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1990 DIGILAW 35 (DEL)

RAJENDER NATH v. BHASKAR S. PIPES

1990-02-08

MAHESH CHANDRA

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Mahesh Chandra ( 1 ) PETITIONERS have filed this C. A. under Order 22 Rule 4 of Civil Procedure Code. read with Rule 9 of the Companies (Court) Rules, 1959, for bringing on record L/rs of deceased respondent No. 2 on the main company petition C. P. 41/82. The application is opposed on behalf of the proposed L/rs and other respondents. I have heard learned counsel for parties. ( 2 ) THE contention of the learned counsels for L/rs and for respondents is that the main C. P. has been filed u/ss. 397/398/433 of Companies Act, 1956, on the ground of alleged acts of oppression and whatever role had been assigned to deceased respondent No. 2 in the alleged oppression was as director of the respondent company and consequently his L/rs cannot be impleaded in his place after his death. Reliance has been placed upon J. K. Investment Trust Ltd. vs. Muir Mills Co. AIR 1961 All. 413 in which D. B. has held : "in proceeding instituted u/s. 397 and 398 it is not permissible to impled the heirs and legal representatives of the deceased director and to continue the proceedings against them " ( 3 ) AS against it, it has been urged by counsel for petitioners that in para 21 of the company petition it has been stated that on the death of Shri R. N. Bhaskar, his shares were appropriated at the instance of Shri B. N. Bhaskar and as many as 400 share were allotted to deceased V. N. Bhaskar also and consequently this aspect having formed the basis of the company petition his L/rs should be impleaded. ( 4 ) AFTER giving my considered throught to the matter, I am of the view that it would not be possible to agree with the submission of learned counsel for the petitioners. Keeping in view the scope of the present company petition and the language of sections 327/398 and 433 the question of appropriating of shareholding of Shri R. N. Bhaskar by deceased V. N. Bhaskar at the instance of Shri B. N. Bhaskar cannot be the subject matter of enquiry in this petition. Furthermore, the acts of oppression which have been alleged against deceased V. N. Bhaskar cannot be ascribed to his L/rs. The proposed L/rs arc now only ordinary shareholders and have no other connection with the management. Furthermore, the acts of oppression which have been alleged against deceased V. N. Bhaskar cannot be ascribed to his L/rs. The proposed L/rs arc now only ordinary shareholders and have no other connection with the management. The acts of Shri V. N. Bhaskar challenged in this petition arc that of a director rather than of an individual shareholder. In view of these facts, it cannot be said that his L/rs have become necessary or even proper parties to this petition. No cause of action can be said to exist vis a vis L/rs of V. N. Bhaskar in favour of the petitioners. I do not think that it would even be open to this court, much less appropriate to bring on record the heirs of deceased director respondent No. 2. This court cannot pass any orders against the L/rs which could have been passed under some other provisions of the law. There is no doubt that the intention of the Legislature in enacting S. 398 was to arm the Court with full powers, but the powers so widely conferred could be utilized only within the limited scope of section 398. It is in this context that it has also been observed by the D. B. in J. K. Investment Trust Ltd. (supra) in para 7, as follows : "it will be noticed that the intention of the Legislature in enacting the sub-section was to arm the Court with full powers if it was of of opinion mentioned in Section 398 (l) had arisen. But the powers so widely conferred could be utilized only to bring to an end the situation which had already arisen or to prevent matter complained of or apprehended continuing in future, it is settled that the liability can be enforced only against a living director and not against his heirs or legal representative after his death. It is, therefore, not possible to accept the argument of the learned counsel for the applicant that the heirs of the deceased Shri Hari Shanker Bagla can be brought on record and proceeded against in these proceedings without having the recourse to Section 406 or the provisions of this Act. " Application dismissed.