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2000 (1) TMI 930

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..... ppellant herein. As against that direction, O.S.A. No. 221 of 1996 was preferred before a Division Bench of this court and the Division Bench reversed the orders passed by the learned single judge and dismissed the company petition. 2. Now, the wife and son of Chandrakanth and certain other directors have come forward with a petition under sections 397 and 398 of the Companies Act, 1956. In view of the amendment made in the Companies Act, the main petition has been preferred before the Company Law Board, Principal Bench, at New Delhi. Subsequently, the main petition was dismissed for non-prosecution and therefore the first respondent herein and others filed a petition in C.A. No. 179 of 1998 in C.P. No. 77 of 1997 for restoration of the main petition. The Principal Bench of the Company Law Board allowed the application for restoration and restored the main petition, as against which order, the respondent therein has come forward with C.M.A. No. 1508 of 1998. 3. The appellant herein instituted Company Application No. 77 of 1998 in C.P.No. 76 of 1997 to have the sitting of the Bench at Madras on the ground that the registered office of the company is situate at Coimbatore and .....

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..... r section 22A of the Securities Act shall be dealt with by a Bench consisting of not less than two members. (4) All other matters including interlocutory and miscellaneous applications connected with the matters falling under sub-regulations (1) and (3) of this Regulation may be heard and decided by a Bench consisting of a single member : Provided that notwithstanding anything contained in regulation 7, it shall be lawful for the Chairman to transfer any matters pending before any Regional Bench to the Principal Bench, for reasons to be recorded in writing." 6. Part VI of the Companies Act deals with Management and Administration and Chapter VI of Part VI deals with oppression and mismanagement regarding which reliefs are provided under sections 397 and 398 of the Companies Act. Mr. Vedantham Srinivasan, learned counsel for the respondent submits that by virtue of regulation 4 of the Company Law Board Regulations, such applications are to be instituted only before the Principal Bench of the Company Law Board and the matter has to be dealt with only by the Principal Bench. Therefore, the appellant herein, the respondent in the main company petition cannot seek to have the .....

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..... pany Law Board Regulations, apart from the Principal Bench, four Regional Benches were constituted, but they were quite fewer when compared to the number of High Courts. Therefore, much difficulty will be expressed by the minority shareholders to approach the concerned Regional Benches than approaching the respective High Court. Their Lordships of the Supreme Court have pointed out that the Company Law Board Regulations show that the Benches of the Board are ordinarily required to have sittings at places mentioned in sub-regulation (2) of regulation 7, these being the Northern, Southern, Eastern and Western Regions. Sub-regulation (1) of regulation 7 has further stated that the proceedings other than those required to be before the Principal Bench under regulation 4 shall be instituted before the Bench within whose jurisdiction the registered office of the company is situated. Their Lordships have also referred to the proviso to regulation 7, which states that the Bench may, at its discretion hold its sittings in any other city or town falling within the region. It has been observed by their Lordships that this type of litigation is therefore to be well taken care of by providing s .....

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..... posed of on merit, the decision shall not be recalled. (3) Where, on the date fixed for hearing or any other date to which such hearing may be adjourned, the petitioner appears but the respondent does not appear when the petition is called for hearing, the Bench, may, in its discretion, adjourn the hearing or hear and decide the petition ex parte . (4) Where the petition has been heard ex parte against the respondent or respondents, such respondent or respondents may apply to the Bench within thirty days for an order to set aside and if the respondent or respondents satisfy the Bench that the notice was not duly served on him or them or that he or they were prevented by any sufficient cause from appearing when the petition was called for hearing, the Bench may make an order setting aside the ex parte order against him or them on such terms as it thinks fit and shall appoint a date for proceeding with the petition : Provided that where the ex parte order is of such nature that it cannot be set aside as against one respondent only, it may be set aside as against all or any of the other respondents also : Provided further that in cases covered by sub-regulation (7) .....

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..... submits that the very beginning of the order indicates that neither of the parties appeared before the Bench and therefore, the order passed by the Bench was only an ex parte order. Inherent power is given to the Company Law Board under regulation 44 to pass any order in the interest of justice. Regulation 44 of the Company Law Board Regulations recites as under : "44. Saving of inherent power of the Bench. Nothing in these rules shall be deemed to limit or otherwise affect the inherent power of the Bench to make such orders as may be necessary for the ends of justice or to prevent abuse of the process of the Bench." 16. According to learned counsel for the respondents, regulation 44 of the Company Law Board Regulations overrides regulation 26. The non obstante clause used in regulation 44 preserves the inherent right of the Company Law Board to set aside its own order in the interest of justice. Learned counsel for the respondents, Mr. Vedantham Srinvasan, cited the following authorities to stress his point : ( i ) Smt. Lachi Tewari v. Director of Land Records AIR 1984 SC 41, in which their Lordships of the Supreme Court reversed the Gauhati High Court order holdi .....

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