TMI Blog2011 (9) TMI 1159X X X X Extracts X X X X X X X X Extracts X X X X ..... n the petition. Amita Sen. since deceased died during pendency of the said application. Her four sons viz. Sudipta Sen (since deceased), Ranjan Sen, Subrata Sen and Sanjoy Sen were substituted in the said petition as the petitioners in her place and stead. Subsequently Sudipta Sen a bachelor died intestate and as such there was no need to substitute nor to bring his heirs and legal representatives in the proceedings as his brothers being heirs and legal representatives were already on record. It appears that in the said application on 21st June 1985 an order of status quo was passed by the then learned Company Judge and the same was and still is subsisting. On subsequent development, during pendency of the aforesaid application substituted applicants decided to withdraw the said Company Petition in CP No. 252 of 1985 and all applications connected thereto. Accordingly they through Mr. Sushil Kumar Saha, learned Advocate applied for withdrawing the petition as they were and are not interested any more in the said application. An order was passed on 12th April 2007 on the said application. They were under impression that by this order prayer for withdrawal of the original application ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... res by way of inheritance and further by virtue of deed of gift the company did not effect rectification of share register recording name of the applicant. Hence, an application has been made before the Companies Law Board under section 111 of the Companies Act for appropriate relief, and the same is pending for adjudication. 2. The application for addition of the appellant and transposition of the present petitioner, and application for correction as above were opposed mutually by the parties. By the impugned judgment and order the learned Trial Judge dismissed both the applications. However, the learned Trial Judge observed that the application filed by the appellant is premature and the same must wait for the decision of the Company Law Board, accordingly leave was granted to bring similar action in future. In effect the learned Trial Judge for the time being refused to grant prayer for addition or transposition but right for bringing separate action has not been destroyed. It is worthwhile to mention that apart from the aforesaid application for addition of party the applicant has also filed comprehensive civil suit seeking reliefs against the Company, which essentially coul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd when a proceeding under section 397 of the said Act is sought to be withdrawn even if by consent of the parties, the Court is to apply its own mind independently and order of withdrawal is not an automatic exercise. In support of this submission he has relied on the decisions of this Court reported in (1985) 3 CLJ 209, (1984) 56 CC 467, (48) CC 131. To buttress the submission on the plea of appealability, he has referred to the decision of this Court reported in AIR 1984 Cal. 191 and 68 All. Eng. Reporter 328. 4. Mr. Mukherjee learned Senior Advocate appearing for the respondents submits that impugned order dated 11th March 2010 is not an appealable one as no appeal lies from any order adding or refusing to add a person as party to the proceeding under Code of Civil Procedure. Indeed the impugned order has decided nothing against the appellant and nor in any way affect his right. As such it is not a judgment within the meaning of Clause 15 of the Letters Patent either. Therefore, going by the provisions of Clause 15 of the Letters Patent and the Code of Civil Procedure instant order is not appealable. According to him what are the orders termed to be judgment to make the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd proper on the facts and circumstances as argued by both the parties? 7. Mr. Mukherjee learned Senior Counsel has taken a point that the aforesaid portion of the order of the learned Trial Judge is not an appealable order under the provision of Order 43 of Code of Civil Procedure, as nothing has been decided, consequently it is not judgment within the meaning of Clause 15 of the Letters Patent. We think that this point needs to be decided first before we advert to other issues and contentions raised by both the parties. It is settled position of law as it has been laid down by the Supreme Court and the large number of decisions of this Court, the provisions of Order 43 of the said Code is not exhaustive to decide the question of appealability in intra-Court appeal in the Chartered High Court and it is governed predominantly by the provisions of Clause 15 of Letters Patent. The Supreme Court has explained what should be the judgment within the meaning of the aforesaid Clause. In the decision of the Supreme Court in Shah Babulal Khimji v. Jayaben. D. Kania Anr. reported in AIR 1981 SC 1786 at pages 1816. 1828 and 1829 of the said report it has been illustrated which of the int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bench of this Court in case of Terai Tea Company Private Ltd. v. Kumkum Mittal reported in AIR 1994 Cal 191. After considering a large number of judgments the Division Bench in our view has taken a correct approach in order to decide what should be the judgment. In paragraph 35 of the said report Justice Ajit Sengupta (as His Lordship then was) speaking for the Bench has expressed Court's view in the context of examining the effect of order for addition of party under the Code, and has observed that: The power of the Court to add a party to the proceedings cannot depend solely on the question whether he has interest in the suit property. The question is whether the right of a person may be affected if he is not added as a party. Such right, however, include necessarily an enforceable legal right. 10. This observation in our view is not inconsistent with the observation of the Supreme Court in Shah Babulal (Supra), rather it is appropriate application of broad principle laid down therein. We think that the Court has to decide if the judgment and order appealed against is not interfered with whether legally enforceable right of the party would be destroyed rendering the par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs and/or additional Directors after June 21,1985 are bad and void particular in view of the pleadings as pleaded in paragraphs 19. 20 and 21 hereinabove; viii) The authorized share capital of the Defendant No. 1 is limited to 35000 equity shares and the issued share capital of the Defendant No. 1 is limited to 22,991 equity shares; ix) That the plaintiff is the holder of 7761 equity shares of the Defendant No. 1 amounting to 33.76% of the total issued share capital; x) The defendants Nos. 14, 23 and 25 are not the Director of the Defendant No. 1. b) Administrator/Receiver/Special Officer be appointed over in and in respect of the defendant No. 1 to conduct and an Annual General Meeting of the equity share holder as on June 21, 1985 taking the share holding of the plaintiff to be 33.75% and to elect a new Board with all the powers under law to conduct and manage the business of the defendant No. 1; c) A decree of perpetual injunction restraining the Defendants and/or each one of them to withhold transmission of shares in favour of the plaintiff In respect of 7761 shares particulars whereof are given in paragraphs 1, 7, 34 and 51 (a)(ix) hereinabove; d) A decree of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant has already approached another forum for assertion of his right disclosed, order of refusal to add the appellant by the learned Trial Judge does not affect his interest at all. In the suit itself as it appears from the prayers of the plaint his right or interest can be determined and if proved, his desired reliefs as contemplated to be achieved with addition of party, can possibly be obtained. 13. We think that the learned Trial Judge had justified reason not to add the appellant though not decided, as unlike in other proceedings under Code in application under sections 397 and 398 of the said Act anyone and everyone cannot come in and join as a party. In order to bring action whether by way of initiation or by addition as petitioner, the person concerned has to satisfy preconditions mentioned in section 399 of the said Act. The appellant is claiming to be the heirs and legal representatives of all the shareholdings of his parents. It will appear from section 399(1) Clause (a) that in order to maintain action under sections 397 and 398 of the said Act a member either singly or jointly in case of more than one of the said Company must have share holding not less than 1/1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iction and for which the proceeding before the Company Law Board is complete mechanism for rendering decision on this Issue. 16. We therefore, hold till decision is taken by the Company Law Board as regard the requisite extent of shareholding as mentioned in section 399 of the Act request for addition cannot be entertained ifye, therefore, hold that this impugned judgment and order is not a judgment within the meaning of Clause 15 of the Letters Patent as nothing has been decided with regard to the right of any extent of the appellant in view of the narration of the fact, has been affected. 17. Mr. Mukherjee appearing for the respondent has correctly pointed out that if any order is passed then the aforesaid issues are to be adjudicated and obviously this Court will be prejudging the issues which are pending before the Company Law Board. 19. Mr. Chatterjee has tried his best to demonstrate his client's anxiety and affection in view of refusal to add him as a party as with the passage of time defying order of status quo extent of his parents' shareholding has been reduced so much so to bring below 1/10th. This fact itself is an oppression which entitled his client to a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny's affairs are being conducted in a manner prejudicial to public interest of in a manner oppressive to any member or members; and (b) that to wind up the company would unfairly prejudice such member or members, but 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, the Tribunal may, with a view to bringing to an end the matters complained of, make such order as it thinks fit. 21. It will appear from the above section that entitlement to make application has to be adjudged in the context of conditions as mentioned in section 399. 22. On reading of the said section read with section 399 of the said Act it appears to us that the representative action will confine to those group of peoples, who are affected by alleged act of oppression by the majority. However, the applicant(s) either jointly or singly must have minimum 1 /10th shareholding in the company. It is also clear from sub-section (2) of section 399 that combined minimum shareholding of 1/10th also qualifies to maintain such application. To make it explicit in this regard if applicant(s) either jointly or singl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 397 and/or 398 of the Act. The law is well settled that order 1. rule 8 will not be applicable to numerous persons, if they are not ascertainable. What is provided under section 399(3) of the Act is that a member himself and on behalf of the other members can present a petition under sections 397 and 398 of the Act. and pursue the petition not only on behalf of himself, but on behalf of other who have given consent or joined in prosecuting the petition under section 397 and/or 398 of the Act. Thus the principle of representative action is provided for in section 399(3) of the Act in a limited way in the sense that it is the members who can alone either give consent or join with the petitioner who wishes to take out an application under section 397 and/or 398 of the Act. Section 399(3) contemplates that a member by himself without joining others, but with the consent in writing from that other can maintain the proceeding under section 397 and/or 398 of the Act. In such a case, the petitioners who gave consent are not parties named in the petition. Yet under section 399(3), any orders passed in the proceedings instituted by that member with the consent of others are binding t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... into and determined at the hearing of the main application. Neither the Companies Act nor the Rules thereunder forbid addition or transposition of parties to a petition. Therefore no appeal lies from such an order of the Company Court. 26. The English decision cited by Mr. Chatterjee in case of Gurtner v. Circuit reported in (1985) 1 All E.R. 328 was rendered in civil action not in the proceedings of this nature under sections 397 and 398 of the said Act. Hence this decision does not lend any persuasive assistance. 27. In view of the aforesaid discussion we think that this appeal is not maintainable and the same is also dismissed. We are of the fimn view that Mr. Chatterjee's client cannot come and join in this proceedings in any manner, particularly when the comprehensive civil suit has already been filed. However, we feel that the proceedings pending before the Company Law Board shall be expeditiously disposed of. We therefore, direct the Company Law Board to dispose of as early as possible preferably within a period of two months from the date of communication of this order. However, it will be open for Mr. Chatterjee's client if so advised to bring appropriate ac ..... 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