TMI Blog1996 (1) TMI 452X X X X Extracts X X X X X X X X Extracts X X X X ..... d and the matter has also been heard at length on many days and many other interim prayers have already been granted. He also stated that no ground for oral evidence has been established by the petitioners. In view of the stand of Shri Sarkar, we had mentioned in our order dated May 25, 1995, that our decision on this application would be given during the next hearing. However, on this date, i.e., October 30, 1995, two replies wore filed one by respondent No. 11 and another on behalf of respondents Nos. 1 and 15 to 19. In the reply of respondent No. 11, it is stated that I say that the petition raises disputed questions of facts and oral evidence would have to be led in the present proceedings . In the same reply in para 7, it is further stated that in the aforesaid circumstances, T submit that the petitioners should be permitted to lead oral evidence and C. A. No. 72 of 1995 be allowed only to that extent and the other relief sought for should not be granted as the similar prayer was made by the petitioners in C, A. No. 102 of 1993 and the same was not granted by order dated April 28, 1993, and have been deemed to be rejected and/or waived by the petitioners and the said reliefs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the Company Law Board with certain powers under the Civil Procedure Code but it does not say that the Company Law Board has to follow the procedure under the Civil Procedure Code. Drawing our attention to rule 6 of the Companies (Court) Rules, 1959, he stated that this rule specifically provides for the application of the provisions of the Civil Procedure Code to the company court while Section 10E of the Companies Act specifically provides that the Company Law Board can regulate its own procedure but while doing so would follow the rules of natural justice. Therefore, he stated that the procedure to be followed by the Company Law Board in adjudicating disputes in petitions need not be strictly in accordance with either the Evidence Act or the Code of Civil Procedure. In view of the fact that affidavits in evidence have already been taken on record, to adjudicate the matter, if a party desires to cross-examine the deponents of the affidavits, the same should be allowed. He drew our attention to page 303, Butterworths, seventh edition, to state that the object of cross-examination is two-fold, first, to elicit information concerning the facts in issue or relevant to the issue tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent by citing 29 B.L. Nag 1392 to state it is the bounden duty of a party, personally knowing the whole circumstances of the case, to give evidence on his own behalf and to submit to cross-examination. His non-appearance as a witness would be the strongest possible circumstance going to discredit the truth of his case . He also referred to Smt. Sudha Devi v. M.P. Narayunan, AIR 1988 SC 1381, 1383, to state that Besides, affidavits are not included in the definition of 'evidence' in Section 3 of the Evidence Act and can be used as evidence only if for sufficient reason the court passes an order under Order 19, rule 1 or 2 of the Code of Civil Procedure. He, therefore, stated that unless otherwise the petitioner subjects himself to chief .examination, affidavits filed by him cannot be treated as evidence for deciding the matter. He also referred to AIR 1988 SC 138 (sir) to state that in judicial proceedings, evidence must be adduced by calling witnesses and affidavits cannot be filed unless permitted by law, or order of court. 8. Shri Chagla stated that the main purpose of the application for the cross-examination of the respondents is to establish the case of the pet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... butors, AIR 1957 Cal 727, wherein the court observed that if the relief prayed for is not granted it must be deemed to have been refused. Citing Satyadhyan Ghosal v. Smt. Deorajrn Debi, AIR 1960 SC 941, he stated that since the prayer has not been granted, the same cannot be again prayed for as it would amount to res judicata in the same proceedings. According to him, it is for the petitioners to prove their case and this cannot be done by cross-examination of the respondents. On this proposition, he cited in Hardayan Garodia v. Gongadhar Periwal, AIR 1963 Cal 500, wherein the court observed (headnote) : A fact not admitted in the pleadings must be proved and it is not permissible for the plaintiffs to contend that they were mislead is not tendering proper evidence in proof of that essential fact. 12. He argued that the court cannot fix its procedure and is bound by the relevant law on the subject, namely, the Code and the Evidence Act and cannot compel a party to examine any particular witness in Municipal Corporation of Greater Bombay v. Lala Pancham, AIR 19G5 SC 1008. 13. Replying in the arguments of counsel for the respondents, Shri Sen stated that the affidavits h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has held in CIT v. Ajanta Electricals [1995] 215 ITR 114 ; [1995] (Suppl.) 4 SCC 182 that the Income-tax Appellate Tribunal is a court and the Evidence Act is applicable to it. Going through the Company Law Board Regulations 11, 12, 13 and onwards, he stated that there is nothing in the Company Law Board Regulations unlike the Companies (Court) Rules, 1959, which specifically states that the proceedings would be governed by the Code. In the absence of any specific provision in the regulations regarding the procedure to be followed by the Company Law Board, it has to be taken that the procedure as per the Code will be followed by the Company Law Board in its proceedings. He further stated that even the Supreme Court has held that the Company Law Board is a court in Canara Bank v. Nuclear Power Corporation of India Ltd. [1995] 84 Comp Cas 70 (SC) ; [1995] 2 CLJ 250. Therefore, the procedure as in the Code and the Evidence Act has to be strictly followed in these proceedings. 15. We have considered the arguments of counsel. While the prayer of the petitioners is for cross-examination of all the respondents who have filed their affidavits, it is the case of Shri Chagla, appearing on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w Board in its proceedings, i.e, the Company Law Board will be guided by the principles of natural justice and shall act in its discretion. The absence of any provision in the Regulations in this regard does not make any difference inasmuch as the Regulations are subordinate to the Act. 19. Further the Act also empowers the Company Law Board to regulate its own procedure, vide Section 10E(6) and the Company Law Board has framed its own regulations. Thus the practice and procedure of the Company Law Board will have to be within the framework of the principles of natural justice and the Company Law Board Regulations. In view of this, the question of applicability of the Evidence Act and the Code to proceedings before the Company Law Board does not arise. 20. This principle of adherence to natural justice while adopting certain procedures by Tribunals has been commented upon appropriately by the Supreme Court in Union of India v. T.R. Varma, AIR 1957 SC 882, as cited by Shri Sen in his arguments. In fact in that case the Supreme Court has specifically stated that the Evidence Act has no application to the Tribunals even though they may be judicial in character. We find a similar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s relate to oppression and mismanagement in the affairs of a company. The functioning of a company is governed by various provisions of the Companies Act as well as its memorandum and articles. Practically every decision of a company is documented either by way of resolution passed by the board of directors or by the general body. The ambit of powers vested in the board is governed by the provisions in the articles and in the memorandum. Every expenditure incurred by the company is accounted for and audited by the statutory auditors. In other words, practically every alleged act of oppression and mismanagement can be traced back to the documents available with the company most of which are also to be statutorily filed with the Registrar of Companies. The Act also provides, in a number of instances, where presumptions could be drawn on the basis of existence/non-existence of connected documents with the company. Thus, the allegations of oppression and mismanagement could easily be adjudicated on the basis of the various provisions of the Act, the articles and memorandum of association of the company as well as the documentary evidence available. This is perhaps the reason why the ne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iled. In other words, there is enormous material available before us to consider the merits of various allegations. 23. Further, as rightly pointed out by Mr. Sarkar, the petitioners had in fact filed an application for cross-examination at the initial stages of the proceedings. Along with this prayer they had also made further prayers, some of which we granted. During the long period of nearly two years, even though there were further proceedings before us, the petitioners never reiterated their prayer regarding cross-examination leading to the presumption that they had abandoned their prayer. As a matter of fact one of the interim orders passed by us on an application of the petitioner during this period even went up to the Supreme Court. Therefore, at this late stage when we have fixed the dates for final hearing, we do not consider it necessary to either record oral evidence or allow anyone to be cross examined. 24. However, the Company Law Board has powers under Section 10E(4) of the Act to order discovery of documents and examining witnesses on oath. Thus, should we, at any point of time consider that on the basis of the affidavits no conclusion can be drawn, we shal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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