1984 (2) TMI 263 - HC - Companies Law

Summary

Issues:
1. Whether the application filed under section 398 of the Companies Act abated on the death of the original applicant.
2. Whether the petitioners could lawfully be allowed to proceed with the application after the death of the original applicant.
3. Interpretation of the relevant sections and rules regarding the procedure applicable to applications under the Companies Act.
4. Nature of the proceeding under section 398 and the rights of members to apply under sections 397 and 398.
5. Whether the court had the authority to transpose the opposite party as applicants in the interest of justice.

Analysis:
1. The appeal was against the rejection of the plea that the application under section 398 of the Companies Act abated on the death of the original applicant. The court allowed the petitioners to proceed with the case after the death of the original applicant, stating that the application continued as it was initially filed in a representative capacity.

2. The appellant contended that the petitioners could not lawfully proceed with the application after the death of the original applicant. However, the court held that the petitioners, though named as opposite parties, were represented by the original applicant, and their transposition was permitted to continue the case as their representative was deceased.

3. The court discussed the interpretation of the relevant sections and rules governing the procedure for applications under the Companies Act. It was noted that the Companies (Court) Rules, 1959, indicated that the Code of Civil Procedure applied to proceedings under the Act, allowing for the transposition of parties in the interest of justice.

4. The nature of the proceeding under section 398 was analyzed, emphasizing the rights of members to apply under sections 397 and 398 based on specific criteria outlined in the Act. The court highlighted the representative capacity in which the original applicant had filed the application on behalf of a group of shareholders.

5. The court addressed the authority of the court to transpose the opposite party as applicants in the interest of justice. It was concluded that the transposed petitioners were permitted to continue the case due to the representative nature of the proceeding, and the court had the inherent power to allow such transposition.

In conclusion, the court dismissed the appeal, finding no merit in the appellant's arguments, and upheld the decision to allow the petitioners to proceed with the case after the death of the original applicant.