TMI Blog2014 (6) TMI 644X X X X Extracts X X X X X X X X Extracts X X X X ..... der Section 397 or 398 of the Act is entertained and it is only after considering the representation of the Central Government, if any, that a final order can be passed - It is important to keep in mind that a statute of a mandatory nature if provides for doing a particular thing in a particular manner than that thing should be done in the manner provided or not at all. Therefore, it is not open for the Company Law Board/tribunal to pass a final order on a petition under Section 397 or 398 of the Act except for its summary dismissal, without giving notice to the Central Government as contemplated vide Section 400 of the Act. There is nothing in the impugned order which could reflect or indicate that the Company Law Board had issued any n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Section 400 of the Act to the Central Government. The appellants have taken specific ground to this effect in the second supplementary memo of appeal to which the respondents have replied contending that no such objection was taken by the appellants before the Company Law Board and that non-issuance of the notice to the Central Government does not cause any prejudice to the appellants. Section 400 of the Act reads as under:- 400. Notice to be given to Central Government of applications under Sections 397 and 398:- The Tribunal shall give notice of every application made to it under Section 397 or 398 to the Central Government, and shall take into consideration the representation, if any, made to it by that Government before pas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ral government in dealing with a petition under Section 397 or 398 of the Act once it is entertained. In Cosmosteels Private Ltd. and others Vs. Jairam Das Gupta and others AIR 1978 Supreme Court 375, three Judges Bench of the Supreme Court in paragraph 14 clearly laid down that it is obligatory upon the court to give notice of the petition under Sections 397 and 398 to the Central Government and if any representation is made by the Central Government, the court is obliged to take it into the consideration before passing any final order. The relevant extract of paragraph 14 of the above citation is quoted below:- Undoubtedly, when a petition is made to the Court under Sections 397 and 398 it is obligatory upon the Court to give notice o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n which provides for the effect of non issuance of the notice to the Central Government would not be of any help to the petitioners as it fails to take into account the ratio of the decision of the Supreme Court in Cosmosteels Private Ltd. (Supra). In the instant case there is nothing in the impugned order which could reflect or indicate that the Company Law Board had issued any notice as envisaged under Section 400 of the Act to the Central Government before proceeding to decide the petition under Section 397 or 398 of the Act. There is no material to show that any notice was issued to the Central Government before passing the impugned order. In view of the aforesaid facts and circumstances, in the absence of notice under Section ..... X X X X Extracts X X X X X X X X Extracts X X X X
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