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2012 (8) TMI 692 - HC - Companies LawCompensated by way of interest on the outstanding loan as ordered by CLB - from the year 1983 until the date of repayment at the rate of interest at which the funds were borrowed after adjustment for any share of profit already passed on - Held that:- the CLB could not have ordered recovery of interest over the amount advanced under the agreement dated 30.09.1983 because such an order essentially resulted in modification of the terms of the agreement between the parties; and such a modification could not have been made without the consent of the appellant company in view of clause (e) of Section 402 of the Act. Worthwhile it shall be to refer to the scheme of the relevant provisions as contained in Part-A of Chapter VI of the Act on the powers of Company Law Board for prevention of the oppression and mismanagement. The CLB, in the present case, though has ordered a fundamental modification in the terms of the agreement between the appellant company and the respondent No. 2 company but then, the consent of the appellant company, the third party for the purpose of clause (e) of Section 402, was not obtained. Neither the order impugned records so nor there is any other material on record to show that any such consent was obtained - directions to recovery of interest from the appellant company by the respondent No.2 company, is set aside CLB appears to have proceeded rather on the wrong assumption that according to the auditor's report of the year 1988-89, the appellant company was not possessing many facilities and that the facilities were not availed by the respondent No. 2 company as appears that the pronoun "it", as used by the auditor in his report, was taken by the CLB to mean as if the appellant company was not possessing many of the facilities. The report, read as a whole, makes it clear that the expression "it does not possess" referred to the respondent No. 2 company, in whose regard the audit report was being made, and not to the appellant company.
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