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Maharaj Kumar Mahendra Singh Vs. Lake Palace Hotels and Motels P. Ltd. and ors. - Court Judgment

LegalCrystal Citation
SubjectCompany
CourtRajasthan High Court
Decided On
Case NumberSpecial Bench Civil Misc. Company Petition No. 1 of 1983
Judge
Reported in[1985]58CompCas805(Raj); 1983()WLN400
ActsCompanies Act, 1956 - Sections 10(2), 163 and 209(4)
AppellantMaharaj Kumar Mahendra Singh
RespondentLake Palace Hotels and Motels P. Ltd. and ors.
Appellant Advocate A.K. Mathur, Adv.
Respondent Advocate L.R. Mehta, Adv. for Respondents Nos. 1 and 2 and; N.N. Mathur, Adv. for Respondent No. 3
DispositionPetition partly allowed
Excerpt:
company act, 1956 - section 163 & 209--no jurisdiction to entertian petition under section 163 right of inspection conferred on director--held, petition under section 209(4) is maintainable and company is under obligation to allow inspection of accounts & other books.;in the light of the notification, this court has no jurisdiction to entertain the petition under section 163 of the act.;when sub-section (4) of the section 209 of the act envisages conferment of right of inspection on the director, then the director can seek a remedy by moving a petition to this court. thus, i hold that the petition is maintainable under section 209(4) of the act amt the company is under an obligation to allow the inspection to the petitioner of the books of account and other books and..........or any of the jurisdiction conferred by the act upon the high court. the central government has issued notification g.s.r. 663 dated may 29, 1959, in which the jurisdiction for entertaining a petition for inspection under section 163 of the act has been conferred on the district courts. the notification under section 10 does not cover section 209 of the act. under sub-section (1) of section 10, general jurisdiction under the act has been conferred on the high court. clause (a) of sub-section (1) of section 10 provides that the high court shall have jurisdiction, except to the extent to which jurisdiction has been conferred on any district court or district courts subordinate to that high court in pursuance of sub-section (2). admittedly, there is no notification issued by the central.....
Judgment:

M.C. Jain, J.

1. The petitioner has moved this petition for seeking direction under Section 163 read with Section 209(4) of the Companies Act, 1956 (hereinafter referred to as ' the Act'), for allowing immediate inspection of the records specified in those provisions. The petitioner is an existing director and a shareholder of the Lake Palace Hotels and Motels Pvt. Ltd. and in his capacity as such has sought this direction. This court issued notices to the respondents. The respondents have appeared before this court, but have not submitted any reply to the petition and the learned counsel for the respondents have raised certain contentions before me with regard to the maintainability of the petition.

2. Mr. L. R. Mehta, learned counsel for respondents Nos. 1 and 2, and Mr. N. N. Mathur, learned counsel for respondent No. 3, have submitted that for seeking any relief under Section 163 as well as under Section 209(4) of the Act, this court has no jurisdiction to entertain this petition. Reference has been made to the notification issued under Sub-section (2) of Section 10 of the Act. Section 10 of the Act provides for jurisdiction of the courts to entertain petitions and Sub-section (2) empowers the Central Government to confer any powers on any District Court to exercise all or any of the jurisdiction conferred by the Act upon the High Court. The Central Government has issued Notification G.S.R. 663 dated May 29, 1959, in which the jurisdiction for entertaining a petition for inspection under Section 163 of the Act has been conferred on the District Courts. The Notification under Section 10 does not cover Section 209 of the Act. Under Sub-section (1) of Section 10, general jurisdiction under the Act has been conferred on the High Court. Clause (a) of Sub-section (1) of Section 10 provides that the High Court shall have jurisdiction, except to the extent to which jurisdiction has been conferred on any District Court or District Courts subordinate to that High Court in pursuance of Sub-section (2). Admittedly, there is no notification issued by the Central Government conferring any power on the District Court with regard to seeking any relief under Section 209(4) of the Act. It would be an independent question to examine as to whether the right under Section 209(4) of the Act is an enforceable right. So far as the question of jurisdiction is concerned, all matters arising under the Act can be heard by this court, which are not covered under the notification issued under Sub-section (2) of Section 10 of the Act by the Central Government. Thus, in my opinion, in the light of the notification, this court has no jurisdiction to entertain the petition under Section 163 of the Act, but if any petition lies under Section 209 of the Act, such an application would lie only to this court.

3. Now, it remains to be examined whether any application for inspection of the documents specified in Sub-section (4) of Section 209 of the Act lies or not. Sub-section (4) of Section 209 of the Act provides that books of account and other books and papers shall be open to inspection by any director during business hours. A bare perusal of the provision shows that it confers a right of inspection on the directors of all books of account and other books and papers. The question arises whether such a right is enforceable by this court. It has been urged before me by the learned counsel for the respondents that Section 209 does not contain any provision conferring any power on this court to make any order directing the company to allow inspection to any director. In the absence of such a provision under Section 209, the right of inspection is not enforceable. It was pointed out that the Act embodies several provisions like Sections 144(4), 163, 196, 304(2) and (3), 307(9), where specific provisions have been made conferring a power on the court to make an order directing inspection of the contemplated documents in the various provisions. The absence of such a provision under Section 209 should be taken to mean that the Legislature did not intend to confer any such right which may be enforceable. It has been pointed out that the breach of Sub-section (4) of Section 209 has been made punishable under Sub-section (5) by the persons who have been specified in Sub-section (6). So the only remedy in case Sub-section (4) of Section 209 of the the Act is contravened is to launch prosecution of the person who has contravened the provision of Sub-section (4) of Section 209.

4. I have carefully considered the above submissions. In my opinion, it cannot be conceived that where a statute confers a right, then the right would remain unenforceable. It is one thing that penal proceedings may be taken. It is entirely different that without initiating penal proceedings, the right is sought to be enforced. It is the look out of the director only to launch the prosecution or to seek enforcement of his right by initiating the proceedings before the court which has jurisdiction to entertain such a petition. The general maxim in 'ubi jus ibi remedium' (where there is a right, there is a remedy). Here Sub-section (4) of Section 209 of the Act confers a statutory right of inspection and the court which has jurisdiction under the Act, in my opinion, possesses powers to enforce that statutory right. It has been urged that the Companies (Court) Rules, 1959, do not envisage any such petition and what petitions lie, are specified. Petitions provided under the Rules are exhaustive. I am unable to agree with this submission as well. As already stated, when Sub-section (4) of Section 209 of the Act envisages conferment of right of inspection on the director, then the director can seek a remedy by moving a petition to this court. Thus, I hold that the petition is maintainable under Section 209(4) of the Act and the company is under an obligation to allow inspection to the petitioner of all the books of account and other books and papers.

5. Accordingly, the petition is partly allowed. The petition under Section 163 of the Act is dismissed as not maintainable. However, the petition under Section 209(4) of the Act is allowed and the respondents are directed to allow the petitioner to inspect all books of account and other books and papers during business hours within a week from today.


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