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TMI Blog1990 (9) TMI 269X X X X Extracts X X X X X X X X Extracts X X X X ..... 11 and 14 appointing them as purchase and selling agents on payments of commission at 3/4 per cent. with retrospective effect from the date of execution of the said agreements ; ( d )termination of the agreement for payment of 1/2 per cent. com mission to Shri Kirpa Narayan and his brothers on the loans advanced to the company for which the said Shri Kirpa Narayan stood personal guarantee. ( e )terminate the mortgages and other arrangements entered into between the company and the trustees for debentures of the value of Rs. 95 lakhs under which almost all the assets of the company in India have been mortgaged with the trustees ; ( f )restrain the company from disposing of the assets of the company and to rescind all contracts, agreements and commitments which may have been made for disposal of any of the assets of the company in India ; and ( g )to pass such other order or orders as may be deemed fit and proper in the circumstances of the case and for safeguarding the interests of the shareholders, creditors, the company and the public at large." During the pendency of the petition, Ganesh Flour Mills Co. Ltd. was taken over under the Industries (Development and Regulatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion have become infructuous ; the applicants have filed their claims before the Commissioner of Payments appointed under the Act and the said Commissioner is proceeding to investigate those claims, and that the Commissioner of Payments is empowered and vested with the powers as are vested in a civil court under the Code of Civil Procedure and is thus competent to investigate the validity of the claims of the applicants. According to the applicants, on account of the aforesaid subsequent events, no relief can be granted to the petitioner in Company Petition No. 45 of 1971 which is, consequently, liable to be dismissed as infructuous. The application has been vehemently opposed by the Company Law Board and Hindustan Vegetable Oil Corporation Ltd. The Company Law Board has also filed an application (Company Petition No. 459 of 1984) under Order 1, rule 10 and Order 6, rule 17 and section 151, Code of Civil Procedure, inter alia , praying that the Commissioner of Payments and Hindustan Vegetable Oil Corporation Ltd. be impleaded as parties to the main petition and that the applicant be permitted to amend the main petition. Besides other amendments, the Company Law Board seeks to ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot be granted by the company court and thus the petition has become infructuous. After noticing the order of Wad J., the contention was rejected by Khanna J. as under : "It is relevant here to mention that this controversy arose earlier as well when the new board under the said enactment was constituted. It was sought to be pleaded then also that the petition under sections 397 and 398 had become infructuous. Wad J., however, by an order dated January 25, 1982, rejected this contention. It was observed that while deciding the matter under sections 397 and 398, the company court would be able to grant relief with respect to the termination of the commission agreements and the execution of mortgages and other arrangements resulting from the issue of debentures, etc. The plea that the validity of the issue of debentures could not be entertained after a lapse of a period of three months by the presentation of the petition under sections 397 and 398 of the Act was not accepted and it was observed that the matter could not be so disposed of summarily but really concerned the merits. The object of sections 397 and 398, it was noted, was not merely to trace whether the company had be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ( c ) defines company as to mean "the Ganesh Flour Mills Co. Ltd., Delhi, a company within the meaning of the Companies Act, 1956, and having its registered office at Subzi Mandi, Delhi. Section 2( e ) next is to the following effect : " 'Ganesh Flour Mills' means ( i )the Delhi Vanaspati Factory, Delhi ; ( ii )the Hindustan Breakfast Food Manufacturing Factory, New Delhi, including the Ganesh Electrical Factory, New Delhi, which is interlinked with it by reason of its location, common services and infrastructure ; ( iii )the Kanpur Vanaspati Factory, Kanpur ; and ( iv )the Solvent Extraction Plant, Bombay." Section 2(i) defines the "Government company" as under : " 'the Government company' means the Government company in which the Ganesh Flour Mills are directed to vest under sub-section (1) of section 5." These provisions thus clearly show it is not the entire Ganesh Flour Mills Co. Ltd. which has vested in the Central Government. The company rather is allowed to exist. It has certain factories, plant, etc. as defined in section 2( e ) which have been taken over. Bereft of them which are termed as "Ganesh Flour Mills", the Ganesh Flour Mills Company Ltd. contin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 398 of the Act does not confer any power on the company court to correct past acts of mismanagement and oppression and impose any penalty therefor. In short, the contention was that these provisions are preventive and not penal in nature. There is no difficulty in accepting the broad proposition put forth by learned counsel. There cannot also be any doubt that, because of legislation and subsequent events, the reliefs ( a ) and ( b ) have become infructuous. But the same is not correct in respect of reliefs ( c ) and ( d ). Mr. Gokhale, however, contended that these reliefs can be granted by the Commissioner of Payments while adjudicating on the validity of claims of the applicants. The Commissioner of Payments, under the Act of 1984, has limited power while determining the claims and priorities under sections 16 to 18 of the said Act. It is not open to the Commissioner of Payments to go into the question whether the agreements in regard to which relief is claimed in the company petition are prejudicial to public interest or, in any manner, oppressive to any member. An act need not always necessarily be fraudulent to be declared as oppressive and prejudicial under the provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... poration Ltd. seems to be only for the sake of objection and is, consequently, rejected. Hindustan Vegetable Oil Corporation is, accordingly, permitted to be impleaded as one of the respondents. The applicant also seeks impleading of the Commissioner of Payments as a party in these proceedings. The Commissioner of Payments has been appointed by the Central Government for the purpose of disbursing the amounts payable under section 7 to the company. The said Commissioner has to decide the claims in accordance with the provisions of the Act of 1984. The powers of the Commissioner are quasi-judicial and it has not been shown as to how the Commissioner is a necessary or even a proper party. The prayer for impleading of the Commissioner of Payments as a party is, accordingly, declined. The main allegations which are sought to be added by way of amendment are in regard to the premises situate at Bombay. The petitioner has prayed that the respondents be directed to restore to the company property situate at Reay Road, Mazagaon Dock, Bombay, and any other properties diverted by Murarka group to themselves and, in the event the property is not returned or the company is deprived of the s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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