TMI Blog2007 (8) TMI 467X X X X Extracts X X X X X X X X Extracts X X X X ..... d Zubin Kamdin for the Appellant. Vishwajeet Sawant for the Respondent. JUDGMENT 1. The appellants, (original respondent) being dissatisfied by the impugned order dated 17-1-2005 passed by the Company Law Board, Principal Bench, New Delhi (for short, CLB ), have preferred present appeal under section 10( f ) of the Companies Act, 1956 (for short, Companies Act ). 2. In the year 2000-01 the respondent raises certain disputes with the appellants. In the month of December, 2001, the respondent files a petition No. 2 of 2002 under sections 397 and 398 of the Companies Act, 1956 before the Company Law Board, New Delhi against the Appellants. 3. On 27-1-2005, by the impugned order the CLB though holds that no case of oppression has been made out by the respondent, yet directed the appellants to purchase the shares of the respondent. Hence the appeal. 4. The relevant conclusion as arrived at by the CLB is as under :- "36. I find that the petitioner has been indulging in forum shopping and she was aware of everything happening in the company till the dispute arose after March, 2000. Now when the relationship in the two groups have soured, the petitioner has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paro Maruti Ltd. [2007] 75 SCL 287 (Delhi). 3. Delstar Commercial Financial Ltd. v. Sarvottam Vinijaya Ltd. [2003] 113 Comp. Cas. 642 (CLB). 4. Needle Industries (India) Ltd. v. Needle Industries Newey (India) Holdings Ltd. AIR 1981 SC 1298. 5. Sangramsinh P. Gaekwad v. Shantadevi P. Gaekwad [2005] 57 SCL 476 (SC). 6. Jyotsna Nalinikant Kilachand v. Nandlal Kilachand Investment (P.) Ltd. [1993] (3) Bom. C.R. 512. 7. The undisputed position is that, respondent (original petitioner) is holding 28 per cent shares in appellant-company (original respondent No. 1). Respondent (original petitioner) has filed petition under section 397/398 of the Companies Act, complaining oppression on minority shareholder and mismanagement of appellant-company, perpetrated by the Managing Director and Directors of the appellant-company. 8. The company was incorporated in the year 1992. The company has its factory at MIDC, Tarapur, Maharashtra. In 1997 the paid up share capital of the company was raised to Rs. 34 lakhs. Appellant-company has availed 3 term loans of about Rs. 90 lakhs in total in 1994, 1996 and 1997 from the Maharashtra State Financial Corporation (for short ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espondent of oppression and even other- wise as the respondent as well as her husband who was acting at the relevant time, as a Chartered Accountant, were fully aware of all the transactions and in fact participated in all such transactions, cannot agitate the same foundation for the relief as prayed in the petition. The operative part, therefore, in view of the above facts and reasoning is contrary to the provisions of sections 397 and 398 of the Companies Act. The appellant, therefore, has made out her case to interfere in view of the directions as given by the CLB. 13. The directions compelling the company to purchase the shares of the respondent/petitioner, in the facts and circumstances of the case, is abuse of the process of the CLB. Such directions are, therefore, contrary to the law and impermissible. 14. The submission based upon Sangramsinh P. Gaekwad s case ( supra ) that, in a given case, the Court despite holding that no case of oppression has been made out may grant such relief so as to do a substantial Justice between the parties . As noted above, in the present case there is no case made out to grant such relief in favour of the respondent. There is no cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eged basic financial matters of the company cannot claim the equity or such reliefs. There is no case of oppression and mismanagement or winding up of the company on any unjust or equitable ground to bring the case under any of section 397 or 398 and/or even 402 of the Companies Act. The above cases as relied by the learned counsel appearing for the respondent are distinct and distinguishable on facts itself. In view of the above reasoning, the Hindustan Constructions Co. Ltd. s case ( supra ) as relied by the learned counsel appearing for the respondent is also of no assistance. 17. The Supreme Court judgment which has been relied by both the parties in Needle Industries (India) Ltd. s case ( supra ), referring to the principle of oppression and mismanagement of surrounding sections 397, 398 and 402 is not in dispute, in no way assist the respondent and on the contrary it supports the appellant in all respects and as there is no case of oppression or mismanagement and/or winding up order. 18. The Apex Court judgment relied by the learned counsel appearing for the appellant in Hanuman Prasad Bagri s case ( supra ) squarely covers the submissions as raised that if the f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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