required circumstances did not exist in this case."
National Company Law Appellate Tribunal Cites 119 - Cited by 0 - A Bhushan - Full Document

Jiyajeerao Cotton Mills Ltd. vs Company Law Board And Ors. on 16 January, 1969

If it is established that there were no materials upon which the authority could form the requisite opinion the court may infer that the authority did not apply its mind to the relevant facts. The requisite opinion is then lacking and the condition precedent to the exercise of the power under Section 237(b) is not fulfilled. On this ground I interfered with the order under Section 237(b) in Barium Chemicals Ltd. v. Company Law Board. ....
Madhya Pradesh High Court Cites 25 - Cited by 2 - Full Document

Rajeev Sabharwal vs Union Of India & Ors on 21 October, 2024

"For the reasons stated earlier we agree with the conclusion reached by Hidayatullah and Shelat, JJ. in Barium Chemicals case [Barium Chemicals Ltd. v. Company Law Board, 1966 Supp SCR 311 : AIR 1967 SC 295] that the existence of circumstances suggesting that the company's business was being conducted as laid down in sub- clause (1) or the persons mentioned in sub-clause (2) were guilty of fraud or misfeasance or other misconduct towards the company or towards any of its members is a condition precedent for the Government to form the required opinion and if the existence of those conditions is challenged, the courts are entitled to examine whether those circumstances were existing when the order was made. In other words, the existence of the circumstances in question are open to judicial review though the opinion formed by the Government is not amenable to review by the courts. As held earlier the required circumstances did not exist in this case."
National Company Law Appellate Tribunal Cites 119 - Cited by 0 - A Bhushan - Full Document

S.R. Bommai vs Union Of India on 11 March, 1994

35. The marginal note of Article 356 indicates that the power conferred by that provision is exercisable "in case of failure of constitutional machinery in the States". While the text of the said article does not use the same phraseology, it empowers the President, on his being satisfied that, "a situation has arisen" in which the Government of the State 'cannot' be carried on in accordance with the provisions of the Constitution, i.e., on the failure of the constitutional machinery, to take action in the manner provided in sub-clauses (a), (b) and (c) and (sic of) clause (1) thereof. This action he must take on receipt of a report from the Governor of the State concerned or ,otherwise', if he is satisfied therefrom about the failure of the constitutional machinery. Article 356(i) confers extraordinary powers on the President, which he must exercise sparingly and with great circumspection, only if he is satisfied from the Govern's report or otherwise that a situation has arisen in which the Government of the State cannot be carried out in accordance with the provisions of the Constitution. The expression 'otherwise' is of very wide import and cannot be restricted to material capable of being tested on principles relevant to admissibility of evidence in courts of law. It would be difficult to predicate the nature of material which may be placed before the President or which he may have come across before taking action under Article 356(1). Besides, since the President is not expected to record his reasons for his subjective satisfaction, it would be equally difficult for the Court to enter 'the political thicket' to ascertain what weighed with the President for the exercise of power under the said provision. The test laid 82 down by this Court in Barium Chemicals Ltd. v. Company Law Board6 and subsequent decisions for adjudging the validity of administrative action can have no application for testing the satisfaction of the President under Article 356. It must be remembered that the power conferred by Article 356 is of an extraordinary nature to be exercised in grave emergencies and, therefore, the exercise of such power cannot be equated to the power exercised in administrative law field and cannot, therefore, be tested by the same yardstick. Several imponderables would enter consideration and govern the ultimate decision, which would be based, not only on events that have preceded the decision, but would also depend on likely consequences to follow and, therefore, it would be wholly incorrect to view the exercise of the President's satisfaction on a par with the satisfaction recorded by executive officers in the exercise of administrative control. The opinion which the President would form on the basis of the Govern's report or otherwise would be based on his political judgment and it is difficult to evolve judicially manageable norms for scrutinising such political decisions. It, therefore, seems to me that by the very nature of things which would govern the decision-making under Article 356, it is difficult to hold that the decision of the President is justiciable. To do so would be entering the political thicket and questioning the political wisdom which the courts of law must avoid. The temptation to delve into the President's satisfaction may be great but the courts would be well advised to resist the temptation for want of judicially manageable standards. Therefore, in my view, the court cannot interdict the use of the constitutional power conferred on the President under Article 356 unless the same is shown to be mala fide. Before exercise of the court's jurisdiction sufficient caution must be administered and unless a strong and cogent prima facie case is made out, the President i. e. the Executive must not be called upon to answer the charge. In this connection I agree with the observation of Ramaswamy, J. I am also in agreement with Verma, J. when he says that no quia timet action would be permissible in such cases in view of the limited scope of judicial review in such cases. I am, therefore, in respectful agreement with the view expressed in the Rajasthan case3 as regards the extent of review available in relation to a Proclamation issued under Article 356 of the Constitution. In other words it can be challenged on the limited ground that the action is mala fide or ultra vires Article 356 itself.
Supreme Court of India Cites 212 - Cited by 15 - K Singh - Full Document

1. Mrs. Kailash Suneja (C.W. No. 5220 Of ... vs Appropriate Authority And Others. Dr. ... on 17 December, 1997

In our opinion, the point is concluded by the above decision also. Since no satisfaction has been arrived at by the respondent on the basis of objective facts and no reasons have been recorded for coming to a positive conclusion as to why there was difference of more than 15 per cent., the order cannot be said to be in accordance with law and must be quashed and set aside."
Delhi High Court Cites 147 - Cited by 291 - Full Document

Deputy Secretary, Ministry Of Finance, ... vs Sahu Jain Ltd. on 18 February, 1969

23. The decisions discussed above do not in our view support the contentions of the appellants in this appeal. Besides it is not necessary for us for the purpose of this appeal to examine other decisions for upholding the contentions of the appellants having regard to the decision of the Supreme Court in Barium Chemicals Ltd. v. Company Law Board, discussed at length earlier in this judgment. In that case the majority view of the Supreme Court have been clearly and unambiguously stated by Hidayatullah J. (as he then was) and Shelat J. and indeed Mr. Basak conceded that if in our view the majority of the Supreme Court had laid down the law and the interpretation of Section 237(b) of the Companies Act, it was not open to him to raise the contentions he has raised.
Calcutta High Court Cites 39 - Cited by 1 - Full Document

S.R. Bommai And Others Etc. Etc. vs Union Of India And Others Etc. Etc. on 11 March, 1994

376. The marginal note of Article 356 indicates that the power conferred by that provision is exercisable 'in case of failure of constitutional machinery in the States'. While the text of the said article does not use the same phraseology, it empowers the President, on his being satisfied that, 'a situation has arisen' in which the Government of the State 'cannot' be carried on in accordance with the provisions of the Constitution, i.e. on the failure of the constitutional machinery, to take action in the manner provided in Sub-clause (a), (b) and (c) and Clause (1) thereof. This action he must take on receipt of a report from the Governor of the concerned State or 'otherwise', if he is satisfied therefrom about the failure of the constitutional machinery. Article 356(1) confers extra-ordinary powers on the President, which he must exercise sparingly and with great circumspection, only if he is satisfied from the Governor's report or otherwise that a situation has arisen in which the Government of the State cannot be carried out in accordance with the provisions of the Constitution. The expression 'otherwise' is of very wide import and cannot be restricted to material capable of being tested on principles relevant to admissibility of evidence in courts of law. It would be difficult to predicate the nature of material which may be placed before the President or which he may have come across before taking action under Article 356(1). Besides, since the President is not expected to record his reasons for his subjective satisfaction, it would be equally difficult for the court to enter 'the political thicket' to ascertain what weighed with the President for the exercise of power under the said provision. The test laid down by this Court in The Barium Chemicals Ltd. v. The Company Law Board and Ors. [1966] Suppl. SCR 311 and subsequent decisions for adjudging the validity of administrative action can have no application for testing the satisfaction of the President under Article 356. It must be remembered that the power conferred by Article 356 is of an extraordinary nature to be exercised in grave emergencies and, therefore, the exercise of such power cannot he equated to the power exercise in administrative law field and cannot, therefore, be tested by the same yardstick. Several imponderables would enter consideration and govern the ultimate decision, which would be based, not only events that have preceded the decision, but would also depend on likely consequences to follow and, therefore, it would be wholly incorrect to view exercise of the President's satisfaction on par with the satisfaction recorded by executive officers in the exercise of administrative control. The opinion which the President would form on the basis of the Governor's report or otherwise would be based on his political judgment and it is difficult to evolve judicially manageable norms for scrutinising such political decisions. It, therefore, seems to me that by the very nature of things which would govern the decision making under Article 356, it is difficult to hold that the decision of the President is justiciable. To do so would be entering the political thicket and questioning the political wisdom which the Courts of law must avoid. The temptation to delve into the President's satisfaction may be great but the courts would be well advised to resist the temptation for want of judicially manageable standards. Therefore, in my view, the Court cannot interdict the use of the constitutional power conferred on the President under Article 356 unless the same is shown to be malafide. Before exercise of the Court's jurisdiction sufficient caution must be administered and unless a strong and cogent prima facie case is made out, the President i.e. the executive must not be called upon to answer the charge. In this connection I agree with the observation of Ramaswamy, J. I am also in agreement with Verma, J. when he says that no quia timet action would be permissible in such cases in view of the limited scope of judicial review in such cases.
Supreme Court of India Cites 195 - Cited by 604 - P B Sawant - Full Document

Mamchand & Co. And Others vs Commissioner Of Income-Tax, West ... on 9 November, 1967

He submitted that the affidavit affirmed by the respondent No. 1 on June 5, 1967, clearly disclosed that there were ample materials and grounds in his possession for the issuing of the warrants of authorisation. He therefore, submitted that the decision of the Supreme Court in Barium Chemicals Limited v. Company Law Board had not application to this case, as the facts in these case were entirely different. In my opinion, there is good deal of force in the contention of the learned Advocate-General. The view of the majority of the Supreme Court in the case of Barium Chemicals Limited was that circumstances must exist which in the opinion of the authority suggested certain things and that if it was shown that circumstances did not exist or that they were such that it was impossible for any one to form an opinion therefrom suggestive of the said things, the opinion could be challenged on the ground of failure to apply the mind of the authority or on the ground that it was formed on collateral grounds and was beyond they scope of the statute. In this case the circumstances that existed before the issue of the warrants of authorisation clearly disclosed that grounds existed for an investigation and it was on these grounds that the respondents No. 1 had formed the belief that a search of the petitioners residential premises and also of the office premises was necessary and also that such books ought to be seized as would be relevant to or useful for further proceeding in law.
Calcutta High Court Cites 34 - Cited by 12 - Full Document

Mrs. Kailash Suneja & Ors. vs Appropriate Authority & Ors. on 17 December, 1997

In our opinion, the point is concluded by the above decision also. Since no satisfaction has been arrived at by the respondent on the basis of objective facts and no reasons have been recorded for coming to a positive conclusion as to why there was difference of more than 15 per cent., the order cannot be said to be in accordance with law and must be quashed and set aside."
Delhi High Court Cites 141 - Cited by 0 - K Ramamoorthy - Full Document
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