2004 (7) TMI 670 - Board - Indian Laws

Summary

Issues:
Clarification sought regarding the order dated November 24, 2003, granting reliefs on account of alleged oppression and mismanagement in a family company.

Analysis:
The applicant filed an application seeking clarification on the order dated November 24, 2003, related to alleged acts of oppression and mismanagement in a family company. The company was found to be a family company with the petitioner as the managing director and the second respondent as the chairman. The removal of the petitioner as the managing director was deemed oppressive, and the applicant was given the option to continue on the board or leave the company. The applicant requested directions for amending the order to reinstate him as the managing director. The respondents, as majority shareholders, argued against the review of the order, stating that the CLB does not have the power to review its own orders. However, the CLB clarified that the petitioner should be given the option to become the managing director, emphasizing that this amendment did not constitute a review of the original order.

The CLB noted that the company was a family company with a history of joint management by the petitioner and the second respondent. The removal of the petitioner as the managing director was considered oppressive and against the principles of partnership. The CLB clarified that the intention of the November 24, 2003 order was to provide the petitioner with the option to become the managing director, rectifying the accidental omission in the original order. This clarification was made under the power of regulation 45 of the Company Law Board Regulations, 1991. The CLB emphasized that this clarification did not amount to a review of the initial order and therefore did not require consideration of previous decisions cited by the respondents. The application was disposed of with these directions.