BHAGWATI DEVELOPERS PRIVATE LTD. versus THE PEERLESS GENERAL FINANCE INVESTMENT COMPANY LIMITED & ORS.

Citation: [2013] 5 S.C.R. 708 · Decided: 04-04-2013 · Supreme Court of India · Bench: B.S. CHAUHAN · Disposal: Appeal(s) allowed
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Judgment (excerpt)

A 
8 
[2013] 5 S.C.R. 708 
BHAGWATI DEVELOPERS PRIVATE LTD. 
V. 
THE PEERLESS GENERAL FINANCE INVESTMENT 
COMPANY LIMITED & ORS. 
(Civil Appeal Nos. 361-362 of 2005) 
APRIL 4, 2013. 
[DR. B.S. CHAUHAN AND FAKKIR MOHAMED 
IBRAHIM KALIFULLA, JJ.] 
C 
Companies Act, 1956: 
ss. 397 and 398 - Comparw petition - With the consent 
of other share-holders - Withdrawal of, by original petitioners 
- Effect of- Held: The withdrawal would not render the petition 
D non-existent, or non-maintainable - The constructive parties 
who provide consent to file the petition, are entitled to be 
transposed as petitioners in the case. 
s. 399 - Company petition - With the consent of other 
share-holders - Form of consent - Held: Consent need not 
E be given by the share-holder personally - It can be given by 
Power of Attorney holder of such share-holder - The issue of 
consent must be decided on he basis of broad concensus 
approach, in relation to the avoidance and subsistence of the 
case - If share-holder who had initially given consent to help 
F meet the requirement of 1110th share-holding, transfer of 
shares by him or if he cease_s to be share-holder, would not 
affect the maintainability and continuity of petition. 
Companies Rules, 1959 - r. 88(2) - Company petition 
G - Withdrawal of - Procedure for, prescribed under r. 88(2) -
Whether excludes applicability of the procedure under CPC 
- Held: No - Code of Civil Procedure,· 1908. 
Code of Civil Procedure, 1908: 
H 
708 
BHAGWATI DE;VELOPERS PVT. LTD. v PEERLESS GEN. 709 
FINANCE INVEST. CO. LTD. 
Or. XX/II r. 1 (5) - Withdrawal of case - Without the 
A 
consent of other parties - Propriety of - Held: A suit filed in 
representative capacity also represents persons besides the 
plaintiff - Grant of withdrawal of such petition without the 
consent of other parties, is unjustified and such order is without 
jurisdiction. 
B 
Doctrines: 
'Ubi jus ibi idem remedium' - Applicability. 
'Actus Curiae Neminem Gravabit' - Applicability. 
c 
The two share-holders of the respondent-Company, 
with the. consent of two share-holders, including the 
appellant-Company, filed petition u/ss. 397 and 398 of 
Companies Act, 1956, alleging mis-management and 
oppression. The Company Court dismissed the petition 
D 
as not maintainable. The two share-holders filed two 
appeals before Division Bench of High Court. 
Subsequently they applied for withdrawal of their appeals 
and the Division Bench of High Court dismissed the 
appeals as withdrawn, by order dated 16.11.1993 and 
E 
18.11.1993 respectively. 
The appellant filed two applications for recalling the 
order of dismissal of those appeals and for transposition 
of appellants therein as proforma respondents and 
substituting the appellant as sole appellant therein. The 
F 
Division Bench of High Court dismissed the applications 
holding that the appellant was a stranger having no locus 
standi; and that there was inordinate delay in the filing of 
such an application. Appellant approached Supreme 
Court by way of Special Leave Petition. The same was G 
disposed of by judgment dated 26.4.1996, observing that 
the appellant could prefer fresh appeal against he order 
of Single Judge of High Court in the winding up petition 
and further observed that the same would not be 
dismissed by the' Division Bench on the grounds of H 
. 710 
SUPREME COURT REPOR:rS 
[2013] 5 S.C.R. 
A limitation or locus standi; and that withdrawal of the 
appeals by the two share-holders would not come in the 
way of the appellant raising such contentions as are 
permissible and available to it. In pursuance of the order 
dated 26.4.1996 the appellants filed app~als, before the 
B Division Bench of High Court, which were dismissed. 
Hence the appeals. 
Allowing the appeals, the Court 
HELD: 1. The right to apply for the winding up of a 
C company is available, provided thatlhe applicant satisfies 
the requisite requirements under Sections 397, 398 and 
399 of the Companies Act 1956, with respect to holding 
10% shares in the total share-holding of the company. It 
is not necessary that the petitioner(s) must hold the same 
D Individually. Such a winding up petition can even be filed 
after obtaining the consent of other shareholders, so as 
to meet the requirement of having an aggregate of 10 per 
cent out of the total share-holding. [Para 6] [720-C-E] 
E 
2. The winding up application is maintainable under 
Section 397, where the affairs of the company are being 
conducted
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