Nishal Rajsakha vs Bnd Fashions Pvt. Ltd. & Ors

BND Fashions Pvt. Ltd. & Ors. ...Respondents

Present:

For Appellant: Shri Ansad Randeria, Shri A. Nair, Advocates

For Respondents: Shri Rajnish Sinha and Shri Nikhil Jam, Advocates

ORDER

21 08 2017 This appeal has been preferred by the appellant (petitioner)

against the order dated lath March, 2017 passed by the National Company Law

Tribunal, Ahmedabad Bench, Ahmedabad (hereinafter referred to as the

ribunal) in I.A.No 11/2016 The aforesaid application was preferred by

original Respondent Nos. 2 and 3 (respondents herein) on fhe ground that the

petition under Sections 397 and 398 of the Companies Act, 1956 was not

maintainable, as the name of the appellant's has not recorded in the register of

shareholder. The Tribunal by the impugned order while accepting the

submissions made on behalf of the respondent dismissed the company petition

with the following observations:

"34. In the case on hand it is held that the petitioner is not

entitled to become a member of 1st Respondent Company. -2-

Therefore, he is not entitled to file a petition u/s. 59 of the

Companies Act, 2013 and u/Sec. 397 and 398 of Companies

Act, 1956.

35. In view of the above said findings this application LA.

11/201 6 filed by Original Respondent No. 2 and 3 is allowed.

The company petition No. 69 of 2016 (New Number TP-136 of

2016) stand dismissed. In view of dismissal of TP 136/2016,

Ms' 20 and IA 21/2017 are closed."

2. Learned counsel appearing on behalf of the appellant submitted that the

combined application under Section 59 along with Sections 397 and 398 was

maintainable, per contra, according to the learned counsel for the respondents

till the appellant's name is entered in the register of members, the application

under Sections 397 and 398 is not maintainable in view of Section 399 of the

Companies Act, 1956.

3. Having heard the learned counsel for the parties, while we are of the view

that except a member qualified in terms of Section 399 (now Section 244 of the

Companies Act, 2013), no other person is entitle to file any petition under

Sections 397 and 398 (now Section 241 and 242 of the Companies Act, 2013),

the application at the instance of the applicant under Sections 397 and 398 was

not maintainable.

4. Insofar as the application under Section 59 of the Companies Act, 2013 is

concerned, we are of the view that once the Tribunal held that petition under

Sections 397 and 398, was not maintainable, the Tribunal was not required to decide the merit of the claim under Section 59 of the Companies Act, 2013, which

is required to be decided on different criteria. As the petition was not

maintainable before the Tribunal, it was not open to the Tribunal to give any

finding with regard to the merit of the claim under Section 59 of the Companies

Act, 2013.

5. For the reasons aforesaid, the observation of the Tribunal with regard to

the merit of the application under Section 59 of the Companies Act, 2013 are set

aside. The order dated lOth March, 2017 stands modified to the extent above.

The application preferred by the appellant under Sections 397 and 398 is

dismissed. It will be open to the appellant to ask for appropriate relief before a

Court of competent jurisdiction, if he is entitled under the law.

6. The appeal stands disposed of with the aforesaid observations.

[Justice S.J. Mukhopadhaya] Chairperson

[Balvinder Singh] Member (Technical)