JUDGMENT
A.K. Sikri, J.
1. Mr. Ramesh N. Hemnani is the petitioner who filed this petition in the year 1985 under Sections 397/398 of the Companies Act, 1956 (hereinafter referred to as `the Act’) alleging oppression and mismanagement. Alternate prayer for winding up of the company under Section 433 read with Section 439 of the Act on `just and equitable’ ground is also made. The petitioner is a member and director of the company. Mr. Ajit Hemnani as well as respondents 2 and 3, namely, Mr. Avtar Singh Sethi and his wife Mrs. Raj Sethi are the other members of the company. The respondents 2 and 3 are also the directors. All four had entered into a joint venture agreement for setting up of a fast food restaurant at New Delhi with the result that this company was incorporated which took franchise of M/s Wimpy International Limited of London and started running the said fast food outlet at N-5, Janpath, Connaught Circus, New Delhi.
2. Various allegations of mismanagement and oppression are made against the respondents 2 and 3 on the basis of which following reliefs are prayed for:
a) Restrain Shri Avtar Singh Sethi and Smt. Raj Sethi from functioning or holding out themselves to be the Directors of the Company.
b) Restrain Shri A.S. Sethi and Smt. Raj Sethi from either by themselves directly or indirectly or in the name of the other companies such as Wimpy India Private Ltd., Wimpy Foods Private Ltd., remove or cause to be removed the cash realisations/sale proceeds of the Wimpy Restaurant of the company at N-5, Janpath, Connaught Circus, New Delhi.
c) Appoint an Administration/Receiver to take charge of the cash realisations and deposit the same in the account of the company and make disbursements thereof under the orders of directions of the Board as is re-constituted by this Hon’ble Court and/or under orders of this Hon’ble Court.
d) Re-constitute the Board of Directors of the company so as to include therein equal representatives of the two groups and in addition appoint an independent Chairman with power to veto any decision of the Board.
(e) To restrain Shri Avtar Singh Sethi and Smt.Raj Sethi holding themselves out as Directors of the company or otherwise directly or indirectly on their account or in the name of any other of their companies from removing any of the assets and properties comprising of equipment, machinery and materials, installed and lying at the restaurant of the company at N-5, Janpath, New Delhi.
f) Restrain the said Shri A.S. Sethi and Smt.Raj Sethi from issuing any orders or directions to the store manager/duty managers/staff of the said restaurant.
g) Direct that the statutory and other records of the company as may have been falsified and/or fabricated to be modified/corrected.
h) To set aside and modify any contracts or arrangements made by Shri A.S. Sethi and Smt.Raj Sethi for and on account of the company.
i) Order termination of the alleged appointment of Shri A.S.Sethi as Managing Director of the company.
j) Pass such other and further orders as may be deemed just, expedient and appropriate in order to remove the grievances, complained of;
k) And in the alternative and if for any reason the reliefs sought for under the provisions of Sections 397, 398, 402 and 403 cannot be granted then to order winding up of the company on the ground of its being just equitable to do so under section 439 under the Companies Act.
3. As noted above, this petition was filed in the year 1985. Order sheet reveals that in the beginning it was vigorously pursued by the petitioner and hotly contested by the respondents. Certain interim orders were passed from time to time. However, within a couple of years of filing of this petition, compromise talks started between the parties and to enable to the parties to settle the matter, the case was adjourned from time to time. This position continued till the year 1989 and the orders sheets of February, 1989 would evince that even draft of the proposed agreement had been exchanged between the parties. However, thereafter, again repeated adjournments were taken to settle the matter. On 5th September, 1989 it was recorded that compromise has not been arrived at and, therefore, the matter was adjourned for arguments on 13th September, 1989. On that date, arguments were not heard as both the parties again started making joint request in order to arrived at a settlement. On 23rd July, 1990 learned counsel for the petitioner made a statement to the effect that neither there has been any settlement nor any possibility of arriving at a settlement and, therefore, it was again directed that the matter be listed for arguments. Thereafter, the latter was heard at length on 8th February, 1991 and a detailed order was passed admitting the petition. Notice as required by Section 400 of the Act was also directed to be issued to the Central Government. There was already an order restraining the Board of Directors and the respondents not to alienate any assets of the company except in the normal course of business. A Local Commissioner was appointed to immediately visit the restaurant of the company and prepare an inventory of the machines lying to herein.
4.Thereafter, there was a change in the management of the company in the year 1992. Perusal of the order sheet would further demonstrate that thereafter attempt was made through the intervention of the court to settle the matter as it was directed that parties shall remain present in the court on various dates and some discussions took place. However, it appears that the court was not successful in getting the matter settled but the parties again started taking adjournments thereafter on the ground that they were having talks of amicable settlement and this is reflected in the order sheets of the year 1998-99. The matter was adjourned from time to time even thereafter. Order sheets would reveal that many times `last opportunity’ was given to the parties to settle the matter with direction that if the parties fail to arrive at a settlement, arguments shall be heard. However, still the matter was adjourned repeatedly at joint request.
5. It may be noted at this stage that different counsel were representing the respondent No.1 on the one hand and the respondents 2 and 3 on the other hand and on 20th August, 2002 it was noted that nobody was appearing for the respondents 2 and 3, court was, therefore, directed to be issued to these respondents directing them to appear in person. As their addresses were not known on 27th February, 2003 they were directed to be served by way of publication in Statesman (English) and Veer Arjun (Hindi).
Inspite of these citations, the respondents 2 and 3 failed to appear. On 22nd August, 2003 this court issued bailable warrants against the respondents 2 and 3 which also could not be executed as whereabouts of these respondents were not known.
6. Case history is narrated in some detail to project that there is hardly any progress in the matter after its admission on 8th February, 1991. When this matter came up for hearing on 3rd November, 2004 after taking note of the aforesaid facts, following order was passed:
“This petition was filed under Section 397/98 of the Companies Act, 1956 which was filed in the year 1985. Vide Order dated 8th February, 91 it was directed that notice be issued to Central Government as required under Section 400 of the Companies Act
Thereafter the petition was adjourned from time to time as some compromise talks were going on between the parties. In the petition three respondents are imp leaded. Respondent no.1 is the company and respondents no. 2 and 3 were the directors at the relevant time. The allegations of oppression and mismanagement are primarily against respondents no. 2 and 3. Respondents no. 2 and 3 are not being represented. Earlier some advocates were appearing and efforts to serve them again have failed and their where bouts are also not known. Mr. Girdhar Govind stated that the company is not functioning today. Affidavit shall be filed confirming this fact and also indicating as to who are the present directors of respondent no. 1 company as per its record. Affidavit be filed within four weeks.
List on 18th January, 2005.”
7. This order would reveal the following significant aspects:
(a) No progress made in this matter even when it is pending for last two decades.
(b) Even after the admission of the petition on 8th February, 1991 (six years after filing of the petition) and direction that notice be issued to the Central Government as required under Section 400 of the Act, these steps are not taken.
(c) Allegations of oppression and mismanagement were against the respondents 2 and 3 who were the directors at the relevant time. Not only they are no more directors they are not being represented either. Their present whereabouts are also not known.
(d) The management of the company had changed some time in the year 1992. There are no allegations against the new management.
(e) The company is not even functioning today.
8. It may be noted that although the respondent No.1 was directed to file the affidavit confirming the fact that it is not functioning and also indicate as to who are the directors of the company, no such affidavit is filed till date even when order dated 18th January, 2005 was passed giving another opportunity to the respondent No.1 and making it clear that no further opportunity shall be granted.
9. When the respondents 2 and 3 are not having charge of the affairs of the company against whom the allegations of mismanagement and oppression were levelled and the management changed in between, there is no purpose in continuing with these proceedings. It is more so when the company has become non-functional for last number of years. No doubt on the allegations of oppression and mismanagement the petitioner had in the alternative, sought winding up of the company also. It is not necessary even to go into that aspect in this petition inasmuch as in view of the present position when the company is not functioning for last number of years and as lost its substratum, the petitioner, if so wants, can file fresh petition for winding up as the prayers which are made in this petition and reproduced above have clearly become infructuous.
10. This petition is accordingly disposed of with liberty to the petitioner as aforesaid. Applications also stand disposed of.