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2013 (9) TMI 850 - HC - Companies LawOppression and mismanagemnt - Maintainability of Company’s Petition u/s 399 - Whether the affairs of the holding company would include the affairs of the subsidiary company in a petition filed under sections 397, 398, 402 and 403 of the Act - Held that:- The Company Law Board had rightly concluded that the company petition was essentially a petition against the holding company - Therefore the Company Law Board found that without even going into the merits of the case and ordering investigation into the affairs of the holding company, the court cannot definitely order investigation into the affairs of the subsidiary companies - In fact, if it was found, after hearing the petition that the order of investigation can be made into the affairs of the holding company, then the provisions of section 239 would come into play and it was for the inspectors, to be appointed by the Central Government, to decide as to whether the business of the subsidiary also required to be investigated – Relying upon Micromeritics Engineers (P.) Ltd. Versus S. Munusamy [2004 (8) TMI 381 - HIGH COURT OF MADRAS]. The Company Law Board had rightly stated that there need not be any direction and gave liberty to the respondent in case the respondent desires that there should be a direction for investigation into the affairs of any of the subsidiary company, it is always open to him to file separate applications in terms of section 214(2) read with section 235 of the Act - When this safeguard was given by the Company Law Board, it was not open for the respondent, at this stage, to contend that because the company application filed by him was a combined application, it had to be taken up together along with the main company petition when he had not complied with section 399(4) of the Act. Whether by impleading the subsidiary companies as the respondent, a shareholder of the holding company, without satisfying the provisions of section 399 of the Act in respect of the subsidiary companies can claim relief in respect of the subsidiary companies in terms of section 402 of the Act also - Held that:- The respondent had not even made any allegations against the subsidiary company or claimed any relief against most of the subsidiary companies in the main company petition - the subsidiary companies cannot be included in the company petition - Hence, the order passed by the learned single judge, setting aside the order of the Company Law Board deleting the subsidiary companies from the array of parties, was not correct - Inasmuch as the subsidiary company cannot be made a party to the company petition. The holding company challenging that portion of the order of the Company Law Board rejecting certain preliminary objections raised by the appellant and against the order of the Company Law Board in not dealing with certain preliminary objections raised by the appellant and against certain directions given by the Company Law Board, as rightly pointed out by the learned single judge, the Company Law Board has not made any error in recognising the statutory right of the respondent herein under law to file a petition under section 214(2) read with section 235 of the Act - Further, in view of the fact that we have categorically held that the order of the Company Law Board ordering to delete the names of the subsidiary companies from the array of parties in the company petition and permitting the holding company to file objections relating to the objections made against them was valid.
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