- (1.) Once again a dispute in a small business family has come to this Court by way of an appeal from an Order of the Company Law Board. The family involved is the Kajaria family. Some members of this family who are respondents in this appeal made an application to the Company Law Board under section 397 and 398 of the Companies Act, 1956, being C.P.No.18 (Kol) of 2009 complaining of oppression and mismanagement by some other members. The family concern involved was Murat Viniyog Ltd.
(2.) The appellant which was the first respondent filed an application before the Board, C.A. No. 503 of 2009 complaining that the petitioners before it did not have the requisite share qualification to maintain the action. On a very small point of procedure to be adopted to deal with that application an appeal came before me, filed by the appellant herein, being A.P.O.T 408 of 2010. I disposed of that appeal on 15th July 2010 by giving some directions to the Company Law Board to deal with the above application filed by the appellant. The group represented by the appellant and the proforma respondents in the appeal will be called the majority and the group represented by the respondents excluding the private respondents will be called the minority when such description is called for. This description is only for convenience and is not to be treated as a finding. Otherwise, the parties are described according to their description in the cause title of the section 397 and section 398 petition. This application challenging the locus standi of the minority to file an application before the Company Law Board was dismissed by the Tribunal on 16th August, 2010. The consequence of this dismissal order is that the Company Law Board will now proceed to hear the application on merits.
(3.) The majority is aggrieved by this Order. THEir point of view is that since the minority does not have the locus standi to maintain the Section 397, 398 application before the Company Law Board, it cannot go into the merits of the dispute. Now I will go into the details of the application. The whole dispute between the parties concerns section 399 of the Companies Act, 1956. This section specifies the class of members who can maintain an application under section 397 and 398. It inter alia states that one hundred members or l/10th of the members of a company whichever is less or holders of not less than l/10th of the issued share capital of the company can apply. Anyone member with the consent of others so as to fulfill the above requirement may also make the application.;