Case Note & Summary
The judgment pertains to Company Application No.85 of 2014 filed by six applicants (Shri Kashinath R. Jhunjhunwala and others) against M/s Laxmichand Bhagaji Ltd. (Depositors Management Committee), the company itself, and Suman Chhabra. The applicants sought a declaration that the respondents were not entitled to disturb their peaceful possession over 6050 sq. yards of land in Village Neb Sarai, and to take on record certain documents. The respondent no.3, Suman Chhabra, raised a preliminary objection regarding the maintainability of the application. The court heard arguments only on this issue. The relevant facts show that by orders dated 24th October 1991 and 28th November 1991, the High Court sanctioned a scheme of compromise/arrangement for the company, and a Depositors Management Committee was appointed to manage the company's affairs. The applicants did not obtain leave of the company court under Section 446(2) of the Companies Act, 1956 before filing the application. The court held that since the company was under the supervision of the company court and the scheme was sanctioned, any proceeding against the committee or its members in relation to the company's assets requires prior leave. The application was dismissed as not maintainable, with no order as to costs.
Headnote
A) Company Law - Maintainability of Application - Section 446(2) Companies Act, 1956 - Leave of Company Court - The applicants sought a declaration that the Depositors Management Committee and its members were not entitled to disturb their possession over certain land. The respondent no.3 raised a preliminary objection that the application was not maintainable as the applicants had not obtained leave of the company court under Section 446(2) of the Companies Act, 1956. The court held that since the company was under the supervision of the company court and a scheme of arrangement was sanctioned, any proceeding against the committee or its members in relation to the company's assets requires prior leave of the company court. The application was dismissed as not maintainable. (Paras 1-10)
B) Company Law - Scheme of Arrangement - Depositors Management Committee - Jurisdiction of Company Court - The court noted that the Depositors Management Committee was appointed by the High Court to manage the company's affairs under the sanctioned scheme. Any dispute regarding the committee's actions or the company's assets falls within the exclusive jurisdiction of the company court. The applicants' failure to seek leave rendered the application not maintainable. (Paras 3-8)
Issue of Consideration
Whether the company application filed by the applicants seeking declaration against the Depositors Management Committee and its members is maintainable without obtaining leave of the company court under Section 446(2) of the Companies Act, 1956.
Final Decision
The company application is dismissed as not maintainable. No order as to costs.
Law Points
- Maintainability of company application
- Section 446(2) of Companies Act
- 1956
- Leave of company court
- Jurisdiction of company court
- Scheme of arrangement
- Depositors Management Committee
Case Details
COMPANY APPLICATION NO.85 OF 2014 IN COMPANY PETITION NO.76 OF 1991
Mr. Dinesh Seth for the applicants/petitioners, Mr. C.K. Rajan for the original petitioner, Mr. Mehul Rathod for the respondent no.1, Mr. Mayur Khandeparkar a/w Mr. Medhavin Bhatt i/by M/s MV Law Partners for the respondent no.3
Shri Kashinath R. Jhunjhunwala, Mrs. Uma Ramnath Jhunjhunwala, Mrs. Manisha Manish Jhunjhunwala, Mrs. Jyoti Siddharth Jhunjhunwala, Mrs. Asha Kailashnath Jhunjhunwala, Mrs. Sonu Rajesh Jatia
M/s Laxmichand Bhagaji Ltd. (Depositors Management Committee), M/s Laxmichand Bhagaji Ltd., Suman Chhabra
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Nature of Litigation
Company application seeking declaration against Depositors Management Committee and its members regarding possession of land.
Remedy Sought
Declaration that respondent no.1 and its committee members are not entitled to disturb peaceful possession of applicants over 6050 sq. yards of land, and direction to take on record copies of documents.
Filing Reason
Applicants alleged that respondents were disturbing their possession over land.
Previous Decisions
By orders dated 24th October 1991 and 28th November 1991, the High Court sanctioned a scheme of compromise/arrangement for the company and appointed a Depositors Management Committee.
Issues
Whether the company application is maintainable without obtaining leave of the company court under Section 446(2) of the Companies Act, 1956.
Submissions/Arguments
Respondent no.3 submitted that the application is not maintainable as the applicants did not obtain leave of the company court under Section 446(2) of the Companies Act, 1956.
Applicants argued that the application is maintainable as it relates to the scheme of arrangement.
Ratio Decidendi
Any proceeding against the Depositors Management Committee or its members in relation to the company's assets, when the company is under the supervision of the company court and a scheme of arrangement is sanctioned, requires prior leave of the company court under Section 446(2) of the Companies Act, 1956. Failure to obtain such leave renders the application not maintainable.
Judgment Excerpts
By this application, the applicants seek a declaration that the respondent no.1 and its committee members or any of their constituted attorneys including Mr. Suman Chhabra are not entitled to disturb the peaceful right, title and possession of the applicant nos.2 to 6 over the 6050 sq.yards of land...
Mr.Khandeparkar, learned counsel for the respondent no.3... raises a preliminary objection about maintainability of this company application on various grounds.
This Court has accordingly heard the learned counsel for the parties only on the issue of maintainability of this company application raised by the respondent no.3.
Procedural History
Company Petition No.76 of 1991 was filed, and by orders dated 24th October 1991 and 28th November 1991, the High Court sanctioned a scheme of compromise/arrangement and appointed a Depositors Management Committee. Subsequently, Company Application No.85 of 2014 was filed by the applicants. Respondent no.3 was impleaded by order dated 13th July 2013. The court heard arguments on maintainability and dismissed the application.
Acts & Sections
- Companies Act, 1956: Section 446(2)
