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TMI Blog1991 (8) TMI 347X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 'the Act') and had, therefore, automatically ceased to be the Directors of the Company as provided in Section 283 of the Act. Even the notices of the Annual General Meetings of the Company have not been sent to them. They are not being supplied with copies of the balance sheets. They have been deliberately kept in complete dark by the respondents about the day to day affairs of the Company by the sheer power of their might and they have been successful in illegally keeping them out of the management of the Respondent Company. They being the Directors of the Company have a statutory right under Section 209 of the Act to have access to all books of accounts and other statutory and relevant records of the Respondent Company. It is also necessary to have inspection of the books of accounts and record of the Respondent Company to support the Company petition. 3. The respondents No. 3, 4 and 11 have filed their joint reply to the said application. The respondent No. 2 has also filed a separate reply. Two preliminary objections have been taken by the respondent No. 2 against the inspection application. Firstly, the applications have ceased to be the Directors of the Company, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation of the respondents that the applicants have automatically ceased to be the Director under Section 283(1)(i) read with Section 299(3) of the Act has categorically been denied and disputed by them, they continue to be the Directors (ill it is decided by this Court in this case and as such they are entitled for the inspection of the account books and record of the Respondent Company under Section 209(4) of the Act. It is clear from the provisions of Rule 6 Companies (Court) Rules, 1959 (hereinafter to be called the Rules') that the provisions of the Code of Civil Procedure apply to the Company petition filed under Sections 397 and 398 of the Act and there is nothing in the Act or the Rules in derogation of the provisions of the Code of Civil Procedure. Rule 9 of the Rules specifically protects the inherent power of the Court. The applicants being parties in the company petition are entitled to invoke the provisions of Order 11, CPC and also inherent power of the Court even assuming for the sake of arguments and not admitting that they have ceased to be the Directors of the Respondent company. He relied upon Rajdhani Roller Flour Mills (P) Ltd. v. Mangilal Bagri and Ors. 1991 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ally ceased to be the Directors under Section 283(1)(i) on account of disqualification incurred by them under Section 299(3) of the Act. The applications have categorically denied it. There is no material on record in support of the version of the respondents that the applicant P.S. Nanawati is the Proprietor of M/s Nanawati Engineering Co., Bhilwara and the applicant N.S. Chhajer is the partner of M/s Sri Ram Engineering, Bhilwara with whom purchases were being made for the Respondent company and they did not disclose their interest with the said firms in any meeting of the Board of the Respondent Company thus incurred disability under Section 283(1)(i) read with Section 299(3) of the Act. The fact that they were/are proprietor/partner of the said firm is not even mentioned in the resolution of the Board dated December 14, 1988, Annexure R 11/4. It has also not been mentioned in it as to how they were/are interested in the said firms. This objection has not been taken by the Respondent No. 2 in its reply (running in 106 pages) to the company petition. In the Company Petition very serious allegations have been made against the respondents. Only two of them may be extracted here: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Court and provisions of the Code to apply. - Save as provided by the Act or by these rules the practice and procedure of the Court and the provisions of the Code so far as applicable, shall apply to all proceedings under the Act and these rules. The Registrar may decline to accept any document which is presented otherwise than in accordance with these rules or the practice and procedure of the Court. 9. Inherent powers of the Court-Nothing in these rules shall be deemed to limit or otherwise affect the inherent power of the Court to give such director or pass such orders as may be necessary for the ends of justice or to prevent abuse of the process of the Court. There is nothing either in the Act or in the Rules prohibiting the inspection of record of a partly by his opponent. The omission of word 'share-holder' is Section 209(4) of the Act does not prohibit a party in a pending case to inspect the records and documents of a company even if he is not a Director. Under the facts and circumstances of the case, it is a fit case in which inherent power of the Court should be invoked for allowing the applicants (petitioners No. 30 and 31) to inspect the account books a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 58 Comp cas 805, relied upon by the learned Counsel for the respondents, that a share holder as a petitioner in a petition under Sections 397 and 398 read with Section 402 of the Act cannot apply for the inspection to the account books and record as the respondent company and the Court has no jurisdiction to allow such an application. 9. The second preliminary objection has also no force. It is clear from the order dated September 28, 1989 (reported in 1990 69 Comp Cas 769 dismissing the earlier Company petition that it was not dismissed on merit. Failure to move such an inspection application in the earlier company petition or in the special appeal filed against the said order dated September 28, 1989 cannot go to deprive the applicants from inspecting the account books and other record of the Respondent Company if they are otherwise entitled under the Act and the Rules. They do not also require that inspection can be done only once. 10. Consequently, the application of the petitioner No. 30 P.S. Nanawati and No. 31 N.S. Chhajer for the inspection fetch account books and other records and papers of the Respondent-company is allowed. The respondents will allow the applicants ..... X X X X Extracts X X X X X X X X Extracts X X X X
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