1983 (1) TMI 216 - SC - Companies Law

Oppression & Mismanagement - Held that - Allow this appeal and set aside the order dismissing the appeal preferred by the present appellants in limine by the Division Bench of the Bombay High Court and remit the case to the appellate Bench for disposal of the same according to law.

Summary

Issues:
1. Dismissal of petition by the learned company judge and subsequent appeal dismissal by the Division Bench of the Bombay High Court.
2. Interpretation of Section 483 of the Companies Act, 1956 regarding the right to appeal in the matter of winding up of a company.
3. Application of Chapter XLII of the Bombay High Court Rules in relation to appeals placement for admission.

Detailed Analysis:
1. The petitioners filed a Company Petition in the High Court of Bombay alleging oppression by the respondents in managing Sakal Papers Pvt. Ltd. The learned company judge dismissed the petition and ordered the petitioners to pay costs. The petitioners appealed this decision under the Companies Act, but the Division Bench of the Bombay High Court dismissed the appeal in limine. The Supreme Court held that the Division Bench erred in summarily dismissing the appeal without considering it on merits. Citing a previous case, the Court emphasized that appeals not explicitly mentioned in the rules are entitled to be admitted and heard on merits. Therefore, the appeal was allowed, and the case was remitted to the appellate Bench for disposal according to law.

2. Section 483 of the Companies Act, 1956, governs appeals in winding up matters. The Court analyzed the provisions of the Act related to prevention of oppression and mismanagement under Chapter VI, distinct from provisions for winding up under Part VII. The Court clarified that an order under sections 397, 398, and 403 of the Act does not pertain to winding up but rather addresses oppression and mismanagement. Therefore, such orders do not fall under the scope of Section 483, which specifically relates to winding up matters. The right to appeal in these cases lies with the High Court having jurisdiction over the company's registered office.

3. The Court referred to Chapter XLII of the Bombay High Court Rules, which outline the procedure for appeals. Rule 966A specifies certain appeals to be placed for admission before a designated Bench. The appeal in question did not fall under this rule, indicating it should not have been summarily dismissed by the Division Bench. Citing precedent, the Court held that appeals not covered by the admission rule are entitled to be heard on merits. Therefore, the Court allowed the appeal and directed the case to be heard expeditiously without an order on costs for the Supreme Court hearing. The parties were advised to seek interim relief from the High Court after two weeks.