Dr.

RAM MANOHAR LOHIYA

NATIONAL LAW UNIVERSITY

Drafting, Pleading & Conveyancing

Project- STAY APPLICATION UNDER

SECTION 151 OF THE CODE OF CIVIL
PROCEDURE, 1908 FOR DIRECTIONS

SUBMITTED TO – SUBMITTED BY –
Dr. Shankuntala Sangam VANSHITA GUPTA
Assistant Professor Enrollment No.- 200101153
(Law) B.A. LL.B. (Hons.)
Dr. Ram Manohar Lohiya National Law University 6th Semester, Section ‘B’
 ACKNOWLEDGMENT
I have taken efforts in this project. However, it would not have been possible without the kind
support and help of many individuals and organizations. I would like to extend my sincere
thanks to all of them. I am highly indebted to Dr. Shakuntala Sangam for his guidance and
constant supervision as well as for providing necessary information regarding the project,
also for his support in completing the project.

I extend my gratitude towards the seniors of my course, who constantly helped me find the
best sources for research. Finally, I acknowledge the authorities of Dr. Madhu Limaye
Library, who provided me with the means to make this project in the form of access to online
books and resources.

This project is a result of my efforts combined with all the means and environment that has
been provided to me by Dr. Ram Manohar Lohiya National Law University, Lucknow and its
authorities and I am thankful to them.

DECLARATION
I hereby declare that the project report of “APPLICATION UNDER SECTION 151 OF
THE CODE OF CIVIL PROCEDURE, 1908 FOR DIRECTIONS”, submitted by me to
Dr. Ram Manohar Lohiya National Law University, Lucknow, Uttar Pradesh in partial
fulfilment requirement for the award of the degree of B.A. LL.B. (Hons.) is a record of
bonafide project work carried out by me under the guidance of Dr. Shakuntala Sangam. I
further declare that the work reported in this project has not been submitted, and will not be
submitted either in part or in full, for the award of any other degree or diploma in this
institute or any other university.

Vanshita Gupta,

Enrollment No.- 200101153

6th Semester, Section ‘B’

B.A. LL.B. (Hons.) Dr. Ram Manohar Lohiya National Law University, Lucknow, Uttar Pradesh
 Introduction
Section 151 is a saving provision and gives legislative perception of an age old and well
entrenched doctrine that every court has inherent power to act ex-debito justitiae and do the
actual and substantial justice among the parties for which alone it exists. The inherent powers
are constitutional in the court itself and have not been deliberated by the code, these powers
are self-reliant of and in addition to any other powers that the court may apply under the
code. Section 151 does not deliberate power on court , it only acknowledges or recognises the
inherent powers of court by the virtue of its being a judicial forum meant to dispense justice.

In Durga Dihal Das vs. Anoraj, it was held that the Code of Civil Procedure is not
exhaustive. There will always be cases and precedence which are not enclosed by the express
provisions of the code wherein justice is necessary to be done, because legislature can foresee
only the most natural and traditional events and no rules can administer for all times to come
so as to make explicit provision against all inconveniences which are enormous in number
and so that their disposition shall express all the cases, that may apparently happen.

Meaning of Inherent power

The Code of Civil Procedure has not defined the expression inherent power. The Supreme
Court in Indian Bank vs. M/s Satyam Fibres (India) Pvt Ltd. held that inherent powers are
powers which are resident in all courts especially of superior jurisdiction. These powers
derive not from legislation but from the nature and the constitution of the tribunals or courts
themselves so as to empower them to assert this virtue, assure obedience to its process and
rules, defend its officers from indignity and wrong and to punish inappropriate behaviour.
This power is indispensable for the organized administration of the court’s business.

Inherent powers of the court can be used only where law is silent on a point under
consideration. Even when the Code is silent, the court cannot enforce its inherent power as to
annul other specific provisions of the code. Inherent powers can be used only in
circumstances for which the code does not make a provision and that too only to meet the
ends of justice or to prevent abuse of the process of the court.
 Object of Section 151
The object of the section is to reinforce and neither to succeed the remedies granted for in the
CPC nor to override or deceive other express provisions. It cannot be invoked when there is
express provision even under which the relief can be asserted by the aggrieved party. The
operative field of power being thus confined, the same cannot be risen to inherent power. The
inherent powers of the Court are in addition to the powers specifically conferred on it. If
there are express provisions covering a peculiar topic, power under Section 151, CPC cannot
be applied in that regard. Section 151, CPC confers on the Court power of making such
orders as may be necessary for the ends of justice.

In the State of U.P vs. Roshan Singh, the supreme court held that it is well established that
provisions of section 151, CPC will not be applicable when there is an alternative remedy.

Inherent powers of the Court

Section 151 reads: Nothing in this Code shall be deemed to limit or otherwise affect the
inherent powers of the Court to make such orders as may be necessary for the ends of justice
or to prevent abuse of the process of the Court.

Section 151 applies, for the ends of justice and to prevent the abuse of process of the court.

For the ends of justice , two rules affecting to the ends of justice may be noted namely—

1. it is in the ends of justice that an injury should be remedied and excessive expense and
inconvenience to parties avoided
2. it will not be in the ends of justice to exercise inherent powers if it would interfere
with the rights of the third parties or cause mischief or injustice.

In Lalta Prasad v. Ram Karan, the Court held that the words “ends of justice” in Section 151,
wide as they are, do not mean ambiguous and indeterminate notions of justice, but justice
affirming to the statutes and laws of the land. They cannot mean that certain provisions of the
statute can be overridden at the dictates of what one might, by private emotion or arbitrary
preference, can or conceive to be justice between the parties.
 Summary of the Case for which the Stay
Application is Drafted
Petition No.:
W.P. (C) NO. 10726 OF 2017

Parties Involved:
Harsh Pal Singh- Petitioner No. 1

Neeru Singh- Petitioner No. 2

Union of India- Respondent No. 1

Registrar of Companies- Respondent No. 2

Ambe Organic Foods- Respondent No. 3

 IN THE HIGH COURT OF DELHI AT NEW DELHI

(EXTRAORDINARY CIVIL WRIT JURISDICTION)

C.M. NO. __________ OF 2019

IN

W.P. (C) NO. 10726 OF 2017

IN THE MATTER OF:

HARSH PAL SINGH & ANR.

…PETITIONERS

VERSUS

UNION OF INDIA & ORS.

…RESPONDENTS

APPLICATION UNDER SECTION 151 OF THE CODE OF CIVIL

PROCEDURE, 1908 FOR DIRECTIONS

MOST RESPECTFULLY SHOWETH:

1. That the petitioners have filed the captioned petition challenging the
disqualification of petitioners as directors in the Respondent No. 3 Company
as well as to change back the status of Respondent No. 3 Company from
“active” to “strike-off” besides seeking other reliefs.
2. The contents of the captioned petition are not repeated herein for the sake of
brevity and the petitioners crave the leave of this Hon’ble Court to refer to and
rely upon the same at the time of hearing of the present application.
3. That Petitioner No. 1 filed form ROC-1 i.e., Investor Complaint Form on
17.11.2014 asking the Respondent No. 2 to direct Mr. Niranjan Mittal, director
 of Respondent No. 3 Company to cooperate in making annual filings of
Respondent No. 3 Company but didn’t receive any response or support from
Respondent No. 2. True copy of the ROC-1 Form is annexed herewith and
marked as Annexure A-1.
4. That the Petitioner replied to the Show Cause Notice dated 23.05.2015
pertaining to default u/s 159/166/210(3)/220 of the Companies Act, 1956 in
the Respondent No. 3 Company and explained the circumstances leading to
the said default and how the Respondent No. 3 Company has stayed defunct
since its very operation. He also stated that as per the Board Resolution dated
14.03.2015, the management of Respondent No. 3 Company has decided to
get its name struck off from records. Upon approaching Respondent No. 2, he
was advised to file the FTE Form dated 13.08.2015 and the same was
approved by the Respondent No. 2 under Section 560(3) of the Companies
Act, 1956 on 08.09.2015. True copies of the Reply of the Petitioner, the FTE
Form, and the as received by the Petitioners are annexed herewith and marked
as Annexure A-2, Annexure A-3 and Annexure A-4.
5. That on the same date, Respondent No. 2, with the intent to harass the
petitioners, filed a malafide complaint before the Ld. Additional Chief
Metropolitan Magistrate, Tis Hazari Courts, New Delhi alleging non-filing of
annual accounts for Financial Years 2009-10, 2010-11, 2011-12, 2012-13,
upon which the trial had been initiated and is presently ongoing in the Ld.
Trial Court. True copy of the Complaint filed by the Respondent is annexed
herewith and marked as Annexure A-5.
6. That during the trial, the office of Respondent No. 2 also issued a notice under
Section 560(5) of the Companies Act, 1956 on 11.01.2016, stating inter alia,
that the name of the Respondent No. 3 Company has been struck off and the
said company stood dissolved. The status of the Respondent No. 3 Company
on the MCA Portal was also displaced as striked off. True copy of the Notice
of striking off is annexed herewith and marked as Annexure A-6.
7. However, sometime in July 2017, Respondent No. 2, on its own accord and
under no statutory backing from any law prevailing in the country, changed
back the status of Respondent No. 3 Company from striked off to active. The
impugned action lacked any reasoning whatsoever and was done by
Respondent No. 2 without giving any fair hearing to the petitioners, thus
violating the principles of natural justice. Owing to this illegal change in the
status of Respondent No. 3 Company, in September, 2017, Petitioners No. 1
and 2 were disqualified as directors in the Respondent No. 3 Company as well
as from other well-functioning companies under their management owing to
their alleged default in the non-filing of annual returns of Respondent
Company No. 3. The said disqualification was again, done without giving any
proper hearing to the petitioners and without considering the special
circumstances and various instances where Petitioner No. 1 had approached
Respondent No. 2 regarding his co-director’s non-cooperation in filing annual
returns and the notice of striking off and dissolution served by Respondent
No. 2 with regards to the Respondent No. 3 Company. True copy of the
disqualification list containing the name of the petitioners is annexed herewith
and marked as Annexure A-6.
8. That aggrieved by this continuous and unjust harassment by Respondent No.
2, the Petitioners had filed the captioned petition before this Hon’ble Court in
December, 2017, against their disqualification as directors and the arbitrary
change of status of Respondent No. 3 Company from striked off to active, as
done by Respondent No. 2 without any application of its mind.
9. This Hon’ble court vide order dated 01.12.2017 stayed the impugned list of
disqualified directors to the extent it included the name of the Petitioners.
Further vide order dated 07.03.2018, the Hon’ble court directed the DIN
allocated to the Petitioners be activated as it was hampering their roles as
directors in other well-functioning companies.
10.That the Respondent No. 2 in Para 24 of its counter-affidavit filed before this
Hon’ble Court has placed a misconceived reliance on the evidence filed under
Annexure I (Colly) of the same affidavit and is trying to mislead the case by
stating that Petitioner No. 1 had admitted his own disqualification by
submitting Form GNL-2 with Form DIR-9. The said forms were submitted by
Petitioner No. 1 on 10.09.2014 to seek the support of Respondent No. 2 in
fulfilling the annual compliances through instructing the other director in
Respondent No. 3 Company, Mr. Niranjan Mittal. The petitioner had also
enclosed a letter dated 09.10.2014 with Form GNL-2 requesting the ROC’s
cooperation for the same purpose. However, there was no cooperation or
action from Respondent No. 2 and the enclosed letter in question remains
unmentioned and undisclosed by them in their counter affidavit. This only
points to the lack of evidence in favour of Respondent No. 2 and misplaced
reliance on available evidence to mislead this Hon’ble Court.
11.That Respondent No. 2 had arbitrarily changed back the status of Respondent
No. 3 Company from “strike-off” to “active” in July, 2017 and has given a
below par reasoning in Paras 24 to 28 of its counter affidavit filed before this
Hon’ble Court that the FTE Form dated 13.08.2015 submitted by Petitioner
No. 1 was rejected by it as there was discrepancy in the balance sheet
submitted by Petitioner No. 1 and that he was a disqualified director on his
own admission as per the Forms GNL-2 and DIR-9 submitted by him on
10.09.2014. They have also claimed that Petitioner No. 2’s appointment as
Additional Director in Respondent No. 3 Company was illegal. However, it is
submitted before the Hon’ble Court that in the complaint filed by Respondent
No. 2 before the Ld. Additional Chief Metropolitan Magistrate, Tis Hazari
Courts, New Delhi, they have submitted a copy of their Master Data dated
____ (______), in which both Petitioners are designated as Director and
Additional Director in the Respondent No. 3 Company. Thus, Respondent No.
2’s claim that Petitioner No. 1 is a disqualified Director since 2014 and
 Petitioner No. 2’s appointment as Additional Director in Respondent No. 3
Company was never accepted is contrary to their evidence submitted in the
complaint filed by them in the Hon’ble Court of Tis Hazari, New Delhi.
Further, the FTE Form dated 13.08.2015 submitted by Petitioner No. 1 as a
Director of Respondent No. 3 Company was also approved by the Respondent
No. 2 and they had served the petitioners with an approval notice of the same
on ____ (____). They also strike off the name of Respondent No.3 Company
after the notice. If Respondent No. 2 had any doubts about the discrepancies
in the Balance Sheet and the Petitioners’ status as Directors of the Respondent
No. 3 Company, they would have never approved the FTE Form and served
them with the approval notice. Thus, Respondent No. 2’s claim that the FTE
Form was never approved is contrary to the notice that they had served the
Petitioners with. Their claim is false and laced with malice in order to divert
this Hon’ble Court from their arbitrary action of changing back the status of
Respondent No. 3 Company from “strike-off” to “active” in July, 2017.
12.That the Petitioners have never been afforded a fair hearing by Respondent
No. 2 before their impugned action of July, 2017 and the subsequent
disqualification that the Petitioners faced due to the aforementioned action.
Further, the impugned action of July, 2017 was not accompanied by any
reasoning by the Respondent No. 2. This grave violation of Principles of
Natural Justice has resulted in the continuous exploitation and harassment of
the Petitioners.
13.That the Special Leave Petition ____ cited by the Respondent No. 2 in their
counter-affidavit filed before this Hon’ble Court is still sub-judice in the
Hon’ble Supreme Court. Further, the SLP was against the judgment passed
by Hon’ble High Court of Bombay in Shailendrajit Charanjit Rai & anr. Vs
The Registrar of Companies, Maharashtra, Mumbai & anr. (Writ Petition
No. 148 of 2018) and other similar petitions, where the Learned Additional
Solicitor General Shri Anil Singh appearing for Registrar of Companies,
Maharashtra had argued as follows:-
“Learned Additional Solicitor General Shri Anil Singh appearing for the
respondents opposed the Writ Petitions. It is pointed out that the orders passed
by the Delhi High Court have been challenged by the Department by filing 17
appeals. Learned ASG opposes the petitions on the ground that the petitioners
admittedly allowed shell company to run for several years. He submits that no
action is taken all these years by the petitioners as required under law.
According to the learned ASG, the CODS-2018 only condones the delay in
filing returns and the respondents – Government has no power to revive a
company once struck off. It is only the NCLT in an appeal under Section 252
can revive the company. Learned ASG would contend that once the petitioners
admit that the companies never carried out any business, they ought to have
applied for declaring the company as a dormant company under Section 455
or apply under Section 248(2) to have the company struck off. He submits that
once the default is admitted the consequence of law for non-compliance
thereof must follow. In his submission, the petitioners are virtually seeking
amendment of the CODS-2018 which does not cover the petitioners. He
invited our attention to the decision of the Apex Court in the case of State of
J & K Vs. A.R. Zakki reported in 1992 Supp (1) SCC 548 in support of his
submission that it is settled law that the Court cannot amend or direct the
Government to amend either law or subordinate legislation. In his submission,
the petitioners who have allowed their companies to merely exist on paper
without doing any business and without having taken appropriate steps to
comply with the provisions of the said Act cannot now be heard to complain
of the consequences of breach.” (Para 4)
(Emphasis Supplied)
14.It is submitted that if Respondent No. 2 has itself argued in the above case that
the Government can never revive a company once striked-off, there was
absolutely no basis for them to change back the status of Respondent No. 3
Company from “Strike off” to “Active” in July, 2017 after serving the Notice
of striking off dated __ to the Petitioners. Thus, the impugned action was only
done to support their malafide complaint in Hon’ble Court of Tis Hazari and
the status of Respondent No. 3 should stay striked-off as per the
aforementioned notice and they cannot prosecute the Petitioners for non-filing
of annual returns for Respondent No. 3 Company that was striked-off due to
the continuous efforts of Petitioner No. 1 and as per the notice issued by
Respondent No. 2. True copy of the Order dated passed by the court is annexed
herewith and marked as Annexure A-8.
15.That the trial before the Ld. Additional Chief Metropolitan Magistrate, Tis
Hazari Courts, New Delhi has reached its advanced stages and may reach its
completion in the very next hearing on 08.02.2023. The trial has already
caused a considerable loss of freedom and reputation to the Petitioners and
they are fearful that its completion will only lead to irreparable loss in terms
of monetary wealth and societal standing. Further, during the cross-
examination of a representative appearing on behalf of Respondent No. 2 in
the last hearing of the aforementioned trial before the Hon’ble Court of Tis
Hazari, perusal of notices issued by Respondent No. 2 themselves under
Section 560(3) and 560(5) of The Companies Act, 1956 by the Ld. Judge
showed that the name of the Respondent No. 3 Company is struck off from
the Register of Companies maintained by Respondent No. 2. However,
contrary to the aforementioned evidence, the Representative on behalf of
Respondent No. 2 had admitted on record that Respondent No. 3 Company is
still active. during his cross-examination. This claim was also the basis of the
complaint filed by Respondent No. 2 in Hon’ble Court of Tis Hazari. Thus,
the claims made by Respondent No. 2 in the aforementioned trial are contrary
 to evidence and factual matrix of the case. Further, as there was no stay on
proceedings of Complaint No. ____, the trial has reached its advanced stages
and may reach its completion in the very next hearing on 08.02.2023. The
proceedings have already caused a considerable loss of finances and
reputation to the Petitioners and they are fearful that its completion will only
lead to further irreparable loss in terms of monetary wealth and societal
standing.
16.That since the issue of striking off Respondent No. 3 Company is pending
before this court and the fact that Respondent No. 2 had itself striked off the
company from its records and then arbitrarily changed back its status to
“active” to support their complaint in the Hon’ble Court of Tis Hazari, the
Petitioners have a prima facie case supported by evidence in their favour
before this Hon’ble Court. While the continuance of proceedings and
subsequent conclusion of trial in Hon’ble Court of Tis Hazari will cause
irreparable loss in terms of finance and reputation to the Petitioners, there will
be no inconvenience to the Respondents if the aforementioned proceedings
are stayed in the interests of justice and equitability. In light of the aforesaid,
the Petitioners:-
(a) Stay the proceedings before the Ld. Trial Court in Complaint No.
536012/2016 during the pendency of the captioned petition; and
(b) Pass such Order/Orders that this Hon’ble Court may deem fit in the facts
and circumstances of the present case and in the interest of justice.

AND FOR THIS ACT OF KINDNESS THE PETITIONER AS IS DUTY

BOUND SHALL EVER PRAY

Petitioner
 Through its Counsel

Advocate Details

Firm Details

Place: New Delhi

Date: