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TMI Blog2017 (3) TMI 1393X X X X Extracts X X X X X X X X Extracts X X X X ..... he deceased petitioner by his legal representatives is found to be far from satisfactory. In those factual backgrounds, let us consider the contention that the petition seeking substitution is required to be rejected since on the date of filing of substitution application, the applicants did not have requisite share qualification to file the company petition in terms of law laid down in Sec. 399 of the Act of 1956. In that connection, we can peruse gainfully the decision in Rajahmundry Electric Supply Corporation Ltd. (1955 (12) TMI 21 - SUPREME COURT OF INDIA)as held that validity of the petition must be judged on the facts as they were at the time of its presentation, and a petition which was valid when presented cannot, cease to be maintainable by reason of events subsequent to its presentation. Coming back to our present case, we have found that the shareholding of the predecessor of applicants in the company was in decimals. But then, the materials on record prima facie show that the original petitioners had the requisite share qualification to file the petition u/s. 397/398 of the Act, 1956. This prima facie shows that the petition was validly filed by the original ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hort 'CLB' Kolkata) on hearing the parties refused to grant interim relief, sought for by the petitioners in company petition No. 994/2011 but was pleased to conclude on the face of record that the petition is maintainable and ordered posting of the matter for further proceeding in accordance with the procedures prescribed. 4. During pendency of the proceeding, petitioner No. 1, namely, Kanubhai C Patel died leaving as many as five legal representatives, namely, Sushilaben Kanubhai Patel, Gaurangika Patel. Smita Virendrakumar Patel Bhavna M. Patel alias Bhavnaben Mukesh Patel and Dhwani A. Agrawal alias Dhwani Alankar Agrawal, who are said to be (i) wife, (ii) daughter, (iii) daughter, (iv) widow of pre-deceased son, Late Mukesh K. Patel and (v) daughter of said pre-deceased son, Late Mukesh K. Patel respectively. 5. However, according to the applicants, due to some very valid reasons, the applicants herein could not prefer an application seeking the substitution of legal representative(s) of the deceased petitioner No. 1 in time for which the case in respect of petitioner No. 1 stood abated. The grounds for which delay occurred in preferring substitution application ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ument that right to sue survives in favour of the surviving petitioners, yet, for non-substitution of the legal representative of the deceased petitioner No. 1 in time the proceeding in question stood abated against all the respondents. This is more so, when the petitioners miserably fail to show that they had any ground - much less their showing sufficient cause, as contemplated in law, - - requiring the court to recall such abatement. 11. Elaborating the alleged lapses on the part of the applicants/petitioners, the counsel for the respondents/non-applicants, contends that in the case in hand, the petitioner No. 1 died on 22.01.2013 and matter relating to death of the petitioner No. 1 evidently came to the notice of surviving petitioners soon thereafter. In spite of all such information, the petitioners had filed the application seeking substitution of deceased petitioner by his legal representatives only on 30.9.2016. Such states of affairs speak loud and clear that the petitioners never pursued their claim in the petition intelligently, wisely and diligently as required under the law. 12. What is however, worse is that despite knowing that the petitioner No. 1 died as back ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anation was not satisfactory, have dismissed the application for condonation of delay. Thus, it is evident that it is difficult to state any straightjacket formula which can uniformly be applied to all cases without reference to the peculiar facts and circumstances of a given case. 32. It must be Kept in mind that whenever a law is enacted by the legislature, it is intended to be enforced in its proper perspective. It is an equally settled principle of law that the provisions of a statute, including every word, have to be given full effect, keeping the legislative intent in mind, in order to ensure that the projected object is achieved. In other words, no provisions can be treated to have been enacted purposelessly. 33. Furthermore, it is also a well settled canon of interpretative jurisprudence that the Court should not give such an interpretation to provisions which would render the provision ineffective or odious. Once the legislature has enacted the provisions of Order 22, with particular reference to Rule 9, and the provisions of the Limitation Act are applied to the entertainment of such an application, all these provisions have to be given their true and correct me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reference to the judgment of this Court in Perumon Bhagvathy Davaswom (supra). In this case the Court, after discussing a number of judgments of this Court as well as that of the High Courts, enunciated the principles which need to be kept in mind while dealing with applications filed under the provisions of Order 22, CPC along with an application under Section 5. Limitation Act for condonation of delay in filing the application for bringing the legal representatives on record. In paragraph 13 of the judgment, the Court held as under - 13 (i) The words sufficient cause for not making the application within the period of limitation should be understood and applied in a reasonable, pragmatic, practical and liberal manner, depending upon the facts and circumstances of the case, and the type of case. The words 'sufficient cause' in Section 5 of the Limitation Act should receive a liberal construction so as to advance substantial justice, when the delay is not on account of any dilatory tactics, want of bona fides, deliberate inaction or negligence on the port of the appellant. (ii) In considering the reasons for condonation of delay, the courts are more liberal w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut is worthy of exercising jurisdiction discretion in favour of applicant. 17. The arguments, so canvassed from the side of the respondents, were, however, disputed by the learned counsel for the applicants citing some alleged inherent infirmity therein. In regard to contention Nos. 1 3 above, it is being argued that the company petition is a petition in representative character and it has repeatedly been held by the Hon'ble Supreme Court and by various High Courts as well as by the various Company Law Boards that the company petition is a representative proceeding and it does not get abated on the death of parties. 18. So, on the death of parties in a representative suit/proceeding, such proceeding does not get abated unlike other proceedings/suits. Rather, in such a situation, the court or Tribunal is required to proceed with such petition/suit and, if necessary, even by adding party/parties who stands represented in such proceeding/suit by the deceased party/parties so as to take the disputes in such proceeding to their logical conclusion. 19. In support of such contention, (a) the decision of Hon'ble Delhi High Court in M/s Jawahar Singh Bikram Singh Vs. Smt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unsel for the respondents/non-applicants, however, submits that above decisions have no application to the case in hand since the facts and circumstances in the cases, relied upon by the learned counsel for the applicants, are materially different from one we have been seized with. This is more so, when there is indisputable evidence to show that the applicants had misled various courts including the Apex Court of the country in respect of substitution matter which forms the very basis of substitution application. 25. Above being the rival claims, let us see whose claim stands to reason in view of materials on record. But before proceeding further, Let us see what is the nature of proceeding u/s. 397/398 of the Act of 1956. In that connection, we may peruse profitably the decision of the Delhi High Court in the case of Jawahar Singh Bikram Singh (supra). 26. In Jawahar Singh Bikram Singh (supra), in a proceeding u/s. 397/398 of the Act of 1956, the petitioner died during the pendency of the proceeding and thereupon, one of the respondents applied for being transposed as petitioner which was allowed. While allowing the application, Hon'ble Delhi High Court came to the fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... body of persons. On the death of one or more of the parties before the court other persons who are not on record are permitted to continue the proceedings. This procedure is permissible on account of the fact that even originally the suit had been brought on their behalf and not for the individual benefit of the actual plaintiff. The same position should on principle be applicable to proceedings under Sections 397 of the Companies Act. 1956, because here also the proceedings are instituted not only for the individual benefit of the actual petitioner but also for and for the benefit of the consenting members of the company. Thus, on a Party of reasoning the contention of Shrimati Sharda Talwar that she was in actual fact a petitioner in the original petition, although shown as a pro forma respondent has to be accepted. It is not necessary to deal with other cases in which it has been held that proceedings in representative suits do not abate on the death of the plaintiff, but reference may be made to Raja Anand Rao v. Ramdas Daduram A.I.R. 1921, Privy Council 123 where it was held under Section 539 of the Code of Civil Procedure. 1882 that if a person who had obtained permission to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gal representatives from themselves wanting to continue the proceedings as heirs of the deceased petitioner they also fulfil the requirements of being members of the company. 27. In Gees Marine Products (P.) Ltd. (supra) CLB, Chennai states quite clearly that a proceeding under section 397/398 of the Act of 1956 is a representative proceeding. The relevant part is reproduced below: - PARA 5 The issue that arises for my consideration is whether the applicant shall be substituted in the place of the second petitioner for the purpose of prosecuting the company petition. The provisions of Sections 397 and 398 clearly envisage the protection of the shareholders and the interest of the public. Sub-section (3) of Section 398 permits an individual shareholder to make an application cinder Section 397 or 398 on behalf and for the benefit of all shareholders of a company for appropriate reliefs, with a view to bring to an end the matters complained thereof. Thus, the proceeding under Section 387 or 398 is a representative proceeding. Even if the original petitioner does not want to continue the proceedings, it is open to the CLB to consider the merits of the case without dismi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h these directions, the company applications in CA 153/2004 and 154/2004 stand disposed of.' The above decisions make it more than dear that petition u/s. 397/398 of the Act of 1956 is representative in nature where the petitioner(s) legally represents the grievances of people who are very similarly situated with the petitioner(s) in such proceeding as far as matter covered by such proceeding. So situated, let us see if such a suit/proceeding stands abated on the death of any of the parties thereto. In that connection, we may peruse the decision of L.Rm.K. Narayanan (supra), where it was held that a representative proceeding does not abate on the death of any of the parties thereto. The relevant part of the judgment is reproduced below: - Para 13. Further it is not incumbent upon the Court to dismiss a petition because a proceeding under S. 397 or 398 of the Act is a representative proceeding. Even if the original petitioner does not want to continue the proceeding the court cannot be compelled to dismiss the action. Even then, it is open to the court to consider the merits of the case without dismissing the petition In Jawahar Singh Bikram Singh (supra) as well ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion Ltd. (supra), it was held that validity of the petition must be judged on the facts as they were at the time of its presentation, and a petition which was valid when presented cannot, cease to be maintainable by reason of events subsequent to its presentation. The decision of Rajahmundry Electric Supply Corporation Ltd. (supra) was also followed in L.Rm.K. Narayanan (supra), where Hon'ble Madras High Court in paras 14 and 15 held as follows:- pare 14. I now propose to deal with the judgment referred to above: Rajahmundry Electric Supply Corporation Ltd case was filed under the old Act (VII of 1913) under Section 153 C, the Supreme Court held thus: Held that the validity of a petition must be judged on the facts as they were at the time of its presentation, and a petition which was valid when presented cannot, in the absence of a provision to that effect in the statute, ceased to be maintainable by reasons of events subsequent to its presentation The withdrawal of the consent by 13 of the members, even if true could not affect either the right or the applicant to proceed with the application or the jurisdiction of the court to dispose of it on its own merits . ..... X X X X Extracts X X X X X X X X Extracts X X X X
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