1999 (2) TMI 608 - HC - Companies Law

Issues Involved:
1. Restoration of the company's tenanted premises.
2. Rendering of accounts and handing over the company's records.
3. Restraint on running a tea stall in the company's premises.
4. Applicability of sections 541, 542, and 543 of the Companies Act, 1956.
5. Maintainability of the petition.
6. Barred by time objection.
7. Legal right over the property.

Issue-wise Detailed Analysis:

1. Restoration of the Company's Tenanted Premises:
The petitioners sought the restoration of the company's tenanted premises at 18, Mehrauli, New Delhi. The court found merit in this request, noting that the premises were indeed under the tenancy of the company. The court ordered that the respondent should restore the property to the company through its chairman or his nominee. The court also noted that the respondent could not use the premises for commercial purposes, such as running a tea stall, but could only use it for residential purposes until further clarification or vacation of the stay order in C.P. No. 91 of 1980.

2. Rendering of Accounts and Handing Over the Company's Records:
The petitioners requested that the respondents render accounts and hand over the company's records. However, the court determined that the provisions of section 543 could not be invoked at this stage because the petition under sections 397 and 398 was still pending, and no prima facie view had been formed. Therefore, reliefs related to rendering accounts and handing over records could not be granted at this stage.

3. Restraint on Running a Tea Stall in the Company's Premises:
The court agreed with the petitioners that the respondent should not use the company's premises for commercial purposes, such as running a tea stall. The court directed respondent No. 1 not to misapply the company premises for commercial purposes.

4. Applicability of Sections 541, 542, and 543 of the Companies Act, 1956:
The court discussed the applicability of sections 541, 542, and 543 of the Companies Act, 1956. Section 541 deals with the liability where proper accounts were not kept, and section 542 addresses liability for fraudulent conduct of business. Section 543 empowers the court to assess damages against delinquent directors. The court noted that these provisions could only be invoked during the winding up of a company or after a prima facie view had been formed in a petition under sections 397 or 398. Since the petition under section 397 was still pending, the provisions of section 543 could not be invoked at this stage.

5. Maintainability of the Petition:
The respondent argued that the petition was not maintainable and should have been filed in C.P. No. 91 of 1980. The court rejected this argument, citing the case of Rajendra Nath Bhaskar v. Bhaskar Stoneware Pipes (P.) Ltd., which held that a separate application under section 543 could be filed after a prima facie view had been formed in a petition under section 397 or 398. Therefore, the petition was found to be maintainable.

6. Barred by Time Objection:
The respondent argued that the petition was barred by time. However, the court found no merit in this argument, noting that the respondent could not point out how the petition was barred by time. The court also noted that the counsel for the respondent did not address any arguments on this point.

7. Legal Right Over the Property:
The respondent claimed a legal right over the property, arguing that it was under the personal tenancy of the late Shri R.K. Sharma. The court rejected this claim, noting that the entire premises were under the tenancy of the company. The court found that the respondent had no independent right over the property and derived his right from his late father, Shri R.K. Sharma. Therefore, the respondent was ordered to restore the property to the company.

Conclusion:
The petition was disposed of with the following orders:
- The respondent was directed to restore the company's tenanted premises at 18, Mehrauli, New Delhi, to the company through its chairman or his nominee.
- The respondent was restrained from using the premises for commercial purposes and could only use it for residential purposes until further clarification or vacation of the stay order in C.P. No. 91 of 1980.
- Reliefs related to rendering accounts and handing over records could not be granted at this stage as the petition under sections 397 and 398 was still pending.

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