Judgment:
P.C. Jain J.
1. The Registrar of Companies, Rajasthan, Jaipur, has filed this petition under Section 439(5) read with Section 433(c) and (f) of the Companies Act, 1956, against the Jaipur Stock Exchange Ltd., which is a company incorporated under the Companies Act (hereinafter referred to as 'the company'). Through this petition, the Registrar of Companies has prayed that the company be ordered to be wound up by this court on the various grounds mentioned in paras 8 to 14 of the petition read with Section 433(c) and (f) of the Act. After presentation of the petition, this court issued a show-cause notice to the company as to why the petition should not be admitted and published. After the service of the petition, Shri U.N. Bhandari appeared on behalf of the company and filed a reply to the petition. The reply is signed by Shri R.C. Goenka, director of the company. In the reply, the company prayed that the winding-up petition be summarily dismissed.
2. Shri M.R. Calla has filed a petition on behalf of S/Shri P.N. Malpani, A.K. Baweja, Subash Kasliwal, Shyam Sundar Mundra and Raman Ram Niwas, said to be the directors of the company, contending that the petition be served upon the said directors and they should be treated as the Jaipur Stock Exchange Ltd. and should be allowed to be heard and the other directors of the company, including Shiv Kumar Mansinghka, be not allowed to represent the Jaipur Stock Exchange Ltd. A copy of thepetition was given to Shri U.N. Bhandari, who filed a reply contending that the allegations made in the petition filed by Shri P.N. Malpani and others, are not maintainable and that the questions raised in the petition by Shri P.N. Malpani and others cannot be decided or adjudicated upon in the petition for winding up. It was also submitted in the reply that Shri P.N. Malpani and others are not interested in defending the winding up petition ; but, on the contrary, they are interested in prolonging the proceedings so that the necessary recognition under the provisions of the Securities Contracts (Regulation) Act, 1956, may not be granted to the company by the Central Government and the other competent authorities. It was also alleged in the reply that the petition filed by Shri Malpani and others is at the behest of certain interested persons, including the two companies--Mewar Stock Exchange Ltd. and Pink City Stock Exchange Ltd., which are headed by influential persons in the business world. It was also submitted that S/Shri P.N. Malpani and A.K. Baweja are also promoters and directors of one of the rival companies, viz., Pink City Stock Exchange Ltd., which is deeply interested in scuttling the efforts of the company to seek recognition under the Securities Contracts (Regulation) Act.
3. In the petition filed by Shri P.N. Malpani and others, it was contended that the certificate of incorporation was issued to the company on December 28, 1983. Before the expiry of 18 months from the date of incorporation, the first annual general meeting was required to be held by the company under para 50 of the articles of association. It was thus contended that on or before June 27, 1985, no annual general meeting was held. It was also submitted that in view of para 69 of the articles of association, the council of management is to retire on the first annual general meeting and, thus, the council of management automatically became defunct, as the first annual general meeting of the company was not held. In the petition, the petitioners further contended that three promoters, viz., S/Shri P.N. Malpani, A.K. Baweja and Subash C. Kasliwal, sent a notice dated December 18, 1985, to the president of the company, as the requisition for convening an extraordinary general meeting and they themselves called a meeting under para 55 of the articles of association on March 15, 1986, and, in the meeting held on March 15, 1986, the election of the new council of management was held and the following members were elected as directors:
1. Shri P.N. Malpani
2. Shri A.K. Baweja
3. Shri Subash C. Kasliwal
4. Shri Shyam Sunder Mundra
5. Shri Raman Ram Niwas
4. Thereafter, a meeting of the board of directors was held on March 17, 1986, in which Shri P.N. Malpani was elected as president and Shri Raman Ram Niwas as vice-president. Shri Subash C. Kasliwal was elected as treasurer. It was further contended that the new president asked the former members of the council of management to deliver possession of the office of the company with all its assets. Thus, it was submitted that Shri Shiv Kumar Mansinghka and his seven associates did not represent the Jaipur Stock Exchange Ltd. and, as such, they cannot be allowed to be represented in the company petition.
5. Shri M.R. Calla, learned counsel for Shri P.N. Malpani and four other directors, submitted that in view of the facts mentioned in the petition, his clients are the true representatives of the company and, therefore, a notice of the petition be served upon them to file a reply.
6. Shri U.N. Bhandari, controverting the submissions made by Shri M.R. Calla, submitted that Shri P.N. Malpani and others are not competent to challenge the status of Shri Shiv Kumar Mansinghka and his other seven associates. In fact, they did not represent the Jaipur Stock Exchange. Shri Bhandari submitted that if Shri P.N. Malpani and others have any grievance, the proper course for them would be to get this matter decided either by filing a civil suit in the court of competent jurisdiction or by taking other appropriate proceedings. In any case, his submission is that the issues raised by Shri Calla cannot be allowed to be agitated in this petition for winding up. Shri Bhandari also submitted that even on merits, there is no case for the petitioners to contend that they are the representatives of the company. He pointed out that the first annual general meeting of the company was held on June 25, 1985, in accordance with the notice issued on May 21, 1985 ; but, for want of proper quorum, the said annual general meeting had to be adjourned. Notices for convening the adjourned annual general meeting to be held on September 20, 1985, were again issued and sent to the members. The adjourned annual general meeting was held on September 20, 1985. A copy of the notice has been filed. The notices were served under postal certificate. A photostat copy of the postal certificate was also placed on record. A copy of the minutes of the adjourned annual general meeting held on September 20, 1985, was also placed on record. It was also submitted that all the required documents and the returns required to be filed after the meeting were duly filed with the Registrar of Companies. Shri Bhandari also urged that the requisition for the meeting was not in accordance with law and the requisitionists, in fact, did not hold any meeting at 3 p.m. in the premises of the Assam Hotel, on March 15, 1986. It was discovered that some of the requisitionists had convened the meeting, but left the said hotel premises before 3 p.m. and, in orderto support his contention, Shri Bhandari pointed out to annexure R/G which bears testimony to the submissions made by him. Shri Bhandari also submitted that in fact ten directors attended the meeting on March 15, 1986. The attendance was recorded, vide annexure R/F. The minutes of the meeting have been incorporated in annexure R/E. The hotel bill, annexure R/E/2, was also filed. Shri Bhandari pointed out that Raman Ram Niwas, who is said to be present in the meeting held by Shri Malpani and his associates on March 15, 1986, was present in the meeting held by the groups represented by Mansinghka and it stands proved by the fact that annexure R/F, which is the attendance record, bears the signatures of Raman Ram Niwas. Shri Raman Ram Niwas or Shri Malpani and others have not filed any affidavit to the effect that annexure R/F does not bear the signature of Shri Raman Ram Niwas. In the meeting held on September 20, 1985, the election of the council of management had also taken place and in the meeting, directors retired and were re-appointed. The second annual general meeting of the company was also held on June 30, 1986, which is evident from the minutes of the proceedings and annexure R/K. There is on record the auditor's report, annexure R/A, and the directors' report, annexure R/M. The audited accounts of the company are annexure R/N. Shri Bhandari also referred to certain annexures which he had filed along with the reply to the application for winding up, out of which are relevant annexures R/11, R/12, R/14, R/15 and R/36. Shri Bhandari also referred to the correspondence through which the company had taken steps for expediting the recognition of the exchange as per provisions of the Securities (Contracts) Regulation Act, after complying with the requisite legal formalities. No documentary evidence, except annexures I, II, IV, V, VI and VII, was filed by the petitioner, Shri P.N. Malpani and others to support their contentions. Annexures 1, 2, 3 and 6 related to requisition for convening the extraordinary general meeting. From the documentary evidence it is evident that Shri Malpani and his associates have done nothing for conducting the business of the company. From the documentary evidence filed by the company, it is evident that Shri Mansinghka and his associates are taking active steps in the management of the company. There is also on record prima facie evidence to hold that the adjourned annual general meeting was held and the directors were re-elected.
7. Shri Bhandari relied upon Maharaja Exports v. Apparels Exports Promotion Council [1986] 60 Comp Cas 353 (Delhi) and submitted that a dispute whether the annual general meeting held was legal or not, can be considered by a civil court in a suit for declaration. His submission is that the various questions raised by Shri M.R. Calla can easily be resolved by the civil court which has jurisdiction to entertain the suit and to adjudicate upon such dispute. In that case, it was held that except in cases where the Companies Act, 1956, confers jurisdiction on the company court or authority like the Central Government or the Company Law Board either expressly or by implication, all other disputes pertaining to a company are to be resolved through the forum of the civil court. Similar view has been expressed in Ravinder Kumar fain v. Punjab Registered (Iron and Steel) Stockholders Association Ltd. [1978] 48 Comp Cas 401 (P & H). In a civil proceeding the plaintiff or the petitioner who files the proceedings is the dominus litis, i.e., he is the best judge of his own interest and clearly the court should not add a person as a defendant or respondent when the party filing the proceedings is opposed to such addition. It is an established principle that it should be left to him to choose his opponent from whom he wants his relief. The court is empowered to add a person as party to the proceedings if his presence before the court is necessary to enable it to effectually and completely adjudicate upon and settle all questions involved in the proceedings. In the present case, the company is contesting the petition for winding up and, for that purpose, it has filed the reply also. Notices were served upon the company in the prescribed manner and there is no irregularity or illegality in the service of the notice to the company and, in view of the facts narrated above, I am of the opinion that no notice is required to be served upon Shri P.N. Malpani and his associates. There is no merit in the petition filed by Shri Malpani and his associates. Shri Shiv Kumar Mansinghka and his other seven associates who have filed the reply are competent to represent the Jaipur Stock Exchange Ltd. and the dispute can be effectually and completely adjudicated upon without the presence of Shri P.N. Malpani and others. However, in case they are interested in contesting the winding-up petition, they may extend their support to Shri Mansinghka and his other associates who are contesting the petition.
8. The petition filed by Shri P.N. Malpani and his associates has, thus, no merit and is dismissed with no order as to costs.