Case Note & Summary
The dispute arose from a long-standing conflict over management and shareholding of K.C. Agro Pvt. Ltd. between the deceased, Shri Girdharlal Dalal, and Shri Bharat Dalal, the second respondent. The deceased had filed Company Petition No. 120 of 2013 before the Company Law Board under Sections 397, 398 and 402 of the Companies Act, 1956, alleging oppression and mismanagement. By order dated 29 April 2015, the Company Law Board allowed the petition. Respondents Nos.1 and 2, being aggrieved, filed Company Appeal No.102 of 2015 under Section 10F of the Companies Act, 1956 before the Bombay High Court. The appeal was admitted on 13 August 2015 and the operation of the Company Law Board order was stayed. During pendency, the deceased passed away on 19 January 2017. On 22 May 2017, Respondent No.1 filed Company Application (L) No.3 of 2017 to bring on record the fact of death and seek consequential amendments. The Prothonotary and Senior Master directed removal of office objections by 27 September 2017, failing which the application would stand rejected under Rule 986 of the Bombay High Court (Original Side) Rules, 1980. Objections were not removed, and the application stood dismissed. On 11 January 2018, the learned Single Judge directed Respondent No.1 to restore the application within one week, failing which Company Appeal No.102 of 2015 would stand dismissed. When listed on 7 February 2018, the Single Judge dismissed the appeal. Respondent No.1 filed Recall Application Company Application (L) No.5 of 2018, which was dismissed on 26 June 2018, but by consent of parties, the dismissal was recalled on 13 July 2018. On 14 December 2018, the recall application was permitted to be withdrawn with liberty to take out appropriate proceedings. Respondent No.1 then filed Company Application No.1 of 2021 seeking recall of orders dated 11 January 2018 and 7 February 2018 or extension of time to clear office objections. The appellant, Chetan Surendra Dalal, filed an intervention application claiming to be the executor under the will of the deceased. By order dated 3 May 2021 as modified on 7 May 2021, the learned Single Judge allowed Company Application No.1 of 2021, extended time to restore Company Application No.5 of 2021 (erstwhile L No.3 of 2017) until 10 June 2021, and consequently restored Company Appeal No.102 of 2015. The appellant challenged this order before the Division Bench. The appellant argued that respondents made false statements, the appeal had abated, and the intervenor should have been heard. Respondents contended that the order merely granted time to remove objections, no prejudice was caused, and the appellant's rights were reserved. The Court, after hearing both sides, held that the restoration application was between the applicant and the court, and no third party had a say. It noted that the Single Judge expressly reserved the appellant's right to raise all contentions, including abatement and allegations of false statements, in the Section 10F appeal. The Court found no reason to interfere and dismissed the appeal. The impugned order was upheld, and the appellant was given liberty to intervene in the main company appeal.
Headnote
A) Civil Procedure - Restoration and Extension of Time - Rule 986 of Bombay High Court (Original Side) Rules, 1980 - A restoration application for non-removal of office objections is a matter between the applicant and the court; the court is entitled to exercise its discretion to extend time to restore. The learned Single Judge extended time to restore Company Application (L) No.3 of 2017 until 10 June 2021, and no prejudice was caused to the appellant because his rights were specifically reserved. Held that the order granting extension was within discretion and not open to interference. (Paras 13-16) B) Company Law - Appeal under Section 10F - Abatement - Companies Act, 1956, Section 10(F) - The impugned order did not set aside the abatement of Company Appeal No.102 of 2015; it only extended time to restore the underlying company application. The learned Single Judge expressly kept open the appellant's right to raise all contentions, including abatement, before the Company Court. Held that the contention regarding abatement was premature and did not warrant interference with the impugned order. (Paras 15-16) C) Civil Procedure - Intervention in Restoration Proceedings - Locus Standi - Companies Act, 1956, Section 10(F) and Bombay High Court (Original Side) Rules, 1980, Rule 986 - A third party/intervenor has no say in a restoration application between the applicant and the court. The appellant, as an intervenor, was permitted to take out an intervention application in the main Section 10F appeal and raise all points, including allegations of false statements. Held that the learned Single Judge's observations reserving the appellant's rights were sufficient to protect his interests. (Paras 15-16)
Issue of Consideration
Whether the learned Single Judge erred in extending time to restore Company Application (L) No.3 of 2017 and restoring Company Appeal No.102 of 2015 under Section 10F of the Companies Act, 1956; whether the appeal had abated and whether the appellant/intervenor had locus to oppose restoration.
Final Decision
The present appeal was dismissed. The Court declined to entertain the appeal and upheld the impugned order dated 3 May 2021 as modified on 7 May 2021, which extended time to restore Company Application No.5 of 2021 (erstwhile L No.3 of 2017) until 10 June 2021 and consequently restored Company Appeal No.102 of 2015. The Court further held that the rights of the appellant to intervene in the main appeal and raise all contentions were expressly reserved.
Law Points
- Restoration application is between applicant and court
- extension of time to remove office objections does not set aside abatement
- third party intervener has no say in restoration
- court retains discretion under Rule 986 of Bombay High Court (Original Side) Rules
- right to raise contentions in main appeal preserved
