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Citation Codes
Equivalent Citations
citation codes
Case Number
Disposition
Attorney(S)
Judges
Acts
  • Sections 397, 398 and 403 of the Companies Act
  • Section 483 of the Companies Act
  • Companies Act, 1956
  • Section 5, Subsection 2 of the 1983 Income Tax Act
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Cites
Cited by
Citation Codes
Equivalent Citations
citation codes
Case Number
Disposition
Attorney(S)
Judges
Acts
  • Sections 397, 398 and 403 of the Companies Act
  • Section 483 of the Companies Act
  • Companies Act, 1956
  • Section 5, Subsection 2 of the 1983 Income Tax Act
Smart Summary

Factual and Procedural Background

The appellants filed Company Petition No. 306 of 1980 before the Bombay High Court under Sections 397, 398 and 403 of the Companies Act, 1956, alleging oppression in the management of Sakal Papers Pvt. Ltd. The learned Company Judge dismissed the petition on 2/3 February 1981 and awarded costs of Rs 10,000 against the petitioners.

Pursuant to Section 483 of the Companies Act, the petitioners appealed to a Division Bench of the Bombay High Court. That appeal was dismissed in limine (summarily) at the admission stage. Aggrieved, the appellants obtained special leave and brought the present appeal before the Supreme Court of India.

Legal Issues Presented

  1. Whether, under Section 483 of the Companies Act read with Chapter XLII Rule 966-A of the Bombay High Court Rules and the Supreme Court’s earlier ruling in Golcha Investment (P) Ltd. v. Shanti Chandra Bafna, the Division Bench of the Bombay High Court was competent to dismiss the appellants’ company law appeal in limine.

Arguments of the Parties

The opinion does not contain a detailed account of the parties' legal arguments.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Golcha Investment (P) Ltd. v. Shanti Chandra Bafna (1970) 3 SCC 665; AIR 1970 SC 1350; 40 Comp Cas 1128 Appeals not enumerated in Rule 966-A of the Bombay High Court Rules must be admitted as of right and cannot be summarily dismissed. The Supreme Court applied the same reasoning mutatis mutandis and held that the Division Bench was bound to entertain and decide the appeal on merits.

Court's Reasoning and Analysis

1. Section 483 provides a statutory right of appeal from any order or decision of the High Court “in the matter of the winding up of a company,” and mandates that such appeals be heard in the same manner as appeals in the High Court’s ordinary jurisdiction.

2. Although an order under Sections 397, 398 and 403 is not literally an order in winding-up proceedings, the Court noted that appeals from such orders nonetheless lie to the same High Court Division Bench under Section 483, a point not disputed by the parties.

3. Chapter XLII Rule 966-A of the Bombay High Court Rules lists certain appeals that first go through an admission stage. The appellants’ company law appeal was not among those listed, meaning it was entitled to be “admitted as a matter of course.”

4. The Supreme Court in Golcha Investment had already ruled that where Rule 966-A does not apply, the Division Bench cannot summarily dismiss an appeal; it must hear and decide it on merits.

5. Applying that binding precedent, the Court concluded that the Division Bench erred in dismissing the appeal in limine and therefore set aside that dismissal.

Holding and Implications

HELD: The appeal is allowed; the Bombay High Court’s order dismissing the company law appeal in limine is set aside, and the matter is remitted to the Division Bench for disposal on merits without a fresh admission hearing.

Implications: The ruling reinforces that appeals under Sections 397/398/403 of the Companies Act, when not covered by Rule 966-A, must be entertained and adjudicated on merits by the High Court. While it applies an existing precedent rather than creating a new one, it safeguards appellants from summary dismissal in similar company law matters.

    Shanta Genevienve Pommerat And Another v. Sakal Papers Private Limited And Others

    1. Special leave granted.

    2. Petitioners filed Company Petition No. 306 of 1980 in the High Court of Judicature at Bombay complaining about the oppression by the respondents in their management of the affairs of the 1st respondent Company Sakal Papers Pvt. Ltd. The matter came up before the learned Company Judge, who by its judgment and order dated February 2/3, 1981 dismissed the petition and directed the petitioners to pay Rs 10,000 as and by way of costs to the respondents. Petitioners preferred an appeal against the decision of the learned Company Judge under the Companies Act, 1956. This appeal was placed for admission before a Division Bench of the Bombay High Court and it was dismissed in limine. Appellants have preferred this appeal by special leave against the order dismissing their appeal by the Division Bench in limine.

    3. As we are of the opinion that it was not open to the Division Bench of the Bombay High Court to dismiss the appeal in limine, we are at this stage not inclined to examine other contentions on merits.

    4. Section 483 of the Companies Act provides that appeals from any order made, or decision given, in the matter of the winding up of a company by the court shall lie to the same court to which, in the same manner in which, and subject to the same conditions under which, appeals lie from any order or decision of the court in cases within its ordinary jurisdiction. The company petition filed by the appellants was under Sections 397, 398 and 403 of the Companies Act. This group of sections is included in Chapter VI headed “Prevention of Oppression and Mismanagement” which in turn falls within Part VI bearing the heading “Management and Administration”. Provisions for winding up are grouped together under Part VII. Section 483 is placed in Chapter II of Part VII. Therefore, at the first blush it would appear that Section 483 provided for appeals from any order made, or decision given, in the matter of winding up of the company by the court. Expression “court” is defined to mean with respect to any matter relating to a company (other than any offence against this Act), the court having jurisdiction under the Act with respect to that matter relating to that Company as provided in Section 10. Section 10 provides that the court having jurisdiction under this Act shall be—

    (a) the High Court having jurisdiction in relation to the place at which the registered office of the company concerned is situate, except to the extent to which jurisdiction has been conferred on any District Court or District Courts subordinate to that High Court in pursuance of sub-section (2); and
    * * *
    Section 483 confers the right to appeal and forum for the same in respect of any order made or decision given, in the matter of the winding up of a company by the High Court having jurisdiction in the matter. The appeal shall lie to the same court to which, in the same manner in which, and subject to the same conditions under which, appeals lie from any order or decision of the court in cases within its ordinary jurisdiction.

    5. Now an order under Sections 397, 398 and 403 of the Companies Act, on the face of it, cannot be said to be an order made or decision given, in the matter of the winding up of a company. Relief, undoubtedly under Section 397 and/or 398 is in fact an alternative to winding up. No doubt order under Section 397, or 398 could be an order made or decision given by the High Court having jurisdiction under the Companies Act and therefore, an appeal will lie to the Division Bench of the same High Court. This is not disputed.

    6. Chapter XLII of the Bombay High Court Rules provides for appeals to appellate court. The Rules make provision for certain type of appeals to be placed in the first instance, for admission before a Bench of the High Court to be appointed by the Chief Justice. It is not in dispute that the appeal preferred by the present appellants was not one such appeal which can be placed for admission under Rule 966-A and it follows from this Rule that the appeal other than those mentioned in that Rule are not to be placed for admission. This point is no more res lntegra in view of the decision of this Court in Golcha Investment (P) Ltd. v. Shanti Chandra Bafna (1970) 3 SCC 665, AIR 1970 SC 1350, 40 Comp Cas 1128 wherein after considering the provision contained in Rule 966-A, it was held that appeals, other than those set out in the Rule are not to be placed for admission and they were entitled to be admitted as a matter of course. This Court accordingly quashed the order dismising the appeal in limine observing that the appellate court erred in summarily dismissing the appeal because it was bound to entertain the same and dispose it of on merits. This observation will mutatis mutandis apply to the present appeal.

    7. Accordingly this appeal must succeed on this limited ground. We accordingly allow this appeal and set aside the order dismissing the appeal preferred by the present appellants in limine by the Division Bench of Bombay High Court and remit the case to the appellate bench for disposal of the same according to law. In other words, the appeal shall not come up for admission but shall be fixed for hearing on merits and disposed of according to law as expeditiously as possible. There shall be no order as to costs of hearing of the appeal in this Court.

    8. Mr R.K Jain, learned counsel for the appellants urged that this Court should make some order of interim nature. As we have disposed of the matter on a preliminary ground, and as we have not heard any contention on merit, it would not be proper for us to examine the question of granting of interim relief. Parties may appear after expiry of two weeks from today before the High Court and seek appropriate relief.

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    Shanta Genevienve Pommerat And Another v. Sakal Papers Private Limited And Others
    (Jan 11, 1983)