I.S Tiwana, J.:— In this petition under Sections 397, 398 and 433 of the Companies Act, 1956, the following prayers have been made:—
(i) To require respondents Nos. 2 to 10 to transfer their shares in the Company to petitioners Nos. 1 and 3 and/or to their nominees at a value to be fixed by the Court in this behalf.
(ii) To remove respondents 2 to 10 from the Directorship of the Company; or
(iii) Alternatively to wind up the Company.
(iv) To pass such order or orders as this Hon'ble Court deems fit in the circumstances of the case.
2. Since the stand of the petitioners was contested by the respondents, the parties vide order dated September 22, 1989, were put to trial on the following issues:—
(1) Whether the affairs of the Company are being conducted in the manner which are oppressive to the petitioners? O.P.P
(2) Whether the affairs of the Company are being conducted in the manner prejudicial to the interest of the Company? O.P.P
(3) Whether a joint petition under Sections 397, 398 and 433 of the Companies Act is not maintainable? O.P.P
(4) Whether the relief of rectification of the register of share holders cannot be claimed in the instant petition? O.P.P
(5) Whether the petition has been presented by the petitioners who do not qualify the test laid down in Section 399(1)(a) of the Companies Act? OPR.
(6) Relief.
3. The petitioners was further directed to produce their evidence on November 3, 1989. As no evidence was produced on that date, it was adjourned to December 12, 1989 for the said purpose. On the said date they filed the present application and raised the plea that:—
“The Companies (Court) Rules, 1959, do not envisage oral evidence in Company Petitions and envisage that facts and documents shall be proved by affidavits with right in parties to file affidavits counter affidavits and reply affidavits so that petitions can be decided on the basis of affidavits”.
4. It was further averred therein that in some of the High Courts such a practice has assumed the status of a rule. It was, therefore, prayed that the Court may be pleased to (i) direct that the evidence shall be by way of affidavits and (ii) pass such other orders as the Court may deem just and proper.
5. This stand of the petitioners is seriously controverted by the respondents with the pleas that the Company (Court) Rules, 1959, do not envisage the adoption of the above noted course as a matter of law or rule and rather the said Rules and more particularly, Rule 6, envisage that the practice and procedure to be adopted by the Courts in these matters shall be the same as provided for in the Code of Civil Procedure. It is further high lighted in the reply on behalf of the respondents that though the Court may require the proving of any fact or point by affidavits as provided for in Order 19, C.P.C, yet in the instant case the petitioners are trying to run away from the law or the procedure laid down for these proceedings in view of the fact that they did not file any list or summoned the witnesses to be examined by them in support of their claim. In other words, the plea is that the application has been filed with a view to gain time and to delay the proceedings.
6. Having considered the submissions of the learned counsel for the parties in the light of the above noted pleas of theirs, I am of the opinion that it cannot be laid down as a matter of law or rule that in these matters the parties have an absolute right to prove their respective pleas by Sling documents or affidavits alone. It is, however, within the discretion of the Court to allow them to prove any particular fact/facts by filing affidavits of any witness for any good or sufficient reason. Even in that situation the Court has to direct the attendance of any of the deponents for purposes of cross-examination at the instance of either party. Keeping in, view the facts and circumstances of the case in hand and more particularly the nature of issues involved, I see no justifiction for the prayers made. This is more so in the light of the observations of their Lordships of the Supreme Court in Needle Industries (India) Ltd. v. Needle Industries Newey (India) Holdings Ltd. . 1981 3 SCC 333, wherein it is emphasised that:—
“It is generally unsatisfactory to record a finding involving grave consequences to a person on the basis of affidavits and documents without asking that person to submit to cross-examination. It is true that men may lie but documents will not and often, documents speak louder than words. But a total reliance on the written word, when probity and fairness of conduct are in issue, involves the risk that the person accused of wrongful conduct is denined an opportunity to controvert the inference said to arise from the documents.”
(Emphasis added).
7. Therefore, the prayears made in this application are declined with costs which I determine at Rs. 500/-.
R.M.S-Application dismissed.