Shri Balaji Textile Mills P. Ltd. & Anr. Vs. Ashok Kavle & Ors.
EmailAppeal: Special Leave Petition (Civil) No. 5180 of 1988.
Petitioner: Shri Balaji Textile Mills P. Ltd. & Anr.
Respondent: Ashok Kavle & Ors.
Apeal: Special Leave Petition (Civil) No. 5180 of 1988.
Judges: SABYASACHI MUKHARJI & S. RANGANATHAN,JJ.
Date of Judgment: May 04, 1988
Head Note:
COMPANIES ACT, 1956:
Section 41(2), 397 and 398 – Whether the petitioners were members of the Company – High Court to decide the question after both the parties adduce further evidence.
JUDGEMENT:
O R D E R
1. This application is by special leave against the judgment and order of the High Court of Karnataka, arising out of application under sections 397 and 398 of the Companies Act, 1956. The question for consideration is a preliminary issue whether the petitioners Nos. 1 and 2 were members of the Company. Section 41(2) of the Act provides that every member who agrees in writing to become a member of the Company and whose name is entered in the register of members, shall be a member of the Company. On the materials adduced before the Court, the Court came to the conclusion that there has been substantial compliance with Section 41(2) of the Companies Act. In the interest of justice we are of the opinion that it is not necessary at this stage to express our opinion about the correctness or otherwise of the view expressed by the High Court but we direct that the proceedings under Sections 397 & 398 of the Companies Act, will decide this question whether the petitioners are members of the Company, in view of they having agreed to become so in writing, will be decided in accordance with law. Both the parties will be entitled to adduce further evidence.
2. We hope and trust that it will be possible for the High Court of Karnataka to dispose of the whole petition as early as possible. Special leave petition is disposed of accordingly.
1. This application is by special leave against the judgment and order of the High Court of Karnataka, arising out of application under sections 397 and 398 of the Companies Act, 1956. The question for consideration is a preliminary issue whether the petitioners Nos. 1 and 2 were members of the Company. Section 41(2) of the Act provides that every member who agrees in writing to become a member of the Company and whose name is entered in the register of members, shall be a member of the Company. On the materials adduced before the Court, the Court came to the conclusion that there has been substantial compliance with Section 41(2) of the Companies Act. In the interest of justice we are of the opinion that it is not necessary at this stage to express our opinion about the correctness or otherwise of the view expressed by the High Court but we direct that the proceedings under Sections 397 & 398 of the Companies Act, will decide this question whether the petitioners are members of the Company, in view of they having agreed to become so in writing, will be decided in accordance with law. Both the parties will be entitled to adduce further evidence.
2. We hope and trust that it will be possible for the High Court of Karnataka to dispose of the whole petition as early as possible. Special leave petition is disposed of accordingly.
