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TMI Blog1989 (9) TMI 321X X X X Extracts X X X X X X X X Extracts X X X X ..... It was agreed that the managing director of Jaipur Metals and Electricals Ltd. (non-petitioner No. 1) would be the chairman of the company, it would also have a right to nominate a certain number of directors and non-petitioner No. 1 asked the company to allot fully paid-up 55 per cent. shares of the company in favour of Ashok Kumar Doshi (non-petitioner No. 5). It was further agreed that petitioners Nos. 1 and 2 were to be the managing director and executive director of the company respectively. They got the plant and machinery approved and erected in a record time of five months and the production commenced from October 12, 1988. Non-petitioner No. 1 started interfering with the day-to-day working of the company and non-petitioner No.5, A.K. Doshi, did not contribute any money and co-operate in the working of the company. The balance amount of Rs. 10 lakhs was also not released by non-petitioner No. 1 as per the lease agreement. Non-petitioner No. 1 started conspiring to oust the petitioners from the management of the company and ousted them on November 22, 1986. They were not allowed to attend the meetings. A committee comprising Sarvashri K.G. Toshniwal, K.K. Vijayvargiya and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Two remedies cannot be availed of simultaneously. Learned counsel for the non-petitioners contended that the petitioners have also tiled a petition, papers Nos. 351 to 419 (annexure R/1), under sections 408 and 409 of the Act before the Company Law Board, Central Government, New Delhi, with the same allegations and making similar prayers ; it is still pending and this fact has been suppressed from this petition. They also contended that two remedies cannot simultaneously be invoked. They relied upon Hungerford Investment Trust Ltd. v. Turner Morrison and Co. Ltd. [1972] ILR 1 Cal 286 and Mohanlal Ganpatram v. Shri Sayaji Jubliee Cotton and Jute Mills Co. Ltd. [1964] 34 Comp. Cas. 777 ; AIR 1965 Guj 96. In reply, it has been contended by learned counsel for the petitioners that there is no express provision in the Act debarring the availing of two remedies simultaneously. He also contended that different remedies are contemplated under sections 408 and 409 of the Act and these provisions are open to the director, managing director and managers only. The provisions of sections 408 and 409 cannot be invoked by shareholders of the company. It is not denied that petition- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded by learned counsel for the non-petitioners that the consent of the shareholders was not enclosed with the petition as required under rule 80 and Forms Nos. 43 and 44, Companies (Court) Rules, 1959 (hereinafter to be called as "the Rules"), and the schedule, papers Nos. 259 to 261, mentioning names and addresses of the members who had given their consent to the petition and the consent, papers Nos. 262 and 263, have admittedly been filed with the rejoinder and they cannot be taken into consideration. They also contended that the consent filed does not show that the shareholders who have given their consent have actually applied their mind. They relied upon M. C. Duraiswami v. Sakthi Sugars Ltd. [1980] 50 Comp. Cas. 154 (Mad), Omni India Ltd. v. Balbir Singh [1989] 66 Comp. Cas. 903 (Delhi), K. P. Chackochan v. Federal Bank [1989], 66 Comp. Cas. 953 (Ker) and Kilpest Pvt. Ltd. v. Shekhar Mehra [1987] 62 Comp. Cas. 717 (MP). In reply, it has been contended by learned counsel for the petitioners that the petitioners are holders of more than 10% of the shares as has been stated at page No. 2, para 6 of the petition and as such the consent of the other shareholders ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt in this petition. It has been observed in Omni India Ltd. v. Balbir Singh [1989] 66 Comp. Cas. 903 (Delhi) as follows (at page 909): "The view taken by us finds support from the decisions of the Allahabad High Court, Madras High Court and Madhya Pradesh High Court. In Makhan Lal Jain v. Amrit Vanaspati Co. Ltd. [1953] 23 Comp. Cas. 100 ; AIR 1953 All 326, a learned single judge of that court held (at page 102 of 23 Comp Cas): 'The expression "consent in writing" obviously implied that the writing itself should indicate that the persons who have affixed their signatures have applied their minds to the question before them and have given their consent to certain action being taken.' In M.C. Duraiswami v. Sakthi Sugars Ltd. [1980] 50 Comp. Cas. 154 , a Division Bench of the Madras High Court examined the expression "consent in writing" in the background of the requirements of sections 397 and 398. On such examination, it was held (at page 158): 'From the very nature of the case, "consent in writing" contemplated in section 399(3) of the Act is a consent to the filing of a particular petition with a particular allegation for a particular relief under section 39 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 398. In the instant case also, the petition filed by the petitioner-respondent has not fulfilled the legal requirements. Learned counsel, appearing for the respondent, submitted that the consent has been obtained while filing the petition but when we examine the said so-called consent, it does not fulfil the legal requirements of section 399(3) of the Companies Act and, therefore, it is of no avail to the respondent. Further, the mandatory requirements of rule 88 of the Companies (Court) Rules have also not been complied with. Therefore, the petition prima facie appears to be not maintainable". K.P. Chakochan v. Federal Bank [1989] 66 Comp. Cas. 953 (Ker.) also supports the contention of learned counsel for the non-petitioners. On this ground also, the petition is not maintainable. III. Defective verification of the affidavits. The third objection of the non-petitioner is that the affidavits are not in accordance with rule 21 and Form No. 3 of the Rules. They relied upon Mool Chand Wahi v. National Paints P. Ltd. [1986] 60 Comp. Cas. 198 (P H), Malhotra Steel Syndicate v. Punjab Chemi-Plants Ltd. [1989] 65 Comp. Cas. 546 (P H) and Gaya Textiles Pvt. Ltd., In ..... X X X X Extracts X X X X X X X X Extracts X X X X
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