TMI Blog2002 (6) TMI 438X X X X Extracts X X X X X X X X Extracts X X X X ..... in preliminary objections raised by the appellant and directed deletion of the names of subsidiaries and directors from the array of party/respondents in the company petition. As against that part of the order of the CLB, the respondent herein has preferred an appeal in C.M.A. No. 2018 of 2000 on the file of this Court and by judgment of even date in C.M.A. No. 2018 of 2000, I did not agree with the reasonings of the CLB and allowed the appeal preferred by the respondent herein, who is the appellant in that appeal. 3. In this appeal, the appellant is canvassing the correctness of certain directions given by the CLB directing the appellant-company to file its reply on the allegations made in the company petition including those in respect of subsidiary companies. Since I have held that the order of the CLB directing deletion of the names of subsidiaries and directors from the array of parties is not legally sustainable, the direction given by the CLB directing the appellant herein to file its reply on the allegations made in respect of its dealings with the subsidiaries cannot be said to be beyond its power and jurisdiction and, therefore, no interference is called for in respec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the learned senior counsel is that the respondent herein was attending numerous general body meetings of the appellant-company and voted for the election of respondents 2 and 3 in the company petition and even more, has seconded the resolution. The learned senior counsel submitted that the position continued even up to the general meeting held on 30-9-1999, less than one year before the date of filing of the company petition. He referred to the proposals of various annual general meetings of the appellant-company wherein accounts, directors report and auditors reports were adopted and submitted that the meetings were attended by the respondent herein and he either proposed or seconded the resolutions. The learned senior counsel also referred to the proposal for declaration of dividend and submitted that the respondent has approved and seconded the proposal for declaration of dividends. The learned senior counsel also referred to the resolution regarding re-appointment of auditors and submitted that the respondent has approved, seconded and voted in favour of the resolution. He also submitted that the respondent has also received without any protest the dividend declared and paid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs in the capacity of shareholders, but the grievance of the respondent clearly shows that he is raising the grievance as a family member. He further submitted that under the articles of association and the memorandum of association of the company, no shareholder is entitled to any office or profit or position in the group companies, and the grievance of the respondent is not that of a shareholder, but merely on the basis of a member of the family. The learned senior counsel submitted that the fact that the respondent has participated in various resolutions because he thought that his demand made in his capacity as a member of the family and not as a shareholder would be granted, is in law no answer at all to the plea of waiver, acquiescence or estoppel. The learned senior counsel submitted that the facts are admitted and undisputed and the company petition has been filed only as an abuse of process of court and it has not been filed by the respondent herein to obtain any genuine relief as a shareholder of the appellant-company. 8. Mr. Arvind P. Datar, the learned senior counsel appearing for the respondent submitted that the main grievance in the company petition by the respon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition has been filed only to pressurise the respondents 2 and 3 in the company petition to grant a position in the appellant-group-companies to the respondent herein. His submission was that the company petition has been filed with an object to extract benefits to which the respondent herein has no right as a shareholder. Both the counsels referred to a number of decisions in support of their respective submissions. 10. I have carefully considered the submissions of the learned senior counsel for the appellant as well as the learned senior counsel for the respondent. The CLB has been constituted by the Companies (Amendment) Act, 1988 and under section 10E(1A) of the Act, the CLB is empowered to discharge such powers and functions as may be conferred on it by the company law or any other law. It shall also exercise such other powers and discharge such other functions as may be conferred on it by the Central Government by notification in the Official Gazette. The CLB, under section 10E(4C), inter alia, is vested with the powers of a civil court under the Code of Civil Procedure, 1908 to try a suit in respect of discovery and inspection of documents or other material objects pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for evidence and it is well-settled that it is open to him to establish the allegations made in the company petition. I am of the view, when the respondent herein has not admitted the contents of the letters and he has a right to explain under what circumstances the letters were written and in which context he has voted for the resolutions, the CLB was perfectly justified in taking the view that the said questions cannot be decided as preliminary issues and only after evidence is taken, on merits of the matter, the questions raised by the appellant can be decided. 12. The CLB, as already held, is the final fact finding authority and the petitioner in the company petition has a right to lead evidence, either oral or documentary, before the CLB. Hence, the question of fact regarding waiver, estoppel or acquiescence cannot be decided as a preliminary issue. Further, the questions raised are not pure questions of law that go to the root of the matter affecting the jurisdiction of the CLB and when the CLB has jurisdiction to decide the matter on the facts of the case, I am of the view, the CLB has adopted the right course in rejecting the preliminary objections raised by the appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. On the facts of the case, the respondent herein, who is the petitioner in the company petition, has raised serious allegations against the appellant herein and respondents 2 and 3 in the company petition. The CLB considered the allegations and held that it would not be proper to decide the question of waiver, estoppel or acquiescence as a preliminary issue. Though the various letters written by the respondent herein were not considered by the CLB and it has not addressed the question whether the company petition is maintainable in view of the letters written by the respondent, in my view, serious questions of fact which are disputed are involved and the CLB is perfectly justified in rejecting the preliminary objections raised by the appellant herein and not rendering any finding on the effect of the letters written by the respondent. 15. As far as the other decision relied upon by Mr. Anil B. Divan, the learned senior counsel, viz., the decision of the Chancery Division in Bellador Silk Ltd., In re [1965] 1 ALL ER 667 is concerned, the Chancery Division has held that the presentation of the petition in order to bring pressure to bear to achieve a collateral purpose is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng before the CLB and the applicability of the decision would ultimately depend upon the facts that may be established before the CLB at the time of final hearing. 20. As rightly pointed out by Mr. Arvind P. Datar, the learned senior counsel that in the cases, on which reliance has been placed by Mr. Anil B. Divan, the learned senior counsel for the appellant, the question of waiver, estoppel or acquiescence was decided not as a preliminary issue, but at the conclusion of final hearing of the case along with other issues. No doubt, as held by the Division Bench of this Court in Saroj Goenka s case ( supra ), it would depend upon the facts and circumstances of each case whether the issue raised by the appellant can be decided as a preliminary issue or not. 21. Under section 3 of the Indian Evidence Act, a fact is said to be proved, when the Court, upon consideration of evidence, comes to the conclusion that even a normal and prudent man, in the circumstances of the case, would act upon the proposition that the fact exists. I am of the view, by the very production of the letters sent by the respondent herein, it cannot be said that the facts stated in the letters have been ..... X X X X Extracts X X X X X X X X Extracts X X X X
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