2011 (7) TMI 1319 - HC - Companies Law

Summary

Issues involved: Interpretation of administrative order by the Chairman of the Company Law Board regarding the constitution of the Principal Bench and transfer of matters, Grievance regarding the composition of the Principal Bench, Exercise of administrative power by the Chairman, Authority of the Chairman in assigning matters to different benches, Dismissal of appeal and imposition of costs.

Interpretation of Administrative Order:
The appeal challenged an administrative order by the Chairman of the Company Law Board directing the matter to be heard by the Principal Bench. The appellant contended that the Principal Bench must consist of the Chairman and not just a member. The order dated April 26, 2010, directed the matter to be heard before the Company Law Board, Principal Bench, New Delhi. The Chairman's power to transfer matters to the Principal Bench was highlighted. The Chairman's decision was based on administrative powers and the notification dated March 17, 2008, allowing him to transfer pending matters. The court found that the Chairman's decision was within his authority, and no interference was warranted based on the arguments presented.

Grievance Regarding Composition of Principal Bench:
The appellant had previously raised a similar issue in another appeal but withdrew it to approach the Chairman of the Company Law Board. An application was then made to the Chairman to determine whether the matter should be heard by the Principal Bench in New Delhi or another bench with a different composition of members. The court emphasized that the constitution of the Bench and assignment of business fell under the Chairman's domain. Litigants cannot choose the bench for their matters, as it is the Chairman's prerogative. The court dismissed the appeal, stating that no interference was necessary based on the Chairman's findings and observations.

Exercise of Administrative Power by the Chairman:
The Chairman's role as the administrative head of all the Benches of the Company Law Board was crucial. The court reiterated that the Chairman had the authority to transfer matters to the Principal Bench as per the notification. Litigants cannot assert a right to choose a specific bench for their cases. The court emphasized that the Chairman's decisions regarding the assignment of matters were final, and unless bias was proven satisfactorily, no grievances could be raised against the Chairman's administrative powers.

Dismissal of Appeal and Imposition of Costs:
The court found the appeal to be misconceived and dismissed it with a cost of Rs. 25,000 to be deposited with the Company Law Board within one month. The Company Law Board was given the authority to appropriate the cost as per the final order in the main Company Petition. A related civil application was also disposed of in light of the main appeal's outcome.