Karnataka Theaters Ltd. vs M. Ratnavarma Padivai

B. Manohar J. - This company application has been filed under rules 6 and 9 of the Companies (Court) Rules, 1959, seeking to recall the order dated March 27, 2013, made in Company Application No. 919 of 2008.

The respondents herein filed the company petition under sections 397 and 398 read with section 402 of the Companies Act, 1956, seeking to supersede the board of directors of the petitioner-company and to regulate the conduct and affairs of the company and also for other certain directions. Since there was no inti rim order of stay for conducting the annual general body meetings, in the 41st annual general body meeting of the company, some new resolutions were passed contrary to the interest of the petitioner-company. The said proceeding was challenged before the II Additional Civil Judge, Mangalore in O.S. No. 125 of 1990. When the matter stood thus, the respondents herein filed Company Application No. 919 of 2008 seeking for amendment of the company petition and add paragraphs Nos. 44-A to 44-AT and also intended to seek the additional reliefs as 15(A) to 15(F) and also for such other reliefs. Some of tire respondents in the company petition died. The applications have been filed to bring the legal representatives of the deceased on record. Since the application filed seeking amendment is pending for a long period, further some of the shareholders of the company approached the Company Law Board for oppression and mismanagement, the respondents filed a memo in Company Application No. 919 of 2008 seeking permission of the court to withdraw the same reserving liberty to them to raise the such issue before the Company Law Board. Since the applicant herein has not opposed the said memo, order has been passed on March 27, 2013, granting permission to the respondents herein to withdraw the said company application reserving liberty to them to raise such issue before the Company Law Board. The applicant being aggrieved by the order dated March 27, 2013, made in C.A. No. 919 of 2008 filed this application seeking for recalling the said order.

Sri. S.S. Naganand, learned senior counsel appearing for the applicant contended that the order passed by this court reserving liberty to agitate the issue before the Company Law Board is contrary to law. The respondents herein have not filed any petition before the Company Law Board. The question of reserving liberty to the respondents herein to raise the issue before the Company Law Board in the proceedings initiated by some other parties does not arise since they are not parties to the proceedings. In the circumstances, the question of reserving liberty to raise the issue which is the subject matter of C.A. No. 919 of 2008 before the Company Law Board does not arise. Under Order 23 of the Code of Civil Procedure, 1908, at any time after the institution of a suit, the plaintiff may withdraw the suit or abandon a part of the claim, where the court is satisfied that a suit must fail by reason of any formal defect or that there are sufficient grounds for allowing the plaintiff to institute a fresh suit for the subject matter of the suit or part of a claim. In the instant case, though the amendment application has been filed in the year 2008, it was pending consideration till the year 2013. The respondents had filed a memo seeking withdrawal of the amendment application to agitate the matter before the Company Law Board which is not permissible under Order 23, Rule 3 of the CPC. No such liberty can be granted and they have to agitate the matter on their own and sought for recalling the order dated March 27, 2013, made in C.A. No. 919 of 2008.

On the other hand, Sri. K.G. Ragnavan, earned senior counsel appearing for respondents Nos. 1, 7 and 8 argued in support of the order dated March 27, 2013, and contended that long after passing of the impugned order, the application has been filed invoking rules 6 and 9 of the Companies (Court) Rules which is not maintainable before this court. No adverse order has been passed against the applicant. The order passed by this court is not prejudicial to the interest of the applicant. The respondents made an application for amendment of the company petition. That amendment application was sought to be withdrawn to agitate the matter before the Company Law Board. If the applicant has any grievance against the said order, they have to prefer an appeal. Hence, the application itself is not maintainable. Hence, sought for dismissal of the application.

I have carefully considered the arguments addressed by the learned senior advocates appearing for the parties and perused the relevant records.

The respondents herein had filed an application seeking amendment of the company petition which was filed in the year 1987. In the amendment petition it was contended that since the respondents have failed to get an interim order in the company petition, in the 41st annual general body meeting, some new resolution has been passed adverse to the interest of the company. It was challenged in O.S. No. 125 of 1990. In view of subsequent events, the respondents had filed an application seeking amendment of the company petition. In view of death of some of the respondents in the company petition, the applications have been filed to bring the legal representatives of the deceased respondents. Hence, there is some delay in disposing of the said applications. In the meantime, some of the shareholders approached the Company Law Board alleging oppression and mismanagement. Since the issue is pending before the Company Law Board, the respondents have thought it fit to withdraw the application seeking amendment of the company petition and to agitate the matter before the Company Law Board. Accordingly, they filed a memo seeking permission of this court to withdraw Company Application No. 919 of 2008, reserving liberty to them to raise such issue before the Company Law Board. None of the parties objected for the same. Accordingly the order has been passed. Even without liberty also, the respondents can agitate the matter before the Company Law Board with necessary application with regard to oppression and mismanagement. If any such application is filed, the same has to be considered by the Company Law Board and to take steps in accordance with law. No blanket permission has been granted to agitate the issue before the Company Law Board. The application has to be considered on its own merits. If there is delay in filing the application, it is for the Company Law Board to deal with the same. Hence, there is no infirmity or irregularity in permitting the respondents to withdraw the amendment application to agitate the issue before the Company Law Board. The order dated March 27, 2013, will not affect the interest of the applicant herein. It is the discretionary of a person either to prosecute the matter or withdraw the same. Hence, the question of recalling the order dated March 27, 2013, permitting the respondents to withdraw the amendment application does not arise. No ground is made out to recall the order dated March 27, 2013. Accordingly, C.A. No. 1589 of 2013 is rejected.