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Dina Nath Sodhi Vs. Eastern Linkers Private Ltd., New Delhi and ors. - Court Judgment

LegalCrystal Citation
SubjectCompany
CourtDelhi High Court
Decided On
Case NumberCompany Petition No. 32 of 1971
Judge
Reported in10(1974)DLT151
ActsCode of Civil Procedure (CPC), 1908 - Sections 152
AppellantDina Nath Sodhi
RespondentEastern Linkers Private Ltd., New Delhi and ors.
Advocates: A.N. Parekh,; Ved Vyas,; C.L. Itorora,;
Cases ReferredMaster. Construction Co. (P.) Ltd v. State of Orissa
Excerpt:
it was held that an accidental slip or omission could be corrected suo motu by the court under section 152 of the civil procedure code, 1908 - even without an application the court could correct any typing mistake. - - bali, set out above, was clearly to the effect that he will pay and take by transfer all those shares. 1 'were clearly a mistake for 'respondent no......the decision of the court as to whether the shares owned by us are 21 as we contend or only 5 as shri bali contends'. on the same day s l. bali made the following statement :- 'i am willing to pay at the rate of rs. 7,500.00 for each cumulative preference share held by the petitioner and members of his family subject to this court deciding the number of shares so held by shri dina nath sodhi and members of his family. according to me shri dina nath sodhi and members of his family own 5 shares and not 21 as contended by him. this question alone may be decided in this and the connected upplications by this court. till this question is disposed of i undertake not to alienate or in any manner subject the company to any commitment or liability except for ordinary day to day transactions,.....
Judgment:

S. Rangarajan, J.

(1) This judgment will dispose of C. A. 608 of 1972 also. D. N. Sodhi was a shreholder and Director of Eastern Linkers Private Limited (which will hereafter be called the 'Company'); the other Director of the Company was S.L. Bali. The Company was imp leaded as respondent No. 1 and S. L. Bedi as respondent No. 2. Smt. Shakuntala Bali wife of S. L. Bali and P. L. Sood and Kartar Singh were imp leaded as respondents 3. 4 & 5, being the other shareholders of the Company. It was alleged by D. N. Sodhi in his petition (C. P. 32/71) under Sections 397 and 398 etc. of the Companies Act that the group of shareholders (respondents 2 to 5) were guilty of certain acts of oppression of D. N. Sodhi. Various reliefs including the investigation of the affairs of the Company, the removal of the present Board of Directors, the appointment of an administrator, the annulment of allotment of certain shares and the restoration of names of certain family members of D. N. Sodhi to the register of members, were sought. The company's authorised capital was 5 lakhs divided info 200,5% comulative preference share of Rs. 2,000.00each and 1000 ordinary shares of Rs. 100.00 each; the ordinary shares were at par with the preference shares with regard to voting rights and repayment of capital in the event of winding up. up to November 12, 1970, the paid up capital of the company was Rupees one lakh. D N. Sodhi claimed to hold 4 commulative shares of the value of Rs. 2,000.00 each ; he also claimed, in addition, that 17 other such shares were held by the rnembers of his family. It was alleged by him that on 13 the November, 1970, 1000 equity shares ofRs. 100.00 each had been issued at the instance of S. L. Bali to himself, his wife and children etc. without the knowledge of D. N. Sodhi, in order to gain control over the Company.

(2) This petition (C. P. 32 of 1971) was resisted by S. L. Bali, inter alia, on the ground that D. N. Sodhi, had only four fully paid up preference shares whereas his wife held another preference share, it was furter alleged hat the two sons and daughter of D. N. Sodhi, who arc stated to hold four preference shares each, did not hold any share at all in the Company and were not its members.

(3) D. N. Sodhi made the following statement which I recorded all on 8th November 1971in C. P. 32 of 1971 : I and members of my family own 21 comulative preference shares in the company, lf we are paid at the rate ofRs. 7, 500.00 per commulative preference .share we are willing to transfer those shares to Shri S. L. Ball within a fortnight of the decision of the Court as to whether the shares owned by us are 21 as we contend or only 5 as Shri Bali contends'. On the same day S L. Bali made the following statement :-

'I am willing to pay at the rate of Rs. 7,500.00 for each cumulative preference share held by the petitioner and members of his family subject to this court deciding the number of shares so held by Shri Dina Nath Sodhi and members of his family. According to me Shri Dina Nath Sodhi and members of his family own 5 shares and not 21 as contended by him. This question alone may be decided in this and the connected upplications by this court. Till this question is disposed of I undertake not to alienate or in any manner subject the company to any commitment or liability except for ordinary day to day transactions, without taking the express order of the court'.

On the same day I passed the following order :

'The statement of Shri Dina Nath Sodhi and Shri S L. Bali are recorded. Shri Bali will file a detailed affidavit concerning the returns stated to have been hied before the Registrar for she years ending 1966, 1967 and 1968 mentioning the details of the shares held by the petitioner and members of his family. He will also cover... The petitioner also will file a detailed affidavit or shares of himself and the members of his family and how and when they were acquired.'

(4) After the evidence on both sides was recorded P. N. Khanna, J. by his order dated 23rd May. 1972 held that Smt. Shakuntala Bali wife of S. L. Bali was not the owner of the eight, shares, which previously stood in the names of Des Raj and Mulk Raj and that D. N. Sodhi and members of his family i.e. his wife, his deceasred brother. his two sons, Ramesh and Suresh, and his daughter Savita Sodhi were the owners of 21 shares. P. N. Khanna, J. finally gave the following direction : The petitioner, respondent No. 1 and respondent No. 2 shall now take steps forth with to have the said 21 comulative preference shares transferred to respondent No. 1 (the Company) at the agreed price of Rs. 7,500.00 for each such share.'

(5) As against the order of P.N. Khanna, J. the following appeals were preferred:

(1)Company Appeal No. 10 of 1972 was preferred by S. L. Bali through his Avocate, Shri A. N Khanna. Shri Ved Vyas also appeared with Shri A. N. Khanna (for S. L. Bali) on 10th August, 1972, when the appeal came up before the Division Bench for admission. (2) Company appeal No. 11 of 1972 was preferred by Smt. Shakuntala Devi Bali through her Advocate, Shri A N. Khanna, when the appeal came up for admission before the Division Bench, Shri Ved Vyas with Shri A. N. Khanna appeared for Smt'. .Shakuntala Devi Bali. on 10th August, 1972. (3) Company Appeal No. 13 of 1972 was preferred by Eastern Linkers Private Limited through Shri D. K. Aggarwal, Advocate. When the said appeal came up for admission on 10th August, 1972, the Division Bench had noted the appearance of Shri Ved Vyas for the appellant.

(6) Ground No. 8 in Company Appeal No. 13 of 1972 (preferred by the company) is important and may he set out.

'That the Hon'ble Company Judge has erred in equating the Appellant Company with Respondent No. 1 (Shri D. N. Sodhi) and Respondent No. 2 (Shri S. L. Bali), in directing the appellant company take to steps forthwith to have the said 21 shares transferred to Respondent No. 1 e.g. appellant company (which presumably meant Respondent No. 2 Shri S. L. Bali) at the agreed price...The Hon'ble Company Judge erred in giving the directions aforesaid, overlooking the important fact that the appeilant company was no party to the agreement between Respondent No. 1 and Respondent No. 2 as disclosed in their respective statements made on 8th November, 1971, and accordingly was not bound or affected thereby '. 7. In this context it is also necessary to notice the various appearances put in by Shri A. N. Khanna. These particulars have been mentioned by D. N. Sodhi (vide para 4 of his reply to C. A. 608 of 1972) as follows: (a) Vakalatnama dated the 21st of May, 1971 in favor of Mr. A. N. Khanna by Respondents Nos. 3 to 5 in C. P. No. 32 of 1971 (date of the stamp is 22nd May, 1971). (b) Vakalatnama in favor of Shri A. N. Khanna by Respondents Nos. 1 and 2 in C. P. 32 of 1971 dated 22rd May, 1971. Both Vakalatnamas appear to have been filed on the same day. (e) Vakalatnama dated the 29th of July, 1971 in C. A. No. 236 of 1971 in C. P. No. 32 of 197i given by M/s. P.L. Sood, Kartar Singh Mehta, Shakuntala Bali, S. L. Bali and Eastern Linkers Private Limited in favor of Shri A. N. Khanna, Advocate. (d) Reply dated the 4th of August, 1971 to C. A. 236 of 1971 in C. P. 32 of 1971 was filed on behalf of all the Respondents (five in number) and the application was singed by Shri A. N. Khanna, Advocate '.

(7) When D. N. Sodhi applied for executing the order of P. N. Khanna, J. various objections wen taken. One of them was that the direction of P. N. Khanna, J. was that the 21 shares should be transferred to the Company and not to S. L, Ball.

(8) When the matter came up before me on 3rd October, 1972, I passed an order as follows :

'SHRIA. N. Khanna admits that the word Respondent No. occurring at page 15 of the original order in the following portion of the judgment of P. N. Khanna J., dated 23rd May, 1972, is a mistake for Respondent No. 2. The concerned sentence, thereforee, will be aminded accordingly and will read as follows : 'the petitioner, respondent No. 1 and respondent No. 2 shall now take steps forthwith to have the said 21 comulative preference shares transferred to respondent No. 2 at the agreed price of Rs. 7, 500.00 for each said share '

As against the said order an appeal was preferred (P. A 0 (0. S.) 66 of 1972) wherein the appearances were noted by the Division Bench as follows, on 1st November. 1972 : Present : Shri Veda Vyasa with Shri Shree Prakash, for the appellant. Shri A.N. Pareekh with Shri P. R. Monga for respondent No. I (Shri Brina Nath Sodhi) Shri A. N. Khanna for respondents 2 and 3 (Shri S. L. Ball and Shrimati Shakuntala Ball). Shri Kanwal Narain for respondents 4 and 5 (Sarvashri P. L. Sood and Kartar Singh Mehta). The Division Bench consisting of Jagjil Singh and R. N. Aggarwal, JJ. passed the following order in the said appeal on that day :

'THECounsel for the appellant and the counsel for the respondents are agreed that it would be appropriate if the learned Company Judge passes orders regarding the amendment or correction in the order of P. N. Khanna, J., dated May 23, 1972, after all the parties, including the present appellant, have been heard. In view of this statement made at the bar by the learned counsel for the appellant and the learned counsel for the responpents we accept the appeal and set aside the order dated October 3. 1972 and direct that the parlies shall appear before the learned Company Judge on November 7, 1972. The learned Company Judge shall consider the matter regarding amendment or correction of the aforesaid order dated 23rd May, 1972 after hearing the counsel for the parties. In the circumstances of the case there shall be no order as to costs of the appeal.' After the said remand, C A. 608 of 1972 (already referred to was preferred by the Eastern Linkers Private Limited in which the applicant prayed for issue of appropriate directions that respondent No. 1 (Dina Nath Sodhi) should made a formal and proper application to correct the order passed by P.N. Khanna, J. on 23rd May, 1972 in C. P. No. 32 of 1971. Shri A. N. Khanna Advocate made the following statement before me on '3th November 1972 : 'Iwas counsel for all the respondents in C.P. 32/71. The said petition was decided by Mr. Justice P. N. Khanna on 23rd May, 1972. My power of attorney ended with that petition I applied on behalf of Smt. Shakuntala Ball in C. A. 522 of 1972 and along with that I filed a fresh power of attorney. Smt. Shakuntala Ball was a pro forma respondent in the appeal case before the D. B. and I appeared for her because there was a reference in the Grounds Appe. 1 to C. P. 32/71 Smt. Shakuntala Bali is not a party to these proceedings and I have no instructions to appear on her behalf. If there was a formal application for amendment of C. P. 32/71 I would certainly have appeared on her behalf to oppose or support that application as per her instructions.' 10. Shri A. N. Pareekh, learned counsel for D. N. Sodhi (respondent No. 1) none the less urged that Shri A. N. Khanna had been appearing on behalf of all the respondents including the Eastern Linkeis Private Limited that the same is borne out by the Vakalatnamas filed by him (as noticed already) and that ail the respondents in C.P. 32/71 had consented to the order of correction passed by me on 3rd October, 1972.

(9) In view of the directions given by the Division Bench in F.A.O. (0 S.) 66 of the 1972, however, it does not seem to me to be permissible to go outside the scope of the remand order which seems to contain the following directions :

(1)That it is appropriate for me to decide the question of correction after hearing the counsel for the parties. I take this to mean that no fresh application in this regard was considered necessary. At least there is no express direction that there should be any such fresh application in this regard. In this view C.A. 608 of 1972 is dismissed. (2) That the above question of correction has to be decided after hearing the counsel for the parties which seems prima facie inconsistent with the contention adduced on behalf of D.N. Sodhi which amounts to saying that all the respondents in C.P.32 of 1971 need not be heard because Shri A. N. Khanna appearing for all of them had consented to the said correction. From the facts stated above, however, it is seen that Shri A.N. Khanna (despite his statement to the contrary made by him before me) did have authority to rerpresent all the respondents. This point was raised by D.N. Sodhi before the Division Bench but the facts pertaining to it do not appear to have been brought to the attention of the Division Bench. For this reason I have heard all the parties concerned, as directed by the Division Bench, regardless of the question whether Shri A.N. Khanna had authority to appear for all the contesting respondents or not.

(10) The controversy now is concerning whether the transfer for the 21 shares should be made in favor of the Company Appeal or S.L. Bali. It is worth recalling that in the Company Appeal preferred by the Company, the Company itself had taken the position that the appellant Company should not have been directed to take steps to transfer the 21 shares to the Company and that what was presumably meant was that the transfer should be to S.L. Bali.

(11) Even apart from any question of any one's consent it seems plain that P.N. Khanna, J. had only directed the shares to be transferred to S.L. Bali and not to the Company. There is no question, thereforee, of exercising any power of the Court to review the order of P.N. Khanna, J. It is only a case of the Court suo motu correcting an accidental slip within the meaning of Section 152 of the Code of Civil Procedure. That an accidental slip or omission could be corrected suo motu by the Court is not one of difficulty. Section 152 C.P.C. reads as follows:

'152.Clerical or arithmetica! mistakes in Judgments, decrees or orders or errors arising therein from any aceidental slip or comission may at any t'me not be corrected by the Court either of its own motion or the application of any of the parties.'

(12) The question whether the correction could be made as ordered by me on 23rd October, 1972 may, in the circumstances be decided now by me even independently of the consent of Shri A.N Khanna to the said correction being made. On this question it seems sufficient to refer to what P. N. Khanna, J. had himself stated in the earlier portion of the order, while referring to the statements made by the parties on 8th November 1972 :

'the petitioner (D. N. Sodhi) stated that he and members of his family owned 21 cumulative preference shares in the company. If they were paid at that rate of Rs. 7,500.00 per cumulative preference share, they were willing to transfer the Shares to S.L. Ball, respondent No. 2, within a fortnight of the decision by the Court on the question as to whether the shares owned by them were 21, as contended by the petitioner (D. N. Sodhi) or only five as contended by S. L. Ball. The statement of S. L. Ball, was also recorded. He (S.L. Bail) stated that he (S. L. Ball) was willing to pay at the rate of Rs. 7500.00 for each cumulative Reference share held by the petitioner and his family members subject to the Court determining the number of shares so held by the petitioner (D. N. Sodhi) and members of his family'.

(13) My attention has been drawn to the observation of Subba Rao, J. (as the then was) speaking for the Supreme Court in C. A. 562/63 decided on 11th October, 1965 that even without an application the Court could suo motu correct any typing mistake. The Supreme Court allowed the correction in that case after the High Court had refused it. I may make it clear that the amendment which was made by me on 3rd October, 1972 correcting the words ''respondent No. 1 'as 'respondent No. 2' in the concluding portion of P. N. Khanna, J's judgment dated 23rd May. 1972 was not by way of review but one made suo motu of an error which was patent and obvious. Having recorded the statements of the parties myelf earlier to the matter being disposed of by P. N. Khanna, J. and having read the order of P. N. Khanna, J. fully, in the manner stated above. I had no doubt whatever that the words 'respondent No. 1' were an accidental slip for the words 'respondent No 2. The Eastern Linkers Prvate Limited was not concerned, according to the statements recorded, to take the transfer of 21 sheres in question. It was .S L. Ball who had undertaken to purchase the shares and it was with that purpose that it was undertaken not to alienate or in any manner subject the company to any commitment or liablity except for ordinary day to day transactions without the express orders of the Court. He h;:d also stated at the forefront that he was willing to pay for those shares at the rate of Rs. 7.500.00 per share. The words used are 'I am willing to pay.........'.

(14) Shri Ved Vyas, who aruged for the Company, suggested that it would have been possible for P. N. Khanna, J. to direct that the transfer of the shares may be made to the Company itself. ft seems to me that one is not concerned with a mere possibility of this kind. The question is one of understanding the order of P. N. Khanna, J. and whether on a reading of the said order there is anything to indicate that P. N. Khanna. J. was contemplating a transfer of the shares to the Company. Apart from there being no expression in the judgment suggesting it the very situation and the observations of P. N. Khanna, J. pertaining to the effect of the statements of the parties which were recorded on 8th November, 1972, leave no doubt concerning the transfer of the shares having to be made to S. L. Bali and not to the Company.

(15) Shri Ved Vyas next contended that when an appeal was pending no correction could be made by the Court of first instance. Ground No. 8 in Company Appeal 13/72 filed by the Company against the order of P. N. Khanna, J.; extracted above, shows that there was no dispute raised in the appeal about this matter per contra. Ground No. 8 reads that P. N. Khanna, J., had presumably meant only S. L. Bali and not the Company as the person to whom the shares in question should be transferred. Even otherwise the mere pendency of an appeal would not take away the jurisdiction of the Court of first instance to correct an obvious slip. This power, under Section 152 C. P. C., could be exercised by court even after the appeal is disposed of (L. Janakiram Iver and others v. P. M. Nilakanta Iver)

(16) It has not been shown how the court is deterred from correcting an obvious slip or omission by any consideration concerning the propriety of the same judge who passed the order having to make the amendment. This consideration of propriety would of course be important if it was not a case of correcting an obvious slip or error. The slip in this case being so obvious it does not seem to require much discussion. A considerable amount of space has been taken in this order only for recounting the facts leading to the controversy, the appearance of parties, the appeals preferred and the stand taken by the Company in its appeal.

(17) Shri D. K. Aggarwal, learned counsel for Smt.Shakuntala Bali, referred to the decision in Master. Construction Co. (P.) Ltd v. State of Orissa, which held that the Commissioner of Sales Tax, who was clothed under Rule 88 of the Orissa Sales Tax Rules, 1947 with a power to correct at any time any clerical error or any error on the face of record arising out of or occurring from an accidental slip or ommission in an order passed by him, could not exercise the said power in the case of errors not apparent on the face of record for the decision depended upon consideration of arguable questions. Not only in the said decision but also in a later decision of the Supreme Court (not cited to me) in T. S. Balaram, Income Tax Officer, Company Circle v. M/s. Volkart Brothers', Hedge, J. speaking for the Supreme Court held that when a mistake occurred in a case arising under the Income Tax Act, 1961, such a mistake in order to be corrected should be a patent mistake on which theie could be no two opinions. I have referred to both these decisions because there is no doubt about the position that when there could be two reasonable views whether the error or not the power to correct errors arising out of accidental slip or omission under Section 152 Civil Procedure Code could not be invoked.

(18) On the facts stated above it seems to be clear beyond doubt that P. N. Khanna, J. had only directed the shares to be transferred to S. L. Bali and not to the Company. The Company had not agreed to take the shares ; nor had D. N. Sodhi agreed to sell the shares to the Company. This agreement to sell the shares and to take by transfer such shares as found by the Court was personal to both those persons, with which question the Company was not directly concerned. The statement of S. L. Bali, set out above, was clearly to the effect that he will pay and take by transfer all those shares. He had not stated any where that the transfer of shares would be made to the Company. There was no suggesstion that the Company should take them. This was the only controversy which D.N. Sodhi and S.L. Bali had wanted this Court to decide. There was no other question that was left to the decision of the Court. A reading of the order ofP.N.Khanna,J. itself makes the position very clear.

(19) On the facts stated above it is established beyond doubt that the words ' respondent No. 1 ' were clearly a mistake for ' respondent No. 2 '. In this view the concluding sentence in the judgment dated 23rd May, 1972 of P. N. Khanna, 1. will be amended as follows :

'The petitioner, respondent No. 1 and respondent No. 2 shall now take steps forthwith to have the said 21 cumulative preference shares transferred to respondent No. 2 at the agreed price of Rs. 7,5001- for each such share. The petition shall stand disposed of accordingly.'.


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