9911796707
TMI Blog1994 (4) TMI 233X X X X Extracts X X X X X X X X Extracts X X X X ..... llant's daughter, Smt. V. Rajeshwari, also holds certain shares in the first respondent-company. She is married and has been residing in the USA since 1973. Before leaving for the USA, she executed a general power of attorney (GPA) in favour of her father, the first appellant herein, on November 29, 1973. On October 25, 1978, the three appellants herein filed an application under sections 397 and 398 in the High Court of Orissa. To comply with the requirement of one-tenth shareholding, the first appellant gave consent in writing for and on behalf of Smt. Rajeshwari as her general power of attorney holder. If the shareholding of Rajeshwari is taken into account and she is deemed to have consented to the filing of the said application, the requirements of section 399 are admittedly satisfied. The precise question in this appeal is whether the consent given by her general power of attorney holder for and on her behalf-and not by her personally-is a valid consent within the meaning of sub-section (3) of section 399. As soon as the application under sections 397 and 398 was filed by the appellants, some of the respondents raised a preliminary objection to the maintainability of the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pect of any shares or stock or debentures which may hereafter be acquired by me and for that purpose to sign and execute proxies or other instruments in my name and on my behalf. 13. To appear and act in all the courts, in the registration office and in any offices of the Government, District, Board, Municipality or any local authority, on my behalf. 14. To sign all the papers to be filed in courts or offices on my behalf and to receive the moneys or other properties from courts or other offices on my behalf. 15. Generally to act (as) my attorney or agent in relation to the matters aforesaid and all other matters in which I may be interested or concerned and on my behalf to execute or do all deeds, acts or things as fully and effectively in all respects as I (were) myself do it if I were personally present." A reading of the several clauses of the general power of attorney discloses ex facie that the powers given thereunder are wide enough to take in the power to grant the consent under section 399(3). Under the said deed, Smt. Rajeshwari empowered her father to manage and otherwise administer her movable and immovable properties including shares and stock as may be held by her ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iew of the matter, they held, the general power of attorney holder is not competent to grant the consent. Mr. Sibal, learned counsel appearing for the respondents, supported the said reasoning. He submitted that the right or power to grant consent under section 399(3) is a personal right which cannot be delegated to or exercised by an agent. The very filing of an application under sections 397 and 398 has serious repercussions on the reputation and creditworthiness of the company. It must, therefore, be insisted that the decision to grant consent must be a personal decision of the member and not a decision of his agent. Mr. Sibal further submitted that this is not even a case where the power of attorney expressly authorised the agent to grant consent under section 399(3). The deed in question is merely a general power of attorney and that is not enough. We are unable to agree with the said reasoning. Section 399 or subsection (3) thereof does not either expressly or by necessary implication indicate that the consent to be accorded thereunder should be given by the member personally. As we have emphasised hereinabove, the first appellant could have filed, or joined as an applicant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 397 shall be in Form No. 43, and a petition under section 398 shall be in Form No. 44. (2) A petition under section 397 or 398 shall not be withdrawn without leave of the court, and where the petition has been presented by a member or members authorised by the Central Government under subsection (4) of section 399, notice of the application for leave to withdraw shall be given to the Central Government." What the rule says is that the letter of consent signed by the consenting members shall be annexed to the petition along with their names and addresses and other prescribed particulars. The rule does not, in any manner, indicate that the consent should be given by the member personally. Mr. Vinoo Bhagat, learned counsel for the appellant, invited our attention to a decision of the Division Bench of the Bombay High Court in Killick Nixon Ltd. v. Bank of India [1985] 57 Comp. Cas. 831. In this case, it is held that the general power of attorney holder is empowered to grant consent under section 399(3). The general power of attorney concerned therein is substantially in the same terms as the one concerned herein. We agree with the said decision. Mr. Sibal brought to our notice a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irectors, the right to pass resolutions and the right to present a petition for winding up are personal rights flowing from the ownership of the share and cannot, by themselves and apart from the share, be acquired or disposed of or taken possession of as contemplated by those articles. The second question is, assuming that these rights are by themselves 'property', what is the effect of the Ordinance and the Act on such 'property'. It is nobody's case that the Ordinance or the Act has authorised any acquisition by the State of this 'property' of the shareholder or that there has in fact been any such acquisition The only question then is whether this 'property' of the shareholder, meaning thereby only the rights mentioned above, has been taken possession of by the State. It will be noticed that by the Ordinance or the Act these particular rights of the shareholder have not been entirely taken away, for he can still exercise these rights subject, of course, to the sanction of the Government. Assuming, however, that the fetters placed on these rights are tantamount to the taking away of the rights altogether, there is nothing to indicate that the Ordinance or the Act has, after taki ..... X X X X Extracts X X X X X X X X Extracts X X X X
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