1974 (5) TMI 67 - HC - Companies Law

Summary

Issues Involved:
1. Addition of parties to the company petition.
2. Withdrawal of the company petition by the original petitioner.
3. Jurisdiction and assumption of jurisdiction by the court.
4. Applicability of the Companies (Court) Rules, 1959, and the Code of Civil Procedure to proceedings under sections 397 and 398 of the Companies Act, 1956.
5. Appealability of the order under clause 15 of the Letters Patent.

Detailed Analysis:

1. Addition of Parties to the Company Petition:
The appeal challenges the order dated November 29, 1973, which directed the addition of Pramotha Nath Mukherjee and Monoranjan Mukherjee as parties to Company Petition No. 398 of 1972. The court granted leave to these respondents to continue the petition and transposed the original petitioner, Dilip Kumar Ganguli, to the category of respondents. The respondents had purchased equity shares and sought registration, which the company refused, leading to an appeal to the Central Government and subsequent legal battles.

2. Withdrawal of the Company Petition by the Original Petitioner:
The original petitioner, Dilip Kumar Ganguli, expressed a desire to withdraw the petition, which was opposed by the respondents. The court adjourned the application and later allowed the respondents to be added as parties. The appellant argued that the court should have dismissed the petition upon the original petitioner's withdrawal. The court held that under Rule 88(2) of the Companies (Court) Rules, 1959, a petition under sections 397 or 398 could not be withdrawn without the court's leave.

3. Jurisdiction and Assumption of Jurisdiction by the Court:
The appellant contended that the court's order amounted to an assumption of jurisdiction over new parties and deprived the company of a valuable defense of lapse of time. The court held that the order did not affect any rights or liabilities of the parties and was within the court's jurisdiction to add parties to avoid multiplicity of proceedings.

4. Applicability of the Companies (Court) Rules, 1959, and the Code of Civil Procedure to Proceedings under Sections 397 and 398 of the Companies Act, 1956:
The court observed that Rule 6 of the Companies (Court) Rules, 1959, makes the provisions of the Code of Civil Procedure applicable to all proceedings under the Act and Rules, except as provided otherwise. The court held that the provisions of Order 1, Rule 10 of the Code of Civil Procedure, which allows the addition of parties, applied to proceedings under sections 397 and 398 of the Companies Act.

5. Appealability of the Order under Clause 15 of the Letters Patent:
The appellant argued that the order under appeal was a "judgment" within the meaning of clause 15 of the Letters Patent. The court disagreed, stating that the order did not determine any rights or liabilities of the parties and was a procedural step towards final adjudication. The court cited several cases to support its view that the order was not a "judgment" and thus not appealable.

Conclusion:
The court dismissed the appeal, holding that the addition of the respondents as parties was justified to avoid multiplicity of proceedings and that the original petitioner's withdrawal did not necessitate the dismissal of the petition. The court affirmed that the order was procedural and not a "judgment" within the meaning of clause 15 of the Letters Patent, thus not appealable.