2013 (8) TMI 1052 - HC - Indian Laws

Summary

Issues involved:
The judgment involves the consideration of whether the Company Law Board could grant an interim order without deciding the application under Section 8 of the Arbitration Act. Additionally, the maintainability of the appeal without the company filing it is also a key issue.

Details of the Judgment:

*Issue 1: Granting of Interim Order without Deciding Section 8 Application*
The Company Law Board granted an interim order without deciding the application under Section 8 of the Arbitration Act. The appellants argued that the conditions of Section 8 were fully satisfied, mandating a referral to arbitration. However, the respondents contended that the interim order was necessary to protect the petitioners while the Section 8 application was being processed. The High Court, citing Supreme Court decisions, held that once an application under Section 8 is filed, the Board must determine if the conditions are met and refer the parties to arbitration if so.

*Issue 2: Maintainability of the Appeal*
The respondents raised objections to the maintainability of the appeal since the company did not file it. However, the High Court found that the appellants had locus standi to challenge the Board's order. The Court noted that the decision relied upon by the respondents did not apply to the facts of this case. The Court left it to the Company Law Board to decide on objections after examining the applicability of Section 8 of the Arbitration Act.

In conclusion, the High Court set aside the order passed by the Company Law Board and remanded the matter back to the Board with directions to decide the Section 8 application and the prayer for interim relief together. The Board was instructed to record reasons for its decisions regarding Section 8 and interim relief. The Court preponed the hearing date for the application under Section 8 and interim relief before the Company Law Board. The original jurisdiction appeal was allowed with the specified directions and observations, with no order as to costs. Additionally, a related civil application was disposed of accordingly.