2011 (4) TMI 1480 - HC - Companies Law

Summary

Issues:
- Appeal against Company Law Board's order to hear CA No.210/11 along with the company petition.
- Interpretation of Section 10E(4C) of the Companies Act, 1956 regarding the powers of the Company Law Board.
- Determination of preliminary issues by the Company Law Board.
- Application of Code of Civil Procedure to proceedings before the Company Law Board.

Analysis:
The appeal in question challenges the Company Law Board's decision to hear CA No.210/11 alongside the company petition. The appellant argues that their application falls under Order 7 Rule 11 of the Code of Civil Procedure and should be heard first. The respondent, however, points to a previous court order directing the Board to conclude the main proceeding by a specific date. The appellant's motive is questioned, suggesting the application was filed to delay proceedings. Reference is made to a judgment from the Andhra Pradesh High Court regarding the powers of the Company Law Board under Section 10E(4C) of the Companies Act.

The judgment highlights the distinction between power and procedure, emphasizing that while certain coercive powers are conferred on the Company Law Board, procedural rules of justice are separate. Section 141 of the Code of Civil Procedure mandates that civil procedure rules apply unless expressly excluded by statute. It is argued that the Company Law Board can determine preliminary issues, contrary to the interpretation presented in the Andhra Pradesh High Court judgment.

The application before the Company Law Board raises specific issues seeking dismissal of the company petition based on finalized decisions and abandonment claims. The Board is instructed to dismiss the company petition if the appellant demonstrates grounds for dismissal, or proceed with the petition if not. The importance of a prompt decision on CA No.210/11 is stressed to adhere to the earlier court order's timeline. The appeal is admitted, and the matter is disposed of accordingly with the parties' consent, waiving any further undertakings.