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2016 (4) TMI 91 - Board - Companies LawDemurrer application - Held that - As the issue of maintainability involves the mixed question of law and facts. Therefore, in the interest of justice, the prayers made in the instant Company Application are partly allowed to the extent that the demurrer application be heard and decided first and for this purpose, the Respondents Advocate is hereby directed to file the reply to the Company Petition within 3 weeks and rejoinder, if any, be filed by the Petitioners Advocate within 2 weeks from the date of receipt of the reply so as to consider the demurrer application first based on the applicable provisions of the Companies Act, 1956/2013 and the facts contained in the Company Petition, reply to the Company Petition and rejoinder thereto.
Issues:
1. Jurisdiction of the Company Law Board to entertain the petitioners who do not qualify under Section 399 of the Companies Act, 1956. 2. Maintainability of the Company Petition under Sections 397, 398, 399, 402, 403 & 406 of the Companies Act, 1956 and Sections 58 & 59 of the Companies Act, 2013. 3. Compliance with orders for filing replies and rejoinders in the Company Petition. Jurisdiction Issue Analysis: The Respondents/Applicants challenged the jurisdiction of the Company Law Board to entertain the Petitioners who do not qualify under Section 399 of the Companies Act, 1956. They argued that the Board should decide the issue of maintainability first before delving into the merits of the matter. The Respondents/Applicants contended that the direction for filing a reply in the main Company Petition was unnecessary and irrelevant as they had filed an application for dismissal challenging the jurisdiction. They relied on legal precedents to support their position that the Board should not direct the filing of pleadings in a Company Petition when considering a demurrer application or an application for dismissal. Maintainability Issue Analysis: The Company Petition filed by the Petitioners alleged acts of oppression and mismanagement in the affairs of the Respondent Company under various sections of the Companies Act, 1956 and 2013. The Respondents/Applicants moved a Company Application challenging the maintainability of the main Company Petition based on the Petitioners' lack of shareholding and jurisdictional requirements. The Board emphasized the importance of determining the maintainability of the Petition first before delving into the merits of the case. The Respondents were directed to file a reply to the Company Petition within a specified time frame to facilitate the consideration of the demurrer application. Compliance Issue Analysis: The Petitioners' Advocate argued that the Respondents were attempting to delay the proceedings by challenging the need to file a reply to the Company Petition. They contended that the Respondents had previously requested an extension to file the reply, making it inappropriate to now contest the filing requirement. The Board highlighted the necessity of complying with its orders for filing replies and rejoinders in a timely manner to ensure a fair consideration of the demurrer application. The Respondents were directed to adhere to the specified timelines for filing their reply and for the Petitioners to file a rejoinder accordingly. In conclusion, the Board partially allowed the prayers made in the Company Application, directing the Respondents to file a reply to the Company Petition within a specified timeframe to address the jurisdiction and maintainability issues raised. The compliance with filing requirements was emphasized to ensure a fair consideration of the demurrer application.
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