Search Results Page
Search Results
1 - 10 of 11 (1.09 seconds)Section 397 in The Companies Act, 1956 [Entire Act]
Section 398 in The Companies Act, 1956 [Entire Act]
M/S Dove Investments Pvt. Ltd. & Ors vs M/S Gujarat Industrial Inv. ... on 2 February, 2006
Corporation and Ors. (supra) holding that procedural provisions are not mandatory is inapplicable to the facts of the present case.
J.P. Srivastava & Sons Pvt. Ltd. & Ors vs M/S Gwalior Sugar Co. Ltd. & Ors on 26 October, 2004
A perusal of the provisions of Section 399(1) would show that (a) in the case of a company having a share capital, members constituting not less than one hundred members of the company or not less than one-tenth of the total number of its members, whichever is less or members holding not less than one-tenth of the issued share capital of the company: and (b) in the case of a company not having a share capital, not less than one-fifth of the total number of its members, shall have the right to apply under Section 397 or Section 398. It is. therefore, far from doubt that Section 399 stipulates minimum qualifications, which members should possess such as their numerical strength or the extent of their share capital. Sub-section (3) of Section 399 provides that any member or more of them having obtained the consent in writing of the rest may make the application under Section 397/398 on behalf and for the benefit of all of them. Section 399 engrafts an important exception to this rule of competence to make an application under Section 397/398. The exception lies in the special dispensation, which the Central Government may give to any person to make an application despite the fact that the person concerned is not eligible to make an application in terms of Section 399(1). The Supreme Court in J.P. Srivastava and Sons Private Limited v. Gwalior Sugar Co. Limited (supra) while confirming the directory nature of requirement of letters of consent given by supporting shareholders, tit the time of making the application under Section 397 & 398 as contemplated in Section 399(3). categorically held thus: "The object of prescribing a qualifying percentage of shares in petitioners and their supporters to file petitions under Sections 397 and 398 is clearly to ensure that frivolous litigation is not indulged in by persons who have no real stake in the company. However it is of interest that the English Companies Act contains no such limitation. What is required in these matters is a broad commonsense approach. If the Court is satisfied that the petitioners represent a body of shareholders holding the requisite percentage, it can assume that the involvement of the company in litigation is not lightly done and that it should pass orders to bring to an end the matters complained of and not reject it on a technical requirement. " The Supreme Court while making abundantly clear that the shareholders holding the requisite percentage can maintain an action under Section 397/398 in order to bring to end the matters complained of. held that the requirement of filing consent letters of members as well as documents required to be annexed to petitions relating to the exercise of powers in connection with prevention of oppression or mismanagement is not mandatory, but merely directory. Thus, this decision of the apex court does not go in aid of the petitioners.
Thakur Pratap Singh vs Shri Krishna Gupta And Others on 2 December, 1952
The requirement of requisite percentage is vital and go to the root of the matter, which cannot be broken and overlooked as envisaged in Pratap Singh v. Shri Krishna Gupta (supra) and therefore, cannot be directory.
Mr. Shaikh Salim Haji Abdul Khayumsab vs Mr. Kumar & Ors on 18 November, 2005
The nature of the provisions of Section 399(1) is not procedural, but it is a part of substantive law and therefore, applying the principles enunciated by the Supreme Court in Shaik Salim Haji Abdul Khayumsab v. Kumar (supra), the requirements of Section 399(1) should be construed as mandatory. Section 399(1) is not a procedural provision. Furthermore, the word "shall" used therein is considered to be imperative in nature and it has to be interpreted as mandatory having regard to the text and context of the statute, irrespective of the fact whether any prejudice is caused. This is all the more evident from Sub-section (4) of Section 399. which empowers the Central Government to exercise its discretion to permit a lesser number of members to file an application than that prescribed by Sub-section (1) of Section 399. A combined reading of Sub-section (1) and (4) would show that the CLB has no option but to reject the application made under Section 397/398. not being supported by the requisite number of members as at the time of filing the application before the CLB. Thus, the requirements of Section 399(1). being statutory are not directory in nature, breach of which cannot be waived by the CLB. This being the settled legal position, the present company petition, not satisfying the mandatory requirements of Section 399(1) is liable to be dismissed, in which case there is no need to elaborate and go into the other procedural and technical defects contained therein.
Section 402 in The Companies Act, 1956 [Entire Act]
Shreenath & Another vs Rajesh & Others on 13 April, 1998
Similarly, the decisions in (a) Shreenath v. Rajesh (supra) and (b) Delhi Development Authority v. Skipper Construction Company Private Limited (supra) having been rendered in the context of interpreting procedural law and procedural/technical requirements will be of little assistance to the petitioners. For these reasons, the petitioners do not possess the requisite locus standi to maintain the petition. Accordingly, the company petition is dismissed without considering its merits. The petitioners are at liberty to initiate appropriate action under the relevant provisions of the Act. redressing their grievances, if so advised.
Delhi Development Authority vs Skipper Construction Co. (Pvt.) Ltd. & ... on 13 November, 2002
Similarly, the decisions in (a) Shreenath v. Rajesh (supra) and (b) Delhi Development Authority v. Skipper Construction Company Private Limited (supra) having been rendered in the context of interpreting procedural law and procedural/technical requirements will be of little assistance to the petitioners. For these reasons, the petitioners do not possess the requisite locus standi to maintain the petition. Accordingly, the company petition is dismissed without considering its merits. The petitioners are at liberty to initiate appropriate action under the relevant provisions of the Act. redressing their grievances, if so advised.