2015 (7) TMI 128 - Board - Companies Law

Substitution of Land security with Personal guarantee - Security given as an interim arrangement only till final implementation of court order - Review power of CLB - Held that - The finding of this Bench that the land in Mantankurichi Village ad- measuring 20.18 acres shall stand as security for discharge of the amount due to the 2nd respondent is upheld by the Hon ble High Court of Karnataka. Without going into the merits of the implementation of the order of this Bench dated 11.01.2012, I am of the view that the filing of this application and seeking permission of this Bench to substitute the land with a personal guarantee is nothing but seeking to review the order of this Bench dated 11.01.2012. This Bench has no power to review of its order. - Found futile exercise & dismissed.

Summary

Issues:
1. Application to substitute land with personal guarantee as security.
2. Maintainability of the application and res judicata.

Analysis:
1. The main issue in this case is the application filed by the petitioners seeking permission to substitute the land at Mantankurichi Village with a personal guarantee as security. The original order dated 11.01.2012 directed the petitioners to offer their land as security until the amount due to the 2nd respondent is discharged. The Hon'ble High Court of Karnataka upheld this decision as an interim arrangement until the amount payable is settled. The respondents have been creating obstacles to hinder the implementation of the order. The petitioners argue that the security should be released once the order is fully implemented. The 2nd respondent, on the other hand, contends that the application is not maintainable, as the Board does not have the power to review its own order. The respondents claim that the issues raised have already been adjudicated by the High Court and are thus barred by res judicata.

2. The second issue revolves around the maintainability of the application and the doctrine of res judicata. The 2nd respondent argues that the present application seeks to challenge the same issues that were already decided by the High Court in a previous order. The High Court's decision affirmed the Board's order regarding the creation of security over the land. The respondents claim that the petitioners cannot re-agitate the issue as it has already been adjudicated and has attained finality. They argue that allowing the substitution of the security with a personal guarantee would prejudice their interests. The Board, after hearing both parties, dismissed the application, stating that it was an attempt to review the original order, which the Board does not have the power to do. The application was deemed meritless and futile, leading to its dismissal without costs on 18th February 2015.