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Challenge to intended action under section 237 of the Companies Act, 1956 by the Company Law Board. Analysis: The petitioners, including Indian Express Newspapers (Bombay) (Pvt.) Ltd., filed a petition challenging the intended action under section 237 of the Companies Act, 1956 by the Company Law Board. The impugned notice, dated 13-11-1987, raised concerns about the conduct of affairs of certain companies, suggesting intent to defraud creditors, members, or other persons. The matter was admitted before a learned Single Judge on 1-3-1988, who granted an interim order to stay the operation of the order and prevent the investigation from proceeding. However, no proceedings commenced under the impugned notice, and over 12 years had passed without any concrete instances of misconduct coming to light. During this period, there was no evidence presented by the respondent-Board to support the apprehensions raised in the impugned notice. All requirements of the Companies Act were being fulfilled, accounts were submitted, and general meetings were held. The absence of any adverse effects or complaints from shareholders or creditors indicated that the apprehensions mentioned in the notice had not materialized. The Court noted that the alleged mala fide intentions were not being considered and focused on the lack of evidence supporting the initial apprehensions. Referring to section 237 of the Companies Act, the Court highlighted the requirement that the business of a company should be conducted with intent to defraud for action to be taken under this provision. The apprehensions mentioned in the impugned notice were based on reports and materials available to the Company Law Board at the time, but since no adverse developments had occurred over the years, the Court concluded that there was no basis to proceed further with the notice. Consequently, the Court set aside the impugned action without delving into the question of mala fide or bona fide, ultimately ruling in favor of the petitioners.
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