I. P. Mukerji, J. - (1.) THE Judgment of the Court was delivered by Background: This is an appeal from the order of the Company Law Board made on 30th March, 2010. It held in that order that the supporters of the applicants before them were more than the required number, necessary, under section 399 of the Companies Act, 1956 ("the Act") to support their application under sections 397 and 398 of the Act. THE appellant submits that such support was not there and the Board ought to have dismissed the main proceedings and allowed their application in this behalf.
(2.) ANY shareholder cannot maintain a proceeding under section 397 and 398 of the Act. Section 399 inter alia enacts that 100 or l/10th of the total number of members of a company whichever is less have the right to apply under sections 397 and 398. ANY member or members holding not less than l/10th of the issued share capital can also apply. Section 399(3) permits any member with the support of others, adding to make the required number of shareholders, to make the application. Here it is common ground that the applicants and their supporters have only 4.73 per cent shares in the appellant company. So they do not fall within the alternative requirement. Now, the question is whether these applicants and their supporters satisfied the first requirement. The total number of members admittedly is 600. The respondent Nos. 1, 2 and 3 in this application being the applicants before the Company Law Board filed the proceedings with the alleged support of a further 113 shareholders. Therefore going by the above section if they can show that these 113 or 60 out of them supported them, they fulfilled the requirement. The appellant contends that there is no such consent as required by law. Therefore, the proceedings should fail on this preliminary ground. Arguments:
(3.) THE case of the appellant was put in this way. THEy argued that 93 such letters of consent appended to the petition were undated. According to the affidavit-in-opposition filed by the contesting respondents being the applicants before the Board, these consent letters were signed some time in November 2008. Further, according to the admission of the said respondents at page-292 of the paper book the 397 proceedings petition was made ready on 5th December. 2008 and filed in January, 2009. THErefore, according to them all these consent letters were signed before the 397 petition was made ready. Hence, there was no consent to this petition. Further according to the appellant specimen signatures of 9 persons do not tally with the signature recorded with the company. One does not hold any share in the company. They contend that a shareholder's consent can only be taken note of by the Court if the consent is real. That means that the shareholder has gone through the petition, understood its contents and accordingly, signified it in such a manner that the Court is satisfied that he had read and understood the case and accordingly, given his consent. A Division Bench judgment of the Madras High Court in M.C. Duraiswamiv. Sakthi Sugars Ltd. reported in 50 Company Cases page 154 an another decision in Omni India Limited and others v. Balbir Singh, reported in 66 Company Cases page 903 were cited by the learned senior advocate for the appellant. Mr. Aniruddha Roy, learned advocate led by Mr. S. K. Kapoor for the contesting respondents has drawn my attention to the wording of the consent letters and argued that on a reading of such consent letters, there should not be any doubt in the mind of the Court that the supporters of the applicants had duly signified a real consent to filing of the section 397 petition.;