2003 (3) TMI 534 - HC - Companies Law

Summary

Issues:
1. Dismissal of petition by Company Law Board on grounds of laches and forum shopping.
2. Interpretation of the concept of forum shopping/jurisdiction shopping.
3. Company Law Board's findings on similarity of allegations in petitions before High Court and Company Law Board.
4. Company Law Board's finding on limitation despite inapplicability of Limitation Act.
5. Setting aside Company Law Board's order and directing disposal of the petition.

Analysis:
1. The dispute arose from a petition filed under sections 397 and 398 of the Companies Act in 1990, transferred to the Company Law Board in 1996 due to a jurisdictional change. The Board dismissed the petition in 1998 citing laches of seven years and forum shopping by the appellant.

2. The appellant argued that the refiling of the petition before the Company Law Board was not forum shopping, as it was done with the court's permission and did not challenge the High Court's order. The court found the Board's characterization of forum shopping erroneous.

3. The Company Law Board found similarities in the allegations of the petitions before the High Court and the Board, concluding that the appellant was not vigilant in protecting shareholder interests. The court criticized this finding as irrational and a misinterpretation of the court's permission to withdraw and refile the petition.

4. Despite acknowledging that the Limitation Act did not apply, the Board still raised the issue of limitation in its decision. The court deemed this finding on limitation unjustified, given the circumstances of the case.

5. The court set aside the Company Law Board's order, stating that the finding of laches due to a seven-year delay was not sustainable. The court directed the Board to dispose of the petition by a specified date, emphasizing the need for timely resolution due to the prolonged pendency of the matter since 1990.