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Issues Involved:
1. Whether the Company Law Board was right in refusing interim reliefs due to pending civil suit and writ petition. 2. Whether the appellant is entitled to interim relief/injunction. Issue-Wise Detailed Analysis: 1. Whether the Company Law Board was right in refusing interim reliefs due to pending civil suit and writ petition: The appellant, Telecommunication Consultants India Ltd., filed an appeal under Section 10-F of the Companies Act, 1956, challenging the Company Law Board's (CLB) order denying interim relief. The appellant had initiated a petition under Sections 397-398 of the Act against respondents concerning the company TCIL Bellsouth Limited. The CLB refused interim reliefs citing the pendency of a civil suit and a writ petition. The High Court noted that the CLB's refusal was based on the principle of avoiding conflicting decisions, as the civil suit and writ petition were initiated prior to the CLB proceedings. However, the High Court emphasized that the CLB has exclusive jurisdiction over matters of oppression and mismanagement under Sections 397 and 398 of the Act. The civil court and writ court do not have jurisdiction to decide on these issues. The High Court criticized the CLB's "hands-off" approach, stating that the CLB should have considered the interim reliefs on their merits, examining the prima facie case, balance of convenience, and potential irreparable harm. The High Court further clarified that the principle of "judicial comity" and "rule of priority" should not prevent the CLB from exercising its jurisdiction. These principles aim to avoid conflicting judgments but do not strip the CLB of its authority to grant interim reliefs. The High Court cited the Supreme Court's observations in National Institute of Mental Health & Neuro Sciences v. C. Parameshwara and Pukhrai D. Jain & Ors. v. G. Gopalakrishna, emphasizing that Section 10 of the Code of Civil Procedure, 1908, does not bar the CLB from passing interlocutory orders. 2. Whether the appellant is entitled to interim relief/injunction: The High Court examined whether the appellant had made a prima facie case for interim relief. The appellant held 44.9% of the shares in the respondent company, with additional support from respondents holding 15.1% shares, together constituting 60% of the total shareholding. The appellant's right to appoint the CEO was supported by Articles 127 and 128 of the Articles of Association. The High Court noted that the appellant was unjustly sidelined by the respondent No. 2, who obstructed the appellant's nominee from functioning as CEO and unilaterally appointed another individual. The High Court found that the appellant had a strong prima facie case, as the largest shareholder was being reduced to a non-entity by the minority group. The balance of convenience favored the appellant, and irreparable harm would result if the appellant's rights were not protected. The High Court emphasized that companies should function democratically, respecting the majority shareholders' rights. The High Court concluded that the CLB should have granted interim relief to maintain the status quo ante, as it existed before the disputes arose. The High Court directed that the bank accounts of the respondent company be jointly operated by nominees of the appellant and respondent No. 2. The appellant was to nominate two persons for the CEO position, and if respondent No. 2 did not concur, the appellant could appoint one of them as CEO. The CLB was also directed to appoint an independent chairperson for the next Annual General Meeting. The appeal was disposed of with costs assessed at Rs. 10,000, and the High Court clarified that its observations would not bind the CLB when deciding the petition under Sections 397 and 398 on merits.
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