2013 (12) TMI 1757 - HC - Companies Law

Summary

Issues:
- Dismissal of Company Appeal against Company Law Board's order for amendment of Company Petition.

Analysis:
1. The Company Appeal was filed against the Company Law Board's order dismissing the appellant's request for amending the Company Petition under Sections 397, 398, 402 & 403 of the Companies Act, 1956. The Company Petition alleged instances of oppression and mismanagement, including illegal share transfer, coercion for share acquisition, mismanagement, resignation of an independent Director, siphoning off funds, and financial mismanagement.

2. The respondents contested the Company Petition, alleging it was a tactic to avoid a Settlement Agreement and labeled it as forum shopping. Several company applications were moved, overshadowing the main petition, leading to delays. The Board directed an expedited hearing, and the respondents agreed to produce original records for scrutiny.

3. The appellant moved for an amendment to include additional allegations regarding his removal as Chairman, appointment of new Directors, and resignation of a co-petitioner. The Board dismissed the amendment application citing reasons like belated filing, prior dismissal of similar applications, and ongoing arguments.

4. The appellant argued that the dismissal was incorrect, citing procedural differences between CLB and CPC. The respondents accused the appellant of prolonging proceedings. The judge observed the delay in seeking amendments, knowledge of relevant events, and the need for expeditious disposal of the main petition.

5. The judge emphasized the importance of fair play in legal proceedings and the need to prevent abuse of the judicial process. The inherent powers of the CLB were discussed, focusing on ensuring justice and preventing abuse. The judge highlighted the concept of "due diligence" and its importance in preventing abuse of process.

6. The judge concluded that the amendment application was rightly dismissed due to undue delay and lack of diligence. The order was upheld, except for a modification regarding ongoing arguments in the main petition. The appeal was ultimately dismissed without costs.