TMI Blog2019 (12) TMI 395X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 of the Act, the Tribunals are vested with the powers of the Civil Court as granted under the Code of Civil Procedure. Sub Section (3) gives sanctity to an order passed by the Tribunal or the Appellate Tribunal by elevating to it that of a decree. Sub Section 4 makes the position clear by deeming the Tribunal as a Civil Court though for the purpose of Section 195 and Chapter XXVI of the Code of Criminal Procedure. The functioning of the Tribunal also has the protection for its action taken in good faith under Section 428 of the Act. The Tribunal can also seek assistance of Chief Metropolitan Magistrate etc., while taking custody of the properties, books of account or other documents of the said company - Section 430 of the Act provides for an absolute bar to a Civil Court to entertain any suit or proceedings, which the Tribunal is empowered to do so under the Act. This provision starts with a negative covenant and thus, makes the intention of the legislature very clear. The object is to decide the disputes of the company. This section gives power to the Tribunal to determine, enforce law qua the company for any violation. Law includes any other law also. Therefore, it is certai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utinizer. The following are the relevant averments made in the suit along with the relief sought for. 15. The plaintiffs further submit that the entire e-voting and manual voting conducted in the 1st defendant club for the term 2018-20 is vitiated by fraud and illegal manipulation by the scrutinizer viz., 2nd defendant and defendants 4 to 13. The office of the 1st defendant club is now forcibly and illegally occupied by the defendants 4 to 13. Further the 14th defendant has been made as a defendant as he was the Chairman of the AGM and he has obviously acted in support of the defendants 4 to 13 either due to collusion or due to coercion and he is guilty of not ensuring a fair procedure even after realizing the huge fraud. The reports of the 2nd defendant is totally manipulated and self-contradictory. There are serious errors in the impugned report also. The reliefs sought for in the suit. In the above circumstances, the plaintiff respectfully prays for a decree and judgment. (i) Declaring that the impugned consolidated report of the 2nd defendant dated 16.09.2018 regarding the election results of the election of the 1st defendant for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the light of Sections 424 to 429 of the Act. Therefore, the order of the learned single Judge would require interference as the only option that is left open to the plaintiffs/respondents 1 and 2 is to approach the Company Law Tribunal, if so advised. The submissions made are sought to be supported through the following decisions. 1.N.Ramji Vs. Ashwath Narayan Ramji and others (MANU/TN/1660/2017); 2.B.K.Educational Services Private Limited Vs. Parag Gupta and Associates (MANU/SC/1160/2018); 3.The Premier Automobiles Ltd., Vs. Kamlekar Shantaram Wadke of Bombay and others (MANU/SC/0369/1975); 4.S.Natarajan V. S.V.Global Mills Ltd., and Others (MANU/TN/2733/2015); 5.Dinekar Rai D.Desai and Others Vs. R.P.Bhasin and Others; 6.Shanti Prasad Jain Vs. Kalinga Tubes Ltd., (MANU/SC/0368/1965 dated 14.01.1965); and 7.Christopher Gnanasekara Baburao Vs. Madras Christian College Association. 8.Chiranjeevi Rathnam and Others Vs. Ramesh and others (MANU/TN/2216/2017). 7. The learned counsel appearing for the respondents 1 and 2/plaintiffs made an endeavour to support and sustain the order of the le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essive to any member or members and that wind up the company would unfairly prejudice such member or members, but that otherwise the facts might 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 law however has not defined what is oppression for purposes of this section, and it is left to courts to decide on the facts of each case whether there is such oppression. As calls for action under this section. 16. We may in this connection refer to four cases where the new s. 210 of the English Act came up for consideration, namely, (1) Elder v. Elder and Watson, (1), (2) George Meyer v. Scottish Cooperative Wholesale Society Ltd. (2), (3) Scottish Co-operative Wholesale Society Ltd. v. Meyer and another(3), which was an appeal from Meyer's case(2), and (4) Re. H. R. Harmer Limited. Among the important considerations which have to be kept in view in determining the scope of s. 210, the following matters were stressed in Elder's case(1) as summarised at p. 394 in Meyer's case(2) :- (1) The oppression of which a petitioner complains must relate to the manner in which the affairs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ast, an unfair abuse of powers and an impairment of confidence in the _probity with which the company's affairs are being conducted, as distinguished from mere resentment on the part of a minority at being outvoted on some issue of domestic policy . The phrase oppressive to some part of the members suggests that the conduct complained of should at the lowest involve a visible departure from the standards of fair dealing, and a violation of the conditions of fair play on which every shareholder who entrusts his money to a company is entitled to rely. ... But, apart from this, the question of absence of mutual confidence per se between partners or between two sets of shareholders, however relevant to a winding up seems to have no direct relevance to the remedy granted by S. 210. It is oppression of some part of the shareholders by the manner in which the affairs of the company are being conducted that must be averred and proved. Mere loss of confidence or pure deadlock does not come within s. 210. It is not lack of confidence between shareholders per se that brings s. 210 into play, but lack of confidence springing from oppression of a minority by a majority in the management ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 242 deals with the powers of the Tribunal. This provision has to be seen contextually and co-existing with Section 241. On a complaint, power is to be exercised towards redressal. Prejudice may either to a member, group of the company or the public at large. 8.6 A complaint touching upon the election conducted to the management of the company would go to the root. Such a challenge is to the very right to manage the affairs. A wrong election would certainly have a cascading effect on the affairs in the form of decisions and functioning of a company. Thus, it cannot be said that Section 241 of the Act would only involve a complaint touching upon the other affairs as against the process of election. As discussed above, the challenge is to the very election itself and therefore, there is no authority available to the office bearers to act and decide on behalf of the company if held bad. Certainly such a challenge would come within the purview of oppression and mismanagement. A technical view contrary to that will make the entire object behind Section 241 of the Act as redundant. 8.7 Section 242(h) of the Act also provides for removal of Managing Director, Manag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he procedure to be adopted by the Tribunal and the Appellate Tribunal. The forums are given liberty to go beyond the Code of Civil Procedure by applying principles of natural justice and subject to other provisions governing. Thus, they are not bound by the Code, which is obviously a procedural one. They can also formulate their own procedure. 8.12 Under Sub Clause (2) of 424 of the Act, the Tribunals are vested with the powers of the Civil Court as granted under the Code of Civil Procedure. Sub Section (3) gives sanctity to an order passed by the Tribunal or the Appellate Tribunal by elevating to it that of a decree. Sub Section 4 makes the position clear by deeming the Tribunal as a Civil Court though for the purpose of Section 195 and Chapter XXVI of the Code of Criminal Procedure. 8.13 The functioning of the Tribunal also has the protection for its action taken in good faith under Section 428 of the Act. The Tribunal can also seek assistance of Chief Metropolitan Magistrate etc., while taking custody of the properties, books of account or other documents of the said company. 8.14 Section 430 of the Act provides for an absolute bar to a Civil Court to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lly refer the decision of the Division Bench of this Court in D. Sivakumar v. Government of Tamil Nadu, [2009] 5 MLJ 958), in which, one of us is a party (M.M. Sundresh, J.). The following paragraph would be apposite. '15. Principle of Ejusdem Generis: Ejusdem Generis is a Latin Expression which means of the same kind . In other words, it means words of similar class. In so far as the principle of ejusdem generis is concerned, we are of the opinion that the said rule applies only when the subjects of enumeration constitute a class or category, statute enumerates the specific words, the general terms follow the enumeration and there is no indication of a different legislative intent. The principle of ejusdem generis would therefore apply only when there is an ambiguity while interpreting any statute. The said rule is applicable when particular words pertaining to class, category or genus are followed by general words. In this Connection, the Hon'ble Supreme Court in (2002) 1 147 ELJ 593 (Grasim Industries Ltd., v. Collector of Customs, Bombay) has held that the said principle will have to be applied with care and caution. The Hon'ble Supreme Court h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itled to read words into an Act of Parliament unless clear reason for it is to be found within the four corners of the Act itself. (Per Lord Loreburn L.C. in Vickers Sons) . The question is not what may be supposed and has been intended but what has been said. Statutes should be construed not as theorems of Euclid , Judge Learned Hand said, but words must be construed with some imagination of the purposes which lie behind them . (See Lenigh Valley Coal Co. v. Yensavage, 218 FR 547). The view was reiterated in Union of India v. Filip Tiago de Gama of Vedem Vasco de Gama [1990] 1 SCC 277 (SCC page 284, paragraph 16). In D.R. Venkatachalam v. Deputy Transport Commissioner [1977] 2 SCC 273, it was observed that the courts must avoid the danger of a priori determination of the meaning of a provision based on their own preconceived notions of the ideological structure or scheme into which the provision to be interpreted is somewhat fitted. They are not entitled to usurp legislative function under the disguise of interpretation. While interpreting a provision the court only interprets the law and cannot legislate it. If a provision of law is misused and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... generally and in the context in which it is used. It is said that every statute is an edict of the legislature. (See: Gwalior Rayons Silk Mfg. (Wvg.) Co. Ltd. v. Custodian of Vested Forests, Palghat and Another, ((1990) Supp SCC 785); Union of India v. Deoki Nandan Aggarwal, ((1992) Supp (1) SCC 323); Institute of Chartered Accountants of India v. Price Waterhouse, ((1997) 6 SCC 312), Harbhajan Singh v. Press Council of India and others ((2002) 3 SCC 722) and Grasim Industries Limited v. Collector of Customs, Bombay ((2002) 4 SCC 297)). 20.The exposition of law as to the applicability of the rule of ejusdem generis is classically expressed by the Apex Court in the case of Siddeshwari Cotton Mills (P) Ltd. v. Union of India, [1989] 2 SCC 458, as follows: 12. The expression ejus-dem-generis of the same kind or nature signifies a principle of construction whereby words in a statute which are otherwise wide but are associated in the text with more limited words are, by implication, given a restricted operation and are limited to matters of the same class or genus as preceding them. If a list or string or family of genus-describing terms are followed by wider or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... test seems to be whether the specified things which precede the general words can be placed under some common category. By this I understand that the specified things must possess some common and dominant feature. 17. In Tribhuban Parkash Nayyar v. Union of India, ((1970) 2 SCR 732) the Court said : (SCC p.106, para 13: SCR p.740) ... The rule reflects an attempt to reconcile incompatibility between the specific and general words, in view of the other rules of interpretation, that all words in a statute are given effect if possible, that a statute is to be construed as a whole and that no words in a statute are presumed to be superfluous... 18. In UPSEB v. Hari Shankar (AIR 1979 SC 65) it was observed : (SCC p.30, para 15 : AIR p.73) ... The true scope of the rule of 'ejusdem generis' is that words of a general nature following specific and particular words should be construed as limited to things which are of the same nature as those specified. But the rule is one which has to be 'applied with caution and not pushed too far'... 19. The preceding words in the statutory provision which, under this particula ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Act, as pointed out above, is in two parts. The first part deals with enumerated categories but the second part which begins by the expression and other envisages a different category of persons. Here `and' is disjunctive. So, while construing such a definition the principle of ejusdem generis cannot be applied. 29. In this context, we should do well to remember the caution sounded by Lord Scarman in Quazi v. Quazi - [(1979) 3 All-England Reports 897]. At page 916 of the report, the learned Law Lord made this pertinent observation:- If the legislative purpose of a statute is such that a statutory series should be read ejusdem generis, so be it; the rule is helpful. But, if it is not, the rule is more likely to defeat than to fulfil the purpose of the statute. The rule, like many other rules of statutory interpretation, is a useful servant but a bad master. 30. This Court while construing the principle of ejusdem generis laid down similar principles in the case of K.K. Kochuni v. State of Madras and Kerala, [AIR 1960 SC 1080]. A Constitution Bench of this Court in Kochuni (supra) speaking through Justice Subba Rao (as His Lordship then was) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... generis cannot be applied to make a part of the definition completely redundant. 35. By giving such a narrow and truncated interpretation of `teachers' under Section 2(35), High court has not only ignored a part of Section 2(35) but it has also unfortunately given an interpretation which is incompatible with the avowed purpose of Section 53 of the Act. ' Hence, in our opinion, the abovesaid principle has no place in interpreting Section 242(h) of the Act. 11. As various decisions have been relied upon by both sides, we need to consider them as well. 12. In Jai Mahal Hotels (P.) Ltd. (supra) the Apex Court was dealing with the scope of rectification and jurisdiction of the Company Law Board. Thus, it was dealing with Section 111(7) read with Section 155 of the Companies Act, 1956. While doing so, the Apex Court took note of the earlier decision rendered in Ammonia Supplies Corpn. (P.) Ltd., v. Modern Plastic Containers (P.) Ltd., [1998] 17 SCL 463 (SC). We may note that the facts involved are totally different along with the scope of power that is required to be exercised. Thus we find no reason for the application of the abovesaid dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne has to unmask the plaintiffs and find out the matter in dispute. Obviously, the matter in dispute is regarding affairs of the company alleged to be conducted prejudicial to the interest of the company, there is a matter which the Tribunal is empowered to determine. The subject matter squarely falls within the ambit of Section 242 and 242(2)(c)(h) of the Companies Act, 2013. 25. In the light of the facts and circumstances of this case, this Court is of the opinion that the word member employed in Section 241 of the Act cannot be given a restricted meaning. If restricted meaning is given, it may lead to abuse of the process law, as it is found in this case. Hence, it is essential to apply the doctrine of reading down to make the provisions under Chapter XVI of the Act purposeful. The golden Rule of statutory construction is that the words and phrases or sentences should be interpreted according to the intent of the legislature that passed the Act. Section 241 and 242 should be read together. If the words of the statutes raises doubt, it is inevitable to call in aid the ground and cause of making the statute and the mischiefs, which the Act intends to redress. Under t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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