1985 (8) TMI 273 - HC - Companies Law

Summary

Issues:
Validity of court's order allowing an interlocutory application without prior notice to shareholders and defendants.

Analysis:
The petitioner, a company, was defendant No. 1 in a suit where a shareholder sought to invalidate a resolution related to the issue of fresh equity shares. The shareholder filed an interlocutory application seeking permission under Order 1, Rule 8 of the Code of Civil Procedure to represent other shareholders. The court allowed the application without prior notice to shareholders or defendants, leading to the challenge in this revision petition.

The petitioner argued that prior notice was required under Order 1, Rule 8, while the respondent contended that the language of the rule did not mandate such notice. The court examined the provisions of Order 1, Rule 8, which allow representation of numerous persons with the court's permission or direction. It noted that the rule did not explicitly require prior notice before granting permission.

The court compared clauses (a) and (b) of Order 1, Rule 8, and concluded that the legislative intent did not necessitate prior notice for permission under clause (a). It highlighted that subsequent notice was mandatory under sub-rule (2) to inform interested parties after permission was granted. The court emphasized that prior notice could provide an opportunity for delay or interference in the legal process.

Referring to a previous decision of the Bombay High Court, the court noted that the interpretation requiring prior notice was based on the old version of the rule, which had been amended. The court clarified that the current version of the rule did not include the word "But," indicating that notice was not a prerequisite for granting permission.

In conclusion, the court held that clause (a) of sub-rule (1) of Order 1, Rule 8 did not mandate prior notice before granting permission. Therefore, the court dismissed the revision petition without costs, stating that the order under revision did not require interference. The court appreciated the assistance of the learned counsel in the case.