2001 (8) TMI 1441 - Board - Companies Law

Summary

Issues:
1. Review of final order based on discovery of a fabricated document.
2. Power of the Company Law Board to review its own order.
3. Allegations related to sale of shares, appointment of directors, and management affairs.

Issue 1: Review of Final Order
The petitioner sought a review of the final order based on the discovery of a fabricated document, a postal receipt, used by the respondents in the case. The petitioner alleged that the receipt for the registered post, supposedly sent for a Board meeting, was forged. The petitioner obtained a certificate from the post office stating that the registered letter was not booked as claimed by the respondents. The petitioner argued that the order passed by the Bench was influenced by this fabricated document and requested a recall of the order based on the Supreme Court's precedent allowing the recall of orders obtained through fraud or misrepresentation.

Issue 2: Power of the Company Law Board to Review its Own Order
The respondent contended that the Company Law Board did not have the statutory power to review its own order, citing previous cases. However, the Board acknowledged that it had not previously examined the issue of reviewing an order based on fraud or fabricated documents. Referring to a Supreme Court decision, the Board recognized that it could review its order if it was influenced by forged documents. The Board clarified that in this case, the findings and relief granted in the order were not based on the allegedly fabricated postal receipt, thus dismissing the application for a review.

Issue 3: Allegations Related to Sale of Shares, Appointment of Directors, and Management Affairs
The allegations made by the petitioner included the sale of shares in contravention of a Memorandum of Understanding (MOU), appointment of new directors without notice, issuance of further shares to new shareholders, and being sidelined from the company's management. The Board had previously ruled that the sale of shares by the petitioner's sisters did not constitute oppression. Regarding the appointment of additional directors and issuance of shares, the Board directed that the petitioner should be offered proportionate shares. The Board also ruled that the petitioner should continue as a director as long as her shareholding remained at 14.7%. The Board's decision was not influenced by the allegedly fabricated postal receipt, as none of the key findings were based on it.

In conclusion, the Company Law Board dismissed the application for a review of the final order, stating that the findings and relief granted were not influenced by the fabricated document. The Board clarified its power to review orders based on fraud or misrepresentation, emphasizing that in this case, the main allegations and decisions were not reliant on the disputed document.