Jai Bhagwan vs Friends Flour Mills Pvt. Ltd.

I.S. Tiwana, J.—Vide my order dated May 31, 1990, in Company Petition No. 1 of 1989, I directed the respondents (now applicants) to produce certain documents in their possession by July 10, 1990, for inspection by the petitioners. Instead of complying with this order, the applicants took the matter in appeal and the learned judges of the Bench have disposed of the same with the following order :

"Let the applicants make a proper application alleging that the petitioner, Jai Bhagwan, and others were not entitled to summon the record as they were not shareholders. No such contention was raised in the impugned order before the learned single judge. The appellants, if so advised, may make a necessary application before the learned single judge.

With these observations, the C. A. stands disposed of."

Hence, this application with the prayer that order dated May 31, 1990, referred to above, be recalled.

Having heard learned counsel, I find no merit in this application.

The principal submission of Mr. Jaiswal, learned counsel for the respondents, is that since, as per the record of the company with the Registrar of Companies, the petitioners are not recorded as shareholders in the company, they have no locus standi to maintain the petition. Therefore, according to learned counsel, these respondents cannot possibly be directed to produce any record for inspection by their opponents, It requires no elaborate elucidation that the questions of locus standi and the maintainability of a particular cause like the question of jurisdiction of the court has to be seen at two stages ; initially on the basis of assertions or the pleas raised in the application or the suit ; and, finally, at the stage of the conclusion of the trial. At the initial stage, the plea raised in defence does not by itself determine the maintainability or locus standi of the petitioner. Such a plea does not straightaway take away the jurisdiction of the court to determine the jurisdictional facts or makes the petition or the suit to be non-maintainable or lead to the dismissal on the ground of locus standi. (See Natraj Studios P. Ltd. v. Navrang Studios AIR 1981 SC 537 and Hans Raj Bansal Vs. Hardev Singh, ). In the instant case, the plea of the respondents is not, by any chance, that in the company petition itself, the petitioners have not alleged or maintained that they are not shareholders in the company. On the contrary, their stand is that they hold at least 1,800 shares in this company and that, therefore, they are well entitled to maintain this petition. Merely because the respondent-applicants have denied this factual position, the petitioners cannot be non-suited on that ground alone nor can their locus standi to maintain the petition be decided against them. I, therefore, maintain my order dated May 31, 1990, and non-suit the applicants.

In the light of the discussions above, the company application, referred to above, stands dismissed, but with no order as to costs.