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2013 (10) TMI 239 - HC - Companies LawRegulations for lodging Caveats - Whether a failure by the CLB to provide notice to the petitioners as caveators under Section 148A of the CPC renders those proceedings, and the orders passed therein, a nullity - Held that - with some concern that the petitioner appears to deliberately have implicated not only the CLB but also its Judicial Member and two Bench officers. Even if there was some justification in impleading the CLB, in furtherance of the relief of a direction to frame rules, this Court perceives no such rationale for impleading a Judicial Member and other officials of the CLB - It goes without saying that the petitioners may, in accordance with law, pursue their caveat application, or another application to intervene in the matter, before the CLB itself which is free to pass appropriate orders. Nothing stated in this order would be construed as an expression of the merits as to whether the petitioners had lodged the caveat, as they allege, and whether they had caveatable rights, which can be recognized and whether they can be heard in the matter in which they claim to be interested - Decided against petitioner.
Issues:
1. Failure to provide notice to caveators under Section 148A of the CPC. 2. Whether proceedings and orders of the Company Law Board (CLB) are rendered nullity due to lack of notice. 3. Applicability of CLB regulations in framing rules for caveats. 4. Right of caveators to be heard in proceedings where they are not parties. 5. Jurisdiction of the High Court in matters before the CLB. 6. Impleading of CLB officials in the writ petition. Issue 1: Failure to Provide Notice to Caveators The petition sought directions for the CLB to frame regulations for lodging caveats and for the High Court to regulate filing of caveats under Section 148A of the CPC. The petitioners claimed to have filed a caveat before the CLB but were not served with requisite papers. They argued that orders made without serving caveators were nullities and should be quashed. The main question was whether failure to provide notice rendered proceedings and orders null and void. Issue 2: Applicability of CLB Regulations The CLB Regulations, 1991 empower the Bench officer to decide on routine matters, but there is no specific provision regarding Section 148A of the CPC. The petitioners argued that the CLB should frame regulations in this regard. Regulation 44 allows the Bench to make orders for the ends of justice, but the regulations do not explicitly cover caveats. The Court considered the need for specific regulations for caveats. Issue 3: Right of Caveators to Be Heard The Court analyzed whether caveators, not impleaded as parties, have the right to be heard. Citing precedents, the Court held that lodging a caveat does not automatically entitle caveators to be heard. The Court emphasized that special prejudice must be shown to vitiate proceedings, and mere lack of service is insufficient to nullify orders. Issue 4: Jurisdiction of the High Court The Court highlighted the limited writ jurisdiction and the need for the CLB to determine the caveators' interest in the matter. The petitioners were advised to seek remedies under the Companies Act, 1956. Bypassing statutory remedies for writ jurisdiction was deemed inappropriate. Issue 5: Impleading of CLB Officials The Court expressed concern over the petitioners implicating CLB officials unnecessarily. Impleading officials without justification was criticized, citing Supreme Court decisions. The Court dismissed the petition and advised the petitioners to pursue their application before the CLB. In conclusion, the Court dismissed the petition, emphasizing the need for caveators to pursue their application before the CLB and avoid bypassing statutory remedies. The Court clarified the limited role of the High Court in such matters and discouraged unnecessary impleading of officials in writ petitions.
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