2010 (7) TMI 814 - Board - Companies Law

Summary

Issues:
1. Whether the Company Law Board can pass an interim relief when the High Court set aside its order as a non-speaking order?
2. Whether the dispute in the current petition is directly in issue in a case already pending before the Company Court, and if the petitioners can file under sections 397 and 398 of the Companies Act, 1956?
3. Whether the order of the Company Court in the pending case governs the reliefs sought by the petitioners?

Analysis:
1. The High Court set aside the Company Law Board's order as non-speaking but did not bar the Board from issuing a fresh order with reasons. The petitioners sought reliefs afresh, indicating the Board's competence to pass an order. The Board can act within its jurisdiction despite the High Court's decision.

2. The respondents filed a suit in the Company Court seeking removal of the first petitioner as director and other reliefs, but the petitioners did not seek any relief in that suit. As the issues and reliefs differ between the pending case and the current petition, the Board's jurisdiction is not ousted. The petitioners' right to remedy their grievances before the Board is valid.

3. The relief sought in the pending case does not address the reduction of the petitioners' shareholding, which is the crux of the current petition. As the issues and reliefs differ, the Board's jurisdiction under sections 397/398 is not affected. The petitioners' filing before the Board is deemed appropriate.

4. Precedents cited by the respondents do not apply to the current case as the issues and nature of grievances differ. The Board's jurisdiction remains intact, and the petitioners are entitled to seek relief for their grievances, especially regarding the change in shareholding.

5. The Board found that the disputes in the current petition are not identical to those in the pending case before the Company Court. Given the significant changes in shareholding and potential for exploitation in the company, the Board's role is to protect both parties' interests until a comprehensive verdict is reached. The Board must ensure its orders do not conflict with those of the High Court or Company Court.

6. Considering the above reasons, the application by the respondents lacks merit and is therefore dismissed by the Board.