Allahabad High Court
Rajeev Mehrotra vs Union Of India Thru' Secry. And 4 ... on 7 October, 2013
Bench: Arun Tandon
HIGH COURT OF JUDICATURE AT ALLAHABAD
?A.F.R.
Court No. - 10
Case :- COMPANY PETITION No. - 41 of 2013
Petitioner :- Rajeev Mehrotra
Respondent :- Union Of India Thru' Secry. And 4 Others
Counsel for Petitioner :- Manish Tandon,Arvind Srivastava,W.H. Khan
Counsel for Respondent :- A.S.G.I.
Hon'ble Arun Tandon,J.
Heard Sri W.H. Khan, learned Senior Advocate assisted by Sri Manish Tandon and Sri Arvind Srivastava, Advocates on behalf of the petitioner and Sri Sanjay Kumar "Om", learned Additional Standing Counsel on behalf of Union of India.
This is a petition under Section 237 (a) (ii) of the Companies Act, 1956. Petitioner, who claims to be the Ex-Secretary of the Company registered in the name and style of 'Cawnpore Club Ltd., 33 Cantt., Kanpur, comes up with a prayer that the company has defrauded its creditors, members and other persons and is otherwise involved in fraudulent and unlawful acts.
On examining the present writ petition in detail, this Court finds that the entire writ petition is replete with allegation of elections of office bearers of the company being not held despite expiry of the term of the elected office bearers and that relevant records having not been made available to the petitioner. It is on these factual allegations only that the petitioner submits that the business of the company is being run unfairly with intent to defraud the creditors and members. Information asked for is not being provided to the members and therefore, action under Section 237 (2) (a) is prayed for. Petitioner submits that the Court may, by an order, declare that the affairs of the company ought to be investigated by inspection appointed by the Central Government.
In the opinion of the Court, the prayer as made in the present petition need not be granted for the following facts and reasons as borne out from the records:
(a) admittedly, the petitioner filed Original Suit No. 835 of 2013 for permanent injunction for fresh elections being held against the respondents to this petition,
(b) petitioner has made an application under Section 234 (1) read with Section 234 (4) of the Companies Act, 1956 for taking proceedings against the company under Section 626 of the Companies Act before the Registrar being Case No. 4032 of 2013 and the matter is being considered by the Registrar of the Company, as is apparent from the orders of the Registrar brought on record.
Even otherwise, this Court finds that under sub-Section (1) (a) of Section 237 of the Companies Act, petitioner has the remedy of approaching the Central Government at the first instance for investigation of the affairs of the company by an inspector to be appointed by the Central Government.
(c) The power of the Court to issue such a direction under Section 237 (a) (ii) of the Companies Act would arise only if the Central Government fails to take appropriate action.
Learned counsel for the petitioner, with reference to the judgment of the Gujarat High Court in the matter of Alembic Glass Industries Ltd., Baroda, reported in 1971 TAX. L.R. 1838 ( V 1 C 480), submits that powers of the Company Court are not restricted because of remedy before the Central Government.
This Court may record that in the same judgment itself, it has been noticed that in a given case, the Court may decline to exercise jurisdiction under Section 237 (a) (ii) of the Companies Act till the Central Government disposes of the matter pending before it under Section 237 (b).
The Court has gone on to explain that the power of the Court is not lost because of pendency of the proceedings before the Central Government and in that circumstance the judgment has to be read.
Another aspect of the matter which needs mention by this Court is that the said judgment was delivered in the year 1971. The Companies Act has undergone a change and now the power to direct investigation of the affairs of the company by an inspection, is also with Tribunal, if in its opinion, there are circumstances suggesting for such inspection as contained under Section 237 (b) of the Companies Act.
It, therefore, follows that an additional remedy of approaching the Tribunal for expressing its opinion in the matter of investigation of the affairs of the company by an inspector to be appointed by the Central Government has been provided for, which statutory provisions did not exist when the judgment in the matter of Alembic Glass Industries Ltd., Baroda (supra) was delivered.
For the reasons recorded above, as also in view of the fact that the allegations made in the present writ petition are vague and general, they do not make a case for any investigation being directed by this Court. The present petition is dismissed and it is left open to the petitioner to approach the Central Government or the Tribunal if he so desire, with making specific case. The Tribunal/Central Government shall not be prejudiced by any of the observations made by this Court herein above while disposing of the matter.
Further this Court finds that in Original Suit No. 3304 of 2009 instituted by one Anchal Gupta, temporary injunction application was rejected vide order dated 31st August, 2010, against which Anchal Gupta has filed First Appeal From Orders No. 3024 of 2010 before the High Court, wherein an interim order has been granted on 1st March, 2011. The interim order granted in the First Appeal From Orders was vacated on 1st June, 2012. Petitioner had also filed writ petition no. 37781 of 2013 which he got dismissed with liberty to file a fresh writ petition but instead of filing a fresh writ petition for whatever reliefs, earlier writ petition was filed, he has chosen to make this petition under Section 237 (a) (ii) of the Companies Act.
(Arun Tandon, J.)
Order Date :- 7.10.2013
Sushil/-
