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TMI Blog1997 (7) TMI 684X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of a valid consent. They have also taken another preliminary objection that the similar issues have been raised in a proceeding before the industrial court at Mumbai instituted by the union of the company and as such to avoid conflict of the decisions, this petition should not be proceeded with. 3. In view of the preliminary objection going to the root of our jurisdiction to entertain this petition relating to the provisions of Section 399, we decided to her the preliminary objections. 4. Shri Ganesh, advocate, appearing for the respondents submitted that the schedule containing the signatures of 146 shareholders signifying their consent cannot be treated as valid consent in writing as envisaged under Section 399(3) of the Act. Even if it is so treated, it is apparent from the wordings of the consent, that the consentors have not applied their mind to the various allegations made in the petition which is a requirement of a valid consent. He referred to the decision of the Company Law Board in Shanhar v. South India Concerns (24 CLA Jan 2, 1997 ; [1997] 1 Comp LJ 307) in which after considering decisions of various High Courts, the Company Law Board had held that the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Naresh Kumar [1997] 90 Comp Cas 329, 333 ; AIR 1997 SC 3, wherein the Supreme Court held procedural defects which do not go to the root of the matter should not be permitted to defeat a just cause. There is sufficient power in the courts, under the Code of Civil Procedure to ensure that injustice is not done to any party who has a just cause. As far as possible a substantive right should not be allowed to be defeated on account of a procedural irregularity which is curable, therefore, he submitted that as far as this preliminary objection is concerned, taking into consideration the observation of the Supreme Court, as stated above,' the defects in the consent letters, if any, should be treated as procedural and the petition should be considered on the merits. As far as the second preliminary objection relating to the matter pending before the industrial court is concerned, he submitted that even though the allegations may be the same, yet, the reliefs sought before the industrial court are entirely different from the reliefs sought in this petition and, therefore, there is no bar to the Company Law Board considering this petition.. 7. We have considered the arguments of co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne through the petition or whether they had been apprised of what the contents of the petition are. 10. Thus, as rightly pointed out by Shri Ganesh, we are not in a position to find any material to show from this schedule and from the narration in each page that the petitioners are aware of the contents of the petitions relating to the allegations as well as the reliefs sought for. There is also no indication that the petitioners were aware that the petition was being filed under Section 397/398 or that the petition relates to allegations of oppression and mismanagement. The non-application of mind by these consentors is quite apparent from the narration in the schedule relating to consent. We do not wish to elaborate the decisions of the various High Courts which we have elaborated in South India Concerns order referred to above, while coming to the conclusion as quoted by Shri Ganesh which we have extracted earlier. However, since a similar schedule (annexure) containing consent had been considered by the Madras High Court in M. C. Duraiswami v. Shakti Sugars Ltd. [1980] 50 Comp Cas 154 which we had referred to in our order relating to Shankar v. South India Concerns [1997] 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elevant provisions of the Code of Civil Procedure, the Supreme Court observed (page 334 of 90 Comp Cas) : The courts below could have held that Shri L. K. Rohatgi must have been empowered to sign the plaint on behalf of the appellant. In the alternative, it would have been legitimate to hold that the manner in which the suit was conducted showed that the appellant-bank must have ratified the action of Shri L. K. Rohatgi in signing the plaint. .. The suit had been filed in the name of the appellant-company ; the full amount of court-fee had been paid by the appellant-bank ; documentary as well as oral evidence had been led on behalf of the appellant and the trial of the suit before the Sub-Judge, Ambala, had continued for about two years. It is difficult, in these circumstances, even to presume that the suit had been filed and tried without the appellant having authorised the institution of the same. The only reasonable conclusion which we can come to is that Shri L. K. Rohatgi must have been authorised to sign the plaint and, in any case, it must be held that the appellant had ratified the action of Shri L. K. Rohatgi in signing the plaint and thereafter it continued with the s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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