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Issues:
1. Maintainability of the company petition filed under sections 397 and 398 of the Companies Act, 1956. 2. Statutory requirements of section 399 of the Companies Act. 3. Jurisdiction of the court after the amendment of the Companies Act. Analysis: 1. Maintainability of the Company Petition: The application raised concerns about the maintainability of the company petition under sections 397 and 398 of the Companies Act, 1956, citing oppression and mismanagement as grounds. The key contention was whether the petition satisfied the statutory requirements of section 399 of the Companies Act. The argument centered on the shareholding threshold of one-tenth of the shareholders required for filing such a petition. The applicants argued that the petitioners themselves must individually hold one-tenth of the shares, disregarding the provision in section 399(3) allowing one or more members with consent to file the petition on behalf of all entitled members. The court rejected this argument, emphasizing that the provision for consent of shareholders is to enable collective action representing one-tenth of the shareholders, not mandating each petitioner to meet the shareholding threshold individually. 2. Statutory Requirements of Section 399: The court referred to a previous judgment to support the interpretation that the petitioners, along with consenting shareholders, collectively need to hold one-tenth of the share capital to meet the statutory requirements of section 399. Additionally, the court distinguished previous cases where consent was deemed insufficient due to lack of understanding of the petition's content, highlighting that in this instance, the written consent appended to the petition demonstrated understanding and compliance with legal requirements. The court analyzed the shareholding structure of the company, confirming that the petitioners, along with the consenting party, collectively held shares exceeding the required one-tenth of the total shares, thus meeting the statutory threshold. 3. Jurisdiction of the Court Post-Amendment: Regarding the jurisdiction of the court post-amendment of the Companies Act, the contention was raised that the court's jurisdiction had been transferred to the Company Law Board. However, the court clarified that as per the Amendment Act, pending proceedings, including the present company petition, were to be continued and disposed of by the court in accordance with the provisions of the principal Act as they stood before the commencement of the amendment. Therefore, the court maintained jurisdiction over the pending company petition, dismissing the argument of lack of jurisdiction. In conclusion, the court ruled that the company petition was maintainable, rejecting the arguments against its validity and jurisdiction. The detailed analysis of the statutory requirements and post-amendment jurisdiction provided clarity on the legal aspects surrounding the maintainability of the petition under sections 397 and 398 of the Companies Act, 1956.
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