1983 (7) TMI 254 - HC - Companies Law

Summary

Issues: Jurisdiction of High Court to entertain petition under Companies Act, 1956, specifically under sections 163 and 209(4); Enforceability of the right of inspection under section 209(4) of the Act.

In this judgment delivered by M.C. Jain, J., the petitioner sought directions under sections 163 and 209(4) of the Companies Act, 1956, for immediate inspection of specified records of a company where they were a director and shareholder. The respondents contended that the High Court lacked jurisdiction to entertain the petition under section 163 due to a notification conferring jurisdiction on District Courts for such matters. However, it was acknowledged that no notification extended to section 209 of the Act, leaving the jurisdiction with the High Court for petitions under that section. The court held that while it lacked jurisdiction for section 163, it had the authority to entertain petitions under section 209 of the Act not covered by the notification.

Regarding the enforceability of the right of inspection under section 209(4) of the Act, the court examined whether the provision granted an enforceable right. The respondents argued that since section 209 did not empower the court to order inspection, the right was not enforceable, and the absence of a specific provision implied the Legislature's intent not to confer enforceable rights. However, the court disagreed, stating that where a statute confers a right, it must be enforceable, even if penal proceedings could also be initiated. The court invoked the principle of "ubi jus ibi remedium" and held that the statutory right of inspection under section 209(4) was enforceable, and the court had the power to ensure its enforcement.

Ultimately, the court partially allowed the petition, dismissing the plea under section 163 for lack of jurisdiction but granting relief under section 209(4). The respondents were directed to permit the petitioner to inspect all relevant documents within a week from the judgment date, emphasizing the enforceability of the statutory right of inspection under the Companies Act, 1956.