TMI Blog2018 (12) TMI 963X X X X Extracts X X X X X X X X Extracts X X X X ..... e issue is the MOU dated 09.11.2011 under which the parties have taken steps. If the MOU is upheld, the steps taken by respondent No. 2 would be in terms of the MOU. If for some reason the MOU is struck down then the issue about oppression and mismanagement would arise for consideration. The issue of legality and validity of the MOU dated 9.11.2011 is pending in the civil suit. The impugned order has rightly stayed the proceedings before the CLB under principles akin to section 10 of CPC. The view taken in the impugned order appears to be a plausible view. Accordingly, no reason to interfere in the present appeal - CO.A.(SB) 20/2013 - - - Dated:- 10-12-2018 - MR. JUSTICE JAYANT J. Appellant Through: Ms. Maneesha Dhir, Mr. K.P.S. Kohli, Mr. Rakesh Wadhwa Ms. Hancy Wadhwa, Advocates Respondents Through: Mr. Arvind Sah, Advocate NATH JAYANT NATH, J. 1. This appeal is filed seeking to impugn the order dated 21.01.2013 of the Company Law Board (CLB) whereby the proceedings in the company petition filed by the appellant under Section 397 and 398 of the Companies Act, 1956 were stayed under Section 10 CPC on account of the suit also filed by the appellant. The applic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de letter dated 8.11.2011 and also executed the Board resolution for induction of Mrs. Shanti Talwar as a Director in her place. 4. Based on the above allegations, the appellant filed a suit before this court for declaration, permanent injunction and rendition of accounts and mandatory injunction being CS(OS) 1632/2012. In the plaint various reliefs were sought including a decree of declaration declaring the unsigned MOU dated 09.11.2011 as rescinded, injunction to restrain respondent No.2 from creating third party interest in the Uttam Nagar property and Pitam Pura property. Various other reliefs were also sought. The suit was filed in May 2012 and is pending adjudication. Thereafter the appellant has filed the company petition under Sections 397 and 398 read with Sections 235, 402 and 403 of the Companies Act, 1956 seeking the relief of permanent injunction to restrain respondent No. 2 from interfering, disturbing and changing the existing equal shareholdings in the Board of Directors of respondent No. 1 Company or from dealing with the assets of the said company. Mandatory injunction was also sought to direct respondent No. 2 to refund the money siphoned off by him. The pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... B. 8. Learned counsel for the respondent has reiterated about the applicability of Section 10 CPC. He relies upon the judgment of the Madras High Court in the case of M.S.D.Chandrasekar Raja vs. Jay Bharath Textiles (P) Ltd., (2014) 2 Comp. L.J. 145 (Mad.). 9. The issue that arises is as to whether the CLB can pass orders under Section 10 CPC as has been done in the present case. 10. I may note that the Supreme Court in National Institute of Mental Health and Neuro Sciences vs. C. Parameshwara, AIR 2005 SC 242 has held that normally, Section 10 is referable to a suit instituted in a civil court and would not apply to proceeding of other nature instituted under any other statute. The Supreme Court held as follows:- 8. The object underlying Section 10 is to prevent Courts of concurrent jurisdiction from simultaneously trying two parallel suits in respect of the -same matter in issue. The object underlying Section 10 is to avoid two parallel trials on the same issue by two Courts and to avoid recording of conflicting findings on issues which are directly and substantially in issue in previously instituted suit. The language of Section 10 suggests that it is refer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is under Section 10 of the CPC which does not empower the Tribunal to stay its proceedings as Section 10 is not to apply to Tribunals. Therefore the first question that arises for consideration is the competence of the CLB to stay its proceedings. It has been held in the order dated 17th April, 2009 that the proceedings before the CLB is maintainable though the same has been stayed till the disposal of the Title Suit filed before the Alipore Court. By virtue of Section 10 of the CPC trial of a suit can be stayed but as the requisites of Section 10 has not been satisfied therefore the proceedings before the CLB could not have been stayed and the reason for staying the proceedings is based on an incorrect conclusion. The identity must be complete as also the subject matter and the parties. In the Title Suit, there are 150 defendants, therefore for lack of identity of subject matter or parties as held in AIR 1985 Cal. 154 there has been illegal exercise of powers as the CLB has indefinitely stayed the proceedings filed before it. A question of law has arisen and therefore this appeal under Section 10Fof the 1956 Act is maintainable. When the conditions of Section 10 is not fulfilled, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to avoid conflicting judgments the CLB could exercise this power under its inherent powers under Regulation 44. 14. Regulation 44 of the Companies Law Board Regulations reads as follows:- 44. 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. 15. The above has been followed by the Company Law Board in Dr.Mrs. Mrunalini Devi Puar and Anr. vs. Gaekwad Investment Corporation Pvt. Ltd. Ors., MANU/CL/0008/1995. The CLB their held that it is well settled law that judicial authorities should avoid situations which may ultimately lead to conflicting decision and the provisions of Regulation 44 of the Company Law Board Regulations would empower a tribunal to pass orders akin to Section 10 CPC. 16. Learned counsel appearing for the appellant has strenuously relied upon the judgment of the Andhra Pradesh High Court in RDF Power Projects Ltd. Ors. vs. M.M.Muralikrishna Ors. (supra). The facts of the case were different. In that case the court was dealing with a ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same. The power of looking into the aspects of oppression and mismanagement having been exclusively vested in the Company Law Board, it cannot be said that the matter in issue before the Company Law Board is also directly and substantially in issue in the previously instituted suit before the Civil Court, warranting stay of the proceedings before the Company Law Board until the proceedings in the suit are concluded. In this context, it would suffice, if a reference is made to the judgment of the Calcutta High Court in Piyush Kanti Guha v. West Bengal Pharmaceutical and Phytochemical Development Corporation Ltd. (supra), wherein in somewhat similar facts situation, it was held thus: Where the main relief sought for in the company petition was on the ground of oppression and framing of a scheme and appointment of directors which was distinctly different from the relief asked for in the civil suit restraining some directors nominated by the Government from functioning, it was held that stay of the proceedings in the company petition could not be granted under Section 10. 17. A perusal of the petition filed here shows that the case of the appellant is that a draft MOU da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion or in any other manner creating any third party rights, title or interest in the properties bearing Plot nos. F-29 F--30 (measuring approx. 257 Sq. Yarsd), Plot no. F-117-A (measuring approx. 100 Sq. Yards), and Plot no. 5 5A (measuring approx. 150 Sq. Yards), total area measuring 507 Sq. Yards out of Khasra No.10/1, Village Asalatpur, Delhi state, Delhi, Colony known as F-Block, Jiwan Park, UttamNagar, New Delhi; (C) pass a decree of PERMANENT INJUNCTION in favour of the Plaintiff an against the Defendant no.2 thereby restraining the Defendant no.2, his agents, servants, employees, etc. from parting with possession or in any other manner creating any third party rights, title or interest in offices bearing No. 278, 279 280, on second floor and the entire third floor (with roof rights) in Vardhman Market Plaza, Plot No. 30, Community Centre, Rani Bagh, Road NO. 44, Pitam Pura, Delhi; (D) pass a decree of PERMANENT INJUNCTION in favour of the Plaintiff and against the Defendant no. 4 thereby restraining the Defendant no.4, his agents, officers, servants, employees, etc. from registering the Sale deed dated 08.11.2011 executed by the Plaintiff in favour of the De ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en illegally withdrawn by the Defendant nos.2 and 3; (I) pass a decree of PERMANENT INJUNCTION in favour of the Plaintiff and against the Defendant no.2 thereby restraining the said Defendant from representing and declaring himself to be the proprietor of M/s Blue Star Travels (India) or to be in any way connected with the said firm; (J) pass any such order or further as may be deemed fit and proper in facts and circumstances of the present case. 19. This court in the aforementioned suit has directed respondent No. 2 to maintain status quo regarding the title and possession in respect of the Pitampura Property. The above order was also confirmed in view of the undertaking given by respondent No. 2 not to change the title or possession of the aforesaid property without prior permission of the court on 16.01.2013. 20. A perusal of the impugned order would show that the learned Tribunal noted that litigation started between the parties only when the terms of the MOU were not carried out as agreed upon between them. Most of the allegations made in the petition are on the ground of forgery. The learned Tribunal also noted that that the appellant had filed a suit before ..... X X X X Extracts X X X X X X X X Extracts X X X X
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