TMI Blog2013 (11) TMI 1543X X X X Extracts X X X X X X X X Extracts X X X X ..... al Form of Procedure, the same shall not be deemed to be limited or otherwise affected by anything contained in the Code. In other words, while construing the powers available to a Quasi Judicial Forum, under a Special Enactment, one must always keep in mind that the boundaries prescribed by the Code of Civil Procedure within which the Civil Courts are obliged to function, would not apply to the Forum created by the Special Enactment. In view of the above, the appeal is allowed and the impugned order of the Company Law Board is set aside and the Company Law Board is directed to proceed with the hearing of the company petition C.P.No.37 of 2011 and dispose it of in accordance with law, preferably in a manner that would put an end to the sufferings of the company, if not the sufferings of the applicant and the second respondent - Company Appeal No.6 of 2011 - - - Dated:- 6-11-2013 - V.RAMASUBRAMANIAN,J. For The Appellant : Mr.R.Murari , Mr.Thriyambak J.Kannan For The Respondent : Mr.R.Sankaranarayanan , Mr.Kumarpaul Chopra JUDGMENT This appeal is filed under Section 10-F of the Companies Act, 1956, challenging an order passed by the Company Law Board, allowi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and for separate possession. 6. It appears that the second respondent's son also filed a suit in O.S.No.136 of 2008 on the file of the Principal District Court, Virudhunagar, praying for a partition of his 3/8 share in the plaint second Schedule properties and 1/4 share in the plaint first Schedule properties and also for a declaration that the gift deeds executed by the appellant were null and void. Both the suits, instituted by the second respondent and his son are now pending. 7. After 6 years of the institution of the suit by the second respondent, the appellant filed a company petition in C.P.No.37 of 2011 on the file of the Company Law Board, under Sections 397 and 398 of the Companies Act, 1956, complaining of oppression and mismanagement against the second respondent. Though the grievance of the appellant was labelled as one of oppression and mismanagement, the real grievance of the appellant was that due to 50% shareholding in the Company and due to the second respondent being one of the 2 Directors in the Board, he had paralysed the functioning of the Company and had created a deadlock. In the company petition, the appellant prayed for various reliefs, including ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on common issues. 11. Similarly, in Guljarilal Kanoria vs. Loptchu Tea Company Ltd {2000 (102) Comp. Cases 292 (CLB)}, the Principal Bench of the Company Law Board again granted stay of its own proceedings, when it was brought to its notice that a civil suit was already pending on the file of the High Court of Calcutta. The Company Law Board pointed out that when the reliefs sought before both Forums are substantially the same, when the parties are also the same and the disputed issues requiring adjudication are also the same, it would be better to stay its proceedings, to avoid conflict of opinion. The said decision of the Company Law Board was upheld by a Division Bench of the Calcutta High Court by a decision rendered on 21.1.2000 in A.C.O. No.180 of 1999. While upholding the decision of the Company Law Board, the Division Bench of the Calcutta High Court pointed out that the proceedings before the Company Law Board cannot go on, without the Civil Court deciding the lis on merits. 12. In Sundeep Gupta vs. Indian Hardware Industries {2008 (142) Comp. Cas.552 (CLB)}, the CLB even went to the extent of dismissing a main petition under sections 397 and 398 on the ground that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the first question raised for my consideration in this appeal is as to whether the provisions of Section 10 of the Code of Civil Procedure would apply, per se to the proceedings before the Company Law Board or not. In order to find an answer to this question, it is necessary to have a look at some of the provisions of the Code of Civil Procedure, the Companies Act, 1956, the Company Law Board Regulations 1991 and a few decisions as to how the Courts have treated the Company Law Board. 17. Section 10 of the Code prohibits a court from proceeding with (i) the trial of any suit, (ii) if the matter in issue is also substantially and directly in issue in a previously instituted suit (iii) between the same parties and (iv) pending in the same court or any other court having jurisdiction to grant the relief claimed. 18. Out of the above ingredients necessary to invoke section 10, two do not pose any problem in so far the case on hand is concerned. The lis in this case is between the same parties, one before the civil court and another before the company Law Board. The jurisdiction of both the Company Law Board and the civil court to grant the reliefs prayed respectively before them, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the District Court, upon which jurisdiction is conferred by the Central Government. Therefore, it is clear that the definition part of the Act, keeps the Company Law Board away from the definition of the expression Court . 24. The Company Law Board is constituted in terms of Section 10-E, for the exercise and discharge of the powers and functions as may be conferred upon it by the Central Government. Sub-section (4-C) of Section 10-E, specifically confers some powers upon the Company Law Board as are vested in a Court under the Code of Civil Procedure. Sub-sections (4-C), (4-D), (5) and (6) of Section 10-E may be relevant for determining the question on hand and hence they are extracted as follows:- (4-C) Every Bench referred to in sub-section (4-B) shall have powers which are vested in a Court under the Code of Civil Procedure, 1908 (5 of 1908), while trying a suit, in respect of the following matters, namely:- (a) discovery and inspection of documents or other material objects producible as evidence; (b) enforcing the attendance of witnesses and requiring the deposit of their expenses; (c) compelling the production of documents or other material objects producib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct to the provisions of Sections 123 and 124 of the Indian Evidence Act, 1872 (1 of 1872), requisitioning any public record or document or copy of such record or document from any Office; (e) issuing commissions for the examination of witnesses or documents; (f) reviewing its decisions; (g) dismissing a representation for default or deciding it ex parte; (h) setting aside any order of dismissal of any representation for default or any order passed by it ex parte; and (i) any other matter which may be prescribed by the Central Government. (3) Any order made by the Tribunal or the Appellate Tribunal may be enforced by that Tribunal in the same manner as if it were a decree made by a Court in a suit pending therein, and it shall be lawful for the Tribunal or the Appellate Tribunal to send in case of its inability to execute such order, to the Court within the local limits of whose jurisdiction,-- (a) in the case of an order against a Company, the Registered Office of the Company is situate; or (b) in the case of an order against any other person, the person concerned voluntarily resides or carries on business or personally works for gain. (4) All proceedings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch; (iv) the method of presentation of petitions (v) the scrutiny of such petitions (vi) the documents that are required to accompany the petition (vii) the rights of parties to appear before the Bench; (viii) the rights of parties to seek plural remedies; (ix) the method of service of notice and process issued by the Bench; (x) the manner of filing of reply and documents by the respondent and the filing of counter reply by the petitioner; (xi) the power of the Bench to call for further evidence or information, the procedure to be adopted by the Board, when a party to a proceeding does not appear; (xii) the power of the Board to set aside ex parte orders; (xiii) the abatement of proceedings upon the death of a party and the power of the Board to set aside the abatement; (xiv) the method of passing of orders; (xv) the supply of certified copies; (xvi) enrichment of time; (xvii) inherent powers of the Board; (xviii) general power to amend etc. 30. Some of the important provisions of the Regulations require to be noted. The Regulations which came into force with effect from 31.5.1991 originally contained a provision under Regulation 27 conferring powers of the Company Law Board to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion of the Code of Civil Procedure. To my mind, the Civil Procedure Code does not confer any such power upon a normal Civil Court. Therefore, it is clear that the Company Law Board is made by these Regulations, to be a Master of its own procedure, apart from being the Master of ceremonies. 35. Coming to the more important Regulation viz., Regulation 44, around which the present dispute revolves, it reads as follows:- 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 . 36. The language employed in Regulation 44 is in pari materia with Section 151 of the Code. 37. Having seen the relevant provisions of the Companies Act, 1956 and the Company Law Board Regulations 1991, let us now undertake a journey into the provisions of the Code of Civil Procedure. The Code of Civil Procedure does not define the expression Court . But Section 5 makes the provisions of the Code applicable to Revenue Courts, that are governed by the provisions of the Code, provided the State Governmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch it is used in a statute and that it is permissible, given the context, to read it as comprehending the Courts of Civil Judicature and Courts or some Tribunals exercising curial or judicial powers. After extracting the meaning of the word Court as propounded in paragraph 701 and the exposition of what is a Court in Law, as found in paragraph 702 of the Halsburys Laws of England, the Supreme Court held in paragraph 31 of the report, as follows:- 31. Now, under Section 111 of the Companies Act, as amended with effect from 31.5.1991, the CLB performs the functions that were theretofore performed by Courts of Civil Judicature under Section 155. It is empowered to make orders directing rectification of the Company's Register, as to damages, costs and incidental and consequential orders. It may decide any question relating to the title of any person who is a party before it to have his name entered upon the Company's Register; and any question which it is necessary or expedient to decide, it may make interim orders. Failure to comply with any order visits the Company with a fine. In regard to all these matters it has exclusive jurisdiction (except under the provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the judgment and decree of a single Judge passed on an appeal. Therefore, the Supreme Court held in Kamal Kumar Dutta, that a Letters Patent Appeal would no longer lie against the decision rendered on an appeal by the Company Judge. Thus the Supreme Court invoked Section 100-A of the Code of Civil Procedure to come to the conclusion that it did, however without going into the question as to whether the provisions of CPC would apply or not. 43. Thus we have on hand, 3 decisions of the Apex court, one in Canara Bank, another in Manish Mohan Sharma and the third in Kamal Kumar Dutta, dealing with the nature, powers and jurisdiction of the CLB. The ratio decidendi of these decisions, could be summarised as follows:- (i) That in a given context, it is permissible to understand the expression Court to include within it, some Tribunals exercising curial or judicial powers; (ii) that since an order passed by the Company Law Board is deemed to be a decree passed by a Civil Court, the enforcement of the orders of the Company Law Board are subject to the same limitation as Civil Courts have with respect to execution of decrees; and (iii) that in view of Section 100-A of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Consumer Forum. While dealing with the issue, the Supreme Court held in paragraph 43 of its report that the proceedings before the National Consumer Commission are although judicial proceedings, but at the same time, it is not a Civil Court within the meaning of the provisions of the Code of Civil Procedure . Relying upon the previous decisions in Bharat Bank Limited vs. Employees {AIR 1950 SC 188} and Nahar Industrial Enterprises vs. Honkong and Shanghai Banking Corporation {2009 (8) SCC 646}, the Supreme Court pointed out that the National Consumer Commission may have all the trappings of a Civil Court, but yet it cannot be called a Civil Court. 48. If anyone thought that the issue had attained finality in Malay Kumar Ganguly, they were thoroughly mistaken as seen from the fact that the same question was raised once again as to whether the Consumer Forums are Courts or not in Trans Mediterranean Airways vs. Universal Exports {2011 (10) SCC 316}. In this case, reliance was placed upon the decisions of the Supreme Court in Laxmi Engineering Works vs. P.S.G. Industrial Institute {1995 (3) SCC 583}, Charan Singh vs. Healing Touch Hospital {2000 (7) SCC 668} and State of Karnat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sumer Fora). Some Tribunals are manned exclusively by Judicial Officers (Rent Tribunals, Motor Accidents Claims Tribunal, Labour Courts and Industrial Tribunals). Other statutory Tribunals have judicial and technical members (Administrative Tribunals, TDSAT, Completion Appellate Tribunal, Consumer Fora, Cyber Appellate Tribunal, etc.). 45. Though both Courts and Tribunals exercise judicial power and discharge similar functions, there are certain well-recognised differences between Courts and Tribunals. They are: (i) Courts are established by the State and are entrusted with the State's inherent judicial power for administration of justice in general. Tribunals are established under a statute to adjudicate upon disputes arising under the said statute, or disputes of a specified nature. Therefore, all Courts are Tribunals. But all Tribunals are not Courts. (ii) Courts are exclusively manned by Judges. Tribunals can have a Judge as the sole member, or can have a combination of a judicial member and a technical member who is an 'expert' in the filed to which the Tribunal relates. Some highly specialised fact-finding Tribunals may have only technical members, but th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ragraph 28 of the report that the Family Court is a creature of Statute and that it is vested with the power to adjudicate and determine disputes between the parties and that the Judges of Family Courts perform all duties and functions which are akin to the functions performed by the Presiding Officer of a Civil or Criminal Court, though to a limited extent. Relying upon the decision of the Constitution Bench in Hari Nagar Sugar Mills Ltd vs. Shyam Sundar Jhunjhunwala, the Supreme Court pointed out that by Courts is meant Courts of Civil Judicature and by Tribunals, those bodies of men who are appointed to decide controversies arising under certain special laws. The Court also made a reference to the passage extracted in Hari Nagar Sugar Mills Ltd., from the opinion of Lord Sankey L.C., in Shell Co. of Australia vs. Federal Commissioner of Taxation, where the following negative propositions were enumerated:- (i) A Tribunal is not necessarily a Court in this strict sense because it gives a final decision; (ii) Nor because it hears witnesses on oath; (iii) Nor because two or more contending parties appear before it between whom it has to decide; (iv) Nor because it give ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6) to regulate its own procedure. 57. Though the procedure to be followed by the Company Law Board is also well laid out in the Company Law Board Regulations 1991, the Board is vested with the power under Regulation 48 even to dispense with the requirement of any of the Regulations. This is a power that is not available even to a Civil Court. Therefore, merely because the Company Law Board is empowered to give a final decision and merely because it can hear witnesses and give a judgment that could affect the rights of parties and merely because its orders are appealable to this Court, it cannot be contended that the Company Law Board is a Court. Therefore, I hold that the Company Law Board is not a Court either within the meaning of the expression Court appearing in the Companies Act, 1956 or within the meaning of the expression appearing in the Code of Civil Procedure. 58. If the Company Law Board is not a Court, it follows as a necessary corollary that all the provisions of the Code of Civil Procedure cannot be required to be followed in the proceedings before the Company Law Board. It is only those provisions of the Code of Civil Procedure which are made applicable under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ailable to the Company Law Board. 63. Therefore, the question as to whether a power not specifically conferred upon a Tribunal by the Rules/Regulations statutorily framed, could still be exercised by the Tribunal by resorting to the inherent powers conferred upon it, appears to be one more question in the long list of vexed questions. 64. To find an answer to this question, we may have to take, once again, a small detour. 65. A similar question repeatedly arose, before the High court and the Supreme court, with respect to the application of the doctrine of res judicata to writ proceedings. As pointed out earlier, the doctrine of res judicata is enshrined in section 11 of the Code of Civil Procedure. By virtue of the Explanation under section 141 of the Code, the provisions of the Code are made applicable to all proceedings before all courts of civil jurisdiction, except the proceedings under Article 226 of the Constitution. 66. But in any number of decisions, the High courts and the Supreme court have held the principle of res judicata is founded upon public policy and that therefore, even without reference to section 11 of the Code, they can be invoked in writ proceedi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... res judicata is also applicable to proceedings under Article 226. 69. Therefore, it is clear that even where some of the principles enshrined in the Code of Civil Procedure are specifically excluded in their application to certain proceedings, the Courts have always made analogous principles applicable to those proceedings, if the foundation of those principles could be traced to public policy. Keeping this in mind, if we have a look once again at section 4(1) of the Code of Civil Procedure, (to which I have already made a reference in paragraph- above) it will be clear that the provisions of the Code do not limit or otherwise affect any special or local law or any special jurisdiction or power conferred or any special form of procedure prescribed by any other law. 70. As indicated elsewhere, Regulation 25 of the CLB (Regulations), 1991, confers powers upon the Board to adjourn the hearing the case. Regulation 44 confers, rather saves the inherent power of the Board, to make such orders as may be necessary for the ends of justice or to prevent the abuse of the process of the Bench. Therefore, the same would naturally include a power to postpone the hearing of a case to a fut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ekara Raja 2.Mrs.Anandhammal 3.Mrs.Hemalatha Devi 4.Mrs.Rajeswari Ammal 5.Mrs.Subashini Ammal 6.M/s.Sri Bharathi Cotton Mills (P) Ltd. 7.M/s.Jeya Bharathi Textile (P) Ltd. Mr.M.S.D.Chandrasekar Raja vs. 1.M/s.Jayabharath Textiles (P) Ltd., Registered Office at No.113, T.P.Mills Road, Cotton Market, Post Box No.117, Rajapalayam 626 117. 2.Mr.M.S.D.C.Radha Ramanan Reliefs sought a) To declare that the gift deeds registered on 24th October 2002 reg. No.3471/02, 24th October 2002 Reg. No.3472/02, 12th December 2002 Reg. No.4079/02, registered on 26th February 2004 Reg. No.784/04 executed by 1st defendant in favour of defendants 2 to 5 are null and void and will not bind the plaintiff's share in the suit property. b) To partition of plaintiff's 1/2 share in plaint A schedule properties by metes and bounds and put plaintiff in possession of his half share. c) To direct the defendants to pay costs of this suit; and d) For such other relief or reliefs as this Hon'ble Court may deem fit and proper in the circumstances of the case. a) Directing the Company to issue Share Certificates in respect of 1,25,000 Equity Shares issued and allot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ties who are before the Company Law Board as well as the Civil Court and a comparison of the reliefs sought both before the Civil Court and before the Company Law Board would show that some of the reliefs sought before both forums, as between the same parties, overlap a little. For instance, before the Civil Court, the son is seeking a partition, apart from other reliefs. Before the Company Law Board, the father is seeking a partition of the land, building and machinery in the company. Therefore, on the surface of it, it may appear that the parties are seeking identical reliefs before different forums. 75. But, I cannot lose sight of one important thing. The power of the Company Law Board under Sections 397 and 398, are very wide. The reliefs that would be granted by the Company Law Board under Section 402 of the Companies Act, 1956, are very wide. As a matter of fact, what a Civil Court could do after a very long journey in the form of a preliminary decree for partition, a final decree and the actual division of properties, is something that the Company Law Board cannot do. But, what the Company Law Board can do under Section 402, is something that may even put an end to the ci ..... X X X X Extracts X X X X X X X X Extracts X X X X
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