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2007 (11) TMI 409 - HC - Companies Law
Issues involved: Appeals u/s 10F of Companies Act, 1956 against interlocutory orders dated 24-8-2007 and 13-9-2007 in Co. Pet. 39/2007.
Summary: Issue 1: Jurisdiction of passing interim order without relief sought in main petition The respondents filed a company petition before the Board under sections 397 and 398 of the Co. Act, raising concerns about oppression and mismanagement. Interlocutory orders dated 24-8-2007 and 13-9-2007 were passed by the Board, restraining certain actions related to bank accounts. The appellants challenged these orders on the grounds of jurisdiction and the authority to pass interim orders without relief being sought in the main petition. The High Court observed that the interlocutory orders were related to the management and better functioning of the company's affairs. The Court found that the Board had not exceeded its jurisdiction in passing these orders, as they were within the scope of addressing the issues of oppression and mismanagement. The Court held that the questions raised did not amount to questions of law under section 10F of the Co. Act, and thus, the appeals were dismissed. Issue 2: Authority to sign on behalf of the Company after removal from Directorship The second question raised by the appellants was whether a person who had been removed from the directorship of a company could be allowed to sign on behalf of the company. The Board had directed that parties could operate bank accounts other than the specified one with joint signatures until the disposal of the petition. The High Court noted that the company petition was primarily about oppression and mismanagement, and the interim orders were aimed at ensuring the smooth functioning of the company's affairs. The Court found that the Board's exercise of discretion in issuing these orders was not perverse and did not warrant intervention. The Court concluded that the issues raised did not qualify as questions of law arising from the interlocutory orders, and therefore, the appeals were dismissed. In conclusion, the High Court upheld the interlocutory orders passed by the Board and dismissed the appeals, stating that no costs were to be awarded.
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