2003 (11) TMI 453 - HC - Companies Law

Summary

Issues Involved:
1. Maintainability of the present appeal.
2. Maintainability of the original company petition filed by the Chatterjee Brothers.

Issue-wise Detailed Analysis:

1. Maintainability of the Present Appeal:

The primary contention revolves around whether the present appeal by Bhagabati Developers Pvt. Ltd. (BDPL) is maintainable following the withdrawal of the original petition and appeals by the Chatterjee Brothers. The respondents argue that since the original company petition is non-existent due to its withdrawal, any appeal connected to it is also non-maintainable. They emphasize that the Supreme Court's order did not set aside the earlier Division Bench's orders, which recognized the withdrawal, thus making the original petition non-existent in the eyes of the law. The respondents also contend that the doctrine of merger does not apply here as the Supreme Court did not make a definitive pronouncement on the merits of the lower court's orders.

On the other hand, BDPL argues that the Supreme Court granted them leave to file an independent appeal, which should be considered within the prescribed period of limitation, implying that the appeal should be treated as if it was filed before the withdrawal by the Chatterjee Brothers. BDPL also contends that as a consenting party to the original petition, they have an independent right to continue the appeal, citing the representative nature of proceedings under sections 397/398 of the Companies Act.

The court, however, finds that the doctrine of merger is inapplicable as the Supreme Court did not interfere with the Division Bench's orders. The court also rejects BDPL's argument regarding the interpretation of section 5 of the Limitation Act, stating that extending the period of limitation does not imply an 'anti-clock-wise' movement as suggested by BDPL. The court concludes that since the original company petition is non-existent, the appeal arising from it cannot exist independently.

2. Maintainability of the Original Company Petition:

The original company petition filed by the Chatterjee Brothers was dismissed by the learned Single Judge on the grounds of maintainability. The judge observed that one of the Chatterjee Brothers, being a non-resident Indian, did not have the necessary RBI permission for share transfer, making him ineligible as a member under the Companies Act. Additionally, the consent letters from BDPL and R.L. Gaggar were found defective and invalid. The Division Bench upheld these findings, noting that the company petition was invalid at its inception.

BDPL's argument that they could continue the proceedings even after the withdrawal by the Chatterjee Brothers was rejected by both the Division Bench and the Supreme Court. The court highlighted that the original petition was not validly instituted, and thus, BDPL could not continue the proceedings independently.

Conclusion:

The court ultimately holds that the present appeals are not maintainable due to the non-existence of the original company petition. The appeals are dismissed, and there is no need to delve into other aspects of the matter. The judgment underscores the importance of the original petition's validity and the procedural requirements for maintaining appeals in representative proceedings under the Companies Act.