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2005 (3) TMI 797 - HIGH COURT OF CALCUTTAOppression and Mismanagement - Allotment of shares - Equitable to wind up the company - NRI investments in shares and balance by resident Indians - value of the imported second hand equipments - Whether the petitioners being qualified doctors would be more suitable for controlling the company having a hospital as the only project - HELD THAT:- It would appear from the said Section that a petitioner who files an application under Section 397, he has to satisfy two ingredients to make out a case under Section 397(a) that to wind up the company would unfairly prejudice the member or members who have the grievance and are the applicants before the court; and (b) that otherwise, the facts would justify the making of a winding up order on the ground that it was just and equitable that the company should be wound up. After analysing the facts of this case it appears to me that two groups are fighting to take control over the company. It have not been able to find out any fact nor has been shown by Dr. Dutta before the Company Law Board which would prejudice the petitioners Dr. Kamal Kumar Dutta and Dr. Binod Prasad Sinha if the company in question were to be wound up. There is no pronouncement in the decision of the Company Law Board as to whether a just and equitable winding up would unjustly prejudice Dr. Dutta and his group or not. It further appears from the facts placed before me by the parties that it would be apparent that Dr. Dutta by way of relief asked a control over the company and if I try to find out an answer, the answer would automatically that none of the parties wants a winding up. Two groups are fighting for company and not for its winding up. I do not have any hesitation to come to a conclusion that the Company Law Board in the instant case did not deal with the said aspect of the matter and not even investigate on those facts and failed to make a conclusion that whether the facts are such that a just and equitable winding up of the company is called for, yet such order of winding up would unfairly prejudice the petitioners and when passed the said order. Then I could have been hesitant to interfere with the order so passed by the Company Law Board. But as has been pointed out by Mr. Sen and I do accept the contention of Mr. Sen since I do not find that the decisions cited by Mr. Sarkar would help him to come across the said hurdle. Since I am of the opinion that the petitioner has failed to fulfil the pre-conditions to have an order u/s 397/398 and the Company Law Board did not deal with the matter at all, I do not have any hesitation to set aside the order passed by the Company Law Board. I also express my opinion following the decision of the Division Bench of our High Court in Bagree Cereals P. Ltd. v. Hanuman Prasad Bagri [2000 (8) TMI 1120 - CALCUTTA HIGH COURT] that the termination of the directorship, even by suppression of notice, or termination of directorship by a show of majority, would not entitle the terminated person to petition for just and equitable winding up is, that there is an appropriate remedy by way of a company suit, which can give the terminated director every relief. If notice has been suppressed, he can file a suit for injunction and declaration and get himself reinstated as a director or if he has been removed from a directorship, he could have filed a suit for declaration. The facts as pleaded by Dr. Dutta, a suit would give him a remedial measure and cannot ordinarily find a petition for just and equitable winding up and I feel that he could obtain each and every adequate relief in the suit court. I am of the opinion that Section 397 contained the essential requirement of the finding of a just and equitable winding up. It appears that the finding of the jurisdictional issue should contain a legal patent error. Granting of relief u/s 398 does not require to make out a case that it is just and equitable to wind up the company. Therefore, I do not have any hesitation to set aside the order passed by the Company Law Board. Thus, the appeal is allowed.
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