2001 (8) TMI 1293 - HC - Companies Law

Summary

Issues Involved:
1. Appropriate forum for hearing appeals under Section 10F of the Companies Act, 1956.
2. Comparison between Section 10F and Section 483 of the Companies Act, 1956.
3. Classification of the Company Law Board (CLB) as a Tribunal or a Court.
4. Jurisdiction and procedural rules for appeals under Section 10F.

Detailed Analysis:

1. Appropriate Forum for Hearing Appeals under Section 10F:
The primary issue addressed was whether appeals under Section 10F of the Companies Act, 1956, should be heard by a single company judge or a Division Bench of the High Court. Section 10F allows any person aggrieved by a decision or order of the Company Law Board (CLB) to file an appeal to the High Court on any question of law. The court noted that the section itself does not explicitly clarify the forum for such appeals, leading to varied interpretations by different courts.

2. Comparison between Section 10F and Section 483:
Section 483 pertains to appeals from orders or decisions in the matter of winding up a company by the court, which lie to the same court in the same manner and subject to the same conditions as appeals from any order or decision of the court in cases within its ordinary jurisdiction. The court highlighted that the forum for appeals under Section 10F is different from that under Section 483. The appellate forum under Section 483 is the Division Bench, while Section 10F appeals should be heard by the company judge of the High Court. The court emphasized the statutory distinction between these two sections, asserting that equating them would be inconsistent with the legislative scheme.

3. Classification of the Company Law Board (CLB) as a Tribunal or a Court:
The court examined whether the CLB should be considered a court or a tribunal. It concluded that the CLB, though having the trappings of a court, is a quasi-judicial tribunal and not a full-fledged court. This conclusion was supported by various provisions, including Section 10E, which outlines the constitution and powers of the CLB, and the recommendations of the Sachar Committee, which led to the 1988 amendments establishing the CLB as a tribunal.

4. Jurisdiction and Procedural Rules for Appeals under Section 10F:
The court noted the absence of specific rules framed by the High Court for hearing appeals under Section 10F. It reviewed several judgments from different High Courts, which indicated a practice of single judges hearing such appeals. The court also referenced the Supreme Court's decision in Stridewell Leathers (P.) Ltd. v. Bhankerpur Simbhaoli Beverages (P.) Ltd., which accepted that an appeal under Section 10F was entertained by a single judge of the Delhi High Court without objection.

Conclusion:
The court concluded that appeals under Section 10F should be heard by the company judge of the High Court, not the Division Bench. This conclusion aligns with the statutory scheme and the practice observed in various High Courts. The preliminary objection to the maintainability of the appeal before the company judge was overruled, and the appeal was deemed maintainable before the company court. The matter was scheduled for hearing two weeks hence.