NISHANT
A member/shareholder cannot be a creditor of the company filing a petition for its winding up under section 433 at the same time, while filing a composite petition under section 397/398 and section 111A as a member/shareholder
NISHANT MEHROTRA 25 Jan 2018

A member/shareholder cannot be a creditor of the company filing a petition for its winding up under section 433 at the same time, while filing a composite petition under section 397/398 and section 111A as a member/shareholder

Bombay High Court :: in MODI FIBRES LTD. v. MODI RUBBER LTD. AND OTHERS :: Companies Act, 1956 – Section 10F read with sections 397/398, 111A and 433 – Appeal against order of Company Law Board – Order admitting a composite petition under sections 397/398 and 111A – Maintainability of composite petition by a shareholder who has also filed petition for winding up of company under section 433 – Whether the argument that the petition under section 433 was not purported to intentionally abandon the right to pursue the remedy under section 397/398 in the capacity of a member/shareholder of the company ought to have been addressed by the CLB in the first instance – Held, yes – Whether ordinarily the High Court would not interfere with the order of admitting the petition, but in the peculiar facts of this case it has become inevitable to do so as the issue raised by the appellants goes to the root of the matter and the CLB has failed to address the same one way or the other – Held, yes [Para 8] – Whether all other questions of the parties are to be left free to be addressed on merit at the appropriate stage as and when occasion arises – Held, yes [Para 9].

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