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TMI Blog2012 (6) TMI 75X X X X Extracts X X X X X X X X Extracts X X X X ..... rder was passed in an interlocutory proceeding registered as C.A. No. 332 of 2011 arising out of a company petition, being C.P. No. 1 of 2010. Another application, registered as C.A. No. 338 of 2011, taken out by the Birla Corporation Limited and the appellants in ACO No. 82 of 2011 (the company), seeking dismissal of the said interlocutory application was also considered in the said order and direction for affidavits has been given in that application. The company petition was filed by the respondent Nos. 1 to 6 representing more than 10 per cent shareholders of the company alleging mismanagement and oppression in the respondent company. This petition was filed under the provisions of sections 235, 237, 247, 250, 397, 398 and 402 of the Companies Act. Earlier, two other orders were passed by the Company Law Board (CLB) in different interlocutory proceedings arising out of the same company petition on 9-2-2011 and 17-6-2011 and these two orders are also under challenge before this Court in two different appeals. In the application registered as C.A. No 332 of 2011, the applicants (respondent nos. 1 to 6 in these two appeals) have raised grievances on different counts over running ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ealed cover on or before 20th July, 2011. On receipt of the documents, the Bench officer shall forward one copy each to the Auditors of the R-1 Company as well as to Ernst and young, already appointed in this matter in CA 302/11, for giving their detailed comments within four weeks and placing the same before the Principal Bench before hearing and disposing of CP No. 1/2010 on merits. Looking at the details and the manner of payments of huge amounts from the A/Cs of the R-1 company as given specifically in paras 24, 25, 35, the Bench officer is also required to issue Notice alongwith a copy of this order to the trust and its trustees to furnish their justification of receipts of such huge amounts enclosing documents to support their case, if any, on or before 20th July, 2011 to the CLB and to all the parties in this matter failing which the Applicants' prayer of their impleadment in this matter shall stand allowed. Adjourned to 30-9-2011 at 2.30 P.M. for arguments on C.P. No. 1/2010 and CAs therein." 3. The impugned order has been challenged both on procedural grounds and on merit. In ACO No. 83, the appellants are Madhav Prasad Priyamvada Birla Apex Charitable Trust (the trust) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er was called on for hearing, Mr. Dholakia, Advocate sought an adjournment of the hearing of the matter. Mr. Dholakia had also handed over the adjournment letter circulated by him to the Bench Officer of the Company Law Board. On the said prayer for adjournment being made, the Senior Counsel appearing on behalf of the respondent Nos. 1 to 6, Mr. Bimal Chatterjee submitted that no relief would be sought against the petitioners on 11th July, 2011 and therefore there should be no impediment to the hearing being continued. 29. In view of such submission, the Company Law Board directed the adjournment notice circulated by Mr. Dholakia to be kept on record. The Company Law Board thereafter proceeded to hear Counsel appearing for the respondent No. 7. The hearing continued till 1.00 p.m. At 1.00 p.m., the Company Law Board observed that it would not be possible to continue the hearing of the matter after recess and further dates of hearing of C.A. No. 332 of 2011 and an application filed by the respondent No. 7 for its dismissal would be fixed afterwards. 30. No submission was made by Counsel appearing on behalf of the respondent Nos. 1 to 6 concerning the petitioners herein. No prayer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld be reasonable time for the parties to make alternative arrangement, when sufficient time intervenes between the last date of adjournment and the next date of trial. In such a case, adjournment on the ground of counsel's ill health could be refused and the party would bear the responsibility for his failure to make alternative arrangements. Take for instance, a suit was adjourned for trial for a period of one week and the counsel appears to have suddenly become in disposed which would be known to the party. Therefore, the party, in advance, has to make alternative arrangement to proceed with the trial engaging another counsel. The words "in time" would, therefore, indicate that reasonable time would be required for making alternative arrangements." It is the case of the appellant trust that, having regard to the reason for which adjournment was sought for, the CLB should have granted adjournment instead of passing the interim order in the light of the ratio of this judgment. 8. The case of the trust is that all the remittance to the trust was for legitimate purpose and the trustees had taken steps to set up a hospital. The investment made by the trust were to make the propertie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er requiring production of documents according to the applicants flows from regulation 24 of the CLB regulation read with section 10E(4C) of the Act and Order 11 Rule 14 of the Code of Civil Procedure. Further case of the applicants is that the issue of not granting adjournment of hearing scheduled on 11-7-2011 cannot be a question of law as it is purely within the discretion of the CLB to decide as to whether hearing of a matter shall be adjourned or not on a particular day. In any event, it has been argued by the learned Counsel appearing for the applicants that no prejudice has been caused to any of the parties by this order. 11. So far as the interim order of 11-7-2011 is concerned, argument was advanced before me at length both on merit as well on the procedural aspect. According to appellants the manner in which the proceeding was conducted before the CLB was seriously flawed. On behalf of the company, the allegation of violation of the principles of natural justice was emphasised, while on behalf of the appellant trust, the main allegation is that they were not given opportunity of hearing at all. The case of the company is that they were not allowed to conclude submissions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itions, nor such direction was prayed for. Allegations are mostly against the CLB over the manner in which the proceeding was conducted before it. The CLB is not before me as a party, as in an appeal proceeding the Court or Tribunal whose order is under challenge before the appeal Court is never impleaded as a respondent. The only testimony of its proceeding is the records of that proceeding. But these records are not before me in full except copies of two orders dated 7-7-2011 and 11-7-2011. I have reproduced the order of 11-7-2011 in the earlier part of this order. The order of 7-7-2011, the copy of which has been produced before me reads: "CA No. 332/2011 mentioned. Part heard. Adjourned to 11/7/11 at 11 a.m." 15. If these two orders form the entire recordal of proceedings of these two interlocutory applications, then in my prima facie opinion the order of the CLB would not be sustainable, having been passed in violation of the principles of natural justice. The impugned order would have to be set aside on this very ground alone. But I do not think I can come to a final conclusion on this point in the absence of the entire records of the proceeding being produced before me. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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