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1955 (4) TMI 24 - HC - Companies Law

Issues Involved:
1. Locus standi of fully paid-up contributories.
2. Proper signing and verification of the petition.
3. Maintainability of the petition due to an earlier pending petition.
4. Proper filing on behalf of certain petitioners.
5. Estoppel against petitioner No. 1.

Issue-wise Detailed Analysis:

1. Locus Standi of Fully Paid-Up Contributories:
The primary issue was whether fully paid-up shareholders have the locus standi to file a petition under section 166 of the Indian Companies Act. The respondents argued that fully paid-up shareholders are not "contributories" as defined by sections 156 and 158 of the Act, and thus cannot present a winding-up petition. However, the court held that fully paid-up shareholders are indeed contributories under section 158, which includes any person liable to contribute to the assets of a company in the event of its winding up. The court emphasized that the term "contributory" is used interchangeably with "members" in the Act, and fully paid-up shareholders have a vested interest in the company's affairs, including the right to participate in the adjustment of rights among contributories. The court cited various sections of the Act, such as sections 167, 173, 174, 177-A, 183, 185, 186, and 187, to support this interpretation. Additionally, the court referenced English case law and legal commentaries, which have evolved to recognize the rights of fully paid-up shareholders to present winding-up petitions. Consequently, the objection was overruled, and the issue was decided against the respondent.

2. Proper Signing and Verification of the Petition:
The petition was challenged on the grounds that it was not properly signed and verified. The court found that the petition was signed by the counsel for the petitioners and verified by one of the petitioners as per rule 10 of the rules. An objection was raised regarding petitioner No. 5, who was out of India at the time the petition was presented. However, it was confirmed that proper instructions were obtained from her before she left for England. The court found no merit in the objection and decided the issue against the respondent.

3. Maintainability of the Petition Due to an Earlier Pending Petition:
The respondents argued that the present petition was not maintainable because of an earlier petition by S. Santokh Singh under section 221 of the Indian Companies Act, which was still pending. The court noted that S. Santokh Singh was only one of the thirteen petitioners, and his pending application could not bar the present petition under section 166. The court decided that the effect of the pending application could be considered at the time of the final hearing of the petition. Thus, the issue was decided against the respondent.

4. Proper Filing on Behalf of Certain Petitioners:
The objection was raised that the petition was not properly filed on behalf of Princess Rajindar Kumari and Rani Ranbir Kaur. The court examined the articles of association of the company, which allowed one of the joint holders of shares to act on behalf of the others. It was found that Rani Ranbir Kaur's name stood first in the register of members, and she was entitled to act on behalf of the joint holders. Additionally, the court found no admissible evidence to support the claim that Rani Ranbir Kaur had signed a blank power of attorney without knowing its purpose. The issue was decided against the respondent.

5. Estoppel Against Petitioner No. 1:
The respondents contended that petitioner No. 1, Raja Surrindar Singh, was estopped from presenting the petition because he participated in the general meeting where the resolution for voluntary winding up was adopted and was a party to the company's opposition to S. Santokh Singh's application under section 221. The court noted that the validity of the resolution and the pending application were to be decided along with the present petition. Therefore, it was premature to express any opinion on estoppel at this stage. The court decided that this issue could be addressed at the time of the final hearing if pressed.

Conclusion:
The preliminary objections were overruled, and the case was set for further proceedings on 29th April.

 

 

 

 

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