TMI Blog1998 (7) TMI 704X X X X Extracts X X X X X X X X Extracts X X X X ..... etition and on that day, the court passed the following order : Counsel for the petitioners prays for leave to withdraw this petition with liberty to move the Company Law Board under Sections 397 and 398. Subsequent to the amendment, all such matters are being filed there although the petitions filed prior to amendment are especially saved by the Amending Act. I allow the request of counsel, which is not opposed by the opposite counsel to withdraw this petition as stated above. Dismissed as withdrawn without prejudice to right, if any, and with liberty to move the Company Law Board who if approached may deal with such petition in accordance with law. This is without prejudice to the rights of the respondents to raise any plea that may be available to them under law. 3. The present petition was later filed on October 16, 1996, before the Company Law Board. When the petition came up for hearing, considering the close family relationship between the parties, we suggested that the parties should try for amicable settlement of the disputes. Even though it was generally agreed that the petitioner's group would sell their shares to the respondent's group, in spite of our b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the Company Law Board to deal with the petition. Accordingly, the respondents are at full liberty to raise all objections including the plea of jurisdiction which is fundamental and foundation of rule of law. 6. He further argued that the petition suffers from limitation aspect also. Since the petition deals with events that occurred prior to 1990, the petitioner has come before the Company Law Board only in 1996 and even in the petition, there is no allegation that the alleged acts of oppression or mismanagement are continuing. One of the ingredients of Section 397/398 is that the alleged acts of oppression/mismanagement should be continuing at least up to the date of the filing of the petition which is not the case in the present petition as the averments in the petition would clearly indicate that all the acts complained of related to the period before 1990. Citing 2CC 717 MB, he stated that the provisions of the Limitation Act are applicable to the proceedings under Section 397/398. In the absence of any allegation as to the continuation of the alleged acts of oppression and mismanagement, the petition cannot be entertained. 7. He further argued to state that in addit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reated as a petition transferred from the High Court. There are certain new allegations that have been made in the petition which itself makes it a fresh petition. Further, according to him, since the High Court itself has advised the Company Law Board to deal with the petition, the question of enquiring into whether the Company Law Board has jurisdiction or not does not arise. Dealing with the provisions of Section 68, he submitted that these provisions do not bar the filing of a petition before the Company Law Board but only impose an obligation on the High Court concerned to dispose of a pending petition by the concerned High Court itself. The provisions of this section are purely transitional in nature and do not prohibit either withdrawal of a petition from the High Court or filing of the same before the Company Law Board afterwards. Accordingly, Shri Chowdhary submitted that the Company Law Board has full jurisdiction to deal with the petition and since the petitioner has already withdrawn the petition before the High Court, the question of forum shopping or jurisdictional shopping does not arise. 10. Dealing with the objection relating to limitation, Shri Chowdhary stated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ificates together with transfer instruments were lodged with the company for registration of the transfer, The argument of Shri Dhawan is that the petitioners gave up their participation in the company after the agreement was entered into thus exhibiting lack of interest in the affairs of the company and therefore, even if their names continue in the register of members, they cannot be treated as members of the company. We are unable to accept this proposition. It is an admitted position that no consideration has been paid for the sale of shares and that the share certificates are still in the possession of these petitioners. The position would have been different if only the registration is pending while all other pre-acts like payment and receipt of consideration and handing over of necessary documents including the share certificates had taken place. In such a situation, we may have to examine about the locus standi of the petitioner even if his name continues in the register of members. In the present case, except an agreement itself, no further action pursuant to the same has been taken. Under these circumstances, we have no hesitation to hold that the petitioner satisfies the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... objection of Shri Dhawan is based on the provisions of Section 68 of the Companies (Amendment) Act, 1988. From this Section it is quite clear that if in respect of certain provisions of the Act, the jurisdiction of the court had been transferred to the Company Law Board by the Amendment Act, even then, all pending matters in any court shall be continued and disposed of by that court. In accordance with this provision, the petition filed by the petitioner in 1990 was continued in the High Court till 1996 and was withdrawn in that year. While allowing the withdrawal, the High Court also gave liberty to the petitioner to move the Company Law Board and while doing so the court also observed that the Company Law Board if approached may deal with such petition in accordance with law. From a reading of this order we are not in a position to come to a conclusion that the High Court had conferred any jurisdiction on the Company Law Board as it has very specifically stated in that order that the Company Law Board would deal with this matter in accordance with law. On any petition filed after May 31, 1991, under Section 397/398, the Company Law Board has jurisdiction and the present petition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he was not keeping quiet and that he had agitated the matter well in time before the High Court. But having withdrawn a long pending matter from the High Court where, in all probability, the matter could have ended in the near future, the petitioner cannot have the excuse that he had been vigilant in protecting his interest as a shareholder. We are coming to this conclusion only on comparing the various allegations in the earlier petition and this petition and find that except for some marginal changes in language or figures, the allegations in the petition are practically the same as in the earlier petition and the present petition is nothing but repetition of the earlier petition. Further, on the arguments of Shri Chowdhary that the effects of the alleged acts of oppression and mismanagement committed earlier still continue, we are of the view that having waited for over seven years, even assuming that the effects are continuing even now, we cannot consider this as a ground to proceed with the petition by shutting our eyes to the plea of the respondents that there is gross delay and laches. 18. Accordingly, considering the fact that through this petition the petitioner has ind ..... X X X X Extracts X X X X X X X X Extracts X X X X
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