(1) On 31-12-1947, the petitioner and one Shantaram then being wife and husband floated the first respondent company as a private limited company. The petitioner was registered as a shareholder in respect of 251 ordinary shares of the 1st reqpondent company being the subject matter of this petition. The petitioner and the said Shantaram both continued to act as and were directors of the 1st respondent company on 1-7-1955.
(2) From the deed of transfer dated 28-6-1955 a copy whereof is annexed as Ex. 2 to the affidavit in reply made on behalf of the 1st respondent compan, it appears that the petitioner had signed the deed of transfer in respect of these 251 ordinary shares of the company. In the register of shares of the 1st respondent company as 1-7-1955 these shares were transferred and registered in the name of the 2nd respondent. From the minutes of the meeting of the directors held on 1-7-1955 it appears that the petitioner and the said Shantaram were both present at the said meeting and the application for transfer of the shares from the name of petitioner to the second respondent was resolved to be accepted and the shares were resolved to be transferred to the name of the 2nd respondent.
(3) I understand from counsel that there have been disputes and differences between the petitioner and the said Shantaram from 1-7-1955. This petition appears to be one of the litigations arising in consequences of such disputes. In para 7 of the petition the petitioner has referred to a suit which she has filed against the 1st respondent company and the said Shantaram. In the written-statement in that suit the minutes of the meeting of the directors held on 1-7-1955 were referred to and annexed. It is the petitioner's case that she was never present at such meeting and that no such meeting of directors was held on 1-7-1955. The petitioner's contention is that the minutes are fabricated for the purpose of depriving the petitioner of the shares in question and of her position as a director of the 1st respondent company. The petitioner denies having at any time executed a deed of transfer of the kind which is annexed as Ex. 2 to the affidavit in reply made on behalf of the 1st respondent company; the petitioner however does not deny her signature on the deed of transfer. The petitioner's case is that the deed of transfer which bears her signature is a fabricated document. In the affidavit in reply made on behalf of the 1st respondent company all these allegations are denied.
(4) Mr. Khambatta on behalf of the 1st respondent company has contended that the procedure prescribed under S. 155 of the Indian Companies Act is a summary remedy ;and should not be allowed to be resorted to in matters involving companies Act is a summary remedy and should not be allowed to be resorted to in matters involving complicated questions such as have arisen in this petition. He contends that questions of forgery and fabrication of documents are not proper to be tried under the summary procedure of application made under section 155 of the Companies Act. He has in that connection referred me to various text-books. In Vol. VI of Halsbury's Laws of England the summary of the purport of the English decisions in this conneftion appears in Art. 448. The relevant observations in that article are as follows:
'The application may be made by the person aggreived, ........ It may be by motion or summons or by action commenced by writ. If the Court thinks that the case, by reason of its complexity or on the ground that there are matters requiring investigation or otherwise could more satisfactorily be dealt with by an action, the Court will decline to make an order on a motion, without prejudice to the right of the applicant to institute an action for rectification. an action may, without any direction by the Court, be instituted for rectification of the register, a course which should be followed where there is much complexity, or where other relief is required x x x.'
(5) Mr. K. Khambatta and Mr. Mody both have referred me to the case of Matheran Steam Tramway Co. v. B. N. Lang, 33 Bom LR 184. In that case the trial Court in its discretion heard on merits and decided a petition made under S. 38 (which is the same as the present section 155) of the companies Act. In the appeal Court before the Division Bench one of the contentions raised was that a complicated matter requiring trial by evidence should not have been allowed to be heard by evidence should not have been allowed to be heard by petition and a suit should have been direfted to be filed. That contention was dealt with as follows:
'It was next said that this was not a matter which could be determined under S. 38 of the Indian Companies Act and that the petitioners should be left to a separate suit, more especially as Mr. Dinshaw had threatened a suit to enforce his lien. But section 38 is widely worded. At the most it is a matter of discretion for the Court whether in any particular case it will hear the petition or leave the parties to a separate suit. An express issue was raised on this plaint, and the learned Judge exercised his discretion by deciding to hear this petition. Under those circumstances, we do not think we ought to overrule him, and force the parties to begin denovo. Mr. dinshaw's explanation as to why he did not bring a separate suit was because it would in effect be carried on at his own expense. There is the additional circumstance that a petition under S. 38 should be a speedier and cheaper process than an ordinary suit.'
(6) The effect of the above observations appear to me to be that the appeal Court was not willing to interfere with the discretion that was used by the trial Court in refusing to refer the petitioner in that matter to an action. The appeal Court also pointed out that the terms of section 38 of the Companies Act were wide and the remedy was speedier and cheaper. The matter is therefore entirely in the discretion of the trial Court.
(7) Mr. Khambatta has referred me to the case of Smt. savitadevi Jhunjhunwala v. Harinagar sugar Mills Ltd., I. C. No. 67 of 1954 decided by Coyjee J. on March 23, 1955. In that case after considering the position as arising under the decision in 33 Bom LR 184 on the facts of that case Coyajed J. refused to allow the petitioner to proceed by the summary procedure prescribed under S. 38 of the Companies Act and referred him to an action.
(8) In all matters arising under the companies Act the rules of this Court provide that the application must be by petition. It is not therefore that complicated questions of facts must be tried on a petition where remedy for action is available to a party. It appears to me that the observation made in English decisions in this connection are relevant and that where discovery and inspection are necessary and complicated questions such as forgery and fabricated documents arise that summary procedure of trial by petition under S. 155 should not be allowed to be produced. This is not a matter where remedy of action is not available. On the contrary it is admitted by both sides that the procedure of filing a suit for rectification is not unknown and is generally resorted to where rights of third parties are concerned. In the matter of petition before me it appears to me that the real disputes are between the petitioner and her erstwhile husband Shantaram and complicated questions of fabrication and forgery must arise. In my view this is not a petition which I should allow to proceed to a hearing. The petitioner may if she so chooses file a suit for the relief which is claimed in the petition.
(9) The order which I therefore make is: the petition must stand dismissed with liberty to the petitioner if so advised to file a regular suit. Costs of this petition if the suit is filed by the petitioner within four months from to-day will be costs in the suit. In default of any suit being filed the costs of this petition will be paid by the petitioner, Counsel certified.
(10) Petition dismissed.