Leila Seth ( 1 ) TWO interesting points of law arise in this appeal. (i) whether the legal heirs of a deceased share-holder can be regarded as members of the company for the purpose of maintaining a petition under sections 397 and 398 of the Companies Act. 1956. and (ii) whether a composite petition under sections 397,398 and 433 (f) of the Companies Act, 1956 is maintainable. ( 2 ) THE admitted tacts are briefly set out. As per the certified copy of the annual return made out upto 15th February, 1984, the share-holders of M/s. Worldwide Agencies Pvt. Ltd. were as follows :- Mr. S. K. Desor 600 shares Mrs. Amrit Kaur Singh 555 shares Mr. Yash Pal Malhotra 250 shares Mrs. Amrit Gupta 200 shares Mrs. Savitri Devi Kohli 5 shares Mr. A. S. Saluja 5 shares Mr. Balwant Singh 405 shares 2010 shares ( 3 ) MR. S. K. Desor was the largest single share-holder and the Managing Director of the said company. He died on 5th March, 1985. The office of the M/s. Worldwide Agencies Pvt. Ltd. was closed on 5th, 6th and 7th March, 1985. ( 4 ) A petition under sections 397 and 398 of the Companies Act, 1956 (hereinafter referred to as "the Act") and in the alternative for winding up was filed by Ms. Margaret T. Desor and her children on 26th March, 1985. ( 5 ) IT is asserted in the said petition that on 12th March, 1985, Mr. S. K. Desor s widow, Mrs. Margaret T. Desor, who is a British subject, applied as a legal heir to the Board of Directors for transmission of 850 shares held by her late husband. (Mr. Yash Pal Malbotra s shares having been bought by Mr. S. K Desor ). She also furnished an affidavit of her daughter Ms. Kim Paul. relinquishing her claim to the shares of her late father. It is further asserted that in vi of this application, the Board of Directors resolved that they had no objection to the transmission of the shares hled by Mr. S. K. Desor, but that the actual transfer would take place on Mrs Margaret T Desor obtaining Reserve Bank of India permission and a succession certificate. Further. Mrs. It is further asserted that in vi of this application, the Board of Directors resolved that they had no objection to the transmission of the shares hled by Mr. S. K. Desor, but that the actual transfer would take place on Mrs Margaret T Desor obtaining Reserve Bank of India permission and a succession certificate. Further. Mrs. Margaret T. Desor s application for allotment of five shares as per her letter of the same date was allowed and it was resolved that in view of the allotment of these shares and her interest in the shares of her late husband, she be appointed a Director of the company, subject to Reserve Bank of India permission At the said meeting the Board of Directors also recorded their deep appreciation of the services rendered by late Mr. S K. Desor as Managing Director-cum-Chairman of the company and mourned his passing away. The quorum of this meeting was of two, Mrs. Arnrit Gupta and Mrs. Savitri Devi Kholi. ( 6 ) ON 23rd March, 1985 the Board of Directors held another meeting. The minutes of the meeting of 12th March. 1985 were confirmed by the two abovementioned Directors. The third Director, Mrs. Amrit K. Singh, however, objected, as she stated that she bad not been informed of the last meeting. ( 7 ) VARIOUS averments have been made in the said petition with regard to oppression and removal of certain valuables by Mrs. Amrit K. . Singh and illegal operation of the bank account etc. It is also asserted that Mrs. Amrit K. Singh is holding the 545 shares benami and these in fact belonged to Mr. S. K. Desor. ( 8 ) A preliminary objection was raised on behalf of Mrs. Amrit K. Singh regarding the maintainability of the petition on the ground that the petitioners were not members of the company as their names had not been recorded in the register of members. A further objection was taken that a composite petition under sections 397 and 398 of the Act with an alternative prayer for winding up the company is not maintainable. ( 9 ) THE learned Company Judge dealt with these contentions and after referring to the various decisions cited came to the conclusion that, the petitioners, who were the wife and children of late Mr. ( 9 ) THE learned Company Judge dealt with these contentions and after referring to the various decisions cited came to the conclusion that, the petitioners, who were the wife and children of late Mr. SK Desor and had obtained letters of administration under section 290 of the Indian Succession Act read with section 273 of the said Act as also permission of the Reserve Bank of India, must be treated as members for the purpose of maintain-biiity of a petition under sections 397 and 398 of the Act. He also held that a composite petition was maintainable. ( 10 ) MR. Amrit K. Singh filed an appeal for herself and, as she alleges, as "working Director" for the company against the judgment and order of the Company Judge dated 21st September, 1988. The appeal was admitted on 13th October, 1988. ( 11 ) THE Supreme Court, on a special leave petition, filed by Mrs. Amrit K. Singh and the company against an interlocutory order, directed, inter alia, by its order dated 16th January, 1989, stay of proceedings before the Single Judge, expeditious disposal of the appeal and consideration by the Division Bench of applications for directions. ( 12 ) , During the pendency of the appeal, without prejudice to the rights and contentions of parties, an emergent meeting of the Board of Directors was directed to be held on 28th January, 1989 to consider the question of registration of 450 shares belonging to the deceased Mr. SK. Desor in the name of Mrs. Margaret T. Desor and her son Sameer K. Desor. respondents Iand 3 respectively. As per the directions of the court dl. 27th January, 1989, the court-appointed Chairman Mr. CK. Mahajan and Mrs. Margaret T. Desor were not permitted to vote at the said meeting. By a majority it was resolved not to register respondents I and 3 as members. Nothing really turns on this resolution, as the court by its order dated 27th January, 1989 had directed that no effect would be given to this resolution, but these facts are being mentioned for the purpose of the record. ( 13 ) MR. By a majority it was resolved not to register respondents I and 3 as members. Nothing really turns on this resolution, as the court by its order dated 27th January, 1989 had directed that no effect would be given to this resolution, but these facts are being mentioned for the purpose of the record. ( 13 ) MR. Arun Jaitley, learned counsel for the appellant has urged that legal heirs of a deceased share-holder do not become members unless their mes are entered in the register of members and it is only those persons whose names are entered in the register of members that can maintain a petition under sections 397 and 398 of the Act. He further contended that there is no automatic transmission and the Board has a discretion and can refuse to register the shires and consequently the legal representatives have no locus standi to maintain such a petition. ( 14 ) IN order to apperciate the rival contentions it is necessary to examine certain provisions of the Act Section 2 (27) of the gives a negative definition of a member and says "member" in relation to a company does not include a bearer a shares-warrant of the company issued in pursuance of section 114 of the Act. ( 15 ) SECTION 41 of the Act, however, reads as follows : (1) The subscribers of the member memorandum of a company shall be deemed to have agreed to become members of the company, and on its registration, shall be entered as members in its register of members. (2) Every other person who agrees in writing to become a member of a company and whose name is entered in its register of members, shall be a member of the company. Section 26 of the English Companies Act, 1948 is substantially the same. Section 109 of the Act reads : "a transfer of the share or other interest in a company of a deceased member thereof made by his legal representative shall, although the legal representative is not himself a member, be as valid as if be had been amember at the time of the execution of the instrument of transfer. " Articles 25 to 28 of Table A which deal with transmission of shares are as follows: 25. " Articles 25 to 28 of Table A which deal with transmission of shares are as follows: 25. (1) On the death of a member, the survivor or survivors where the member was a joint holder, and his legal representatives where he was a sole bolder, shall be the only persons recognised by the company as having any title to his interest in the shares. (2) Nothing in clause (1) shall release the estate of a deceased joint holder from any liability in respect of any shares which had been jointly held by him with other persons. 26. (1) Any persons becoming entitled to a share inconsequence of the death or insolvency of a member may, upon such evidence being produced as may from time to time properly be required by the Board and subject as hereinafter provided, elect, either- (a) to be registered himself as holder of the share; or (b) to make such transfer of the share as the deceased or insolvent member could have made. (2) The Board shall, in either case, have the same right to decline or suspend registration as it would have had, if the deceased or insolvent member had transferred the share before his death or insolvency. 27. (1) if the person so becoming entitled shall elect to be registered as holder of the share himself, he shall deliver or send to the company a notice in writing signed by him staling that he so elects, (2) If the person aforesaid shall elect to transfer the shares, he shall testify his election by executing a transfer of the share. (3) All the limitations, restrictions and provisions of these regulations relating to the right to transfer and the registration of transfer of shares shall be applicable to any such notice or transfer as aforesaid as if the death or insolvency of the member had not occurred and the notice or transfer were a transfer signed by that member. 28. A person becoming entitled to a share by reason of the death or insolvency of the holder shall be entitled to the same dividends and other advantages to which be would be entitled if he were the registered holder of the share, except that he shall not. 28. A person becoming entitled to a share by reason of the death or insolvency of the holder shall be entitled to the same dividends and other advantages to which be would be entitled if he were the registered holder of the share, except that he shall not. before being registered as a member in respect of the share, be entitled in respect of it to exercise any right conferred by membership in relation to meetings of the company. Provided that the Board may, at any time, given notice requiring any such person to elect either to be registered himself or to transfer the share, and if the notice is not complied with within ninety days. the Board may thereafter withhold payment of all dividends, bonuses or other moneys payable in respect of the share, the until requirements of the notice have been complied with. Article 28 is in pari materia to Article 32 of Table A of the English Companies Act. ( 16 ) SECTION 210 of the English Companies Act before its amendment in 1980 is substantially the same as section 397 of our Act. ( 17 ) IT is the admitted case of parties that the regulations for management of the company as contained in Table A to the Act apply to the M/s. Worldwide Agencies Pvt. Ltd. on this aspect The relevant provision in the Articles of Association of the company regarding transfer of shares is Article 17, which reads : "no share shall be transferred to any person other than a shareholder of the company so long as any member of the company is willing to purchase the same at fair value. This clause shall not apply to the executor of administrator of a deceased share-holder if there is will or to the heir or lineal descendents where no letter of administration has been taken. " It is also admitted that letters of administration were issued to respondents I and 3 and the Reserve Bank of India granted permission to respondent No. 1 to acquire 850 shares belonging to Mr. S. K. Desor, on non-repatriation basis. ( 18 ) MR. " It is also admitted that letters of administration were issued to respondents I and 3 and the Reserve Bank of India granted permission to respondent No. 1 to acquire 850 shares belonging to Mr. S. K. Desor, on non-repatriation basis. ( 18 ) MR. Jaitley submits that in view of the provisions 397 of the Act only a member is entitled to move a petition under sections 397 and 3*-8 of the Act and only a person whose name is in the register of members is a member in view of section 41 of the Act. He also relies on the decision of the Supreme Court in Balkrishan Gupta and Others v. Swadesh Polytex Ltd. and Others, 58 Company Cases 563. The particular observation on which he lays emphasis is: "the privileges of a member can beexercised by only that person whose name is entered in the register of members. A receiver whose name is not entered in the register of members cannot exercise any of those rights unless in a proceeding to which the company concerned is a party and an order is made therein. " ( 19 ) IN the abovementioned case the point in issue before the Supreme Court was whether a share-holder ceases to be entitled to exercise a right to attend a meeting and vote and/or issue a requisition notice under section 169 of the Act when a Receiver has been appointed with certain powers under Order XL of the Code of Civil Procedure. The Court observed therein that whether advantages a man may have as a result of the owhership of a right may be curtailed by the disadvantages in the form of burdens attached to it". and he may be left with no "immediate practical benefit", but he remains the owner because his interest will outlast that of other persons in the thing owned. ( 20 ) THE Supreme Court referred to its earlier decision in the case of Howrah Trading Co. Ltd. V. Commissioner of Income-tax, 29 Company Cases 282 and observed that even where the holder of a share whose name is entered in the register of members hands over his shares with blank transfer forms duly signed, the transferee would not be able to claim the rights of a member as against the company concerned until his name is registered in the register of members. ( 21 ) AFTER examining various decision, the Supreme Court came to the conclusion that mere appointment of a receiver in respect of certain shares of a company, without more, cannot deprive the holder of the shares, whose name is entered in the register of members of the company, the right to vote at the meetings of the company or to issue a notice under section 169 of the Act. ( 22 ) THE decision of the Supreme Court in Shanti Prasad Jain v. Kalinga Tubes Ltd. (1965) 35 Company Cases 321 relied on by learned counsel for the appellant is not relevant as it was not dealing with the matter in issue before us. The question there was basically whether there was "oppression" within the meaning of section 397 of the Act. ( 23 ) IN the present case, the issue is not as between the registered owner and some one else whose claim is opposed to him, but what is to be examined here are the rights of the legal representatives of the registered owner who is no longer alive. ( 24 ) IT is no doubt true that section 399 of the Act gives the right to "members of a company" to apply under sections 397 and 398 of the Act; further section 41 provides that a member of a company is a person who has applied in writing and "whose name is entered in the register of members It is correct that names of respondents I and 3 are not yet entered in the register of members, but the name of Mr. S. K, Desor is still on the register of members and the requisite shareholding for moving a petition under sections 397 and 398 was held by him. ( 25 ) COUNSEL are agreed that there is no decision of our Courts directly on the point, but there is a decision of the English Courts dealing with this issue. ( 26 ) IN Re Jermyn Street Turkish Baths Ltd. (1970)3 All E. R. 37, Pennycuick, J. held on facts that the petitioners were duly registered as members of the company because a note had been made in the register regarding letters of administration and he observed that there was no particular form required for registration. ( 26 ) IN Re Jermyn Street Turkish Baths Ltd. (1970)3 All E. R. 37, Pennycuick, J. held on facts that the petitioners were duly registered as members of the company because a note had been made in the register regarding letters of administration and he observed that there was no particular form required for registration. But the learned Judge held that even if it was not so, the personal representatives of a deceased member must be regarded as members of a company for the purpose of section 210. Relying on a decision of Buckley, J in Re Bayswater Trading Co. Ltd. (1970) 1 All E R. 608, he opined that section 210 requires that the "member" must include representatives of a deceased member. Consequently, he held that the petitioners had locus standi to present the petition. Though this judgment of Pennycuick, J. was reversed in appeal on other points, the decision was not set aside on this point. ( 27 ) MR. Jaitley, however, contended the observations made in the abovementioned case are obiter. It would appear to us that this contention is not cotrect. Our opinion is fortified by the observations in various text books dealing with Company Law which have taken the same view. ( 28 ) IN the 1972 Edition of Gore-Browne on Companies, it is stated as follows at page 798 : "it has recently been settled that the personal representatives of a deceased member, even though they are not registered as members, are entitled to present a petition under section 210. Inre Jermyn St. Turkish Baths Ltd. , Pennycuick, J. held that on its true construction section 210 required that the word member should include the personal representatives of a deceased member, on whom title of his shares devolved by operation of law. " At page 491 in Buckley on the Companies Acts 14th Ed. the abovementioned decision in Re. Jermyn Street Turkish Baths Ltd. is also referred to and it is observed that for the purpose of a petition under this section member include the personal representatives of a deceased member. It is further mentioned that the decision was reversed without affecting this point by the Court of Appeal. ( 29 ) SIMILAR observations have been made in Halsbury s Laws of England, Fourth Edition. Vol. 7, Paragraph 1010 at page 604. ( 30 ) THE view expressed in Re. It is further mentioned that the decision was reversed without affecting this point by the Court of Appeal. ( 29 ) SIMILAR observations have been made in Halsbury s Laws of England, Fourth Edition. Vol. 7, Paragraph 1010 at page 604. ( 30 ) THE view expressed in Re. Jermyn Street Turkish Baths (supra) also finds indirect support from various other decisions of the English Courts. ( 31 ) IN James v. Buena Ventura Nitrate Grounds Syndicate Ltd. , (1896) I Chancery Division 456, it mas held that the legal representatives of the deceased member whose name still remained on the register could require an allotment of the shares which the latter would, if living, have been entitled to have offered nim, thess shares not pet having been disposed of by the company; consequently memder in Article 17 of Table A of the Companies Act, 1862 which provides that on the increase of the capital of a company the new shares shall be offered to the members in proportion to their existing shares would include a deceased member so long as his name is on the register. ( 32 ) IN Llewellyn v. Kasintoe Rubber Estate Ltd, 1914-15 All E. R. Rep 558, it has been held that notwithstanding that the executors of a deceased member of a company have not caused themselves to be registered as the owners of his share, they have the same right to dissent from a scheme for the reconstruction of the company and to restrain the liquidator from carrying that scheme into effect without purchasing the deceased member s interest as the deceased member himself would have had if be bad been still living. ( 33 ) IN New Zealand Gold Extraction Company (Newberyvautin Process ). Limited v. Peacock, (1894) 1 Q. B. 622. it was held that the liability for calls existed, despite the fact that notice could not be given to a dead man because it may be given to his legal representatives. ( 34 ) ARTICLES 25 and 28 of Table A of the Act deal with the transmission of shares. Limited v. Peacock, (1894) 1 Q. B. 622. it was held that the liability for calls existed, despite the fact that notice could not be given to a dead man because it may be given to his legal representatives. ( 34 ) ARTICLES 25 and 28 of Table A of the Act deal with the transmission of shares. Article 28 specifically says that a person becoming entitled to a share by reason of the death of the holder will be entitled to the same dividends and "other advantages" to which he would be entitled if he were the registered holder of the share, except that he shall not, before being registered as a member in respect of the share, be entitled in respect of it to exercise any right conferred by membership in relation to meetings of the company. The proviso indicates that the Board may, at any time, give notice to such members to elect either to register himself or transfer shares and if the notice is not complied within 90 days, the Board may withhold payments of dividents etc. until compliance of the notice. ( 35 ) WHAT emerges from the abovmentioned decisions and the provisions of the Act and Table A is that the legal representatives are entitled to what the deceased share-holder whose name is on the register would be entitled to. except of course with regard to attending meetings and being counted for the purpose of a quorum etc. It is, as if. the estate of the deceased becomes entitled to the subsequent benefits, such as allotment of new shares or in the event of reconstruction the statutory right to dissent or the locus standi to present a petition to wind up a company or institute proceedings under section 397 of the Act and the disadvantages of call etc. To put it metaphorically, it is as if the "estate" is "personified" and treated as a member. ( 36 ) THE crux of the matter, therefore, appears to be, whose name is on the register ? If A s name is on the register he is the member, even if his ownership rights have been curtailed by the appointment of a receiver. But if the register bears the name of a member and he is since deceased then surely his legal representatives can act for him, for how else will the deceased member act ? If A s name is on the register he is the member, even if his ownership rights have been curtailed by the appointment of a receiver. But if the register bears the name of a member and he is since deceased then surely his legal representatives can act for him, for how else will the deceased member act ? This is borne out by the provisions of Section 109 of the Act and other provisions pertaining to transfer. ( 37 ) IT is well settled that succession is not kept in abeyance and the property vests in the legal representatives on death and they can act for the deceased member for the purpose of transfer of shares etc. as is provided in section 109 of the Act. ( 38 ) TO the present case admittedly the legal representatives have been more than anxious to get their names put on the register of members in place of the deceased member, who was the Managing Director and Chairman of the company and had the controlling interest. It would be patently unfair to insist that their names must be first put on the register, before they can move an application under sections 397 and 398 of the Act, as admittedly this is dependent on the Board of Directors. The Board of Directors can delay or even malafide refuse to register the legal representatives of the deceased member and thus completely frustrate the filing of an application under sections 397 and 398 of the Act. Would it then be proper to insist that legal representatives, who have applied for registration, must wait till their names are first put on the register of members either under section 155 of the Act or otherwise before they can move an application and let the oppression continue in the meantime ? ( 39 ) THE contention of learned counsel for the appellant that if legal representatives, who are only potential members or persons likely to come on the register of members, are permitted to file an application under sections 397 and 398 of the Act, it would create havoc, as then persons having blank transfer forms signed by members, and as such having a financial interest, could also claim to move an application under sections 397 and 398 of the Act, contains a clear fallacy. ( 40 ) THE fallacy in the argument is, that in the case of persons having blank transfer forms, signed by members, it is the members themselves who are shown on the register of members and they are different from the persons with the blahk transfer forms; whereas in the case of legal representatives it is the deceased member who is shown on the register and the legal regresentatives are in effect exercising his right. A right which has devolved on them through the death of the member whose name is still on the register. Thus. in the case of persons holding blank transfer forms the legal and beneficial title is different, whereas in the case of legal representatives, it is the same. ( 41 ) CONSEQUENTLY, we are of the view that legal representatives of the deceased member, whose name is still on the register of members, are entitled to present a petition under sections 397 and 398 of the Act as if they are in the shoes of the deceased member. ( 42 ) MR. Jaitley has contended that from a perusal of Art. 26 of Table- A, it is clear that automatic tnansmission of shares cannot_take place on the death of the member, in view of the fact that the Board of Directors has a discretion to decline or suspend registration. He has relied on the decision of the Guwabati High Court in the case of Smt. Bina Barua and Others v. Datowjan Tea Co. (P)Ltd and Others (1981) 51 Company Cases 660. where the court held that the Board of Directors were right in the facts and circumstances of the case, in refusing to register the shares in the name of the widow of the deceased. ( 43 ) HE also relied on the decision of the Madras High Court in the cuse of M. G. Amirthalingam v. Gudiyatham Textiles Pvt. Ltd. and Others (1972) 42 Company Cases 350 where the court had upheld the decision of the Board not to register shares. In the said case the petitioner applied after his father s death to the Company to transmit the shares held by his father to his name. In the said case the petitioner applied after his father s death to the Company to transmit the shares held by his father to his name. The Board of Directors after considering various factors came to the conclusion that the activities of the petitioner were against the interests of ths company and consequently declined to do so holding it was not in the interests of the company. ( 44 ). The discretion of the Board of Directors to bonafide refuse registration is not disputed. But in the facts and circumstances of the case as above indicated, we are of the view that the legal representatives have an immediate legal interest and as long as the deceased member s name remains on the register they act for and on his behalf as it were, even though their own membership may be in abeyance. It is in the context of pursuing the right of the deceased member that we have conrtrued the word member to conclude that a petition under sections 397 and 398 of the Act can be moved by the legal representatives. ( 45 ). Mr. Jaitley next contended that the position whether a person is a member has to be seen as on the date of filing of the petition under sectiohs 397 and 398 of the Act and not subsequently. He relied on the decision of the Supreme Court in the case of Rajahmundry Electric Supply Corporation Ltd. v. A. Negeshwara Rao and Others, A I R. 1956 S. C. 213 wherein it has been observed that the validity of a petition must be judged on the facts as they were at the time of its presentation, and a petition which was valid when presented cannot, in the absence of a provision to that effect in the statute, cease to be maintainable by reason of events subsequent to its presentation. ( 46 ). In reply, Mr. Vinoo Bhagat, learned counsel for the respondents has submitted that in the facts and circumstances of the case, the grant of the letters of administration and the permission of the Reserve Bank of India relate back to the date of death of the deceased and consequently the petition was validly initiated. ( 47 ). The application to the Reserve Bank of India for permission with regard to five shares was dated 1st May, 1985 and granted on the same date. ( 47 ). The application to the Reserve Bank of India for permission with regard to five shares was dated 1st May, 1985 and granted on the same date. But the letters of administration under section 290 of the Indian Succession Act were granted only on 28th April, 1987. It was only after the letters of administration had been obtained, that the application with regard to transfer of 850 shares was made on 26th June, 1987 and the permission was granted on 20th July, 1987. ( 48 ). Since we have already decided, as indicated above, that the legal representatives of a deceased member, whose name is still on the register, have locus to move a petition under sections 397 and 398 of the Act, it is not necessary for us to decide whether in view of section 220 of the Indian Succession Act, 1925 the letters of Administration and the Reserve Bank of India permission which is linked with it will relate back to the date of death of the deceased. ( 49 ) MR. Jaitley, next contended that in the facts of this case, Reserve Bank of India permission has been erroneously obtained and consequently amount to no permission. ( 50 ). In the present appeal, which only against the Judgment and order dealing with the preliminary objections, as abovementioned, this point does not appear to have been raised before the learned Company Judge. In any case, it would appear to us that neither the facts are before us, nor is it proper or necessary to deal with this aspect at this stage. However, the observations of the Supreme Court in Life Insurance Corporation of India v. Escorts Limited and Others, AIR19s6 SC 1370 at page 1412 are pertinent. Mr. Justice 0. Chinnappa Reddy speaking for the Court has opined that once permission is obtained whether before or after the purchase of the shares, it is not open to the company or any other authority or individual to take upon itself or himself, the task of deciding whether the permission was rightly granted by the Reserve Bank of India and ordinarily, it is not open to go behind the permission. ( 51 ) ). Coming to the second question, whether a composite petition under sections 397, 398 and 433 (f) of the Act is maintainable, Mr. ( 51 ) ). Coming to the second question, whether a composite petition under sections 397, 398 and 433 (f) of the Act is maintainable, Mr. Jaitley has relied on the decision in Kilpest Private Ltd. v. Shekhar Mehra, (1987) 62 Company Cases 717, and urged that it is not maintainable. ( 52 ) ). Mr. Bhagat on the other hand supported the contrary stand by him by placing reliance on the decision in Navnitlal M. Shah and others v. Ami Drug House Ltd. and others, (1977) 47 Company Cases 136 and the decision of this Court in Bhaskar Stoneware Pipes Private Ltd. and others v. Rajmder Nath Bhasker and another, (1988) 63 Company Cases 184. ( 53 ) ). In Kilpest Private Ltd (supra), the Madhya Pradesh High Court held that if a petition in is initially made under sections 397 and 398 of the Companies Act for relief against mismanagement and oppression, it cannot be converted into a winding up petition under section 433 (f), because there are many distinguishing features and in view of these distinguishing features, a composite petition also cannot be filed. The distinguishing features mentioned by the court were, first, the different rules and forms applicable to the petition pertaining to opperssion and mismanagement and the petition for winding up, second, whereas a notice to be Central Government is necessary under section 400 it is not required in the case of a winding up petition; third, share qualification is required for an application under sections 397 and 398 as per section 399 but no minimum share qualification is required for a petition for winding up fourth, under section 401. the Central Government can apply whereas in the case of a winding up petition, it is the Registrar of Companies who can apply under section 439 of the Act; fifth, the nature of reliefs as indicated in section 402 is much wider whereas in a winding up petition the nature of reliefs is narrow as is apparent from section 443; sixth, in a petition pertaining to oppression and mismanagement, the remedy is a preventive nature and provides for continuity of the company whereas winding up results in civil death of the company. ( 54 ) ). ( 54 ) ). In the case of Navnitlal M. Shah and others (supra), the Gujarat High Court noticed the history of the introduction of the provisions of sections 153c and 155d of the Indian Companies Act 1913 and section 210 of the English Companies Act, 1948 (which is substantially the same as section 397 of the Act ). It referred to the fact that in the absence of provisions under sections 153c and 153d of the Indian Companies Act, 1913 (which are in pari materia with sections 397 and 398 of the Act) the Court had "either to wind up the company under the 'just and equitable' clause or dismiss the petition, both of which alternative courses may not do full Justice to the case". The provisions were introduced to remove this lacuna. Consequently, it concluded that "it is reasonable to believe that relief under sections 397 and 398 is alternatative to an order for winding up. ( 55 ) THE observations of the Supreme Court in Shanti Prasad Jain v. Kalinga Tubes Ltd. (1965) 35 Company Cases at page 363 on this point were noticed. After noticing another observation of the Supreme Court that 'the power conferred on the court to grant a remedy in an appropriate case appears to envisage a reasonable disrcretion vested in the court in relation to the order sought by a complainer as the appropriate equitable alternative to a winding-up order" the Court concluded that it thus appears well setteld that relief under sections 397 and 398 is alternative to an order for winding up. ( 56 ) ). Mr. Justice D. A. Desai went on to opine that if a relief can be granted as an alternative then parties "seeking one can simultaneously ask for alternative relief in order to avoid multiplicity of proceedings. When one relief can be as alternative to the other, it is indisputable that both such reliefs, one as alternative to the other, can be claimed in the same proceedings. If the relief, one in the alternative to the other, can be asked in the same proceeding, a composite petition would certainly be maintainable. When one relief can be as alternative to the other, it is indisputable that both such reliefs, one as alternative to the other, can be claimed in the same proceedings. If the relief, one in the alternative to the other, can be asked in the same proceeding, a composite petition would certainly be maintainable. Otherwise, it might lead to a startling situation, where a party must first seek one relief, go through the entire gamut of the proceedings and then come with a second petition saying that as the first relief has been refused, the party is now entitled to the alternative relief" The learned Judge rejected the contention, that the procedure prescribed for presentation and hearing of a winding up petition and the procedure prescribed for presentation and hearing of a petition for reliefs under sections 397 and 398 and the averments to be made in the two cases are so materially different that the court cannot proceed with them simultaneously in the same petition. ( 57 ) ). While noticing that under section 397 grievances may be individual to the complaining members, whereas a petition for winding up is a representative action, the Court held that a composite petition praying for winding up and relief under sections 397 and 398 would be maintainable if winding up is sought on the ground that it is just and enquitable to wind up the company. If the company is sought to be wound up on the ground that it is just and equitable, the petitioner must allege and the court must be satisfied that it is just and equitable to wind up the company. Similarly, if relief is sought under section 397, the court must first be satisfied that it would have been just and equitable to wind up the company. That conclusion will have to be reached by the court on proof adduced by the petitioner. Only after that conclusion is reached, can the court proceed to decide whether to wind up the company or if it is satisfied that winding up would unfairly prejudice the member or members give, relief under section 397 instead of winding up the company. ( 58 ) ). The observations of the Bombay High Court in Bilasrai Joharmal and others v. Akola Electric Supply Co. ( 58 ) ). The observations of the Bombay High Court in Bilasrai Joharmal and others v. Akola Electric Supply Co. Private Ltd 28 Company Cases 549 with regard to a composite petition being presented and which were referred to by Desai, J are pertinent, especially in respect of notice to the Central Government. Chagla. C. J. speaking for the Court opined that it would be open to the Court or the Company Judge to dismiss the composite petition "summarily and not to admit it at all That would apply both with regard to the prayer for winding up and with regard to the directions under sections 397 and 398. But the Court may not want to dismiss it summarily and the Court may want it to be admitted at least for the purpose of giving notice to the company so that the company should be heard. If the Company Judge takes that view at that stage, then we will direct that not only a notice should be given to the company, but also to the Central Government, so that all difficulties with regard to section 400 would be obviated. It would also lead to this useful result, that when the petition comes up before the Company Judge after it has been accepted, not only the Company will be before the Company Judge, but also the Central Government. At that stage the learned Judge will give such directions as he thinks proper. With regard to winding up, if he wishes to go further into the matter, he would have the petition advertised as requried under the High Court Rules. If, on the other hand, he thinks that there is no case for winding up. he may dispose of that part of the petition and with regard to sections 397 and 398 he would give such direction as the Companies Act provides, as we have just pointed out, after hearing both the company and the Central Government". ( 59 ) IN Bhaskar Stoneware Pipes (supra), this Court dealt with a petition under sections 397. 398 and 433 (f) of the Act. The appellate Court noticed the allegations of the petitioner that there are circumstances which rendered it "just and equitable" that the company be wound up. ( 59 ) IN Bhaskar Stoneware Pipes (supra), this Court dealt with a petition under sections 397. 398 and 433 (f) of the Act. The appellate Court noticed the allegations of the petitioner that there are circumstances which rendered it "just and equitable" that the company be wound up. It observed that section 397 read with section 433 (f) and 434 (2) of the Companies Act make it clear that a court will not proceed to wind up a company merely because it is just and equitable to do so, particularly where the occasion for winding up is mutual lack of confidence and understanding between the various grounds of shareholders, if some way could be found for continuing the company as a running concern after removing the misunderstanding and setting right the 'oppressive' acts. The court has. therefore, to consider, in all such cases, whether, short of winding up, it is possible for the company's affairs to be remedied by recourse to section 397 or section 398. ( 60 ) THOUGH the question whether a composite petition could be moved was not in issue in that case, the court noticed that section 497 requires two conditions to be fulfilled before an order can be passed under that section : (1) there must be acts of oppression and mismanagement; and (ii) the affairs of the company must be such that it is just and equitable to wind up the company. It is only in a case where a winding up is otherwise peremptory under the just and equitable clause that the court may decide that short of winding up, a remedial procedure should be adopted under section 397. It was further held that even petitions other than winding up petitions have to be posted for admission in the first instance. . ( 61 ) THE decision of the Madbya Pradesh High Court in Kilpest Private Ltd. (supra) holding that a composite petition is not maintainable appears to have been arrived at only because there are certain distinguishing features in respect of the two petitions, i. e. , the one under sections 397 and 398 and the other for winding up. . ( 61 ) THE decision of the Madbya Pradesh High Court in Kilpest Private Ltd. (supra) holding that a composite petition is not maintainable appears to have been arrived at only because there are certain distinguishing features in respect of the two petitions, i. e. , the one under sections 397 and 398 and the other for winding up. It does not appear to have considered the background of the introduction of the precursor to section 397 and/or whether the distinguishing features can be reconciled or the question of multiplicity of proceedings With all due respect we are not inclined to follow that decision but prefer to rely on the decision in Navnitlal M. Shah and others (supra) and the observations of the Supreme Court in Shanti Prasad Jain (supra) and the Bombay High Court in Bilasrai Joharmal and others (supra) and this Court in Bhaskar Stoneware Pipes Private Ltd. and others (supra) as above indicated. ( 62 ) FROM what has been noticed above, it appears to us that the averments which a petitioner would have to make to invoke the jurisdiction under sections 397 and 398 are not destructive of the averments which are required to be made in a case for winding up under section 433 (f) on the just and equitable ground, though they may appear to be contradictory. ( 63 ) WITH regard to procedure, it appears to us that the petition must proceed upto a certain stage which is common to both and though there might be some difference in the procedure to be adopted, it is not such which is irreconcilable and cannot be simultaneously gone through. ( 64 ) IT also appears to us that a discretion is conferred on the court and if the court is satisfied that the facts justify the making of a winding up order on the ground that it is just and equitable that the company should be wound up but the court is of the the opinion that it would be a remedy worse than the disease, than the court can examine whether the alternative relief by way of a direction under section 397 can be granted. ( 65 ) CONSEQUENTLY, we are of the view that a composite petition under sections 397 and 398 and 433 (f) is maintainable. ( 66 ) FOR the reasons outlined above, we dismiss, the appeal with costs. ( 65 ) CONSEQUENTLY, we are of the view that a composite petition under sections 397 and 398 and 433 (f) is maintainable. ( 66 ) FOR the reasons outlined above, we dismiss, the appeal with costs. Counsel's fee Rs. 2,000/.