Section 125 CrPC: Unmarried Daughter Can Claim Maintenance From Father: Madras High Court

It has to be acknowledged right at the outset that in a latest, landmark and laudable judgment titled R Kiruba Kanmani Vs L Rajan in Crl. O.P. No. 15336 of 2019 delivered on June 17, 2019, the Madras High Court has very rightly held that unmarried daughter can claim maintenance from her father by filing petition under Section 125 of Code of Criminal Procedure. It must be informed here that the Criminal Original petition was filed under Section 482 of Code of Criminal Procedure by petitioner to set aside the order dated 02.04.2019 passed in MC SR. No. 185 of 2019 on the file of Principal Judge, Family Court, Chennai. The father is bound to maintain his unmarried daughter and this is what the Madras High Court has minced no words in making it absolutely clear.

                                          To start with, it is first and foremost pointed out in this noteworthy judgment authored by Justice N Anand Venkatesh of Madras High Court that, “This petition has been filed challenging the order of the Court below rejecting the petition filed by the petitioner under Section 125 of Cr PC seeking for monthly maintenance from the respondent, who is the father of the petitioner.” Para 2 then spells out that, “The petitioner who is aged about 18 years is the unmarried daughter of the respondent and she has sought for maintenance from the respondent father on the ground that she is not in a position to take care of the expenses incurred by her towards her education.” So it is certainly the duty of the father to maintain her unmarried daughter who is unable to sustain herself.

                                      To be sure, it is then revealed in para 3 that, “The Court below has rejected the petition mainly on the ground that the petitioner is a major and that in terms of Section 125 (1) (b) and (c) of Cr PC, the petitioner is not entitled for any maintenance and that she does not suffer from any physical or mental disablement.”

                             As it turned out, it is then pointed out in para 4 that, “Mr. Sharath Chandran, learned counsel for the petitioner submitted that the Court below has completely misdirected itself in rejecting the petition and that the order of the Court below is opposed to settled principles of law. The learned counsel for the petitioner further submitted that a combined reading of Section 125 of Cr PC and Section 20(3) of the Hindu Adoption and Maintenance Act makes it very clear that a father is under an obligation to maintain his unmarried daughter even if she has attained majority.”

                                   More to the point, the learned counsel for the petitioner then in order to substantiate his arguments cited many relevant portions of different judgments which are enumerated in detail in para 5. Let us discuss some of them in brief here.

i [Noor Saba Khatoon Vs. Mohammed Quasim] reported in 1997 6 SCC 323

10. Thus, both under the personal law and the statutory law (Section 125 Cr PC) the obligation of a Muslim father, having sufficient means, to maintain his minor children, unable to maintain themselves, till they attain majority and in case of females till they get married, is absolute, notwithstanding the fact that the minor children are living with the divorced wife.

11. Thus, our answer to the question posed in the earlier part of the opinion is that the children of Muslim parents are entitled to claim maintenance under Section 125 Cr PC for the period till they attain majority or are able to maintain themselves, whichever is earlier and in case of females, till they get married, and this right is not restricted, affected or controlled by the divorced wife’s right to claim maintenance for maintaining the infant child/children in her custody for a period of two years from the date of birth of the child of the 1986 Act. In other words Section 3(1)(b) of the 1986 Act does not in any way affect the rights of the minor children of divorced Muslim parents to claim maintenance from their father under Section 125 Cr PC till they attain majority or are able to maintain themselves, or in the case of females, till they are married.

12. It, therefore, follows that the learned trial court was perfectly right in directing the payment of amount of maintenance to each of the three children as per the order dated 19-1-1993 and the learned 2nd Additional Sessions Judge also committed no error in dismissing the revision petition filed by the respondent. The High Court, on the other hand, fell in complete error in holding that the right to claim maintenance of the children under Section 125 Cr PC was taken away and superseded by Section 3(1)(b) of the 1986 Act and that maintenance was payable to the minor children of Muslim parents only for a period of two years from the date of the birth of the child concerned notwithstanding the provisions of Section 125 Cr PC. The order of the High Court cannot, therefore, be sustained. It is accordingly set aside. The order of the trial court and the revisional court is restored. This appeal succeeds and is allowed but without any orders as to cost.

ii [Jagdish Jugtawat Vs. Manju Lata and others] reported in 2002 5 SCC 422

4. Applying the principle to the facts and circumstances of the case in hand, it is manifest that the right of a minor girl for maintenance from parents after attaining majority till her marriage is recognized in Section 20(3) of the Hindu Adoptions and Maintenance Act. Therefore, no exception can be taken to the judgment/order passed by the learned Single Judge for maintaining the order passed by the Family Court which is based on a combined reading of Section 125 Cr PC and Section 20(3) of the Hindu Adoptions and Maintenance Act. For the reasons afore-stated we are of the view that on facts and in the circumstances of the case no interference with the impugned judgment/order of the High Court is called for.

iii. [Mansi Vohra Vs Ramesh Vohra] reported in 2012 SCC online Del 5835

6. This Court is also of the opinion that even in Jagdish Jugtawat (supra), the Supreme Court has held that maintenance petition filed by the major daughter even if she does not fall in one of the exceptions mentioned in Section 125(1)(c) Cr PC, would be still maintainable on a combined reading of both Sections 125 Cr PC and Section 20(3) of Hindu Adoptions and Maintenance Act, 1956.

7. Moreover, to ask the petitioner to now file an independent petition before the Family Court under Section 20(3) of Hindu Adoptions and Maintenance Act, 1956 would not only cause her inconvenience but would also defeat her right to claim maintenance for the period Section 125 Cr PC proceeding was pending before the Metropolitan Magistrate. Such an interpretation would, in certain cases where both sections clearly overlap, create multiplicity of litigation.

iv. [T. Vimala and others Vs. S Ramakrishnan] reported in 2016 SCC Online Mad 12324

10. No doubt, Section 125 Cr PC is not happily worded, since it has prescribed certain riders for a daughter or son who has attained majority to claim maintenance from their father. They must establish that they are under physical disability or they are suffering out of injury. There may be cases, where a daughter or a son, even after having attained majority, may not have sufficient financial capacity to maintain themselves and they continue to need the support of their father. This is a reality of the situation. But, the Court cannot simply put the blame on the draftsman. Court must interpret the law. It should advance the cause of justice. That will be march of law.

11. In Jagdish Jugtawat v. Manju Lata [(2002) 5 SCC 422] exactly, as in our case, it was argued before the Hon’ble Supreme Court that the daughter having attained majority and as it has not been established that she is suffering out of any physical disability or injury, she is not entitled to maintenance from her father. The Hon’ble Supreme Court noticing the phraseology employed in Section 125 Cr PC encountered a difficult situation. However, in its zeal to advance the scheme of social justice incorporated in Section 125 Cr PC and to protect a daughter, who has attained majority, but who does not suffer any physical disability, the Hon’ble Supreme Court called in aid Section 20 of the Hindu Adoption and Maintenance Act and held that although in view of the rider attached to a daughter, who attained majority, she may not be eligible for maintenance under Section 20 of the Hindu Adoption and Maintenance Act from her father and thus maintained the maintenance order passed in her favour under Section 125 Cr PC.

12. Exactly, similar is the situation before us. The said Apex decision was not brought to the notice of the learned Principal Sessions Judge, Dindigul. Had it was produced, the thinking of the learned Principal Sessions Judge, Dindigul would have been different. So, in such view of the matter, scraping of maintenance granted to the second daughter on account of her attaining majority and her inability to establish physical disability is to be set aside.

v. [Agnes Lily Irudaya Vs. Irudaya Kani Arasan] reported in 2018 SCC Online Bom 617

12. From the afore-stated position, it is clear that the unmarried daughter though attained majority is entitled to claim maintenance from the father.

                                    In hindsight, it is then held in para 6 of this judgment after considering all these relevant judgments that, “It is very clear from the above judgments that even though Section 125 restricts the payment of maintenance to the children till they attain majority, when it comes to the daughter, Courts have taken a consistent stand that even though the daughter has attained majority, she will be entitled for maintenance till she remains unmarried by virtue of Section 20(3) of the Hindu Adoption and Maintenance Act, 1956. In order to avoid multiplicity of proceedings, the Courts have taken a consistent stand that the petition under Section 125 of Cr PC can be entertained without pushing her to file an independent petition seeking for maintenance under Section 20(3) of the Hindu Adoption and Maintenance Act, 1956.”

                                        While continuing in the same vein, it is then held in para 7 that, “That apart, the Hon’ble Supreme Court has also held that mental injury is nothing but malice in law which can be gathered on the basis of violation of a legal right to claim maintenance vested under any law for the time being in force including Section 125 of Cr PC. If the right to claim maintenance of the daughter is infringed, definitely it can be called as a injury which can very well be fit into the definition of mental injury.”

                               More crucially, it is then held in para 8 that, “The Court below has not taken into consideration the march of law that has taken place by virtue of the above judgments and had committed an error by rejecting the petition at the threshold on the ground of maintainability and the same requires interference by this Court in exercise of its jurisdiction under Section 482 of Cr PC.”

                         Finally and perhaps most crucially, it is then held in the last para 9 that, “This Criminal Original Petition is allowed and the order passed by the Court below dated 02.04.2019 is hereby set aside. The petitioner is directed to represent the petition before the Court below and the Court below shall proceed to number the petition and thereafter deal with the same in accordance with law. The Registry is directed to handover the original maintenance petition filed before this Court to the learned counsel for the petitioner by retaining the copy of the same in order to enable the petitioner to represent the petition before the Court below.”

                                     In conclusion, it can well be said that the Madras High Court has minced just no words in making it absolutely clear that unmarried daughter can certainly claim maintenance from her father under Section 125 of Cr PC. The Court has also elegantly and aptly cited relevant judgments of the Apex Court and different High Courts to substantiate this. All such relevant judgments do underscore clearly that a daughter who is unmarried can claim maintenance by virtue of Section 20(3) of the Hindu Adoption and Maintenance Act, 1956. There can be no denying or disputing it. Even Muslims are bound to maintain their unmarried daughter as already stated earlier. All the courts must always adhere to what has been stated so appropriately and rightly by the Madras High Court. This will certainly ensure that the right of the unmarried daughter to claim maintenance is always protected from being violated with impunity by her father!

Sanjeev Sirohi, Advocate,

s/o Col BPS Sirohi,

A 82, Defence Enclave,

Sardhana Road, Kankerkhera,

Meerut – 250001, Uttar Pradesh.

Majority Of Citizens Don’t Want Judiciary To Show Any Sympathy To Rape & Murder Convicts: Madras High Court

“We are shocked by the savagery of the offence unleashed by the accused towards the deceased. Such conduct of the accused would only show that he is an extremist and that he will be a menace to the society.” The Madras High Court has confirmed death sentence to a man accused of brutal murder of a love couple. The prosecution case against Kattavellai @ Devakar was that he threatened the couple with an aruval and demanded that the jewels worn by the girl be entrusted to him. When they refused to part with the jewel, the accused cut both side of the neck of boy with aruval and brutally murdered him. When the girl attempted to flee away from the place of occurrence, the accused chased her, gagged her nose and mouth with a towel and made her to suffocate. Thereafter, the accused forcibly raped the girl, besides he cut her hands and legs brutally, which resulted in her death. After unleashing such an act of brutal crime on the hapless victims, the accused, robbed the gold chain, handbag and tiffin box and then fled away from the place occurrence. The Trial Court had convicted the accused and sentenced him to death.

The bench comprising Justice R. Subbiah and Justice B. Pugalendhi confirmed the conviction and death sentence awarded to the accused by the Trial Court. The judgment begins with a brief discussion about are mixed opinion about relevancy of death penalty among the citizens of this Country. The bench said:

“A majority of the citizen want the judicial system to deal the offenders of rape and murder with an iron hand, without showing any sympathy or mercy to them. They also want the Judiciary to take note of the plight and trauma that would have been undergone by the families of the victims silently. Contrarily, there are also voices that require the judicial system to soft pedal on the issue by resorting to reformative theory and to relieve the offender (s) from the gallows and to view the offence committed by the accused with a humanitarian approach.” The bench said it is ‘shocked by the savagery of the offence unleashed by the accused on the young couple.

The court also observed that the accused has no good antecedents and was involved in the cases of robbery. It said: “In this case, as the attack on D2 were not on vital parts, she would have suffered excruciating pain which would be more rather that of the one suffered by D1. The brutality of the attack on the young and helpless girl, after forcibly raping her, would show the inhuman act of the accused. The accused had preyed the young girl (D-2) who unfortunately got trapped with the accused and taking advantage of the situation, the accused had caused the offence of rape on her.

Thus, we are shocked by the savagery of the offence unleashed by the accused towards the deceased 1 and 2 in this case. Such conduct of the accused would only show that he is an extremist and that he will be a menace to the society. The incident that the accused attempted to commit suicide during a family dispute would further strengthen the same. Such a person will deserve no leniency or sympathy and he should be punished without any impunity.” The bench, while confirming the death sentence, said: “For having committed such gruesome, inhuman, barbaric and heinous offence, the accused cannot be imposed with any other punishment, other than death sentence and therefore we are inclined to confirm the death sentence imposed by the trial court on the accused.”

 

Faculty cannot follow full time course while teaching: Madras High Court

CHENNAI: Acting as a faculty member, condemning the rituals of pursuing a full-time course of a teacher or professor, the Madras High Court has made it clear that the university or the concerned college can not be allowed without prior permission. .

The university/institution and the recognition authorities must ensure that no teacher/professor is permitted to do the full time course without obtaining prior permission from the University/College.

Justice S Vaidyanathan stated this in his recent order while upholding the decision of the Controller of Examinations, who nullified all exams in which a woman faculty member of S A Polytechnic College appeared.

Petitioner P Shanmughavalli submitted that she got admission for a two-year Mechanical Engineering course in Anna University for the 2014-16 academic year and got employed as a lecturer in the College, during which she applied for leave to appear for four semester examinations.

Rahul Gandhi security lapse: Madras High Court issued notice to Centre and Tamil Nadu Government

CHENNAI: The Madras High Court today issued notices to the Tamil Nadu and Central governments on a PIL seeking a judicial probe in alleged security lapses during Congress President Rahul Gandhi’s visit to the Rajaji Hall here to pay homage to departed DMK patriarch M Karunanidhi.

Advocate A.P. Suryaprakasam also sought a direction to the State to pay a compensation of ₹20 lakh to the families of each of those who had died on that day. He wanted compensation even to those who were injured because of alleged official failure in making proper arrangements for the people to pay their last respects.

The petitioner said the police had resorted to lathi charge on the public who came to pay tribute to the departed leader as a result of which three people died.

A Division Bench comprising justices S Manikumar and Subramonium Prasad, which heard the petition filed by advocate A P Suryaprakasam, posted the matter for further hearing on September 14.

Madras High Court fumes over unchecked, corruption in Chennai corporation

CHENNAI: The Madras High Court made strong observations over ‘rampant’ corruption in the city corporation and said people were unable to get any document without bribing officials.

A petition filed by H Lakshmi came up for hearing , said “in every transaction in the corporation, people are absolutely frustrated and the corrupt activities of the officials are rampant and the people are unable to get necessary approvals, certificates and documents from the Corporation without paying bribe to these officials.”

Additional Advocate General Manishankar who appeared on behalf of the commissioner, that the civic body was initiating all steps to eradicate irregularities and illegalities in respect of the constructions and other related offences.

Justice SM Subramaniam rejected the the submission and directed Corporation Commissioner to file a report explaining the nexus, collusion and corrupt activities largely found between the officials of corporation, police, local politicians, electricity board authorities and metro board authorities.

Mismanagement of Company Affairs

Junaid Ahmed

Section 398 of the companies Act, 1956 is designed to primarily protect a company from being mismanaged and usurped by few at the helm to the detriment of the company’s interest and public interest.

Sec.398 of the companies Act, 1956 mandates a person holding 10% of the equity shares to file an application under sec.398(1)(a)& (b) if the affairs of the company are being conducted in a manner prejudicial to public interest or in a manner prejudicial to the interests of the company.

If the shareholder feels aggrieved by the way the affairs of the company are being carried out, he may well approach the Tribunal under section 398 of the companies Act, 1956 if he qualifies under section 399 of the Companies Act ( i.e. Holding not less than one- tenth of the issued share capital of the company).

In the case of ShriKishanKhariwalVs.The Ganganagar Industries Limited andOrs.(2004) 118 CC 626 (CLB) The company law board observed that “To maintain a petition under Section 397/398 the provisions of Section 399 have to be complied with. According to this Section, to maintain a petition under Section 397/398, the petitioners should hold either 10% or more shares of the subscribed capital or should constitute 10% or more of the total members in the company. In the present case, the petitioner has claimed that the shares held by him together with those of the members supporting him, account for 10.35% shares in the company and such the requirements of Section 399 are satisfied. This percentage is based on the share capital of the company before the issue of further shares impugned in the petition. This Board has always taken the view that if the shareholding of the petitioners is reduced below 10% on account of further issue of shares and if the issue of further shares is also challenged in the petition, then, the petition will not be dismissed as not maintainable in terms of Section 399. Instead, the allegation relating to the issue of further shares would be examined first as to whether the same is an oppressive act and if it is found to be so, then only other allegations in the petition would be examined. In the present case, the petitioner claims the support of those holding more than 10% shares and he has also impugned the further issue of shares, which has resulted in the holding of the petitioner and his supporters to around 1%. Therefore, this petition cannot be dismissed at the threshold before examining as to whether the issue of further shares could be considered to be an act of oppression against the petitioner and his supporters”.

M. MoorthyVs.Drivers and Conductors Bus Service P. Ltd(1991) 71 con cases 136, 148 (Mad)the Madras High court observed

“The language of sections 397 and 398 leaves no doubt as to the true intendment of the Legislature and it is transparent that the remedy provided by these sections is of a preventive nature so as to bring to an end oppression and mismanagement on the part of controlling shareholders and not to allow its continuance to the detriment of the aggrieved shareholders of the company. The remedy is not intended to enable the aggrieved shareholders to set at naught what has already been done by the controlling shareholders in the management of the affairs of the company.”

In this case the company sold its asset in gross neglect of the interest of the company, and the management of the company was indifferent to the affairs of the company after the sale of assets. Hence the court held it to be a case of mismanagement and passed orders under section 397 and 398 of the companies act.

The High court of Andhra Pradesh in the case of Sri Ramdas Motor Transport Ltd. and Ors.Vs.KaredlaSuryanarayana and Ors.ANDDevarapalli Surya Rao and Ors.Vs.SriRamdas Motor Transport Ltd. and Ors. [2002]110CompCas193(AP) observed “relief under Section 398 of the Act can be obtained only if (1) the affairs of the company are being conducted in a manner prejudicial to public interest or the interests of the company, or (2) if there is a material change which has taken place in the management or control of the company in the manner set out in the said section, and that by reason of such change it is likely that the affairs of the company will be conducted in a manner prejudicial to public interest or in a manner prejudicial to the interests of the company.

But Section 397 of the Act comes into play when minority share-holders allege oppression by the majority shareholders and Section 398 of the Act comes into play when the affairs of the company are being conducted in a manner prejudicial to public interest and not in the interest of the company.

In the case of Akbarali A. Kalvert and Anr. Vs. Konkan Chemicals Pvt. Ltd. and Ors the company law board relied upon the observations made by the supreme court in the case of NanalalZaver v. Bombay Life Assurance Co. Ltd. [1950] 20 Comp Cas 179 that “It is well-established that directors of company are in a fiduciary position vis a vis the company and must exercise their power for the benefit of the company. If the power to issue further shares is exercised by the directors not for the benefit of the company but simply and solely for their personal aggrandizement and to the detriment of the company, the court will interfere and prevent the directors from doing so. The very basis of the court’s interference in such a case is the existence of the relationship of a trustee and of cestuique trust as between the directors and the company.”

A person to file an application u/s.398 should have a right to apply in virtue of sec.399.

The High court of Patna in the case of Bihar State Industrial Development Corporation Limited, a Government of Bihar Company and Magadh Spun Pipe Limited, a Joint Venture Company promoted by Bihar State Industrial Development Corporation LimitedVs.Company Law Board, Principal Bench and Ors observed

I. The object of prescribing a qualifying percentage of shares in petitioners and their supporters to file petitions under Sections 397 and 398 is clearly to ensure that frivolous litigation is not indulged in by persons who have no real stake in the company.

II. Moreover, I find that the Company Law Board has relied upon the judgment in SrikantDuttaNarasimha Raja Wadiyar’s case (supra) relied upon by the respondents under which if the person has been treated as a member of the company then the Company Court can exercise its jurisdiction in his favour. Even on this point treatment as a member of the company would be confined only to respondent Nos. 4 and 5, with respect to whom it was found that their names figure in the annual returns filed by the appellant company before the Registrar of Companies and further that they have been issued notices of two annual general meetings. There being no such finding with respect to respondent Nos. 2.and 3 and further there being a specific finding that the respondent Nos. 4 and 5 did not qualify as holding 1/10th share capital, this Court fails to understand as to how even by relying upon the said decision the Company Law Board could have arrived at a conclusion that the petitioners had succeeded in showing that they were holding 10% equity shares and entitled to maintain a petition under Section 398 before it.

The above judgment goes on to show that the courts are wary of accepting applications u/s. 398 if the petitioner does not meets the requirements prescribed under Section. 399.

Power of the Tribunal under section 398 of the companies act

Section 398 invests the tribunal with some very extensive powers to pass such orders as it may think fit in the circumstances to bring an end to the agony of the shareholders and set the mischief committed by the management at rest to ensure smooth functioning of the company in the interest of the company and public.

The courts have by virtue of section 398 been playing a pro- active role, and they still continue to do so, whenever they sense a whiff of mismanagement in a company.

A clutch of decisions by various courts and tribunal reaffirm and reiterate the point that the court would intervene and take stock of the situation and pass such orders as it deems appropriate in the given circumstances, if it proved to its satisfaction that the alleged acts of mismanagement have been and are being committed which seriously affects the health of the company and public interest.

A case to hold water, will have to be corroborated with sufficient evidence in the backdrop of allegations made against the company under section 398, that would make out a case for proceeding against the management of the company.

A glimpse at section 235 of companies act:

Section 235 of companies act is another section that deserves a mention when there occurs mismanagement in the company’s affairs.

A shareholder who feels the affairs of the company are being mismanaged ,and it would only be fair to invoke a probe into the affairs of the company to make things transparent, shall make an application under section 235(2) (a).

Section 235(2) (a) reads as follows;

“Where, in the case of a company having share capital, an application has been received from not less than two hundred members or from members holding not less than one-tenth of the total voting power therein”, the tribunal may, after giving the parties an opportunity of being heard ,by order declare that the affairs of the company ought to be investigated by an inspector or inspectors, and on such a declaration being made, the central govt. shall appoint one or more competent persons as inspectors to investigate the affairs of the company and to report thereon in such manner as the central govt. may direct.

A shareholder holding one- tenth of voting rights shall by virtue of section 235 invoke a probe into the affairs of the company.

A application to sustain under section 235(2)(a) should corroborate the allegations made in the application with sufficient evidence, as would satisfy the court to direct an inquiry into the affairs of the company.

Applications under this section would not be entertained if the allegations made in the application are vague and uncertain.

It becomes extremely pertinent to place on record a case law that buttresses the above mentioned point.

In the case of Mohta Bros. (P.)Ltd. and Ors.Vs.Calcutta Landing and Shipping Co. Ltd. and Ors[1970]40CompCas119(Cal), 73CWN425the high court ofCalcutta observed “Full particulars must be given by a petitioner in an application under Sections 397 and 398 of the Act of acts of mismanagement and oppression. Vague and uncertain allegations of mismanagement and oppression, although they may constitute grounds for suspicion, do not entitle a petitioner to ask the court to embark upon an investigation into the affairs of the company, in the hope that in consequence of such investigation, something will turn up which will enable the court to grant relief to the petitioner. It is true that it may not always be possible for one or a group of shareholders to furnish particulars of acts of mismanagement, fraud, oppression, misappropriation or other improper acts, but such inability on the part of shareholders, who have no access to the books of the company, is by no means a ground for directing an investigation into the affairs of the company or for giving any other relief to a petitioner. The petitioner must set out the facts which constitute acts of mismanagement, misappropriation, fraud or oppression and prove, prima facie, at any rate, that on those facts an investigation is called for. If a petitioner fails to set out the facts and produce satisfactory proof in support of those facts no order for investigation into the affairs of the company can be made, nor can any relief be granted to the petitioner. A shareholder has no right of access to the books of the company, but denial of access to such books is not an act of oppression as has been held by this court in a Bench decision, Rajya Lakshmi (Lalita) v. Indian Motor Co. Ltd. MANU/WB/0037/1962 : AIR1962Cal127 If a petitioner cannot make out a case of mismanagement and oppression, because he was unable to collect materials for the purpose, it is not for the court to direct the directors of the company to offer inspection of the company’s books and accounts to enable a petitioner to collect materials for the petition under Sections 397 and 398 of the Act, or to direct investigation into the company’s affairs and accounts by an independent person to bring out materials for further orders against the company, its directors or shareholders”.

To sustain an application under section.398 should have conclusive evidence as to the allegations they make. The person complaining of mismanagement should glean the necessary evidence in support of his allegations made under section 398.

In Re: Bengal Luxmi Cotton Mills Ltd. [1965]35CompCas187(Cal), 69CWN137,the high court of Calcutta observed “In an application under Section 397 and Section 398, the petitioner may rely upon, and indeed he should rely upon, supporting affidavits from persons having personal knowledge of the allegations of oppression, mismanagement, misconduct or other act prejudicial to the interest of the company, if the petitioner has no personal knowledge himself. Failure or omission to secure affidavits of persons having personal knowledge of the charges made, if the petitioner has no personal knowledge of the same, may prove fatal to the petition itself as was held in In re Clive Mills Co. Ltd., ”

Conclusion-

Thus, to put things in perspective an application under section 398 should allege that the affairs of the company are being conducted in a manner prejudicial to public interest or in a manner prejudicial to the interests of the company as opposed to alleging that the affairs of the company are being conducted in a manner prejudicial to interest of a few shareholders. An application under section 398 would sustain the scrutiny of the court only if the application alleges that the mismanagement is of such a nature as would have an adverse impact upon the health of the company.