{"id":129394,"date":"1998-09-04T00:00:00","date_gmt":"1998-09-03T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/ms-ammonia-supplies-vs-ms-modern-plastic-containers-on-4-september-1998"},"modified":"2017-04-04T23:39:17","modified_gmt":"2017-04-04T18:09:17","slug":"ms-ammonia-supplies-vs-ms-modern-plastic-containers-on-4-september-1998","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/ms-ammonia-supplies-vs-ms-modern-plastic-containers-on-4-september-1998","title":{"rendered":"M\/S Ammonia Supplies … vs M\/S Modern Plastic Containers … on 4 September, 1998"},"content":{"rendered":"
Supreme Court of India<\/div>\n
M\/S Ammonia Supplies … vs M\/S Modern Plastic Containers … on 4 September, 1998<\/div>\n
Author: Misra<\/div>\n
Bench: G.B.Pattanaik, A.P. Misra<\/div>\n
           PETITIONER:\nM\/S AMMONIA SUPPLIES CORPORATION(P)LTD.\n\n\tVs.\n\nRESPONDENT:\nM\/S MODERN PLASTIC CONTAINERS PVT.LTD.& ORS.\n\nDATE OF JUDGMENT:\t04\/09\/1998\n\nBENCH:\nG.B.PATTANAIK, A.P. MISRA\n\n\n\n\nACT:\n\n\n\nHEADNOTE:\n\n\n\nJUDGMENT:\n<\/pre>\n
 JUDGMENT
\nMISRA, J.\n<\/p>\n
The present appeal arises out of an order dated\t May
\n16,  1994  dismissing  the  appellant- Company appeal by the
\nHigh Court. The short question raised by the  appellant\t is:
\n“Whether  in  the  proceedings\tunder  Section\t155  of\t the
\nCompanies Act,\tthe  Court  has\t exclusive  jurisdiction  in
\nrespect\t of  all  the  matters\traised\ttherein or have only
\nsummary jurisdiction?” According to the appellant, there are
\nconflicting decisions of the various High  Courts  in  India
\nwhich  resulted\t into  reference  of Appellant’s case to the
\nFull Bench by the Delhi High Court. The Full  Bench  decided
\nthat  the  jurisdiction is summary in nature, thus rejecting
\nthe case of the appellant that the power of the Court  under
\nthis  is  exclusive  in\t respect  of  all the matters raised
\ntherein.\n<\/p>\n
In order to appreciate the point it is necessary  to
\nrefer to certain facts.\n<\/p>\n
M\/s    Ammonia\t Supplies   Corporation\t  (P)\tLtd.
\n(hereinafter referred to as an\tappellant-Company)  went  in
\nliquidation  and  was  directed to be wound-up by the Punjab
\nHigh Court Circuit Bench at Delhi.  By Order dated 24th Dec.
\n1962 the  said\tHigh  Court  was  pleased  to  transfer\t all
\nproceedings to\tthe  Court  of District Judge, Delhi.  It is
\nsaid Shri Murarilal Bhargava is the sole beneficiary of\t the
\nsaid Company.\tHe filed an application for absolute stay of
\nthe liquidation proceedings which was  granted\ton  the\t 1st
\nFebruary, 1978\ttill  further  orders.\tHe was authorised to
\ncarry on the business of the Company.  The stay order was in
\nrespect of  all\t the  affairs  except  with  regard  to\t the
\nassessment  and\t of income tax payment thereof in respect of
\nwhich it was directed that the same shall be  prosecuted  by
\nthe official liquidator.\n<\/p>\n
On the 3rd January, 1977 the appellant-Company\tmade
\ninvestment  in\tthe  shares of M\/s Modern Plastic Containers
\n(P) Ltd.\t(hereinafter\treferred    to\t  as\t the
\nrespondent-Company)  to\t the extent of 50% shares that is to
\nsay 1,265  shares  of  Rs.    100  each\t amounting  to\t Rs.
\n1,26,500\/-.  Shri  O.P.\t   Bhargava  S\/o  Shri\tM.L.Bhargava
\nmarried the sister-in-law of one Shri V.K.Bhargaval, one  of
\nthe Managing   Directors  of  the  respondent-Company.\t  On
\naccount of this Shri M.L.  Bhargava became  closer  to\tShri
\nV.K.  Bhargava.\t   It  is  for this reason appellant-Company
\ninvested    into    the\t   aforesaid\tshares\t  of\t the
\nrespondent-Company.    The   dispute   pertains\t about\tthis
\ninvestment.  According to respondent-Company  there  was  no
\nsuch  investment made by the appellant-Company nor any share
\nwas transferred by the respondent-Company in favour  of\t the
\nappellant-Company.    On   the\t other\thand,  the  bone  of
\ncontention of the appellant-Company is inspite of payment of
\nthe aforesaid amount for shares it was not invested in\tsuch
\nshares.\t  The  appellant-Company became 50% share holders of
\nthe   respondent-Company   about   which   there    is\t  an
\nacknowledgment by  the\trespondent-Company.  Strong reliance
\nis placed on the  basis\t of  various  documents\t mainly\t the
\nBalance\t Sheet\tof  the\t appellant-Company dated 31st March,
\n1977 showing investment in  the\t respondent-Company.Accounts
\nof  the\t appellant-Company were audited which took notice of
\nthis investment which was subjected to income tax assessment
\norders dated 19th May, 1978 and 4th August, 1979.   On\t18th
\nJanuary,  1983\tShri  V.K.Bhargava  dies  in a car accident,
\nwhich according to the appellant is the\t reason\t of  dispute
\nbetween\t the  appellant-Company\t and the respondent-Company,
\nbeing  raised  by  the\tbrothers  of   the   deceased\tShri
\nV.K.Bhargava.\tIt  is because of this the appellant filed a
\ncomposite petition on 10th September,  1984  under  Sections
\n397,  398  and 155 of the Companies Act for rectification of
\nthe Register of Members and for oppression and mismanagement
\nof  the\t respondent-Company  which  was\t admitted  on\t14th
\nSeptember, 1984.   However, it seems that the petition which
\nwas filed by the appellant under  Sections  397,  398,\tread
\nwith  155,  the Court by its order confined the relief under
\nSection 155, that  is  to  say,\t rectification\tprayer\tmade
\ntherein.   In  this  appeal  we are only concerned with this
\npart viz., the jurisdiction of the Court under\tSection\t 155
\nwhile  dealing\twith  any application for the rectification.
\nFurther\t case  of  the\tappellant-Company   is\t that\tShri
\nV.K.Bhargava  informed\tthe  appellant\tthat  his  group  of
\nshare-holders in the respondent-Company wanted to get rid of
\nMittal Group of share-holders as the joint  functioning\t was
\nnot proceeding\twell.\t It is on account of this he desired
\nthat the appellant-Company of whom the sole  beneficiary  is
\nShri M.L.Bhargava  and\tultimately  Shri  O.P.\tBhargava-son
\nshould have 50% shares by purchasing the shares belonging to
\nMittal group.  On account of this the appellant-Company sent
\nthe aforesaid amount to Shri V.K.  Bhargava  for  purchasing
\nthe shares  in\tthe name of the appellant-Company.  Reliance
\nis placed on the basis of various  letters,  some  of  which
\naccording   to\t the   appellant   are\t admission  for\t the
\nappellant-Company being entitled to the\t shares\t holding  of
\n50%.   According  to  the  facts  as recorded by the Company
\nJudge in its order dated  4th  March,  1994  refers  to\t the
\naverment  in  the  petition  before  him,  that\t 1265 shares
\nbelonging to Mittal Group were to be transferred in the name
\nof   the   appellant-Company   in   the\t  records   of\t the
\nrespondent-Company but due to fraudulent intentions the same
\nwas not\t done.\t  The  alternative  plea was taken that Shri
\nV.K.Bhargava has no fund acquire the said  1,265  shares  in
\nJanuary\t and  February\t1977 and it should be hold that said
\nShri V.K.Bhargava held those shares benami in his  name\t for
\nthe benefit  of\t the appellant-Company.\t In other words, the
\nmoney was given by the Appellant-Company though\t the  shares
\nwere purchased in the name of Shri V.K.Bhargava.  It is from
\nthe  money  which  was advanced by the appellant-Company the
\nrespondent-Company allotted 470 shares, that is to say,\t 265
\nand 205\t shares\t to  the Respondent Nos.  2 & 3 respectively
\nbefore the Company Judge to bring the distribution of shares
\nratio of 50% each.  A prayer was made that the Court  should
\ndeclare\t that 470 shares allotted to the said respondents is
\nnull  and  void\t  and\tit   should   be   held\t  that\t the
\nappellant-Company  is  having  share-holding  of  those 1265
\nshares.\t Accordingly, necessary rectification be made in the
\nRegister of the members of the respondent-Company.
\nContesting the case set up by the  appellant-Company
\nbefore\tthe learned Company Judge the respondents vehemently
\ndisputed the claim. The contention is as the  claim,  if  at
\nall   of   the\tappellant-Company  of  having  advanced\t the
\naforesaid amount of Rs. 1.26,500\/- to late Shri V.K.Bhargava
\nthe recovery of which was  hopelessly  time  barred  as\t the
\nsaid transaction took place in year 1977 whereas the Company
\npetition was only filed in the year 1984. Hence, the present
\npetition  has  been filed as a device, as an alternative, to
\nclaim to be the member of the respondent-Company as owner of
\nthe shares to the extent of Rs. 1,26,500\/-. In fact, no such
\namount was ever paid to the  respondent-Company\t and  at  no
\npoint  of  time\t the appellant-Company became entitled to be
\nthe share holder of the respondent-Company.  The  shares  of
\nthe  respondent-Company\t could\tonly be transferred with the
\npermission  of\tBoard  of  Directors.  There  was  no\tsuch
\npermission.  In\t fact  in  order  to become the member or to
\npurchase the shares of the Company a procedure is prescribed
\nunder the Companies Act which has to be followed before\t the
\nshares\tcould be transferred. There is neither any such plea
\nby the appellant-Company nor there is  nay  such  proceeding
\nundertaken  for\t the  transfer\tof  shares  in favour of the
\nrespondent-Company  as\talleged.  Actually,  the   aforesaid
\nMittal Group offered to transfer shares to Shri V.K.Bhargava
\nwhich  was duly transferred by the Board of Directors. Hence
\nno question arises of offering any share  for  sale  to\t the
\nappellant-Company  of  the  shares  belonging  to the Mittal
\nGroup. If there are any transaction of\tadvancement  of\t Rs.
\n1,26,500\/-  to\tShri  V.K.Bhargava,  the said transaction is
\nbetween Shri M.L.Bhargava or by the  appellant-Company\twith
\nShri  V.K.Bhargava which could only be a private transaction
\nbetween them and the respondent-Company has  nothing  to  do
\nwith   the   same.   In\t  fact,\t shares\t purchased  by\tShri
\nV.K.Bhargava from Mittal Group had always been shown in\t the
\nincome\ttax  return  of\t Shri  V.K.Bhargava  as his personal
\nassets. The  respondent-Company\t further  pleaded  that\t the
\nappellant  had\tforged\tletter dated June 7, 1984 as much as
\nthe said letter was never issued by the\t respondent-Company.
\nFurther,  there is no entry in the books of accounts for the
\naforesaid amount. In fact the various documents filed by the
\nappellant-Company apart from the forged letter including  25
\nother letters are also denied by the respondent-Company.
\nIt is also necessary  to  record  certain  facts  as
\nrecorded in the proceedings before the Company Judge.  These
\nfacts  are recorded in the impugned order of the High Court.
\nOn 30th April, 1985 the Court directed the parties  to\tfile
\naffidavits and\tminute\tbooks.\t  This\texercise started for
\nconsidering the plaint\tof  the\t appellant-Company  for\t the
\nrectification as aforesaid.  Liberty was given to each party
\nto cross-examine  the  witnesses.    The case was listed for
\ncross-examination of the defendant on the 2nd  August,\t1985
\nand 5th\t August,  1985.\t On the various dates the matter was
\nlisted but was adjourned.  On 22nd January, 1986 a direction
\nwas given that the Registrar of Companies should produce the
\nenquiry report, if any, pertaining to the complaint filed by
\nShri M.L.Bhargava on 11th February, 1986.  On the 14th\tJuly
\n1986  learned  counsel for the respondent-Company raised the
\nobjection that since the proceedings under  Section  155  of
\nthe  Companies\tAct  was  summery  jurisdiction, the various
\npoints raised by the appellant-Company adjudication to which
\nrequires  detailed  evidence  to  be   led   including\t the
\nadjudication  of  the  various\tletters including forged one
\ncannot be gone into in these  proceeding  put  only  through
\ncivil suit.    Hence,  the  case  should be tried by a Civil
\ncourt.\tThus raised the objection about the  maintainability
\nof the\tpetition.  It is thereafter the learned Single Judge
\ndeferred recording  further  evidence.\t   After   extensive
\narguments  and\tconsidering  various authorities the Company
\nJudge following the Full Bench decision of  the\t Delhi\tHigh
\nCourt  in the very case of the appellant-Company reported in
\nAIR 1994 Delhi.\t 51 (F.B.) held that it is not\ta  fit\tcase
\nfor  exercising\t discretion  of\t the  Court for invoking the
\nsummary jurisdiction under Section 155 of the companies Act,
\non the facts and circumstances of this case and if  advised,
\nthe  appellant-Company\tcould  seek  his  remedy  by  filing
\nregular civil suit after seeking  permission  of  the  court
\nunder Section 446 (2) of the Companies Act.  The petition of
\nthe appellant-Company  was, therefore, dismissed.  On appeal
\nalso the Division Bench dismissed the appeal.\t Hence\tthis
\nspecial leave petition.\n<\/p>\n
Within the aforesaid matrix of\tfacts  the  question
\nraised is not something new but is what is being raised time
\nand  again  in the various High Courts including this Court.
\nThe question is, whether the jurisdiction of the court under
\nSection 155 of the Companies Act is summary in nature or  it
\nis  all\t encompassing to include all types of disputes to be
\nadjudicated exclusively\t by  the  court.    Learned   senior
\ncounsel\t for  the appellant contends that the aforesaid Full
\nBench of the Delhi High Court holds  it\t to  be\t summary  in
\nnature\tbased  on  the\tdecision  of this Court in the case,
\nPublic Passenger Service Ltd.  Vs.  M.A.Khadar\tand  Another
\n(1966 Companies Act  (Vol.  36) S.C.  Page 1) about which he
\nfeebly submitted to be in percuricum.\tIn  the\t alternative
\ncontention  is\tboth in the full Bench decision of the Delhi
\nHigh Court and decision of this Court  in  the\tcase  Public
\nPassenger Service Ltd.\t(Supra), notice was not drawn to the
\ndefinition  of\t‘Court’ as defined under Sec.2 (11) and Sec.
\n10 of the Companies Act.  If that would have been considered
\na different interpretation would have  followed.    If\tthat
\ndefinition  is\tread into Section 155 the ‘Court’ would only
\nbe a company judge and not Civil Court.\t Further, submission
\nis even if it could be said the jurisdiction  of  the  Court
\nunder  Section 155 is summary in nature, an applicant cannot
\nbe driven to file civil suit only because  one\traises\tsuch
\ndispute\t for  dispute  sake  to\t harass an applicant with an
\nobject to delay the proceedings.  The Court has\t to  examine
\nits sustainability  at\tleast prima facie.  By merely saying
\ncomplicated questions of fact and law are involved and there
\nbeing challenge of any document to be forged, a party should
\nnot be driven to file civil suit.  Even if such\t a  plea  is
\ntaken the court should scrutinise the objections to reach to
\na   prima   facie   finding  before  drawing  conclusion  of
\njurisdiction.  The  argument  is  various  documents  itself
\nprima facie prove the appellant having become shareholder of
\nthe  respondent-Company\t and  bare  perusal  of the document
\nshows it not being forged and  if  that\t be  so,  the  order
\ndirecting  the\tappellant to seek permission to file suit on
\nthe facts and circumstances of this case is not justified.
\nIn support that the court has exclusive jurisdiction
\nreliance is  placed  in\t Canara\t Bank  Vs.    Nuclear  Power
\nCorporation of India Ltd.  and Others.\t (1985\t(Vol.\t 58)
\nCompanies  Cases  Page\t633)  read  with  Section 2 (II) and
\nSection 10 of the Act.\tLearned counsel\t for  the  appellant
\ncontends,  these  decisions  in principle holds, the ‘Court’
\nexercising power under\tthe  Companies\tAct  have  exclusive
\njurisdiction  hence  the  ‘Court’ referred to in Section 155
\ncould  only  be\t  the\tcompany\t  judge\t  having   exclusive
\njurisdiction.\tHence,\tno matter under it could be sent for
\nadjudication to the civil court.  The learned  counsel\talso
\nreferred to  the  case in Indian Chemical Products Ltd.\t Vs.
\nState of Orissa and Another (1966 (Vol.\t 36) Companies cases
\nPage 592)  to  contend\tthat  this  jurisdiction  is  to  be
\nliberally exercised.\tHe  also  referred  to\tthe  case in
\nMadhusudan Gordhandas and Co.  Vs.  Madhu Woollen Industries
\nPvt.  Ltd.  (1972 (Vol.\t 42) Company cases  Page  125)\tthat
\nthe  exercise of discretion has to be within the permissible
\nparameters.  Strong reliance is placed\ton  the\t proviso  of
\nSub-Section(3) of Sec.\t38 of the Indian Companies Act, 1913
\n(hereinafter  referred\tto  as\t‘1913  Act’) under which the
\nCourt exercising power of rectification may direct an  issue
\nto  be tried by the civil court in which any question of law
\nis raised.  This section deals with  rectification  as\tSec.
\n155  of\t the Indian Companies Act of 1956 (as amended in the
\nyear 1960) (hereinafter referred to as ‘1960 Act’) to  which
\nthe present  case  is  concerned.   Since the proviso to the
\nsaid Sec.  38 was  deleted,  it\t is  urged  this  inevitably
\nindicates that Court need not refer any issue now.
\nAs  we\thave  said  above the interpretation of Sec.
\n155, viz., the rectification of the register  of  a  company
\nhas  come  umpteen time before various courts and in view of
\ndivergence of view full Bench of the Delhi  High  Court\t was
\nconstituted.\n<\/p>\n
\tWe  may\t also  notice  that by Companies (Amendment)
\nAct, 1988 S. 155 of the Act has been omitted from  the\tAct.
\nWith  effect  from 31st May, 1991 and now under Sec. 111 the
\npower to rectify the register of members of  a\tcompany\t has
\nbeen  vested  in  the Company Law Board. However, we are not
\nconcerned with this amendment.\n<\/p>\n
The remedy provided by S.  155 of the Act is summary
\nin  nature,  has  been the view of various High Courts (See:
\nSoma Vati Devi Chand V.\t Krishna Sugar Mills Ltd., AIR\t1966
\nPunjab 44;  There Dhelakhat Tea Co.  Ltd., Air 1957 Calcutta
\n476; Punjab Distilling Industries Ltd.\tV.   Biermans  Paper
\nCoating Mills  Ltd.    1973  (43)  Company Cases 189 (Delhi)
\n(DB); Public Trustee V.\t Rajeshwar Tyagi, 1973 (43)  Company
\nCases 371:   (AIR 1972 Delhi 302) (DB); Anil Gupta V.  Delhi
\nCloth and General Mills Co.  Ltd.  1983 (54)  Company  Cases
\n301; Vishnu  Dayal  Jhunjhunwalla  V.\tunion of India, 1989
\n(66) Company Cases 684 (Allahabad) (DB); Rao  Saheb  Manilal
\nGangaram Sindore V.  Messrs Western India Theatres Ltd.\t AIR
\n1963 Bombay 40.\n<\/p>\n
On the other hand a contrary view has been taken  by
\nthe   Gujarat  High  Court  in\tGulabrai  Kalidas  Naik\t Vs.
\nLaxmidas Lallubhai Patel, (1978 (48) Company Cases 432) when
\nit  is\theld  that  Section  155  does\tnot   indicate\t the
\njurisdiction  conferred by the Section is one hedged in with
\na condition that it can only be exercised when relief can be
\ngranted in summary manner, also\t by  Kerala  High  Court  in
\nMathew Michael Vs.  Teedoy Rubbers (Ubdual) Ltd., (1983 (54)
\nCompany\t  Cases\t  88)\tand   Madras   High  Court  in\tMrs.
\nE.V.Swaminathan Vs.  K.M.M.A.  Industries and roadways\tPvt.
\n(1993  (76)  Company  Cases  1).  In  order  to resolve this
\nconflict as aforesaid the Delhi High Court in  the  case  of
\npetitioner company relying on Public Passengers Service Ltd.
\n(Supra)\t held  that  the  jurisdiction\tof  the\t Court under
\nSection 155 is summary in nature.\n<\/p>\n
In Public  Passengers  Service\tLtd.  (supra),\tthis
\nCourt  held  by\t reasons  of its complexity or otherwise the
\nmatter can more conveniently be decided in a suit, the Court
\nmay refuse relief under Section 155 and relegate the parties
\nto a suit.\n<\/p>\n
Learned Counsel for  the  appellant  initially\tmade
\nfeeble\tsubmission as aforesaid to hold that the decision in
\nPublic Passenger Service  Ltd.\t  (supra)  case\t is  in\t per
\ncuriam.\t  We have no hesitation to reject such a submission.
\nThis issue  was\t directly  there  and  was  considered\twith
\nrespect\t to the interpretation of Section 155 and was a case
\nnot under 1913 Act but 1960  Act  hence\t by  no\t stretch  of
\nimagination  it\t could\tbe said that the said decision is in
\nper curiam.  Next submission is neither this  case  nor\t the
\nFull Bench of Delhi High Court considered Section 2 (II) and
\nSection 10 of this Act, if it would have been done different
\ninference would\t have  been  drawn.    The submission is the
\nexpression “the Court” used under Section 155 by  virtue  of
\ndefinition  of the Court as defined under Section 2(II) only
\nmeans Company court and not Civil court.  Similarly  Section
\n10  defines  jurisdiction  of the Court under this Act to be
\nthe High Court having jurisdiction for the  company  concern
\nexcept\tto the extent the jurisdiction has been conferred in
\nDistrict court subordinate with the  High  Court  and  where
\njurisdiction  has been conferred on District court the court
\nwould mean the District Court Hence  the  only\tCourt  which
\nwould have exclusive jurisdiction under Section 155 would be
\neither High Court or the District court, as the case may be,
\nby virtue  of  Section\t2(II)  and  Section  10.   For ready
\nreference Section 2(II) and Section 10 are quoted  hereunder
\n:-\n<\/p>\n
…\n<\/p>\n
\t   Section 2(II) :  “The Court means –\n<\/p>\n
\t   ————-\n<\/p>\n
\t   (a)With  respect to any matter relating to a
\n\t   company (other  than\t any  offence  against\tthis
\n\t   Act),  the  Court  having jurisdiction under this
\n\t   Act with respect to that matter relating to\tthat
\n\t   company, as provided in section 10;\n<\/p>\n
\t   (b)With  respect to any offence against this
\n\t   Act, the Court of a Magistrate of the First Class
\n\t   or, as the case may be, a Presidency\t Magistrate,
\n\t   having jurisdiction to try such offence;”
\n\t   S.10. “Jurisdiction of Courts. –\n<\/p>\n
\t   —-\n<\/p>\n
\t   (1)The  Court having jurisdiction under this
\n\t   Act shall be-\n<\/p>\n
\t   (a)the High\tCourt  having  jurisdiction  in
\n\t   relation  to\t the  place  at which the registered
\n\t   office  of  the  Company  concerned\tis  situate,
\n\t   except  to  the  extent to which jurisdiction has
\n\t   been conferred on any District Court or  District
\n\t   Courts subordinate to that High Court in\n<\/p>\n
\t   (b)pursuance of sub-section (2);\n<\/p>\n
\t   and\n<\/p>\n
\t   (c)where jurisdiction has been so conferred,
\n\t   the\tDistrict  Court in regard to matters falling
\n\t   within the scope of the  jurisdiction  conferred,
\n\t   in  respect\tof companies having their registered
\n\t   offices in the district.”\n<\/p>\n
He  also  relied  on the case of State of Orissa Vs.
\nIndian Chemical Product Ltd.  (AIR  1957  Oeissa  Page\t203)
\ndealing\t with  rectification  under  old  Section  38 of the
\nCompanies Act of 1930.\n<\/p>\n
Now we proceed to examine the  submissions  for\t the
\nappellant  in  the  light  of  various\taforesaid  decisions
\nreferred to by the  learned  counsel  keeping  in  mind\t the
\ninterpretation of “Court” in the Act.\n<\/p>\n
In  the\t case of Canara Bank (supra) the question of
\njurisdiction was tested inter set between  the\tCourt  under
\nthe   Special\tCourt\t(Trial\t of   Offences\tRelating  to
\nTransactions in Securities) Act, 1992 and  the\tCourt  under
\nthe Indian Companies Act:\n<\/p>\n
\t   “Having  regard to the enormity of the securities
\n\t   scam and its ramifications, Parliament thought it
\n\t   was necessary that  all  matters  in\t respect  of
\n\t   claims  arising out of transactions in securities
\n\t   entered into between the stated dates in which  a
\n\t   person  notified  was involved, should be brought
\n\t   before and tried by the same forum.\t That  forum
\n\t   had\tbeen  invested\twith the jurisdiction to try
\n\t   persons   accused   of   offences   relating\t  to
\n\t   transactions\t in  securities entered into between
\n\t   the stated dates.  It was also required  to\tgive
\n\t   directions to the custodian in regard to property
\n\t   belonging   to   persons   notified\twhich  stood
\n\t   attached under  the\tprovisions  of\tthe  Special
\n\t   Court Act.\t The  object of amending the Special
\n\t   Court Act.  The object of  amending\tthe  Special
\n\t   Court Act is to invest the Special Court with the
\n\t   power   and\tauthority  to  decide  civil  claims
\n\t   arising out of thrnsactions in securities entered
\n\t   into between the stated dates in which  a  person
\n\t   notified was\t involved.   In these circumstances,
\n\t   it is proper to attribute to the word “Court”  in
\n\t   section  9A (1) of the Special Court Act, not the
\n\t   narrower meaning of a court of  civil  judicature
\n\t   which  is  part  of\tthe  ordinary  hierarchy  of
\n\t   courts, but the broader meaning of a curial body,
\n\t   a body acting judicially to deal with matters and
\n\t   claims arising out of transactions in  securities
\n\t   entered  into between the stated dates in which a
\n\t   person notified is involved.\t  An  interpretation
\n\t   that\t suppresses  the  mischief  and advances the
\n\t   remedy must plainly be given,”.\n<\/p><\/blockquote>\n
\t   “The word “court” must  be  read  in\t the
\n\t   context in  which it is used in a statute.  It is
\n\t   permissible, given the context,  to\tread  it  as
\n\t   comprehending  the courts of civil judicature and
\n\t   courts  or\ttribunals   exercising\t curial\t  or
\n\t   judicial, powers.\tIn  the context in which the
\n\t   word “court” is used in section 9A of the Special
\n\t   Court (Trial of Offences Relating to Transactions
\n\t   in Securities) Act, 1992  ,\tit  is\tintended  to
\n\t   encompass  all  curial  or  judicial bodies which
\n\t   have jurisdiction to decide\tmatters\t or  claims,
\n\t   inter   alia\t  arising  out\tof  transactions  in
\n\t   securities entered into between the stated dates,
\n\t   in which a person notified is involved.”\n<\/p><\/blockquote>\n
The Court held that Company Law Board would not have
\njurisdiction to decide a petition under Section 111  of\t the
\nCompanies  Act,\t 1956  (as  amended  in the year 1988) where
\npersons notified under\tthe  Special  Court  Act,  1992\t are
\ninvolved.   In\tother words, all matters pertain to security
\nscam even in respect of matter covered by Section  111,\t the
\nSpecial Court  would  have  jurisdiction.   This case has no
\nrelevance for deciding the controversy in the present  case.
\nThis  decision\tholds  “the  word ‘court’must be read in the
\ncontext in which it is used in a statute”.\n<\/p>\n
Next  reliance was on the case in Sudarsan Chits (I)
\nLtd. (Supra). This was a case where on a petition by certain
\ncreditors, the appellant company was ordered to be  wound-up
\nby   the  Company  Judge  and  an  official  liquidator\t was
\nappointed. Pending appeals against this order  the  Division
\nBench  approved a scheme of arrangement and kept in abeyance
\nthe winding up order. During implementation of\tthis  scheme
\nan  application\t was  filed  before the Division Bench for a
\ndirection  to  the  provisional\t liquidator  to\t file  claim
\npetition  under\t Section 446 (2) of the Companies Act, 1956.
\nThis was rejected on the ground that it had no\tjurisdiction
\nto  entertain  such  a\tpetition  as there was no Winding up
\nproceedings either before the Company Judge or the  Division
\nBench. This Court held:\n<\/p>\n
\t   “That  the  winding\tup  order made by the company
\n\t   judge had not been quashed,\tset  aside  cancelled
\n\t   revoked or  recalled.    On\tthe  contrary,\tafter
\n\t   directing that the winding up order shall be\t held
\n\t   in  abeyance, the Division Bench directed that the
\n\t   official  liquidator\t shall\tcontinue  to  act  as
\n\t   provisional liquidator  as provided by s.  450 and
\n\t   that\t itself\t was  a\t stage\tin  the\t winding   up
\n\t   proceedings.\t  When\twinding\t up order was kept in
\n\t   abeyance,  it  was  in  a   state   of   suspended
\n\t   animation.\tThe  fact  that\t the  Division\tBench
\n\t   directed that, pending the implementation  of  the
\n\t   scheme  as  sanctioned  by  the  High  Court,  the
\n\t   winding up order will be kept in  abeyance  itself
\n\t   without  anything  more  showed that the order was
\n\t   neither cancelled nor recalled not revoked not set
\n\t   aside.    It\t  continued   to   exist   but\t  was
\n\t   inoperative….   Therefore,\t the winding up order
\n\t   was effectively subsisting but inoperative for the
\n\t   time being….  If the winding up order was merely
\n\t   held in abeyance, i.e., it was not  operative  for
\n\t   the\ttime  being,  but it had not ceased to exist,
\n\t   the winding up proceedings were  in\tfact  pending
\n\t   and\tthe  court  which  made\t the winding up order
\n\t   would be  the  court\t which\twas  winding  up  the
\n\t   company.   It  was  well-settled that a winding up
\n\t   order once made could be revoked or\trecalled  but
\n\t   till\t it  was revoked or recalled, it continued to
\n\t   subsist.  That was the situation in this case.  If
\n\t   the winding up order was subsisting.\t   the\tcourt
\n\t   which  made\tthat order to the court which kept it
\n\t   in  abeyance\t would\thave  jurisdiction  to\t five
\n\t   necessary directions to the provisional liquidator
\n\t   to take recourse to Section 446 (2).”\n<\/p><\/blockquote>\n
The question was whether the  Division\tBench,\twhich
\nwas  monitoring\t the scheme after winding up order would have
\njurisdiction to pass an order for a direction to the official
\nliquidator when the winding-up order was  kept\tin  abeyance?
\nThe High  Court held that it has no jurisdiction.  This Court
\nrejected this and held when  winding-up\t order\twas  not  set
\naside,\tquashed, cancelled or revoked the court which kept in
\nabeyance the winding-up order would have jurisdiction to give
\nnecessary directions.  In the present case, as aforesaid, the
\nquestion is the scope and the width of\tthe  jurisdiction  of
\n‘Court’\t keeping  abeyance the winding-up order would have or
\nnot the jurisdiction to direct\tthe  applicant\tto  seek  his
\nremedy under Section 446 (2).\n<\/p>\n
Before\twe  come back to Section 155, since appellant
\nalso submitted the Company Judge should\t himself  decide  the
\nrelief\tunder  Section\t446 (2) having exclusive jurisdiction
\ninstead of sending it to the civil court.   For\t this  it  is
\nnecessary  to  refer  to the short background of Section 446.
\nEarlier under section 171 of the Indian Companies  Act,\t 1913
\nthere was  no  similar provision as Section 446 (2).  It only
\nprovided no suits or proceedings pending  could\t proceed  nor
\nfresh suit  could  be filed without leave of the Court.\t This
\nprovision was re-enacted with little modifications in section
\n446 (1).  After winding up order  a  company  may  have\t many
\nsubsisting  claims and in order to recover it, he may have to
\nfile suits.  It is to  avoid  this  eventuality\t for  a\t long
\narduous\t procedure before the civil Court the jurisdiction of
\nthe  Company  Judge  was  enlarged  even  to  entertain\t such
\npetition for  recovering  the  claims  of  the\tCompany.  The
\npurpose of various amendments brought in the Companies Act is
\nto centralise as far as possible all proceedings to the Court
\ncreated under this act for adjudication\t of  various  claims.
\nIt is in this background Section 446(2) was brought in, based
\non the recommendation of Company Law Committee Report through
\nan amendment  of the Companies(Amendment) Act, 1969.  In this
\nbackground the Sudarshan Chit (I)Ltd.  (supra) holds:\n<\/p>\n
\t  “Sub-section (2) of S. 446 confers jurisdiction on
\n\t   the court which  is\twinding\t up  the  company  to
\n\t   entertain  and  dispose  of proceedings set out in
\n\t   cls. (a) to (d). The expression  “court  which  is
\n\t   winding  up the company” will comprehend the court
\n\t   before which a winding up petition is  pending  or
\n\t   which  has  made  an\t order\tfor winding up of the
\n\t   company and further\twinding\t up  proceedings  are
\n\t   continued  under  its  directions.  Undoubtedly, a
\n\t   look at the language of s. 446 (1) and (2) and its
\n\t   setting in Part VII, which deals with  winding  up
\n\t   proceedings,\t  would\t  clearly   show   that\t  the
\n\t   jurisdiction of the court to entertain and dispose
\n\t   of proceedings set out in sub-cls. (a) to  (d)  of
\n\t   sub-s.  (2)\tcan  be invoked in the court which is
\n\t   winding up the company.”\n<\/p><\/blockquote>\n
The  appellate\tBench  in  this\t  case\t held\tsince
\nwinding-up  proceeding in respect of the appellant-Company is
\nno more pending and there is no Court which could be said  to
\nbe  the\t Court\tof  winding  up of the company thus the claim
\npetition on behalf of the company which is not being wound-up
\nis not contemplated under Section 44l (2).  This decision and
\ndecision in  Canara  Bank  (supra)  rejected  the  restricted
\nmeaning\t given\tby  the\t High  Court of the expression “court
\nwhich is winding up the company”.  Hence to this extent there
\ncould be no doubt, a Company under liquidation falling\tunder
\nSec.   446  (2), the Company judge alone would have exclusive
\njurisdiction to decide matter covered by it.
\nNow reverting to the submission to read definition of
\n‘Court’ as defined under Section 2 (11) read with Section  10
\nwith  the  word\t ‘Court’  used\tunder Section 155, whether it
\nwould  result  into  any  different  interpretation  to\t lend
\nsupport\t  to  the  submission  of  learned  counsel  for  the
\nappellant? Submission of learned counsel for  the  appellant?
\nSubmission  is\tthe word ‘court’ under section 155 would only
\nmean  Company  Judge  and  he  alone  would  have   exclusive
\njurisdiction  while  exercising\t powers\t under\tthis section,
\nhence any direction to seek leave of the court under  Section
\n446 (2) for filling suit cannot be sustained.
\nFirst the scope of Section 155 and Section 446 to  be
\nunderstood to  be  entirely in different fields.  Section 155
\ndeals with power of the Court to rectify register of  members
\nmaintained by a Company.  Section 441 deals with commencement
\nof winding-up by the Court.  Section 442 deals with the power
\nof  the\t Court\tto  stay  or restrain proceedings against the
\ncompany, at any stage after the petition for  winding  up  is
\nfiled but before a winding-up order is made.  A creditor or a
\ncompany may apply to the Court having jurisdiction to wind-up
\nthe  company to restrain all further proceedings in any suits
\nor proceedings against the Company.  Section 143  deals\t with
\npowers\tof  Court to hear such petition, Section 444 entrusts
\nthe Court after the winding up order to communicate the\t same
\nto the\tofficial Liquidator.  Section 445 directs that a copy
\nof the winding up order to be filed with the Registrar.\t Then
\ncomes Section 446.  Sub-section (1) is after winding up order
\nhas  been  passed  or  the  official  liquidator   has\t been
\nappointed, it puts an embargo on any suit to be instituted or
\nif  pending  against the company on that date to be proceeded
\nwith except with the leave of the Court.  Use of  the  words,
\nno suit…’  shall be commenced ‘….  proceeded with…….’
\nexcept by leave of the\tcourt…….”  spells  out  that  the
\njurisdiction  of  the civil court is not ousted to adjudicate
\nmatter between the parties but embargo is to be controlled at
\nthe discretion of the Company Judge, depending on  the\tfacts
\nof each\t case.\t  Then\tcomes Section 446 (2) under which the
\nCourt is invested  with\t the  jurisdiction  to\tentertain  or
\ndispose\t of any suit or proceeding by or against the company.
\nSo Section 446 deals with cases of the company under  winding
\nup while Section 155 deals with both classes of companies one
\nunder winding up and other not under winding-up.
\nNow  we\t proceed to examine the power of the Court to
\nrectify the register of members of a  company  under  Section\n<\/p>\n
155.  The question raised for the appellant is that the Court
\nunder  this Act cannot direct an applicant to seek his remedy
\nby was of suit but the Court under the Act  having  exclusive
\njurisdiction should   decide  itself.\t In  support,  strong
\nreliance is placed on the deletion of proviso to  Section  38
\nof the\t1913  Act.    Section  38  of  the  old Act is quoted
\nhereunder:\n<\/p>\n
\t   “38. Power of Court to rectify register. – (1) If-\n<\/p><\/blockquote>\n
\t   (a)\tthe name of any\t person\t is  fraudulently  or
\n\t   without  sufficient\tcause  entered\tin or omitted
\n\t   from their Register of members of a company; or in
\n\t   the\tmanner\tdirected  by  the   code   of\tCivil
\n\t   Procedure, 1908 (V of\n<\/p><\/blockquote>\n
\t   (b) default is made\tor  unnecessary\t delay\ttakes
\n\t   place  in entering on the register the fact of any
\n\t   person having ceased to be a member,
\n\t   the\tperson\taggrieved,  or\tany  member  of\t  the
\n\t   company,  or\t the  company, may apply to the Court
\n\t   for rectification of the register.\n<\/p><\/blockquote>\n
\t   (2)\tThe Court may either refuse the\t application,
\n\t   or  may  order  rectification  of the register and
\n\t   payment by the company of any damages sustained by
\n\t   any party aggrieved, and mayb make such  order  as
\n\t   to  costs  as  it  in  its  discretion thinks fit.
\n\t   1908), on the grounds mentioned in section 100  of
\n\t   that Code.”\n<\/p><\/blockquote>\n
The proviso gave discretion to the Court to direct an
\nissue of law to be tried,  if  raised.\t  By  this  deletion,
\nsubmission is that the Company Court now itself has to decide
\nany  question  relating\t to the rectification of the register
\nincluding the law and not to send one  to  the\tcivil  court.
\nThere  could  be  no  doubt  any  question  raised within the
\nperipheral field of rectification,  it\tis  the\t Court\tunder
\nSection\t 155  alone  which would have exclusive jurisdiction.
\nHowever, the question raised does not rest here.  In case any
\nclaim is based on some seriously  disputed  civil  rights  or
\ntitle,\tdenial\tof  any\t transaction or any other basic facts
\nwhich may be the foundation to claim a right to be  a  member
\nand if the Court feels such claim does not constitute to be a
\nrectification  but  instead  seeking  adjudication  of\tbasic
\npillar some such facts falling outside the rectification, its
\ndiscretion to send a party to seek his\trelief\tbefore\tcivil
\ncourt  first for the adjudication of such facts, it cannot be
\nsaid such right of the court to have been taken\t away  merely
\non   account  of  the  deletion\t of  the  aforesaid  proviso.
\nOtherwise under the garb of rectification one may  lay\tclaim
\nof  many such contentious issues for adjudication not falling
\nunder it.  Thus in  other  words,  the\tcourt  under  it  has
\ndiscretion  to find whether the dispute raised are really for
\nrectification or is of such a nature, unless decided first it
\nwould not came within the purview of rectification.  The word
\nrectification’ itself connotes some error which has crept  in
\nrequiring correction.\t Error would only means everything as
\nrequired under the law has been done yet by some mistake  the
\nname  is either committed or wrongly recorded in the register
\nof the Company.\t In T.P.    Mukherjee’s\t Law  Lexicon,\tfifth
\nrevised edn;\n<\/p>\n
\t \u00ef”The expression rectification of the register used
\n\t   in\tSec.   155   is\t significant  and  purposeful.
\n\t   ‘Rectification’ implies the correctness of an error
\n\t   or removal of defects or imperfections. It  implies
\n\t   prior   existence   of  error,  mistake  or\tdefect
\n\t   ……… the register kept by the Company  has  to
\n\t   be shown to be wrong or defective”.\n<\/p>\n
\t   Strounds judicial Dictionary;\n<\/p>\n
\t   —————————–\n<\/p>\n
\t   “Rectify – Altering the register of a company so as
\n\t   to make it conformable with a lawful transfer”
\n\t   In Venkataramaiya’s Law Lexicon, 2nd Edn;
\n\t   “The act to\tbe  done  under\t the  powers  of  that
\n\t   Section  is\tthe  ‘rectification of the register, a
\n\t   term which itself implies that the register, either
\n\t   in what is or what is not upon it,  is  wrong;  but
\n\t   the\tregister cannot be wrong unless there has been
\n\t   a failure on the part of the company to comply with
\n\t   the directions  in  the  Act\t as  to\t the  kind  of
\n\t   register  to\t be  kept:  for\t if  the  Act has been
\n\t   complied with, the register must be right  and  not
\n\t   wrong.”\n<\/p>\n
In other words, in order to qualify for rectification,
\nevery procedure as prescribed under the Companies  Act\tbefore
\nrecording  the\tname  in the register of the company has to be
\nstated to have been complied with by the  applicant  at\t least
\nthat  part  as\trequired  by the Act and assertion of what not
\ncomplied with  under  the  Act\tand  rule  by  the  person  or
\nauthority  of the respondent company before applicant to claim
\nfor the rectification of such register.\t   The\tCourt  has  to
\nexamine\t on  the facts of each case, whether an application is
\nfor rectification or something else.  So field\tor  peripheral
\njurisdiction  of  the Court under it would be what comes under
\nrectification  not  projected  claims  under   the   garb   of
\nrectification.\t So  far exercising of power for rectification
\nwithin its field there could be no doubt the Court as referred
\nunder Section 155 read with Section 2(11) and Section  10,  it
\nis  the\t Company Court alone which has exclusive jurisdiction.
\nSimilarly, under Section 446 the ‘Court’ refers to the Company
\njudge which has exclusive jurisdiction to decide matters  what
\nis covered  under  it  by  itself.   But this does not mean by
\ninterpreting such ‘court’  having  exclusive  jurisdiction  to
\ninclude within it what is not covered under it, merely because
\nit  is\tcloaked\t under the nomenclature rectification does not
\nmean court cannot see the substance after removing the cloak.
\nQuestion for scrutiny  before  us  is  the  peripheral
\nfield  within  which court could exercise its jurisdiction for
\nrectification. As  aforesaid  the  very\t word  “rectification”
\nconnotes  something  what ought to have been done but by error
\nnot done and what  ought  not  to  have\t been  done  was  done
\nrequiring  correction.\tRectification  in  other words, is the
\nfailure on  the\t part  of  the\tcompany\t to  comply  with  the
\ndirections  under the Act. To show this error the burden is on
\nthe applicant, and  to\tthis  extent  any  matter  or  dispute
\nbetween\t persons  raised in such Court it may generally decide
\nany matter which  is  necessary\t or  expedient\tto  decide  in
\nconnection with the rectification.\n<\/p>\n
Both under the 1913 Act and 1960 Act  a\t procedure  is
\nprescribed  for\t admitting  a  person as member by purchase or
\ntransfer of shares of that company.  With  reference  to  1913
\nAct  under  Section 29, a certificate of shares or stock shall
\nbe prima facie evidence of the title  of  the  number  of  the
\nshares or  stock  therein.   Section 30 defines “member” to be
\none who agrees to become a member of a company and whose  name
\nis entered in its register.  Section 31 is to keep register of
\nits members.\tSection\t 34  deals with transfer of shares and
\napplication for the registration of the transfer of shares  is
\nto be  made either by the transferor or the transferee.\t Where
\nsuch application is made by the transferor for registration of
\nhis share a registered notice is to be sent to the transferee.
\nSection 34 (3) restricts to register a\ttransfer  share\t until
\nthe  instrument\t of  transfer duly stamped and executed by the
\ntransferor and transferee has been delivered to\t the  company.
\nThus  before  the  name\t of any transferee is registered these
\nprocedure has to be shown to have been followed, which\tis  an
\nobligation of any such applicant under the Act.\t This shows an
\napplication  is\t to  be\t made  either  by  the\ttransferor  or
\ntransferee for registering  the\t name  of  the\ttransferee  as
\nmembers\t or share holders of the company by placing before the
\ncompany\t duly  stamped\tand  signed  document  both   by   the
\ntransferor and\ttransferee.    Similarly is the position under
\nSection 155 of Indian Companies\t Act,  1960  before  power  is
\nexercised  for\trectification  essential  ingredients  are  to
\nexist.\tSection 100 gives mandate to a company not to register
\ntransfer of shares, unless proper instrument of transfer  duly
\nstamped\t and  executed\tby  or on behalf of the transferee has
\nbeen delivered to the company along with certificates relating
\nto the shares.\n<\/p>\n
All  the  above\t indicates  the\t limitation  and   the
\nperipheral  jurisdiction with which court has to act. In spite
\nof its exclusiveness it cannot take  within  its  lap  outside
\nthis  scope  of\t rectification. This is indicated even by Sec.
\n155 itself:\n<\/p>\n
 “Section 155 : Power of Court to rectify  register  of
\nmembers\n<\/p>\n
1)If –\n<\/p>\n
a)the name of any person –\n<\/p>\n
i)is  without  sufficient cause, entered in the register
\nof members of a company, or\n<\/p>\n
ii)after having been entered in the register, is  without
\nsufficient cause, omitted therefrom; or\n<\/p>\n
b)default  is made, or unnecessary delay takes place, in
\nentering on the register the fact of any person having become,
\nor ceased to be a member;\n<\/p>\n
the person aggrieved, or any member of the company, or
\nthe company, may apply to the Court for rectification  of  the
\nregister.\n<\/p>\n
Sub-section  (1)  (a)  of Section 155 refers to a case
\nwhere the name of any person without sufficient cause  entered
\nor omitted  in the register of members of a company.  The work
\n‘sufficient cause’ is to be tested in relation to the Act  and
\nthe Rules.   Without sufficient cause entered or omitted to be
\nentered means done or omitted to do in\tcontradiction  of  the
\nAct  and  the  Rules or what ought to have been done under the
\nAct and the Rules but not done.\t Reading  of  this  sub-clause
\nspells\tout  the  limitation  under  which  the\t court\thas to
\nexercise its jurisdiction.  It cannot be doubted in  spite  of
\nexclusiveness\tto   decide   all  matter  pertaining  to  the
\nrectification it has to act within the said four  corners  and
\nadjudication of such matter cannot be doubted to be summary in
\nnature.\t  So,  whenever\t a  question  is  raised  court has to
\nadjudicate on the facts and circumstance of each case.\tIf  it
\ntruly  is  rectification  all matter raised in that connection
\nshould be decided by the court under Sec.  155 and if it finds
\nadjudication of any matter not falling under it, it may direct
\na party to get his right adjudicated by civil court.\tUnless
\njurisdiction   is  expressly  or  implicitly  barred  under  a
\nstatute, for violation or redress  of  any  such  right\t civil
\ncourt would  have  jurisdiction.    There is nothing under the
\nCompanies Act expressly barring the jurisdiction of the\t civil
\ncourt,\tbut  the  jurisdiction of the ‘court’ as defined under
\nthe Act exercising its powers under various sections where  it
\nhas been   invested.\t  with\t exclusive  jurisdiction,  the
\njurisdiction of the civil court is impliedly barred.  We  have
\nalready\t held above the jurisdiction of the ‘court’ under Sec.
\n155, to the extent it has exclusive, the jurisdiction of civil
\ncourt is impliedly  barred.    For  what  is  not  covered  as
\naforesaid the  civil court would have jurisdiction.  Similarly
\nwe find even under Sec.\t  446(1)  its  words  itself  indicate
\njurisdiction of civil court is not excluded.  This sub section
\nstates, ‘………..\tno  suit or legal proceedings shall be
\ncommenced ………  or proceeded  with\t …….    except  by
\nleave of the court’.  The words ‘except by leave of the court’
\nitself\tindicate  on  leave  being given the civil court would
\nhave jurisdiction  to  adjudicate  one’s  right.    Of\tcourse
\ndiscretion  to\texercise  such\tpower  is  with\t the  ‘court’.
\nSimilarly under Sec.  446(2) ‘court’ is vested with powers  to
\nentertain  or dispose of any suit or proceedings by or against
\nthe company.  Once this discretion is  exercised  to  have  it
\ndecided\t by  it, it by virtue of language therein excludes the
\njurisdiction of the civil court.  So we conclude the principle
\nof law as decided by the High Court that jurisdiction of Court
\nunder Section 155 is summary  in  nature  cannot  be  faulted.
\nReverting  to the second limb of submission by learned counsel
\nfor the appellant that court  should  bot  have\t directed  for
\nseeking\t permission  to\t file  suit  only  because a party for
\ndispute sake states that the  dispute  raised  is  complicated
\nquestion of  facts  including  fraud  to  be adjudicated.  The
\nCourt should have examined itself to see  whether  even\t prima
\nfacie what  is\tsaid  is  complicated  question\t or not.  Even
\ndispute of fraud, if by bare perusal of the document  or  what
\nis  apparent  on  the face of it on comparison of any disputed
\nsignature with that of the admitted  signature\tthe  Court  is
\nable  to  conclude  no fraud, then it should proceed to decide
\nthe matter and not reject it only  because  fraud  is  stated.
\nFurther\t on  the other hand learned counsel for the respondent
\ntotally\t denies\t any  share  having  been  purchased  by   the
\nappellant-company or  any  amount  paid to it.\tNo transfer of
\nany such share was ever approved by the Board of Director.  It
\nis urged the money even if advanced to Sri V.K.Bhargava by the
\nappellant-company if at all was a private transaction  between
\nthe two\t to  which  respondent-company\thas no concern.\t So we
\nfind there is total denial by the respondent.
\nWe have gone through the judgment of the  High\tCourt.
\nIt  has rightly held the law pertaining to the jurisdiction of
\n‘court’ under Sec.  155 and  even  referred  to\t some  of  the
\ndocuments  of  the  appellant  but  concluded  since  they are
\ndisputed and said to be\t forged\t hence\tdirected  for  seeding
\nleave if  advised  for\tsuit.\t We  feel  it  would have been
\nappropriate if the court would have seen  for  itself  whether
\nthese documents are disputed and any document is alleged to be
\nforged\twhether\t it  said  to  be so jurisdiction of the civil
\ncourt.\tSo we conclude the principle of law as decided by  the
\nHigh  Court  that  jurisdiction\t of Court under Section 155 is
\nsummary in nature cannot be faulted.  reverting to the\tsecond
\nlimb  of  submission by learned counsel for the appellant that
\ncourt should not have directed for seeking permission to  file
\nsuit  only  because  a\tparty for dispute sake states that the
\ndispute raised is  complicated\tquestion  of  facts  including
\nfraud to  be  adjudicated.    The  court  should have examined
\nitself to see  whether\teven  prime  facie  what  is  said  is
\ncomplicated question  or  not.\t  Even dispute of fraud, if by
\nbare perusal of the document or what is apparent on  the  face
\nof it on comparison of any disputed signature with that of the
\nadmitted  signature  the  Court\t is able to conclude no fraud,
\nthen it should proceed to decide the matter and not reject  it
\nonly because  fraud  is\t stated.    Further  on the other hand
\nlearned counsel for the respondent totally  denies  any\t share
\nhaving\tbeen  purchased by the appellant-company or any amount
\npaid to it.  No transfer of any such share was\tever  approved
\nby the\tBoard  of  Director.\tIt  is urged the money even if
\nadvanced to Sri V.K.Bhargava by the appellant-company,\tif  at
\nall  was  a  private  transaction  between  the\t two  to which
\nrespondent-company has no concern.  So we find there is\t total
\ndenial by the respondent.\n<\/p>\n
We  have  gone through the judgment of the High Court.
\nIt has rightly held the law pertaining to the jurisdiction  of
\n‘court’\t under\tSec.  155  and\teven  referred\tto some of the
\ndocuments of  the  appellant  but  concluded  since  they  are
\ndisputed  and  said  to\t be  forged hence directed for seeking
\nleave if  advised  for\tsuit.  We  feel\t it  would  have  been
\nappropriate  if\t the  court would have seen for itself whether
\nthese documents are disputed and any document is alleged to be
\nforged\twhether\t it  said  to  be  so  only  to\t exclude   the
\njurisdiction  of the court or it is genuinely so. Similarly we
\nfeel appropriate while deciding this  the  court  should  take
\ninto   consideration  the  submissions\tfor  the  respondents,
\nwhether it would come within the scope of rectification or not
\nin the light of\t what we have said above.\n<\/p>\n
Since the High Court has not examined this case in the
\naforesaid  light,  we  feel  it appropriate to direct the High
\nCourt to decide this question in the light  of\twhat  we  have
\nsaid afresh, without prejudice to any party of any observation
\nmade by\t us above.  In case High Court comes to the conclusion
\nthat any issue raised does not come within Sec.\t 155  then  we
\nfeel  it  appropriate  on  the facts and circumstances of this
\ncase, as it is pending since 1984, that High  Court  exercises
\nits  discretion\t under Sec.446(2) to get it adjudicated by the
\ncourt (Company Judge) itself instead of sending\t back  to  the
\ncivil to which we order.\n<\/p>\n
With the  aforesaid  findings  the  appeal  is\tpartly
\nallowed. Costs on the parties.<\/p>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India M\/S Ammonia Supplies … vs M\/S Modern Plastic Containers … on 4 September, 1998 Author: Misra Bench: G.B.Pattanaik, A.P. Misra PETITIONER: M\/S AMMONIA SUPPLIES CORPORATION(P)LTD. Vs. RESPONDENT: M\/S MODERN PLASTIC CONTAINERS PVT.LTD.& ORS. DATE OF JUDGMENT: 04\/09\/1998 BENCH: G.B.PATTANAIK, A.P. MISRA ACT: HEADNOTE: JUDGMENT: JUDGMENT MISRA, J. The present appeal arises […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-129394","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nM\/S Ammonia Supplies ... vs M\/S Modern Plastic Containers ... on 4 September, 1998 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/ms-ammonia-supplies-vs-ms-modern-plastic-containers-on-4-september-1998\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"M\/S Ammonia Supplies ... vs M\/S Modern Plastic Containers ... on 4 September, 1998 - 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