JUDGMENT 1. THIS is an appeal against an order made by S. P. Mitra, j., on the 22nd March, 1963 in an application made by Bameswardayal dubey under sections, 397 and 398 of the companies Act, 1956 (hereinafter referred to as the "said Act" ). The facts in this case are as follows: 1. There is a Cinema House situated at 67, Howrah Road in Howrah, the land and building originally belonged to Batanlal Chamaria and at present stands in the name of protap Properties Private Ltd., of which the said batanlal Chamaria is the Managing director It is in 1949 that we come across the mention oi Durgapada mukherji, who at one time was working as rent collector for Ratanlal chamaria. On the 22nd November 1949, we tina Ratanlal writing to the District magistrate, Howrah, stating that he had let out the Cinema House to durgapada. who was to run the same under the name and style of "asoke Cinema", as the proprietor thereof. The letter was written for the purpose of obtaining a license for running the said Cinema. Durgapada obtained a temporary license at first and thereafter, a permanent license. In October, 1953 Ratanlal transferred the said properties to pratap Properties Private Ltd., and Durgapada continued to take out the license to run the cinema. On the 24th March, 1955 a private limited company was incorporated under the name and style of "asoke Cinema Private Ltd. ", by Durgapada, his wife Kanika Mukherji, hiralal Sanyal and his wife Santilata Devi. Hiralal Sanyal was at the material time employed by Ratanlal. Sm. Kanika Mukherji is the appellant in this case. In April, 1955 an agreement was entered Into between Durgapada and his wife on the one hand and the Asoke Cinema Private Ltd., on the other, to sell to the said company the business run under the name and style of 'asoke Cinema. ' by the vendors, for a sum of Rs. 15,000 |- which amount was to he satisfied by the allotment to the vendors or their nominees, of a number of shares in the company and by undertaking to pay the debts and liabilities thereof. On the 1st January, 1956 a cinema license was taken out in the name of Hiralal Sanyal- At or about this time, Hiralal and his wife held 750 shares and the remaining 750 shares were held by Durgapada and his wife. On the 1st January, 1956 a cinema license was taken out in the name of Hiralal Sanyal- At or about this time, Hiralal and his wife held 750 shares and the remaining 750 shares were held by Durgapada and his wife. In June, 1956 Hiralal and his wife transferred 749 shares out of their holdings in favour of the petitioner Rameswar-dayal Dubey and Bachraj Chamaria the respondent No. 1 both of whom at the material time were In the employ of ralanlal. On the 16th November, 1956 durgapada and. his wife transferred 749 shares out of their holdings of 750 shares in favour of Bachraj and his nominees. After the above transfers, the shares of Asoke Cinema Private ltd., Were held as follows:- Chandi Prosad Chamaria 700 shares Rarneswar Dayal Dubey (Petitioner) 700 Bachraj Cham aria (respondent No. 1) 50 Murari Lai Sharma (respondent No, 3) 48 Hiralal Sanyal (respondent No. 4) 1 share Durgapada Mukherji (deceased) 1 2. CHANDI Prosad is a nephew of bachraj and Rameswardayal Dubey the petitioner was in the employ of Katanlal and was actually looking after some of his litigations, including proceedings before the Rent Controller in respect of the Cinema House, initiated by Durgapada. On [he 27th June, 1956 Bachraj Chamaria was appointed as the direct or-in-charge of the company, On 2nd July, 1956 Hiralal Sanyal was appointed as the director-in-charge, but under the control of Baehraj Chamaria. On the 26th September, 1956 Durgapada mukherji and one Biswanath Pandey iiled a suit being Suit No. 55 of 1956 in the court of the Sub-Judge, Howrah, against the said company, Ratanlal, Bachraj, Hiralal Sanyal etc., for a declaration that the plaintiffs were holding a valid lease in respect of the cinema premises and had unfettered rights to run the said business, for injunction and other reliefs, On the 18th December, 1956 a suit was filed in this High Court by Hiralal Sanyal and his wife, being Suit No. 3209 of 1956, against the said company Bachraj, murarilal, Dubey, Durgapada etc. for a declaration that the sale and transfer of shares to Bachraj and ethers were void, that the prices of the shares were never paid and two receipts had been falsely obtained, in respect thereof. for a declaration that the sale and transfer of shares to Bachraj and ethers were void, that the prices of the shares were never paid and two receipts had been falsely obtained, in respect thereof. In january|february: 1957 the District Magistrate of Howrah ordered that as the parties were involved in litigation, no license could be issued until the cases were disposed of and that the cinema house would stand closed in the meanwhile. We find that on the 28th February 1957, a directors' meeting of the company expressed an intention to give up the tenancy to the landlord. In fact, on the 24th April, 1957 a genreal meeting was purported to have been held in which it was inter-alia resolved that bachraj was authorised to surrender the tenancy to the landlord, and make over possession upon certain conditions. In another resolution dated 6th May, 1957 it was stated that possession of the cinema house together with assets etc., had been given to the landlord with effect from 1st May, 1957. Whatever may be the real truth behind the above transactions, it is admitted by all parties that on 29th May, 1957 Durgapada with the help of hired hooligans made a forcible entry into the cinema house, ejected the employee of the company by force and took possession thereof. It appears that Bachraj Chamaria immediately informed the police and criminal proceedings were commenced, but on the 2nd November, 1957 Durgapada died leaving him surviving the respondent No, 2 his widow and three minor children, none of whom are parties to this proceeding. Prior to his death, several material incidents look place. Durgapada had somehow managed to obtain a license in his own name for the cinema house. On 9th august, 195v upon an appeal being preferred before the commissioner, Burdwan Division, the license was set aside. But upon a further appeal being made to the State Government, it was ordered that the license should continue in the name of Durgapada. After Durgapada's death, the license has been issued in the name of his widow, Kanika Mukherji. rie next fact is that in sometime August, 1957 Durgapada made an application before the Rent Controller, howrah, for standardisation and fixation of rent at the rate of Rs. 400 - per month in respect of the said cinema house and rent is being deposited month by month. rie next fact is that in sometime August, 1957 Durgapada made an application before the Rent Controller, howrah, for standardisation and fixation of rent at the rate of Rs. 400 - per month in respect of the said cinema house and rent is being deposited month by month. In March 1959, an attempt was made by Ratanlal Chamaria and others to restrain Sm, Kanika Mukherji from procepding with the application before the Rent Controller for fixation of rent, but it failed. Thereafter, protracted efforts wore made for taking away the license from Kanika Mukherji but up till now these efforts have failed. On or about the 29th March, 1961 the present application was made by rameswardayal Dubey under sections 397 and 398 of the Indian Companies Act, the first respondent is Bachraj Chamaria, the second respondent is Sm, Kanika Mukherjec, the third respondent is murailal Sharma, the fourth respondent is Hiralal Sanyal, the fifth respondent is the company and the sixth respondent is Pratap Properties Private limited. The petition filed in this case is a long rambling document. The main allegations are as follows: - (1) That Sm. Kanika Mukherji, the respondent No. 2 has been set up by bachraj Chamaria, the respondent No. 1 to take wrongful possession of the said cinema house under a colour of title. She is a tool in the hands of the said respondent and there is a deep laid collusion and conspiracy among the respondents, other than the company, to exploit the company's business and to misappropriate the profits arising out of the same. (2) That the respondents 1, 2 and 3 are sharing the profits and Sm. Kanika Mukherji has been put in possession with the object of depriving the company of its business and profits. (2) That the respondents 1, 2 and 3 are sharing the profits and Sm. Kanika Mukherji has been put in possession with the object of depriving the company of its business and profits. (3) That the several litigations both in tho High Court and at Howrah, as also before the Rent Controller, including a criminal proceeding against durgapada Mukherji were all collusive in nature and were intended to camouflage and cover up the real intention and activities of the respondents other than the company namely, to continue to be in possession of the company's business premises and run the business, either in the name of the said Durgapada or bis widow or the said respondent No. 1 and thereafter divide and share the profits of the same, with a view to deprive the shareholders of the dividends they would otherwise be entitled to, and to avoid compliance with the provisions of the Companies Act and the payment of tax liabilities of the company. 3. IT may be mentioned here that these statements are made in paragraphs 23, 24 and 25 of the petition, all of which are verified as 'submission' made to court. In paragraph 40 of the petition, which is also verified as submission, the petitioner states that the facts and circumstances mentioned in the petition show that the affairs of the company are being conducted in a manner extremely oppressive to the petitioner, Farther, the facts stated would justify the making of a winding-up order on the ground that it is just and equitable that the company should be wound up, It is said that. such an order would prejudice to petitioner and therefore, an order should be made under section 397 of the said Act. In paragraph 41, which is also verified as submission, it is stated that the affairs of the company were being conducted in a manner extremely prejudicial to the interests cf the company. It is, therefore, prayed that on order should be made under section 398 of the said Act. 4. APART from the fact that the whole application is unreal and in my opinion, not a proper application under sections 397 and 398 cf the said Act, it appears irom the evidence that if there is one thing that has not boon proved, it is the story of collusion and conspiracy between the respondents other than the company. 4. APART from the fact that the whole application is unreal and in my opinion, not a proper application under sections 397 and 398 cf the said Act, it appears irom the evidence that if there is one thing that has not boon proved, it is the story of collusion and conspiracy between the respondents other than the company. In fact, the learned judge has rejected the charges of collusion and conspiracy, and has definitely held that on 29th May, 1957 Durgapadn took forcible and wrongful possession of the cinema house with all its assets and belongings. He has not come to the finding that the appellant has been put up conclusively to retain possession on behalf of Bachraj, and for his benefit. Nevertheless, the learned Judge has come to the conclusion that inaction on the part of Bacbraj amounts to "oppression" as laid down by Lord keith and Lord Denning in (1) Scottish co-operative. Ltd. v. Meyer, (1958) 3 a. E. R, 66. I shall presently deal with that case, and consider whether the learned Judge is right in his conclusion. An administrator was appointed as an interim measure during the pendency of the application to take possession of the cinema house, and this order has been made absolute. Before I proceed further, 1 should like to set out below the findings of the learned Judge upon some of the matters mentioned above. His finding is as follows:-"the petitioner's case is (which i am inclined to accept) that Durga took forcible possession of the property on the 29th May 1957 and thereafter started carrying on business in his own name. Upon the death of Durga, Kanika Mukherjee has been continuing the business. On this evidence the conclusion is that the business of exhibiting films that was carried on at premises No. 67, Howrah Road till the 16th January, 1957 was the business of Asoke Cinema Private Limited. Thereafter a trespasser had been carrying on business at the premises and on his death his wife had been doing so. There is no prayer in the petition for accounts against Kanika mukherjjce. Learned counsel for the petitioner also has not asked for any such relief." 5. Thereafter a trespasser had been carrying on business at the premises and on his death his wife had been doing so. There is no prayer in the petition for accounts against Kanika mukherjjce. Learned counsel for the petitioner also has not asked for any such relief." 5. ON the question of collusion and conspiracy, the learned Judge after exhaustively considering the evidence comes to the following finding: -"the petitioner's case is that there was a conspiracy between bachraj and Durga and after durga's death between Bachraj and kanika. Indeed the petitioner has gone to the extent of saying that there is deep laid collusion and conspiracy among the respondents, other than the Company to exploit the Company's business and to misappropriate the profits arising out of the same. The petitioner has advanced this case in paragraphs 23 to 27, 32 and 34 of the petition. Bachraj has firmly denied this charge in questoin 23 and 24. I have examined the evidence on this aspect of the matter and am inclined to accept Bachraj's answers to these two questions. I do not think there is any conspiracy as alleged by the petitioner. Bachraj may have acted foolishly or negligently in not taking proper steps against Durga and particularly against Kanika for recovery of possession of the Company's properties, but I do not think that he has conspired with any one to go against the interest of the Company. But the fact remains that inaction on the part of Bachraj who was the Director-in-charge has been oppressive to the other members of the Company and the principles laid down by Lord Kaith of Avon-holm and Lord Denning in the passages quoted above are to my mind applicable to the facts and circumstances of the present ease. The petitioner in my opinion has established a case for exercise of powers by the Court under section s97 of the Companies Act, 1956. 6. I must also mention here the three issues which were framed by the learned Judge for trial on evidence. They are as follows: - "(1) Is the Company the lessee of Asoke Cinema bouse at premises No. 67, Howrah Road, howrah ? (2) Is the Company the owner of the moveables lying in the premises ? (3) Is the business carried on at premises No, 67, Howrah Road the business of the Company ?" These are all questions of title. (2) Is the Company the owner of the moveables lying in the premises ? (3) Is the business carried on at premises No, 67, Howrah Road the business of the Company ?" These are all questions of title. The application was for invoking the court's intervention, for the protection of a minority shareholder against the alleged oppression of the majority. Fraud, collusion and conspiracy was alleged. There is not a single issue on any of these matters. 7. AS was to be expected, there was a prolonged trial and a number of witnesses were examined and documents tendered. On behalf of thi; petitioner, the following oral evidence was called: the petitioner himself, Hiralal sanyal and Bachraj Chamaria. The appellant examined herself, her father and throe other witnesses. The first comment that arises is as to whether the learned Judge correctly appreciated the scope of the application, and whether the procedure adopted was justified-I shall presently go into the question of the scope of section 397 of the said Act under which relief has been granted. But apart from all technicalities,, it is obvious that section 397 cannot be utilised in trying a title suit between a company, its share-holders and a stranger, who was claiming title, not as a share-holder of the company but independently. The object of section 397 is to protect the minority shareholder from the oppression of the majority. It is not a provision of the law which enables a share-holder of the company to question the title of a stranger and have it decided in the application, like ft title suit. Briefly speaking, this is what has happened in this case. Whatever may have been the earlier antecedents of Durgapada Mukherjee, it is accepted on all hands that in May, 1957 durgapada, forcibly and with the help of hired goondas took possession of the cinema house and thereafter continued to carry on business on his own behalf. After his death, it has been found as a fact that the appellant has been carrying on business on her own behalf and she claims the business as belonging to her late husband. She Is not a registered share-holder. In fact she applied for letters of administration to the estate of Durgapada but the application was dismissed. In any event, the company has not recognised her and not a single share stands in her name. She Is not a registered share-holder. In fact she applied for letters of administration to the estate of Durgapada but the application was dismissed. In any event, the company has not recognised her and not a single share stands in her name. Therefore, the position briefly is this: a stranger has ousted the company from possession and is claiming its assets, and in fact proceedings, civil and criminal, are pending, including proceedings before the Kent Controller. A share-holder, find there is no evidence to show that he is in a minority, does not take any other steps under the Companies Act but straightway makes an application under section 397, making reckless allegation of collusion and conspiracy. All these allegations of collusion and conspiracy are rejected as being false, and yet, the application is transformed into a title suit, and the stranger is ousted from possession by order of court. In my opinion, this is not in accordance with the provisions of law, and is clearly in excess of the jurisdiction conferred upon the court under section 397 of the said Act. It would be observed that the three issues which have been tried aie all issues regarding title as to the business which is being carried on now at 67, Howrah road and its assets. There is no issue at all about the oppression or about any of the conditions that should exist for the granting of relief under section 397 or 398 of the said Act, I could have understood if the learned Judge decided that Bachraj Chamaria or the Directors of the Company were guilty of inaction, and should be displaced from their office and an administrator should be appointed to take steps for the protection of the interests of the company by instituting appropriate proceedings for ejecting the trespasser. The learned Judge, however, has, in the application itself decided the title and ousted the appellant, who is a stranger, from possession. Thus, in my opinion, is an erroneous application of the provisions of section 397. 8. BEFORE I deal with the law, I shall refer to certain facts in the ease. I have already given above, a list of the present share-holders of the company, i have also mentioned that each one of the persons is in some way connected with Ratanlal Chamaria. 8. BEFORE I deal with the law, I shall refer to certain facts in the ease. I have already given above, a list of the present share-holders of the company, i have also mentioned that each one of the persons is in some way connected with Ratanlal Chamaria. Durgapada, who was at one time employed as a rent collector by Ratanlal, -seems to have taken the law into his own hands and in May 1957 forcibly took possession of the cinema house and its business and assets. Let us now see how the other parties stand in the matter. The petitioner Dubey has given evidence in this case. It is interesting to learn as to how he purchased the shares in the cinema business. The evidence is that he was working under Ratanlal chamaria since 1944 and worked there till March, 1960. He purchased 700 shares in the company from Hiralal on the 25th June 1956, through Bachraj to whom he paid Rs. 7,000 - as a consideration. He was then drawing a salary of Rs. 300 - per month. He was asked to show as to how he got Rs. 7,000|- for the purchase of these shares. He said that Rs. 4,000/- was his iavings out of his salary. He had Rs. 1500/- with him and Rs. 2500 /- he had kept with ratanlal Chamaria. He was asked as to whether the books of Ratanla Chamaria would show that Rs. 2500/- was either retained by him or ever paid by him, but he said that there was no record kept of the same. His evidence was that, from time to time he would keep monies out of his salary with Ratanlal and would take monies therefrom whenever he needed. He was asked as to whether any records would how it, but he said that no records were kept. As regards the balance of rs. 3000/- he said that he sent for it from his native place and got the money. He said he had a business in his native place, but he has not been able to produce any records to show that he had the money at his native place or brought down Rs. 3000/- from his native place in Rajasthan, for the purpose of buying the shares. He said he had a business in his native place, but he has not been able to produce any records to show that he had the money at his native place or brought down Rs. 3000/- from his native place in Rajasthan, for the purpose of buying the shares. At the relevant time, Bachraj, Murarilal and Dubey were all working at the same office of ratanlal at No. 3, Chandmari Road, howrah (Q. 121 to 123 ). Chandiprosad is the nephew of Bachraj and Hiralal was also employed by Batanlal. The story about keeping monies out of his salary with Ratanlal without interest and without being entered in the books, is incredible and should be rejected. If the petitioner had caused a sum of rs. 3000]- to be brought down from rajasthan, it would certainly have appeared in the books of account, because admittedly he had a business there. In any event, some evidence to that effect would have been available. In my opinion, the petitioner has failed to prove satisfactorily that it was he who paid the consideration for the shares which he holds in the company. Let us now consider the evidence as to the other share-holders. Chandiprosad chamaria is the holder of 700 shares. In the petition, it is stated that he is a nephew of Bachraj, the suggestion being that Bachraj had got him to buy the shares in order to advance his own case. Yet Chandlprosad has not been made a party to this application. The petitioner was asked as to whether Chandiprosad was in conspiracy with Kanika mukherjee, but he disclaimed any such allegation (Q. 884 ). He said that he did. not even consult Chandiprosad before he made the application and wag unaware whether Chandiprosad at all knows about the application (Q. 885, 886, 887 ). He has also admitted that chandiprosad was not against him, (Q. 1035 ). Next I come to Murarilal who holds 48 shares. As regards Murarilal, it would be revealing to set out certain questions and answers of the petitioner namely questions 243 to 249, which are as follows : - "243. Q, Is there any other party to this conspiracy or simply the two parties, Durgapada and bachraj ? a. Bachraj and Murarilal were the directors of the company and both of them were parties to that conspirary. Q, Is there any other party to this conspiracy or simply the two parties, Durgapada and bachraj ? a. Bachraj and Murarilal were the directors of the company and both of them were parties to that conspirary. 244, Q. Therefore, two of the directors-Bachraj and Murarilal were parties to this conspiracy by which Durgapada took possession of the cinema house ? a. At the time when the incident happened Bachraj and Murarilal were both directors of the company but most of my suspicion falls on Bachraj. 245. Q. Was Murarilal a party to this conspirary by which Durgapada took possession of the cinema houss. A. I cannot say anything about milrarilal 246. Q- Therefore, he is not a party to this conspirary is it your case ? a. That is so. 247. Q. (Shown) Look at your affidavit filed in these proceedings affirmed on the 26th June 1961-Sec para (sic) ? a, Yes, he has been impleaded here; he was also a director at that time. 248. Q, Tell me whether he was a party to the conspiracy or not? a. The fact remains that he was a director of the company. 249. Q, Question repeated ? a. I have my doubt in the matter; I have my doubt with regard to his being a party to the conspirary. It Is significant that although collusion and conspirary is claimed, the petitioner himself called as his witness both Bachraj and Hiralal, As regards hiralal Sanyal, the petitioner says that he is supporting the company. Upon his point the following questions and answers are revealing: -"879. Q. Hiralal Sanyal also filed an affidavit irt this proceedings-look at bis affidavit-paragraph 20 (Reads ). He is also supporting you? a. Yes, he is supporting the company. 880. Q. Therefore, you find now that everybody is supporting you and everybody is against Kanika Mukherjee-do you realise that now ? a, But Bachraj certainly is in collusion with her because now I have every reason to suspect that. 881. Q. Save and except-Bachraj the other respondents are not in collusion-that is your present case? a. Bachraj and Murarilal are in collusion with her/' 9. I have already pointed out the evidence of the petitioner with regard to Murarilal which is entirely conflicting and unworthy of belief. Let us see what his evidence is against Bachraj. 881. Q. Save and except-Bachraj the other respondents are not in collusion-that is your present case? a. Bachraj and Murarilal are in collusion with her/' 9. I have already pointed out the evidence of the petitioner with regard to Murarilal which is entirely conflicting and unworthy of belief. Let us see what his evidence is against Bachraj. In his evidence, the petitioner has been constrained to admit that he has no definite case against Bachraj and his entire case rests on suspicion only. In question 233, he says that when Bachraj did not do anything beyond starting a criminal case against Durgapada he began to have 'suspicion' in his mind that he was in collusion with Kanika or Durgapada. In Question 234, he says that at first he had no 'suspicion' but afterwards he just began to have 'suspicion' that it might be so. In question 241, he repeats that this was his "suspicion at the present moment", this statement of his having suspicion has been, repeated in answers to Questions 259 to 262, 272, 274 and 293. 10. LET us, therefore,. summarise the position. There are 1500 shares, oi which Durgapada Mukherji only held 1 share. The evidence of the petitioner comes to this that as regards Chandi Prosad who had 700 shares he was not consulted at all and he is not a party to the collusion and conspiracy; in fact, he is not even a party to the proceeding. Murari, who holds 48 shares is also exonerated, hiralal is friendly to the petitioner, Therefore, the only person against him was Bachraj who held only 50 shares. In respect of the allegation of collusion and conspiracy, which is the main basis of the petition everybody has been exonerated by the petitioner except Bachraj. A single person cannot be guilty of collusion and conspirary and the learned Judge has rightly rejected the case made out by the petitioner. The allegation then made is that Sm. Kanika Mukherji has been "set up by Bachraj". But this also is mere suspicion. The relevant allegations of facts in the petition are all verified as submission to Court, and the evidence is that all these allegations are based on suspicion. If this be the position, then I do not see how it can be said that the majority was, or is, oppressing the minority. Bachraj is himself in a minority. The relevant allegations of facts in the petition are all verified as submission to Court, and the evidence is that all these allegations are based on suspicion. If this be the position, then I do not see how it can be said that the majority was, or is, oppressing the minority. Bachraj is himself in a minority. If the petitioner had any complaint, he should first have taken steps to seek the assistance of the other share-holders and exhaust his other remedies under the Companies act, before invoking the protection of sec. 397. The evidence is that, barring several casual conversations with Bachraj, the petitioner took no step to invoke any of his remedies under the Companies Act. Even when he attended the share-holders' meeting he admits in Question 626, that he made no protest. He has also admitted that he knows nothing about the accounts of the company and has never looked into it, (Q. 624-627 ). I have stated above that the application is really an "unreal" one. This may be elaborated a little. Ratanlal Chamaria, a member of the well known 'chamaria' family of Calcutta is the owner of the property. It is significant, that the shares, excepting one are held by persons who are connected with Ratanlal. Chandi Prasad does not actually work under Ratanlal but he is the nephew of Bachraj and was one of his nominees when the shares came to be redistributed. The history set out above will show that the carrying of the business in various names did not work out and the ground was prepared for making over possession to ratanlal, or the Protap Properties Private Limited, which is his company. It was at this stage that everything went wrong. Durgapada took possession of the cinema house and the business together with its assets, by force, with the help of hired goondas and managed to get the license to run it, in ms own name. He also look proceedings before the Rent Controller which perhaps was the "unkindest cut. of all", to the effect that the rent, instead of being rs. 2000|- per month should be Rs, 400/ -. There is no wonder, therefore, that a spate of litigation followed. This application is only a part of such proceedings. The petitioner has failed to give satisfactory evidence that he genuinely bought the shares himself. of all", to the effect that the rent, instead of being rs. 2000|- per month should be Rs, 400/ -. There is no wonder, therefore, that a spate of litigation followed. This application is only a part of such proceedings. The petitioner has failed to give satisfactory evidence that he genuinely bought the shares himself. It appears that he was not only in the employ of Ratanlal but that he was closely connected with legal proceedings, on behalf of Ratanlal, in respect of this very property, and at one stage was looking after the rent control proceedings on his behalf. In fact, in those proceedings he actually gave evidence on behalf of the Protap Properties Private Ltd,, against Kanika Mukherji. He admits that he did so "for Ratanlal" (Q. 135, 136, 137, 138 ). He admitted that he was "looking after that litigation" (Q. 142, 143, 144 ). At the meeting of the Board of Directors on 6th May, 1957 it was decided to make over possession to Ratanlal and at the general meeting of the share-holders on 24th April 1957 in which the petiotner was present, it was inter-alia resolved that Bachraj Chamaria should surrender the tenancy to the landlord. It appears from a copy of the minutes (Vol. II Part II P. 343-49) that the petitioner was actually present and signed the minutes. There is on record a petition filed by the Protap Properties private Ltd, in suit No. 5028 of 1955 (Kartic Chandra Bose v. Hiralal sanyal and Ors.) verified by Ratanlal Chamaria as "true to his knowledge (seevol. II, Part II. paper book pp. 211 at 216} where we find the following statement:-"on the 30th of April, 1957 Bachraj Chamaria as Managing Director of the said asoke Cinema Private Limited surrendered the tenancy on behalf of Asoke Cinema Private Limited together with all its assets to your petitioner," In paragraph 9 of the said petition, which has also been verified by Ratanlal as true to his knowledge, he says that on or about 29th of May, 1957 durgapada Mukherjee forcibly entered "your petitioner's said Cinema House and a Criminal case was filed on behalf of your petitioner against the said durgapada Mukherjee complaining of the criminal trespass and taking of forcible possession". In this background, can it be said that the petitioner is an independent person and that the application has been made for the benefit of the company ? I have mentioned above, that rent control proceedings were taken against the landlord in an attempt to decrease the rent. If the rent was reduced it would be to the benefit of the company and its cinema business and yet in those proceedings the petitioner actually looked after the interest of ratanlal, in opposition to the reduction of rent and gave evidence on his behalf (Q. 308 ). He was a party to the proposal for surrendering the tenancy to Ratanlal. His interest and that of the company, do not seem to be identical. It is not difficult to imagine as to the genesis of this application and as to whose interest it was intended to serve. There can be little doubt that the real motive behind it is to regain possession on behalf of Ratanlal Actually, during his evidence, the petitioner let out the truth. In Question 305, he said that this was an "ejectment suit". Hiralal Sanyal in his evidence, further cleared up this aspect of the matter. He said that Ratanlal wanted the company to go into liquidation, so that he could regain possession of the property and let it out to new tenants, but Ms intention could not be fulfilled because in 1957 Durgapada took forcible possession of the property. (Hiralal-Q. 384, 389 ). Bachraj, in his evidence (Q, 717 lo 725) supports this and admits that it is Ratanlal who wants to get possession of the cinema after it is released from the trespasser. Coming back to the evidence of Hiralal, who was called by the petitioner himself, he admits that Ratanlal wanted possession of the cinema house to enable him to let it out to somebody else on higher rent (Q. 321 ). He also admitted (Q. 367) that the position changed, due to Durgapada's taking wrongful possession of the house. In questions 371 to 376. ' Hiralal admits that Ratanlal's intention was that the company should be controlled by persons who listen to his dictates. The following questions and answers ara revealing: 4 "371. Q. After November, 1955-Ratanlal Chamaria's intention was that the company should be controlled by persons who would act according to bis desires and dictates ? a. That is so. ' Hiralal admits that Ratanlal's intention was that the company should be controlled by persons who listen to his dictates. The following questions and answers ara revealing: 4 "371. Q. After November, 1955-Ratanlal Chamaria's intention was that the company should be controlled by persons who would act according to bis desires and dictates ? a. That is so. 372, Q. And that intention of his continued right up to June, 1956? a. Or even later until Durga took over possession. 3v3, Q. June, 1956 or may be even later ? a. Yes. 374. Q. The reason for this intention was that ratanlal Chamaria was anxious to let out the property to a new tenant who would give him higher rent and from. whom he would get a large amount of selami ? a. That is so. 375. Q. After Durga had taken forcible possession, the property went out of the hands of the persons who were under the control of Ratanlal ? a, Yes. 376. Q. Therefore, it would be an all-out effort on the part oi Ratanlal to get possession of the pro- perty some how or other ? a. Yes. " 11. HIRALAL admitted that the petitioner Rameswardayal Dubey, who was a tutor of Ratanlal's son, was a favourite of Ratanlal Chamaria. He was frank enough to admit that all his own litigation expenses, which amounted to Rs. 2000/- was being paid by Ratanlal (Q. 406 to 412 ). He informed the Court that it was likely that if the company got possession of the property, Ratanlal would get it dissolved and would regain possession of the property. It will he remembered that both Hiralal and bachraj were called as witnesses by the petitioner. 12. IN my opinion, in the background of these facts, it is obvious that the application is not a genuine one and is not made by a minority share-holder, because oi oppression by the majority, nor for the benefit of the company. In my opinion also, it has been amply established by evidence that Durgapuda became a trespasser, and since he trespassed into the premises on 29th May, 1956 he had been claiming the business for himself and had been running it for his own benefit. It has also been established that the appellant Sm. In my opinion also, it has been amply established by evidence that Durgapuda became a trespasser, and since he trespassed into the premises on 29th May, 1956 he had been claiming the business for himself and had been running it for his own benefit. It has also been established that the appellant Sm. Kanika mukherji is not a share-holder and is not in possession of the cinema house on behalf of the company but is claiming adversely to it. She is claiming title on her own behalf that is to say, on behalf of herself and her minor children as the heirs and legal representatives of Durgapada. The question is whether this application lies under section 397 against a trespasser, and particularly in the absence of the minor children of the appellant. Thia involves the question as to whether an application of this description can be transformed into a title suit against a stranger, and an order made, virtually for the ejectment of the respondent, who is claiming title on her own behalf. This brings me to a consideration of the provisions of section 397 of the Companies Act. It is the only provision under which relief has been granted. Section 397 of the said Act, appears in Chapter VI, which is beaded-"prevention of oppression aiad mismanagement. " It runs as follows: -"397. Applicatoin to Court for relief in cases of oppression.- (1) Any members of a company who complain that the affairs of the company are being conducted in a manner oppressive to any member or members (including any one or more of themselves)may apply to the Court for an order under this section, provided, such members have a right so to apply in virtue of section 399. ' (2) If, on any application under sub-section (1), the Court is of opinion- (a) that the company's affairs are being conducted in a manner oppressive to any member or members ; and (b) that to wind up the company would unfairly prejudice such member or members, but that otherwise the facts would justify the making of a winding-up order on the ground that it was just and equitable that the company should be wound up ; the Court may, with a view to bringing to an end the matters complained of, make such order as it thinks fit. "section 398 deals with the case of mismanagement, particularly as a result of material changes in the management and control of the company. 13. SECTION 399 lays down as to who shall have the right to apply under section 397 or section 398, In the case of a company having a share capital, not less than one hundred members of the company or not less than one-tenth of the total number of its members, whichever is less, or any member or members holding not less than one-tenth of the issued share capital of the company, may maintain such an application. Section 400 provides that notice of such application is to be given to the Central Government. Section 401 confers the right upon the Central government itself to apply to Court for an order under section 397 or section 398, Section 402 is important and should be set out: - "402. Powers of Court on application under section 397 or 398-Without prejudice to the generality of the powers of the Court under section 397. Section 401 confers the right upon the Central government itself to apply to Court for an order under section 397 or section 398, Section 402 is important and should be set out: - "402. Powers of Court on application under section 397 or 398-Without prejudice to the generality of the powers of the Court under section 397. or 398, any order under either section may provide for- (a) the regulation of the conduct of the company's affairs in future; (b) the purchase of the shares or interests of any members of the company by other members thereof or by the company, (c) in the case of a purchase of its shares by the company as aforesaid, the consequent reduction of its share capital; (d) the termination, setting aside or modification of any agreement howsoever arrived at, between the company on the one hand, and any of the following persons, on the other, namely: (i) the managing director, (ii) any other director, (iii) the managing agent, (iv) the secretaries and treasurers, and (v) the manager, upon such terms and conditions as may, in the opinion of the Court, be just and equitable in all the circumstances of the case ; (e) the termination, setting aside or modification of any agreement between the company and any person not referred to in clause (d), provided that no such agreement shall be terminated, get aside or modified except after due notice to the party concerned and provided further that no such agreement shall be modified except after obtaining the consent of the party concerned; (f) the setting aside of any transfer, delivery of goods, payment execution or other act relating to property made 01 done by or against the company within three months before the date of the application under section 397 or 398, which would, it made or done by or against an individual, be deemed in his insolvency to be a fraudulent preference ; (g) any other matter lor which in the opinion of the Court it is just and equitable that provision should be made. 14. THESE are all the provisions that we are concerned with in this case. Sections 397 and 398 are based upon section 153c of the Companies act oi 1913. Section 153c was entitled "power of court to act when a company acts in a prejudicial manner or oppresses any part of its members". 14. THESE are all the provisions that we are concerned with in this case. Sections 397 and 398 are based upon section 153c of the Companies act oi 1913. Section 153c was entitled "power of court to act when a company acts in a prejudicial manner or oppresses any part of its members". It provided that without prejudice to any other action that may be taken, whether in pursuance of the Act of 1913 or any other law for the time being in force, any member of a company who complains that the affairs of the company are being conducted- "(a) in a manner prejudicial to the interest of the company) or (b) in a manner oppressive to some part of the members (including himself)may make an application to the court for an order under section 153c, may make an application, and if on any such application the Court is of opinion- (a) that the company's affairs are being conducted as aforesaid, and (b) that to wind up the company would unfairly and materially prejudice the interests of the company or any part of its members}, but otherwise the facts would justify the making of a winding up order on the ground thut it is just and equitable that the company should be wound up, the court may, with a view to bringing to an end the matters complained of, make such order in relation thereto as it thinks fit. " Sections 397 and 393 are based on clause (a) of section 153c (a) of the 1913 Act, Section 399 is based on clause (3) and section 402 is based on clause (5 ). All these provisions are based on section 210 of the English companies Act, 1948. Previous to the introduction of section 210, the rule of supremacy of a majority of the shareholders was established as long ago as 1843, in (2) Foss v. Pfarbottle (1643) 2 hare 461. In that case, the minority shareholders alleged that the company had a claim in damages against some of the directors by reason of the fraudulent acts of those directors, but at the general meeting the majority resolved that no action should be taken against them. In that case, the minority shareholders alleged that the company had a claim in damages against some of the directors by reason of the fraudulent acts of those directors, but at the general meeting the majority resolved that no action should be taken against them. Two of the minority shareholders took legal proceedings against the directors and others to compel them to make good the losses to the company, but the court dismissed the action on the ground that, as the acts of the directors were capable of confirmation by the majority of members, the Court should not interfere. It was thus left to the majority to decide what was for the benefit of the company. There are many exceptions to the rule laid down in Foss v. Harbottle (supra ). For example, the majority could not confirm an act which was ultra-vires the company, or was illegal; or an act which constituted a fraud against the minority or where the wrongdoerd, were themselves under the control of the company etc. The matter however, did not rest there. The English Companies Act, 1948 is itself based upon the report of the Cohen Committee, which was published in 1945. The great majority of the recommendations of that committee were incorporated in the companies Actj 1947, which was consolidated with the Companies Act, 1929, and other relevant enactments in the companies Act, 1948. It was always the law that if a majority acted in oppression of the minority, the latter may petition the court to wind up the company, on the ground that it was jrst and equitable to do so. The Cohen Committee however found that in many cases the winding up of the company would not benefit the minority shareholders, since the break up value of the assets may be small, or the only available purchaser may be that very majority whose oppression had driven the minority to seek redress. In an attempt to meet such cases, it was recommended that the court should have power to grant an alternative remedy to winding up. By section 210 such an alternative remedy has been provided for. In an attempt to meet such cases, it was recommended that the court should have power to grant an alternative remedy to winding up. By section 210 such an alternative remedy has been provided for. Such an alternative remedy is available upon two conditions: - (1) The affairs of the company are conducted in a manner oppressive to some part of the members : and (2) the court would have power to make a winding-up order under the just and equitable clauses [s. 222 (1)] but such winding up would unfairly prejudice the members [s. 210 (1) (2)]. Section 210 has been analysed by Palmer in his company Law, 20th Edition pp. 506 to 507, It is stated as follows: -"the court may make such order as it thinks fit for ending the matters complained of. The order may regulate the conduct of the company's affairs in the future, or provide for the purchase of the shares of any member of the company by other members, or an exceptional provision by the company itself. If the company itself is to be the purchaser the court may but need not, provide for the reduction of the company's capital (s, 210 (2): in any event, in the case of an order authorising the company to accfuirc its own shares, the court will ensure that the interests of the creditors are safeguarded. The petition should set out with some particularity the relief which is sought, if necessary in alternative form. It will almost always be necessary for the affidavit supporting the petition to be of some greater detail than the normal statutory affidavit supporting a winding up petition. The court has unfettered discretion to make any order which it considers to be appropriate, e. g., for the appointment of additional or other directors, the distribution of dividend or the issue of new shares, or the prohibition of any of these measures. It can also order or authorise the purchase of the shares of the minority by the majority, the company or others at a price to be fixed by a court expert. Moreover, since the court may order or authorise the purchase of the shares of any member, the majority might find itself bought out by the minority under the section a risk which might considerably affect the attitude of a majority in its negotiations with the minority. Moreover, since the court may order or authorise the purchase of the shares of any member, the majority might find itself bought out by the minority under the section a risk which might considerably affect the attitude of a majority in its negotiations with the minority. Section 210 does not give the courts unlimited jurisdiction to intervene in the affairs of the company. The court can exercise its jurisdiction only if the requirements of the section are satisfied. The most important of them are : firstly the minority must prove that the majority conducted the affairs of the company in an oppressive manner-not only that minority share-holders have been oppressed-and secondly, the oppression must be upon the members in their capacity as members and not in any other capacity, e. g., that of directors. However, the requirements of the section in spite of its somewhat restrictive wordings, should be interpreted in a liberal spirit in order to carry out the intention of parliament which designed this remedy in order to suppress an acknowleged mischief." 15. SECTION 153c in the Indian act of 1913 was introduced by the amending Act 52 of 1951 and is based on section 210 of the English Act. It however enlarges the scope by not only making it applicable where the affairs of the company were being conducted in a manner oppressive to the members, but also in a manner prejudicial to the interests of the company. In the instant case, the learned Judge has held that in his opinion, a case has been established for exercise of powers by the court under section 397 of the Companies Act, 1956. I shall, therefore, proceed on the footing that it is a case of oppression of the minority by the majority of the shareholders. In order to understand this relief, as provided for in section 397 of the said Act, it would be necessary to consider a few authorities. 16. THE first case to be considered is (3) Edwai'da and anr. v. Halliwell and ors., (iy. JU; 2 All. E. R. 1064 in that case, Jenkins, L. J. explained that, the principle laid down in Foss v. Harbottle: (supra) about the validity of majority rule had certain exceptions including the cases where the minority were wrongdoers and were themselves; in control of the company. v. Halliwell and ors., (iy. JU; 2 All. E. R. 1064 in that case, Jenkins, L. J. explained that, the principle laid down in Foss v. Harbottle: (supra) about the validity of majority rule had certain exceptions including the cases where the minority were wrongdoers and were themselves; in control of the company. The learned Judge said as follows: -"the rule in Foss v. Harbottle (supra), as I understand it, comes to no more than this. First, the proper plaintiff in an action in respect of a wrong alleged to be done to a company or association of persons is prima facie the company or the association of persons itself. Secodly, where the alleged wrong is a transaction which might be made binding on the company or association and on all its members by a simple majority of the members, no individual member of the company is allowed to maintain an action in respect of that matter for the simple reason that, if a mere majority of the members of the company or association is in favour of what has been done, then cadit quaestio no wrong had been done to the company or association and there is nothing in respect of which any one can sue. If, on the other hand, a simple majority of members of the company or association is against what has been done, then there is no valid reason why the company or association itself should mot sue. In my judgment, it is implicit in the rule that the matter relied on as constituting the cause of action should be a cause of action properly belonging to the general body of corporation or members of the company or association as opposed to a cause of action which some individual member can assert in his own right. The cases falling within the general ambit of the rule are subject to certain exceptions. It has been noted in the course of argument that in cases where the act complained of is wholly ultra vires the company or association the rule has no application because there is no question of the transaction being confirmed by any majority. The cases falling within the general ambit of the rule are subject to certain exceptions. It has been noted in the course of argument that in cases where the act complained of is wholly ultra vires the company or association the rule has no application because there is no question of the transaction being confirmed by any majority. It lias been further pointed out that where what has been done amounts to what is generally called in these cases a fraud on the minority and the wrongdoers are themselves in control of the company, the rule is relaxed in favour of the aggrieved minority who are allowed to bring what is known as a minority shareholders' action on behalf of themselves and all others. The reason for this is that if they were denied that right, their grievance could never reach the court because the wrongdoers themselves, being :in control, would not allow the company to sue. Those exceptions are not directly in point in this case, but they show especially the last one, that the rule is not an inflexible rule and it will be relaxed where necessary in the interests of justice. " the next case to be considered iis scottish Co-operative Wholesale Society Ltd. v. Meyer and anr., (supra ). In that case the facts were as follows: The appellants were owners of a weaving mill, and the respondents, who formerly were German nationals, started in 1947 the manufacture cf rayon cloth, which the appellants had not previously manufactured. The respondents, who provided the formulae, knowledge and experience, had extensive connections in Europe in the trade and obtained licences for the purchase of yarn and the manufacture of rayon cloth, which was then subject to control. A private company, subsidiary of the appellants, was formed for the purpose. The issued share capital of this company was 7,9000, 1 shares, of which 4,000 were held by the appellants and 3,900 by the respondents. The company had five directors of whom the respondents were two and three were nominees of the appellants. The company was successful. The appellants desired to acquire further shares at par, the value of a 1 share being then 6 odd. The company resisted. The company had five directors of whom the respondents were two and three were nominees of the appellants. The company was successful. The appellants desired to acquire further shares at par, the value of a 1 share being then 6 odd. The company resisted. The appellants then adopted a policy of starving the company of supplies of rayon cloth from the mill, on which the company was dependent, and threw out a proposal for the purchase by them of the shares at 4. 16s. per share. The nominee directors of the company adopted a policy of passive support of the appellants, by inactivity, allowing the company's trading activities to decline or vanish. On petition by the respondents under S. 210 of the Companies act, 1948 on the ground that the affairs of the company were being conducted in a manner oppressive to some part of the members, viz., the respondents, the appellants were ordered to purchase the respondents' shares at 3. 15s. each. It was common ground that it was just and equitable that the company should be wound up. The house of Lords held that in view of the fact that the company was a subsidiary of the appellants and that the appellants" nominees on the board of the company were participating in the policy of the appellants, there was oppression within the meaning of section 210 of the Companies Act, 1948, although the misconduct of the nominee directors was negative, being passive neglect of the company's interests. In the case, two major grounds of defence were taken. The first was that the appellant was an independent entity and was entitled to conduct its own affiars for its own benefit and not for the benefit of another company. Secondly, it was urged that the directors of the company could not be charged with any specific act of oppression but only perhaps with inaction. On the first point, Lord Morton said as follows: -"my Lords, it is, I think, manifest that the oppressive operations so clearly described were all operations in the conduct of the society's affairs, not in the conduct of the company's affairs. The society so conducted its affairs as to oppress the company by shutting it off from its previous source of supply. The society so conducted its affairs as to oppress the company by shutting it off from its previous source of supply. By so doing, the society did, I think, oppress the minority shareholders in the company; but, as I have already pointed out, the respondents can only bring themselves within s. 210 of the Act of 1948 if they prove that the affairs of the company whereof they are members are being conducted in a manner oppressive to themselves as minority share-holders. They cannot succeed, in my opinion, merely by proving that the affairs of another company are being so conducted, even if that other company holds the majority of the shares in the company whereof the respondents are members and nominates the majority of its directors. It may be unfortunate that this form of oppressoin is not covered by the section; but this is, to my mind, the inevitable result of the words "the affairs of the company are being conducted". For this reason; my Lords I should have held the society entitled to succeed if the only evidence of oppression has been evidence that the society deliberately so conducted its own affairs as to cause hardship to the company and to force down the value of its shares, however regrettable such conduct may be, and whether or not it may be actionable. " In other words, the learned judge was of the opinion that in order to come within the scope of section 210, it is the majority members of the company against when relief was asked for that should be guilty of oppression and not some independent person. On the facts of that particular case however, the learned Judge finally came to the conclusion that the society was not an independent person. The company was a subsidiary of the society and all its affairs were controlled by the society which had its nominee Directors on its board. It was found as a matter of fact that the nominee directors of the company themselves were, by their inaction, carrying out the mandates of the society. The company therefore, came to be oppressed in a manner which brought the matter within the scope of section 210. It was found as a matter of fact that the nominee directors of the company themselves were, by their inaction, carrying out the mandates of the society. The company therefore, came to be oppressed in a manner which brought the matter within the scope of section 210. Lord Keith said as follows: -"on the vital matters affecting the company's prosperity known to the nominee directors, these directors remained silent, concealed the facts from the respondents and took no action and gave no advice helpful to the company. As Lord Sorn put it their conduct as directors was a negative one to 'let the company drift towards the rocks'. My Lord, if the society could be regarded as an organization independent of the company and in competition with it, no legal objection could be taken to the actions and policy of the society. . . . . . But that it not the position. In law, the society and the company were, it is true, separate legal entitles. But they were in the relation of parent and subsidiary companies, the company being formed to run a business for the society which the society could not at the outset have done for itself unless it could have persuaded the respondents to become servants of the society. . . . In these circumstances, I have no doubt the conduct of the society was oppressive. . . . Misconduct in the affairs of a company may be passive conduct, neglect of its interests, concealment from the minority of knowledge that it is material for the company to know. That, in my opinion, is what happened here. " lord Denning severely criticised the conduct of the nominee directors. He said as follows: - "It is plain that, in the circumstances, these three gentlemen could not do their duty by both companies, and they did not do so. They put their duty to the society above their duty to the company in this sense, at least, that they did nothing to defend the interest of the company against the conduct of the society. They probably thought that, 'as nominees' of the society, their first duty was to the society. In this they were wrong. By subordinating the interest of the company to those of the society they conducted the affairs of the company in a manner oppressive to other shareholders. They probably thought that, 'as nominees' of the society, their first duty was to the society. In this they were wrong. By subordinating the interest of the company to those of the society they conducted the affairs of the company in a manner oppressive to other shareholders. It is said that these three directors were, at most only guilty of inaction-of doing nothing to protect the company. But the affairs of a company can, in my opinion, be conducted oppressively by the directors doing nothing to defend its interest when they ought to do something-just as they can conduct its affairs oppressively by doing something injurious to its interest when they ought not to do it. . . . . . . Now I quite agree that the words of the section do suggest that the legislature had in mind some remedy whereby the company, instead of being wound up, might continue to operate. But it would be wrong to infer therefrom that the remedy under section 210 is limited to cases where the company is still in active business. The object of the remedy is to bring 'to an end the matters complained of,' that is, the oppression, and this can be done even though the business of the company has been brought to a stand-still". 17. IN my opinion, the following propositions have been established by this decision. (1) The principle embodied in section 210 of the English Act of 1948 is an exception to the rule laid down in Foss v., Harbottle (supra) which lays down the sanctity of the majority rule. (2) Under section 210, a minority which is oppressed by the majority can get relief without winding up of the company, but the oppression must be by the company itself. Oppression by an independent person is not within the scope of section 210. It may so happen however, that a unit outside the company may be so connected with its affairs that it can be said that the unit has caused oppression within the company itself. That, however, is a question of fact, and must be determined each case. It is not intended in such proceedings to adjudicate upon the rights of parties claiming independently. (3) The oppression need not always consist of active conduct. It may also be deduced from inaction or passive conduct. That, however, is a question of fact, and must be determined each case. It is not intended in such proceedings to adjudicate upon the rights of parties claiming independently. (3) The oppression need not always consist of active conduct. It may also be deduced from inaction or passive conduct. (4) In order to apply the provisions of section 210, it is not always necessary that the company should be in active business. It can also happen if the business of the company has come to a stand-still. Similar principles are applicable to applications under sec. 397. In such applications also, rights of third parties who claim independently, cannot be adjudicated or summarily affected. It is not that the rights of third parties can never be affected. Sec. 402, has made express provisions, where the rights of third parties can be affected. For example, certain agreements can be set aside between the company and third parties e. g., in the case of a fraudulent preference. Since, these specific instances have been set out in sec. 402, it cannot be said that it was contemplated that the rights of strangers could be affected under any circumsatnces or that the rule is of universal application. 18. IN (4) Elder v. Elder and Watson (1952) S. C. 49 the scope of section 210 was summarised thus:- " (1) The oppression of which a petition complains must relate to the manner in which the affairs, of the company concerned are being conducted ; and the conduct complained of must be such as to oppress a minority of the members (including the petitioners) qua shareholders. (2) It follows that the oppression complained of must be shown to be brought about by a majority of members exercising as shareholders a predominant voting power in the conduct of the company's affairs. (3) Although the facts relied on by the petitioner may appear to furnish grounds for the making of a winding up order under the "just and equitable' rules, those facts must be relevant to disclose also that the making of a winding up order would unfairly prejudice the minority members qua shareholders. (3) Although the facts relied on by the petitioner may appear to furnish grounds for the making of a winding up order under the "just and equitable' rules, those facts must be relevant to disclose also that the making of a winding up order would unfairly prejudice the minority members qua shareholders. (4) Although the word 'oppressive' Is not defined, it is possible, by way of illustration, to figure a situation in which majority shareholders, by an abuse of their predominant voting power, are 'treating the company and its affairs as if they were their own property' to the prejudice of the minority share-holders and in which just and equitable grounds would exist for the making of a winding up order. . . . . . but in which the 'alternative remedy provided by section 210 by way of an appropriate order might well be open to the minority share-holders with a view to bringing to an end the oppressive conduct of the majority. (5) The power conferred on the Court to grant a remedy in an appropriate case appears to envisage a reasonably wide discretion vested in the Court in relation to the order sought by a complainer as the appropriate equitable alternative to a winding up order. " In the case of (5) In re: H. R. Harmer Ltd. (1958) All E. R. 689 the facts were as follows: One 'h' had a business which was later on taken over by a company. 'h' had the controlling shares and he took in his sons C and B by making them a gift of some of his own shares. 'h' considered that he was entitled to disregard resolutions of the board of directors which included both himself and his two sons, so long as he held the voting control. He assumed powers which he did not possess and exercised them against the wishes of the shareholders who had a minority of votes. It was conceded that at the time of the presentation of the petition next mentioned, the facts would justify the making of a winding up order on the ground that it was just and equitable that the company should be wound up. The petition was one under section 210, which was filed by the sons, alleging oppression by the father. It was held that grounds had been made out for orders under section 210. The petition was one under section 210, which was filed by the sons, alleging oppression by the father. It was held that grounds had been made out for orders under section 210. Jenkins, L. J. said as follows: - "It is to be observed, first, that the person permitted to apply to the court under s. 210 is 'any member of (the) company', and he must show-'that the affairs of the company are being conducted in a manner oppressive to some part of the members (including himself ). . . . . . . . ' this indicates that the oppression complained of must be complained of by a member of the company and must be oppression of some part of the members (including himself)in their or his capacity as members or a member of the company as such. Secondly, it is to be noted that the section does not purport to apply to every case in which the facts would justify the making of a winding-up order under the 'just and equitable' rule, but only to those cases of that character which have in them the requisite element of oppression. Thirdly, the phrase 'the affairs of the company are being conducted' suggests, prima -facie, a continuing process and is wide enough to cover oppression by any one who is taking part in the conduct of the affairs of the company, whether de facto or dejure. Fourthly, the section gives no guidance as to the meaning of the word 'oppressive', although it does, as already mentioned, indicate that the victim or victims of the oppressive conduct must be a member or members of the company as such. Prima facie, therefore, the word 'oppressive' must be given its ordinary sense and the question must be whether in that sense the conduct complained of is oppressive to a member or members as such. Inasmuch as in the present case it is not in dispute that the facts would justify a winding-up order under the 'just and equitable' rule and it is recognised that such an order would unfairly prejudice the complaining members, this would appear to be, in effect, the only question in issue. " 19. Inasmuch as in the present case it is not in dispute that the facts would justify a winding-up order under the 'just and equitable' rule and it is recognised that such an order would unfairly prejudice the complaining members, this would appear to be, in effect, the only question in issue. " 19. IN the case of (6) Rajahmundry electric Supply Corporation Ltd. v. Nageshwara Rao and Ors., (1956) S. C. A. 300, the Supreme Court explained the scope of section 153c of the Indian companies Act, 1913, Ayyar, J., said as follows : - "It was next contended that the allegations in the application were not sufficient to support a winding up order under S. 162, and that, therefore, no action could be taken under S. 153-C. We agree with the appellant that before taking action under S. 153-C, the COURT must be satisfied that circumstances exist on which an order for winding up could be made under S. 162. The true scope of S. 153-C is that whereas prior to its enactment the Court had no option but to pass an order for winding up when the conditions mentioned in S. 162 were satisfied, it could now in exercise of the powers conferred by that section make an order for its management by the Court with a view to its being ultimately salvaged. Where, therefore, the facts' proved do not make out a case for winding up under S. 162, no order could be passed under S. 153-C. " 20. THE learned Judge then considered the question as to how far it can be said that the "just and equitable" clause in section 162 of the Companies act, 1913 should be invoked as a result of the mismanagement of directors. The learned Judge said as follows: - "When once it is held that the words 'just and equitable' are not to be construed 'ejusdem generis'. then whether mismanagement of directors is a ground for a winding up order under s. l62 (vi) becomes a question to be decided on the facts of each case. Where nothing more is established than that the directors have misappropriated the funds of the company, an order for winding up would not be just or equitable, because if it is a sound concern, such an order must operate harshly on the rights of the shareholders. Where nothing more is established than that the directors have misappropriated the funds of the company, an order for winding up would not be just or equitable, because if it is a sound concern, such an order must operate harshly on the rights of the shareholders. But if, in addition to such misconduct, circumstances exist which render it desirable in the interests of the share-holders that the company should be wound up, there is nothing in section s. 162 (vi) which bars the jurisdiction of the court to make such an order. (1924) A. C. 783 was itself a case in which the order for winding up was asked for on the ground of mismanagement by the directors, and the law was thus stated at page 788 ; "it is undoubtedly true that at the foundation of applications for winding up, on the 'just and equitable' rule, there must lie a justifiable lack of confidence in the conduct and management of the company's affairs. But this lack. of confidence must be grounded on conduct of the directors, not in regard to their private life or affairs, but in regard to the company's business. Furthermore the lack of confidence must spring not from dissatisfaction at being out-voted on the business affairs or on what is called the domestic policy of the company. On the other hand, wherever the lack of confidence is rested on a lack of probity in the conduct of the company's affairs, then the former is justified by the latter, and it is under the statute just and equitable that the company be wound up." The learned Judge also held that under section 153c an administrator could be appointed just as a liquidator can be appointed to manage the affairs of the company under the orders under section 162. 21. THE next case to be consideration is another decision of the Supreme court- (7) Shanti Prasad Jain v. Kalinga Tubes Ltd. (1965) 1 Com. L. J. 193. In that case, the dispute was between two groups of shareholders in Messrs. Kalinga Tubes Ltd., namely P -and L groups. An application was made under sections 397 and 398 of the Companies Act. L. J. 193. In that case, the dispute was between two groups of shareholders in Messrs. Kalinga Tubes Ltd., namely P -and L groups. An application was made under sections 397 and 398 of the Companies Act. Wanchoo, J. said as follows: -"we shall first take up the case under section 397 of the Act and proceed on the assumption that a case has been made out to wind-up the Company on just and equitable; grounds. This is a new provision which came for the first time; in the Indian Companies Act, 1913 as section 153-C. That section was based on section 210 of the English companies Act, 1948 which was introduced therein for the first time. The purpose of introducing section 210 in the English Companies Act was to give an alternative remedy-to winding-up in case of mismanagement or oppression. The law always provided for winding-up, in case it was just and equitable to wind up a company. However it-was being held for some time that though it might be just and equitable in view of the manner in which the affairs of the company were conducted to wind it up, it was not fair that the company should always be wound up for that reason, particularly when it was otherwise solvent. That is why section 210 was introduced in the English act to prove an alternative remedy where it was felt that though a case had been made out on the ground of just and equitable cause to wind up a company, it was not in the interest of the shareholders that the company should be wound up and that it would be better if the company was allowed to continue under such directions as the court may consider proper to give. That is the genesis of the introduction of section 153c in the 1913 Act and section 397 in the Act (1956 ). . . . the question in each case is whether the conduct of the affairs of a company by the majority shareholders was oppressive to the minority shareholders and that depends upon the facts proved in a particular case. As has already been indicated, it is not enough to show that there is just and equitable cause for winding up the company, though that must be shown as preliminary to the application of section 397. As has already been indicated, it is not enough to show that there is just and equitable cause for winding up the company, though that must be shown as preliminary to the application of section 397. It must further be shown that the conduct of the majority shareholders was oppressive to the minority as members and this requires that events have to be considered not in isolation but as a part of a consecutive story. There must be continuous acts on the part of the majority share-holders continuing up to the date of petition, showing that the affairs of the company were being conducted in a manner oppressive to some part of the members. The conduct must, be burdensome, harsh and wrongiui and mere lack of confidnce between the majority shareholders and the minority snareholder would not be enough unless the lack of confidence springs from oppression of a minority by a majority in the management of the company's affairs, and such opression must involve at least an element of lack of probity or fair dealing to a member in the matter of his proprietary rights as a shareholder. It is in the light of these principles that we have to consider the facts in this case with reference to section 397. 22. LET us now consider the facts of this case in the light of the principles of law laid down in the decisions mentioned above. The first thing that the petitioner would have to show is that there were grounds for which it was "just and equitable" that the company should be wound up. Secondly, it would have to be shown that the majority in the company was oppressing the minority and that such oppression was continuous, harsh and wrongful and affecting the proprietary interests of the petitioner. Lastly, that winding-up of the company would unfairly prejudice the petitioner. Let us see what the allegations of the petitioner were in this case and what exactly has been found in order to justify the making of an order under section 397. First of all, the petitioner has nowhere shown that he was in a minority and that the majority were oppressing him. I have already analysed the evidence above and the result is that the entire complaint of the petitioner is against Bachraj chamaria who holds only 50 shares. The petitioner himself holds 700 shares. First of all, the petitioner has nowhere shown that he was in a minority and that the majority were oppressing him. I have already analysed the evidence above and the result is that the entire complaint of the petitioner is against Bachraj chamaria who holds only 50 shares. The petitioner himself holds 700 shares. He made no attempts to ascertain where Chandi Prasad, who held 700 shares, or Murarual who held 48 shares, would be wrong to support him. Chandi Prasad has not even been made a party to the proceedings. The petition is a prolix one, out the allegations amount to the follow ing: It is shown that the company had the object of running the cinema, in a cinema house which belongs to Ratanlal Chamaria, that is to say, Protap Properties Pvt. Ltd. Durgapada Mukherjee, who was at one time employed by Ratanlal, became the lessee of the property, took out a cinema license in his own name and was running the business. Later on, however, a number of persons came in who were all connected in some. way or other with Ratanlal and the shares were distributed amongst them. The allegation is that it was Bachraj who manoeuvred matters so that he could get control of the majority shares of the company and he was in full control and management. The petition itself states in paragraph 19 that on or about may 29, 1957 Durgapada with the help of hired hooligans forcibly entered the cinema house and took wrongful possession. Paragraph 19 is verified as true to the knowledge of the petitioner. It is further stated that on the 2nd may, 1957 Durgapada died, leaving him surviving his widow Kanika Mukherjee and three minor children. After the death of Durgapada, Sm. Kanika mukherjee continued in wrongful possession, although she had not been recognised as a lawful tenant and a number of litigations have been launched, including criminal proceedings against Durgapada Mukherjee. There are allegations in the petition that Sm. Kanika mukherjee was running the said business, but had run into heavy debts and was trying to mortgage or create a, charge on the Ashoke Cinema together with its assets. No evidence was adduced to prove this charge. Reckless allegations of collusion and conspiracy have been made in the petition. Firstly, it has been stated that Sm. Kanika mukherjee was running the said business, but had run into heavy debts and was trying to mortgage or create a, charge on the Ashoke Cinema together with its assets. No evidence was adduced to prove this charge. Reckless allegations of collusion and conspiracy have been made in the petition. Firstly, it has been stated that Sm. Kanika mukherjee was in collusion and conspiracy with all the respondents other than the company, in order to exploit the company's business and to misappropriate the profits arising out of the same. It is then stated that Bachraj had set up Sm. Kanika Mukherjee to take possession of the business and the wrongful gains were being shared by him. Certain litigations have been instituted, but they were not being properly conducted and Bachraj was not; taking any steps in order to safeguard the interest of the company. Prayers in the pettion are that an adminstration or special officer be appointed to take possession and remain in charge of the business of the company carried on under the name of Asoke Cinema at 67., howrah Road, Salkia, and to carry on the said business, and that the respondents Nos. 1, 3 and 4 be restrained from acting as directors of the respondent no. 5 and that the respondent No. 2 her servants and agents be restrained from inter-meddling or interfering with the; business and affairs of. Asoke Cinema at; 67, Kowrah Rord, Salkia, Howrah. There is also a prayer for an injunction restraining the respondent No. 2 her servants and agents from dealing with transferring, selling, mortgaging or creating any charge on the Asoke Cinema or any of its machinery, plants, projectors, fixture fittings and equipments; and for such further or other orders; and directions as will ensure the protection of the interests of the petitioner. If the case as made out in the petition was proved, the position would be as follows: Bachraj Chamaria had really obtained the majority of shares, and in collusion and conspiracy with the other respondents, had set up Kanika Mukherjee to cake possession of the Cinema House, and while he and the other respondents were sharing the profits the petitioner was left out and received no part of the dividends. The petitioner in his evidence has stated that he had several times spoken to Bachraj who did not take care of the same and has not taken any action to safeguard the interests of the company. The petitioner, however, has misreably failed to prove the allegation of collusion and conspiracy. He has also failed to prove that it was Bachraj who managed to get the majority of the shares or that sm. Kanika Mukherjee was set up by the said Bachraj or that Bachraj and the other respondents were sharing the profits. What the learned Judge did was to convert the application into a title suit, for trying the question as to whether the company was the owner of the lease and of the assets of the business, now run at the cinema house at Howrah, or Kanika Mukherjee and her children were the owners thereof. This was done in the absence of the minor children. The petitioner in his evidence confessed that he was under the misapprehension that it was an 'ejectment suit', and the matter has been conducted in the court below as if it was. The issues raised were wholly as to title, and it has been, decided in this application that Sm. Kanika Mukherjee's title was to be rejected and she should be ejected from the premises No. 67, Howrah Road, and should lose possession of the business and assets, although at the moment that the application was made, she was in possession, running the business and holding the cinema license. What has emerged from this prolonged trial is that the petitioner has failed to prove any case of collusion and conspiracy as alleged in the petition. It has been accepted that Durgapada forcibly entered into possession in 1957 and in fact was a trespasser. Although Sm. Kanika Mukherjee is not a shareholder, and although she is claiming an independent title which has nothing to do with the company, her title was decided in this application, in spite of protest and virtually an ejectment order was made against her. She protested against the adjudication of her title in this application but her objections were not entertained. In contesting the title, many points were raised by Sm. She protested against the adjudication of her title in this application but her objections were not entertained. In contesting the title, many points were raised by Sm. Kanika Mukherjee, but the learned judge held that inasmuch as the said respondent had not pleaded the said matters in her affidavit-in-opposition, she could not be heard to agitate the same. This appears to be rather odd, because the petition itself was not one for adjudication of title and naturally no such pleadings were made regarding title. If at all, these proceedings are to be altered into a title suit, then the least that should have been done was to allow proper pleadings to be made, to permit the parties to raise all the necessary facts in regard to the title. As regards oppression, nothing whatsoever has been established in the evidence. All that has been found is that the petitioner mentioned the matter several times to Bachraj who did not take any active steps. The learned judge has held that Bachraj was guilty of inaction. Bachraj himself has explained that he had taken legal advice and was advised not to file a further civil suit, but he filed a criminal complaint which became instruction because of the death of Durgapada. He said that a number of litigations were already pending as to the title. As regards the winding up, no facts have been either mentioned in. the petition or proved in the evidence, to show that it was just and equitable that the company should be wound up. Except the fact of dispossession, there is no other satisfactory evidence of the position of the company's business. The petitioner has irankly stated in his evidence that he knows nothing of the accounts of the company. Bachraj said that there was no difficult about getting finance to run the company. In this unsatisfactory state of affairs it would be difficult to come to the conclusion that it was just and equitable that the company should be wound up. Such a conclusion would require a lot more evidence. I have said above that the facts as presented in this case are somewhat 'unreal'. The real connection of Ratanlal Chamaria with the facts of this case has not been properly investigated. Such a conclusion would require a lot more evidence. I have said above that the facts as presented in this case are somewhat 'unreal'. The real connection of Ratanlal Chamaria with the facts of this case has not been properly investigated. There is evidence which tends to show that it was really Ratanlal who was at the back of the application and that his intention is to regain possession and to put this company into litigation. In the premises, any order under section 397 would be highly unjust. In any event, such an application can not be transformed into a suit for title, adjudicating the title of a third party, claiming adversely to the company. The result is that this appeal ought to succeed. The order of the court below is set aside and the application dismissed. The administrator should make over possession to the party from whom he received possession. This order will be without prejudice to any further application being made for, either the winding up of the company, or an order under sec. 397 or 398 of the Companies Act, on proper materials, and in the presence of the proper parties. The appellant is entitled to the costs of the appeal and to the costs of the hearing in the court below. Certified for two Counsel. The administrator will retain the costs, charges and expenses, including; the costs of the appeal and of the hearing below and the reserved costs from out of the assets in his hands, taxed as between attorney and client.