TMI Blog1994 (1) TMI 209X X X X Extracts X X X X X X X X Extracts X X X X ..... manufacturers, exporters, importers and dealers in plywood, hardwood, veneer, blocks of flooring and various other purposes. The authorised capital of the company is Rs. 4 lakhs only divided into 4,000 equity shares of Rs. 100 each. These shares are divided into two groups, one led by respondent No. 2 and the other led by respondent No. 1. Respondents Nos. 1 and 2 were the first two directors of the company and this position continued till May 7, 1991. On May 7, 1991, respondent No. 2 ceased to be a director because he absented himself from three consecutive meetings of the board of directors held on December 15, 1990, February 28, 1991, and April 10, 1991. On May 7, 1991, the appellant was taken as a director on the board of directors of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y other matter arising out of the ordinary course of business can be conducted unless it is approved by both the directors. This order has been assailed by the appellant on the ground that the Company Law Board has acted without jurisdiction and that this order is contrary to the principles of natural justice apart from being arbitrary and unreasonable. Shri C.K. Garg, learned counsel for the appellant, has argued that once the appellant has been lawfully inducted as a director of the company, no order could be made by the Company Law Board affecting the business of the company without a notice to the appellant. Shri Garg argued that the Company Law Board had no authority to pass an order in the nature of one passed on July 30, 1993. Sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... panies Act, 1956, Shri O.S. Dhawan, who has absented himself without leave during the three consecutive meetings held on December 15,1990, February 28, 1991, and April 10, 1991, has ceased to be the director of the company. Para 2 of the minutes shows that in terms of article 33 of the articles of association, the appellant has been inducted as a director. The second document is the copy of the minutes of the fifth annual general meeting of respondent No. 3. Para 8 of these minutes shows that a resolution was passed to the effect that the appellant shall be appointed as a director, not liable to retire by rotation. The third document is Form No. 32. This form contains information regarding induction of the appellant as a director and cessat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by any decision or order of the Company Law Board may file an appeal to the High Court within sixty days from the date of communication of the decision or order of the Company Law Board to him on any question of law arising out of such order : Provided that the High Court may, if it is satisfied that the appellant was prevented by sufficient cause from filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days". A look at the provisions, quoted hereinabove, clearly shows that the Company Law Board has been empowered to exercise the powers and discharge functions as provided by the Act, or any other law as also those powers and functions which are conferred upon it by the Central Gove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered view that there is no justification for importing the interpretation which has been placed on section 18 of the Rajasthan High Court Ordinance, 1949, for the purpose of interpreting section 10F of the Act. The language employed in section 18 shows that an appeal is maintainable to the High Court against the judgment of one judge of the High Court. This jurisdiction is also not available in cases where the judgment has been passed in exercise of appellate jurisdiction in respect of a decree or order made in exercise of appellate jurisdiction by a court subject to the superintendence of the High Court. Such appeal is also not maintainable against an order made in exercise of revisional jurisdiction, or a sentence or order passed under se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the directors of the company and the Company Law Board has been appraised of the fact that the appellant is the director of respondent No. 3, so far as respondent No. 2 is concerned, he has not taken any step to implead him as appellant in the proceedings. The Company Law Board proceeded on the erroneous assumption that Shri O.S. Dhawan continues to be a director of the company. In fact, the Company Law Board has passed the order by presuming that only respondents No. 1 and 2 are directors of the company. Clearly, the Company Law Board has ignored the basic principles of natural justice. The Company Law Board has failed to act in consonance with the requirement of the principles of natural justice while passing the impugned order. Once the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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