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2018 (4) TMI 919 - HC - Companies LawOppression and mismanagement - Held that:- Appellant no.1 had responded to all allegations and had pointed out that the payment to Barkha lnds had been made in the normal course of business and respondent no.2's allegation that the company did not need such service/ software was baseless; that the amount debited to SCA International was the commission earned by respondent no.1 company, i.e., income generated by the company and not money taken from or allegedly diverted from the company; that the fixed deposits were encashed to meet a liability of ₹ 2.5 Crores of respondent no.1 as on 31st March 1998; that the shares of appellant no.3 held by respondent no.1 company were transferred to KSB Engineers Pvt. Ltd. against receipt of full consideration vide cheque No.762618 dated 30th June 2004 for ₹ 5 Lakhs and Cheque No.762619 dated 30th June 2004 for ₹ 750,000/ and that the transaction was carried out with the full knowledge of the board of directors. The Company Law Board has in its order noted these responses at Para 17: Re sale of Spectron Shares to KSB engrs , Para 19 : Re Barkha lnds , Para 20 : Re SCA International and Para 21 : Re the encashment of the fixed deposits and at Para 18 : Re the facts , figures and explanation re catering expenditure. However, thereafter in Para 50 of its order the CLB merely records a bald finding that “As regards the allegation of misappropriation of fund and siphoning off of funds to the Respondents own concerns, the Respondents hove failed to refute the specific allegations made in that regard.” It has to be noted that even the allegations of misappropriation and siphoning off by respondent no.2 were generally bald unsubstantiated allegations. Moreover, the CLB has, in the order noted and recorded responses/explanations offered by appellant no.1. Thereafter, without dealing with the same, the CLB has in an error apparent concluded that “the Respondents have failed to refute the specific allegations made in that regard”. In the aforesaid context of facts, allegations and pleadings, the CLB's finding is totally unreasoned, discloses an error apparent and is ex facie perverse. The impugned order, therefore, is unsustainable and requires to be set aside and is hereby set aside, with costs.
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