Bombay High Court
Chetan Surendra Dalal vs K. C. Agro Pvt Ltd And 11 Ors on 21 October, 2021
Bench: S.J. Kathawalla, Milind N. Jadhav
Kanchan P Dhuri 1 / 12 APP-L-12210-2021.odt
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
APPEAL (L) NO. 12210 OF 2021
IN
COMPANY APPLICATION NO. 4 OF 2021
Chetan Surendra Dalal ... Appellant
Versus
K.C. Agro Pvt. Ltd. and Others ... Respondents
WITH
INTERIM APPLICATION (L) NO. 12217 OF 2021
IN
APPEAL (L) NO. 12210 OF 2021
WITH
APPEAL (L) NO. 12273 OF 2021
IN
COMPANY APPLICATION NO. 3 OF 2021
Chetan Surendra Dalal ... Appellant
Versus
Star Grain & Shipping Pvt. Ltd. and Others ... Respondents
WITH
INTERIM APPLICATION (L) NO. 12286 OF 2021
IN
APPEAL (L) NO. 12273 OF 2021
.........
Shri Haresh Jagtiani, Senior Advocate alongwith Shri Yashpal Jain and Ms. Aditi
Harsha for the Appellants.
Shri Kevic Setalwad, Senior Advocate alongwith Shri Malcolm Siganporia, Shri
Hormuz Mehta and Shri Ahsan Allana instructed by J. Sagar Associates for
Respondent Nos.1 and 2 in Appeal (L) No.12210 of 2021.
Shri Vikram Nankani, Senior Advocate alongwith Shri Malcolm Siganporia, Shri
Hormuz Mehta and Shri Ahsan Allana instructed by J. Sagar Associates for
Kanchan P Dhuri 2 / 12 APP-L-12210-2021.odt
Respondent Nos.1 and 2 in Appeal (L) No. 12273 of 2021.
Shri Shanay Shah alongwith Ms. Monisha Mane Bhangale and Ms. Warisha Parkar
instructed by Parinam Law Associates for Respondent No.4 in both the above Appeals.
.........
CORAM : S.J. KATHAWALLA AND
MILIND N. JADHAV, JJ.
RESERVED ON : 13TH SEPTEMBER, 2021
PRONOUNCED ON : 21ST OCTOBER, 2021
ORAL JUDGMENT (PER: S.J. KATHAWALLA & MILIND N. JADHAV, JJ.):
Appeal (L) No. 12210 of 2021
1. The present Appeal arises from an Order dated 3 rd May 2021, as modified on 7th
May 2021, passed by the Learned Single Judge in Company Application No.1 of 2021
and Company Application (L) No.4 of 2019.
2. Company Application No. 1 of 2021 was filed by Respondent No.1 seeking
recall of the Orders dated 11th January 2018 and 7th February 2018 passed by the
Company Court and in the alternative, for extension of time to clear office objections
with respect to Company Application (L) No. 3 of 2017. Company Application (L)
No.4 of 2019 was an intervention application filed by the Appellant in Company
Application No.1 of 2021.
3. Respondent Nos.1 and 2 are the Original Appellants in Company Appeal No.
102 of 2015 filed under Section 10(F) of the Companies Act, 1956 ("the Act"). The
controversy in the present Appeal is limited.
Kanchan P Dhuri 3 / 12 APP-L-12210-2021.odt
4. Briefly stated, there were disputes inter-se between one Shri Girdharlal Dalal
("the deceased") and Shri Bharat Dalal, Respondent No. 2 herein, in respect of
management of Respondent No. 1 Company. Due to certain disputes between the
parties pertaining to dilution of shareholding of the deceased, Company Petition No.
120 of 2013 was filed by the deceased against the Respondents before the Company
Law Board, Mumbai Bench, under Sections 397, 398 and 402 of the Act. By a
Judgment and Order dated 29th April 2015, the Company Law Board allowed
Company Petition No. 120 of 2013 filed by the deceased. Being aggrieved by the said
Judgment and Order dated 29th April 2015, Respondent Nos. 1 and 2 filed Company
Appeal No. 102 of 2015 before this Court under Section 10(F) of the Act. By order
dated 13th August 2015, the Appeal was admitted and the operation of the order dated
29th April 2015 was stayed.
5. Thereafter, on 19th January 2017, the deceased passed away. On 22 nd May 2017,
Company Application (L) No. 3 of 2017 was filed by Respondent No. 1 to place the
fact of the deceased's death on record and for seeking consequential amendments.
This Company Application (L) No. 3 of 2017 has now been numbered as Company
Application No. 5 of 2021. In the meantime, on 14 th July 2017, a Testamentary Petition
was filed by the Appellant for obtaining probate of a will dated 21 st May 2012 and
codicils dated 11th September 2015 and 8th November 2016.
6. On 13th September 2017, the Prothonotary and Senior Master of this Court
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directed that the objections in Company Application (L) No. 3 of 2017 be removed on
or before 27th September 2017, failing which the said application would stand rejected
under Rule 986 of the Bombay High Court (Original Side) Rules, 1980. Since the
objections were not removed, Company Application (L) No. 3 of 2017 stood dismissed
for want of removal of office objections. On 11 th January 2018, an order came to be
passed by the Learned Single Judge directing Respondent No. 1 to take steps to restore
Company Application (L) No. 3 of 2017 within a period of one week, failing which the
said Company Appeal No.102 of 2015 would stand dismissed. On 7 th February 2018,
the matter was listed at the request of Respondent No. 1, at which time, the Learned
Single Judge in view of the self-operative order dated 11th January 2018, dismissed
Company Appeal No.102 of 2015 filed by Respondent Nos. 1 and 2 under Section
10(F) of the Act.
7. A Recall Application being Company Application (L) No. 5 of 2018 was filed by
Respondent No. 1, which was dismissed by the Learned Single Judge on 26 th June
2018. However, by consent of the parties i.e. the Appellant and Respondent Nos. 1 and
2, the order dated 26th June 2018 was recalled by the Learned Single Judge vide his
order dated 13th July 2018. On 14th December 2018, by an order passed by the
Company Court, Company Application (L) No. 5 of 2018 was permitted to be
withdrawn with liberty to take out appropriate proceedings. With this liberty,
Respondent No. 1 filed Company Application No. 1 of 2021, in which the Impugned
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Order has been passed.
8. In the meantime, the Appellant filed an Intervention Application in Company
Application No. 1 of 2021. By the Impugned Order, the Learned Single Judge has
allowed the Company Application No. 1 of 2021 thereby extending the time to restore
the Company Application No. 5 of 2021 (erstwhile (L) No. 3 of 2017) till 10 th June
2021 and consequently the Company Appeal No.102 of 2015 filed under Section 10(F)
was restored.
9. Being aggrieved by the Impugned Order, the Appellant has filed the present
Appeal before us. We may note at the outset that a companion Appeal (L) No. 12273
of 2021 has also been filed by the Appellant pertaining to another company Star Grain
and Shipping Private Limited, facts whereof are more or less identical and the
Impugned Order was passed in respect of both the companies. Hence, reference in
this Order is made to the facts pertaining to Appeal (L) No. 12210 of 2021.
10. Shri Haresh Jagtiani, Learned Senior Advocate for the Appellant, has urged
that :
(a) the various applications and Affidavits in support filed by Respondent
No. 2 are full of falsehoods and contradictions and that no relief ought to have been
granted by the Learned Single Judge to Respondent No. 2 in view of the falsehoods
in the Affidavits filed by him;
(b) the Company Application (L) No. 3 of 2017 contained several false
Kanchan P Dhuri 6 / 12 APP-L-12210-2021.odt
statements pertaining to the knowledge of death of the deceased, which according to
the Appellant was as far back as 23rd January 2017;
(c) the statement that Respondent No. 1 company was not intimated of the
death of the deceased was a blatant lie since the knowledge of Respondent No. 2 must
be foisted on the company as he was the only shareholder of Respondent No. 1
company;
(d) the reasons assigned by Respondent No. 2 in his Affidavit in Support
filed in Company Application (L) No. 5 of 2018 was false in view of the fact that
Respondent No. 2 himself had filed an Administration Suit where he had made all
legal heirs of the deceased as party Defendants;
(e) the recall of the order dated 26 th June 2018 was in a peculiar
circumstance and that order can never have the effect of obliterating the false
statements uttered by Respondent No. 2;
(f ) the falsehoods of Respondent No. 2 continued even when Company
Application No. 1 of 2021 was filed by Respondent No. 2 as once again Respondent
No. 2 contended that he did not have knowledge about the whereabouts of the legal
heirs of the deceased, which was ascribed to a period prior to 19 th May 2017;
(g) Respondent Nos. 1 and 2 can hardly contend that the Appellant is not
the only proper and worthy successor to prosecute/defend litigation by virtue of him
being the executor of the last Will of the deceased; and
Kanchan P Dhuri 7 / 12 APP-L-12210-2021.odt
(h) In other proceedings filed inter se between the parties, the Appellant has
been impleaded in place of the deceased and this fact ought to have been considered by
the Learned Single Judge; and
(i) the Impugned Order is flawed and legally perverse as the Learned Single
Judge has restored the Section 10(F) Appeal, which abated on 19 th April 2017.
11. On the other hand, Shri Setalvad, Learned Senior Advocate for Respondent
Nos. 1 and 2, contended that:
(a) the Impugned Order merely granted Respondent Nos. 1 and 2 time to
remove office objections and restore Company Application (L) No. 3 of 2017 and that
no prejudice whatsoever has been caused to the Appellant since in paragraph 6 of the
Impugned Order, the right of the Appellant has been expressly kept open to urge his
Intervention Application before the Company Court;
(b) the Appeals falsely proceeds on the basis that the Impugned Order in
effect sets aside the abatement of Company Appeal No. 102 of 2015 against Shri
Girdharlal Dalal. In fact, the decision on abatement has been deferred to an
appropriate stage as set out in paragraph 6 of the Impugned Order;
(c) the Appellant's right as the executor of the estate of the deceased is challenged
by Respondent No. 2 and admittedly, the Appellant is not the legal heir of the
deceased. He therefore submits that the right of the executor i.e. the Appellant herein
cannot be said to be established unless a probate/letters of administration has been
Kanchan P Dhuri 8 / 12 APP-L-12210-2021.odt
granted by a competent court in favour of the Appellant;
(d) the Appellant has wrongly assumed the office of the executor of the
deceased and that the Appellant's intent is to merely take charge of the estate of the
deceased;
(e) since the order dated 26th June 2018 was recalled by consent of parties
on 13th July 2018, the Appellant cannot be heard to contend that despite his
unconditional consent, the order dated 26 th June 2018 was to be read into by this
Court;
(f ) since the rights of the Appellant have been expressly kept open in the
Impugned Order, the Impugned Order read with the order dated 7 th April 2021 does
not set aside the abatement of Company Appeal No. 102 of 2015.
12. Shri Shah, Learned Advocate for Respondent No.4, adopted the submissions
made by Shri Setalvad.
13. We have heard the Learned Counsels for parties and have perused the record
before us and for more than one reason, we are not inclined to entertain the present
Appeal.
14. By the Impugned Order, the Learned Single Judge has extended the time to
take steps to restore Company Application (L) No. 3 of 2017, as is evident from
paragraph 5 of the Impugned Order, which reads thus:
"5. Time to take steps to restore Company Application (L) No.3
Kanchan P Dhuri 9 / 12 APP-L-12210-2021.odt
of 2017, as mentioned in the order dated 11 th January 2018, is extended
upto and including 10th June 2021."
15. Thereafter, the Learned Single Judge in paragraph 6 of the Impugned Order
specifically noted the contentions urged by Shri Haresh Jagtiani and held as under :
"6. I have to note that Mr. Jagtiani appeared on behalf of one
Chetan Dalal, who has filed an intervention application bearing
Company Application (L) No.4 of 2019 in the present Company
Application No.1 of 2021. Mr. Jagtiani submitted that affidavit in
support of this application contained all lies and the court was being
misled into passing the order. In my view, restoration application is
between applicant and the court and the court is entitled to exercise its
discretion. No third party can have a say in that. At the same time, if,
Mr. Jagtiani's client wishes to take out an intervention application in
the appeal, they may do so, if so advised, and he may raise all points in
the application including his client's allegations that the affidavit in
support to Company Application No.1 of 2021 contained all lies and
seek dismissal of the appeal and the court will consider that application
on its own merits including Mr. Setalvad's contentions whether any
third party can intervene in an appeal filed under Section 10F of
Companies Act, 1956."
16. In our view, paragraph 6 of the Impugned Order causes no prejudice to the
Appellant since it specifically reserves the right of the Appellant to raise all
contentions before the Company Court and seek dismissal of the Appeals filed under
Section 10(F) of the Act by Respondent Nos. 1 and 2. The import of paragraph 6 of
Kanchan P Dhuri 10 / 12 APP-L-12210-2021.odt
the Impugned Order is that the Learned Single Judge has not set aside the abatement
of Company Appeal No. 102 of 2015, since it expressly reserves the right of the
Appellant to raise any and all contentions raised in the Intervention Application filed
by the Appellant, before the Company Court. We agree with Shri Setalvad's
submission that the decision on abatement has been deferred to an appropriate stage as
noted by the Learned Single Judge in paragraph 6 of the Impugned Order.
17. Moreover, if at this stage, we accept the submissions made by the Appellant,
pertaining to him being a "proper and worthy successor" as contended by Shri Jagtiani,
we would not only expand the scope of the present Appeal, but effectively render the
challenge raised by Respondent No. 2 to the wills and codicils stated to be executed by
the deceased, otiose. It must be borne in mind that the Appeals filed before us arise
from the proceedings filed in Section 10(F) appeals and therefore the issue before the
Company Court would be in respect of the management of Respondent No. 1
company. The Learned Single Judge has exercised his discretion in granting time to
Respondent Nos. 1 and 2 to take steps to restore Company Application (L) No. 3 of
2017, which in our view is not perverse and does not warrant any interference.
18. We are informed that Respondent Nos. 1 and 2 have filed Interim Application
(L) No.15777 of 2021 in Company Application (L) No. 3 of 2017 for carrying out
appropriate amendments since the form of Company Application (L) No. 3 of 2017
warranted such amendments. It would be apposite that the Appellant is permitted to
Kanchan P Dhuri 11 / 12 APP-L-12210-2021.odt
intervene in Interim Application (L) No.15777 of 2021 as well. This would also address
the grievance raised by the Appellant that the Affidavit in Support of Company
Application (L) No. 3 of 2017 was full of falsehoods as the Appellant can address all
these issues at the appropriate stage before the Company Court. This direction read
with paragraph 6 of the Impugned Order adequately protects the concerns raised by
the Appellant.
19. Both parties in their Written Submissions have referred to certain judgements,
which in our view are settled position in law in the facts and circumstances in which
they were passed. In the peculiar facts and circumstances of the present case, we are of
the view that there is nothing perverse in the Impugned Order, which warrants any
interference. The Appellant's rights are sufficiently safeguarded in view of the
directions passed above and in paragraph 6 of the Impugned Order.
20. Accordingly, we see no reason to interfere with the Impugned Order and the
Appeal is disposed of as with no order to costs.
21. Rights and contentions of the parties are expressly kept open.
Appeal (L) No. 12273 of 2021
22. In view of the above Order, nothing survives in this Appeal and the directions
contained above shall also be read as having passed in this Appeal.
23. We are informed that Respondent Nos. 1 and 2 have filed Interim Application
(L) No.15776 of 2021 in Company Application (L) No. 4 of 2017 for carrying out
Kanchan P Dhuri 12 / 12 APP-L-12210-2021.odt
appropriate amendments since the form of Company Application (L) No. 4 of 2017
warranted such amendments. It would be apposite that the Appellant is permitted to
intervene in Interim Application (L) No.15776 of 2021 as well.
24. This Appeal is accordingly disposed of with no order as to costs. The above
Interim Application also stands disposed of.
25. Rights and contentions of the parties are expressly kept open.
( MILIND N. JADHAV, J. ) ( S.J. KATHAWALLA, J. )
Digitally
signed by
KANCHAN
KANCHAN PRASHANT
PRASHANT DHURI
DHURI Date:
2021.10.21
15:59:38
+0530
