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TMI Blog2016 (12) TMI 1914X X X X Extracts X X X X X X X X Extracts X X X X ..... Appellants and the Respondent no. 3 under Section 397-398 of the Companies Act, 1956, alleging acts of oppression and mismanagement. In the course of the said proceedings before the Company Law Board at Mumbai and the Company Law Board at Delhi,, various interim orders came to be passed including an Order dated 15.09.2015 which was passed upon an Agreement/Consensus between the parties, by which the present Respondent nos. 1 and 2 were to buy out the Appellant nos. 1 to 5 for a consideration of Rs. 19 Crores. In the course of the proceedings in the said CP no. 18 of 2015, various interlocutory Company applications were filed including a Company Application no. 122 of 2015 and 133 of 2015. The Respondent nos. 1 and 2/original Petitioners had also filed a Company Application no. 53 of 2015 seeking to amend Company Petition no. 18/2015, nos. 122 of 2015 and 133 of 2015. The said interlocutory Company Applications were heard by the Company Law Board, New Delhi and by Order dated 16.03.2016, the said Company Applications were kept for Orders. It is further contended by the Appellants that shockingly when the impugned Judgment came to be pronounced on 25.04.2016, the Company Law Board, N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er dated 12.03.2015, the Appellant no. 6 was directed to hold the Extraordinary General Body Meeting on the schedule time, date and place but, however, the Resolution passed, if any, were not to be implemented until the next date of hearing. It is further contended that the Appellant no. 1 was required to file a short reply within a week in respect of the interim relief to which rejoinder, if any, was allowed to be filed. The Company Petition was listed on 27.03.2015 for hearing in respect of the interim reliefs. Various Resolutions came to be passed at the Extraordinary General Body Meeting on 13.03.2015 and the Resolution for raising the capital through Right Issue of shares was also passed. Accordingly, the Appellant nos. 1 to 5 filed an interim Affidavit in reply on 20.03.2015 and the rejoinder was filed on 24.03.2015 by the Respondent nos. 1 and 2. The Company Law Board at Mumbai passed an interim Order on 10.04.2015 by which the Resolution passed on 13.03.2015 were stayed and resultantly, the Appellant no. 6 was restrained from giving effect to the letter of offer of Right Issues. Thereafter, the Appellant nos. 1 to 5 filed before the Company Law Board at Mumbai on 13.04.2015 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aw Board, Mumbai, Company Application no. 122/2015 for a prayer that an Order or direction permitting the Appellant no. 6 to give effect to the said Resolutions of the shareholders of Extraordinary General Meeting Body dated 30.06.2015. The Respondent nos. 1 and 2 filed an affidavit in reply to such application on 03.08.2015 and inspection was permitted by an Order dated 04.08.2015 for inspection to the Respondent nos. 1 and 2 and a suggestion was given to the parties to amicably settle the dispute. An affidavit in rejoinder was filed by the present Appellants and ultimately, the present Respondent nos. 1 and 2 filed Company Application no. 133 of 2015 for setting aside the Resolutions passed in the Extraordinary General Meeting dated 30.06.2015 and for staying the same by way of interim Order. The Company Law Board of New Delhi passed an Order recording the Resolution passed an Order recording that the settlement arrived at between the parties. The Original Petitioners-Respondent nos. 1 and 2 herein, filed Company Application no. 162 of 2015 seeking extension of time for making the payment in terms of the settlement. The Respondent nos. 1 and 2 thereafter filed written arguments i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther pointed out that the Company Law Board has held that the acts and the conduct of Shalby Group is oppressive against the interests of Dr. Naik Group. It is further pointed out that by the impugned Judgment, Dr. Naik Group has been ordered to exit from the Company and consequential orders, have been made at Para 117 of the impugned Judgment. It is further pointed out that both the parties accept that they could not work together and, as such, according to the Respondents, there is no reason to interfere in the impugned Judgment. It is further pointed out that Central Government Order dated 29.06.2015 empowers the Delhi Company Law Board to decide all urgent and mentioning matters and, therefore, the main Company Petition was mentioned before the Company Law Board. It is also brought to my notice subsequent Order dated 23.09.2015 whereby the Company Law Board Delhi was empowered to entertain and dispose of all urgent and mentioning matters falling in the State of Goa mentioned before it. It is further pointed out that in view of the urgency in deciding the main Company Petition, the Mumbai Company Law Board by Order dated 10.04.2015 and 24.04.2015, had fixed the main Company Peti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hi in view of the absence of a Member at Mumbai and, as such, not giving a notice to the concerned parties that the matter was being examined finally, would not at all be justified. Learned Senior Advocate has thereafter taken me through the impugned Judgment to point out that the findings therein are in any way perverse in breach of the principles of natural justice, without properly looking into the evidence on record especially the evidence produced by the Appellants and, as such, the impugned Judgment passed by the Company Law Board deserves to be quashed and set aside. 7. On the other hand, Shri S. G. Desai, learned Senior Advocate appearing for the Respondent nos. 1 and 2, has pointed out that though the Company Applications filed one by the Appellants and the other by the Respondent nos. 1 and 2 were heard, the learned Company Law Board was justified to pass the impugned Judgment looking into the rival contentions in the main Company Petition filed by the Respondent nos. 1 and 2. Learned Senior Advocate further submits that as the Company Law Board found that disposing of the main Company Application would be justified in the circumstances of the case and as the Appellants ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Advocate has also relied upon the Judgments reported in (2004) 4 Company Law Journal 519 in the case of B. V. Thirumalai & Ors. vs. Best Vestures Trading (P) Ltd., 2002 Company Cases Page 800 in the case of Ashok Kumar Oswal & anr. vs. Panchsheel Textile Manufacturing and Trading Co. (P) LTD. & Ors. of the Company Law Board, 2007) 3 Company Law Journal 499 (CLB) in the case of S. Varadarajan & anr. vs. Udhayem Leasings and Investments (P) Ltd. & Ors., (2010) 158 Company Cases 195 (CLB) in the case of Mrs. Gurpreet Gill vs. Pumpkin Studio P. Ltd. & Ors. and (1958) 3 ALL E. R. 66 in the case of Scottish Co-operative Wholesale Society Ltd. Meyer & anr. 8. I have carefully considered the rival contentions of both the learned Senior Advocates appearing for the their respective parties. The main question of law raised in the present Appeal is whether the matter fixed before the Delhi Bench was heard only on the two Company Application nos. 122 and 133 of 2015 and the disposal of the main Company Petition was in breach of the principles of natural justice. The records clearly reveal that the Company Petition filed by the Respondent nos. 1 and 2 was before the Bench at Mumbai, In fact, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sues and the reliefs in CA 122/2015 and CA 133/2015 are same as the issues and reliefs sought in the main petition ? Point no. 2: When the applications moved against each other not only being replete of the averments and issues of main petition and comprehensively asserted and denied with material papers on both sides and thread bare argued all the points, and when the petition becomes infructious once these applications are decided, would it be possible to dispose the main petition along with these applications? 11. At Para 67 of the said Judgment, it is clearly recorded that since the pleadings in Company Application nos. 122 of 2015 and 133 of 2015 are complete, the Bench heard the Applications which are replete of the averments and the contentions in the main Petition and the replies filed by the Appellant no. 1. The impugned Judgment further records that the Courts are not obliged to put on hold passing effective remedy just for want of hearing the main case. It is also recorded to that when the relief in Company Applications make the main Petition infructuous, such Company Petition could be disposed of along with the application and, as such, proceeded to dispose of the ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsiderations in aid of the final relief prayed in the main Petition. When the Respondent nos. 1 and 2 themselves have taken such stand, it was not appropriate on the part of the Respondent nos. 1 and 2 to now rescile from such stand to contend that the learned Company Law Board was justified to pass the impugned Judgment disposing of the Company Petition. 14. Though Mr. S. G. Desai, learned Senior Advocate appearing for the Respondent nos. 1 and 2, had attempted to impress upon this Court the correctness of the reasoning of the Company Law Board which cannot be said to be erroneous but, however, as the Appellants were admittedly not put to notice that the main Company Petition itself was being disposed off, such finding laboriously rendered by the Company Law Board stands vitiated on account of the breach of the principles of natural justice as there was no effective hearing on the main Company Petition. 15. In such circumstances, without going into the merits of the rival contentions raised by the Appellants and the Respondents in the main Petition, I find it appropriate and in the interest of justice to quash and set aside the impugned Judgment passed by the Company Law Board ..... X X X X Extracts X X X X X X X X Extracts X X X X
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