2016 (11) TMI 79 - HC - Companies Law

Recall of order - withdraw the application seeking amendment of the company petition and to agitate the matter before the Company Law Board - Held that - In view of death of some of the respondents in the Company Petition applications have been filed to bring the legal representatives of the deceased respondents. Hence there is some delay is disposing of the said applications. In the meantime some of the share holders approached the Company Law Board alleging oppression and mismanagement. Since the issue is pending before the Company Law Board the respondents have thought it fit to withdraw the application seeking amendment of the company petition and to agitate the matter before the Company Law Board. Accordingly they filed a memo seeking permission of this Court to withdraw the Company Application reserving liberty to them to raise such issue before the Company Law Board. None of the parties objected for the same. Accordingly the order has been passed. Even without liberty also the respondents can agitate the matter before the Company Law Board with necessary application with regard to oppression and mismanagement. If any such application is filed the same has to be considered by the Company Law Board and to take steps in accordance with law. No blanket permission has been granted to agitate the issue before the Company Law Board. The application has to be considered on its own merits. If there is delay in filing the application it is for the Company Law Board to deal with the same. Hence there is no infirmity or irregularity in permitting the respondents to withdraw the amendment application to agitate the issue before the Company Law Board. The order dated 27-3-2013 will not affect the interest of the applicant herein. It is the discretionary of a person either to prosecute the matter or withdraw the same. Hence the question of recalling the order dated 27-03-2013 permitting the respondents to withdraw the amendment application does not arise. No ground is made out to recall the order dated 27-03-2013. Accordingly the C.A. is rejected.

Summary

Issues:
- Application seeking to recall an order dated 27-03-2013 in Company Application No.919/2008.
- Reserving liberty to raise issues before the Company Law Board.
- Interpretation of Order 23 of the Code of Civil Procedure.
- Maintainability of the application under Rules 6 and 9 of the Company Court Rules.

Analysis:

1. The application before the court sought to recall an order dated 27-03-2013 made in Company Application No.919/2008. The respondents had filed a Company Petition under Sections 397 and 398 of the Companies Act, 1956, seeking to supersede the Board of Directors and regulate the company's affairs. The respondents later filed an application to amend the petition, which was pending for a long period. Some shareholders approached the Company Law Board for oppression and mismanagement, prompting the respondents to withdraw the application to pursue the matter before the Board. The applicant contended that reserving liberty for the respondents to raise the issue before the Board was contrary to law.

2. The interpretation of Order 23 of the Code of Civil Procedure was crucial in this case. The applicant argued that the respondents' memo seeking withdrawal of the amendment application to agitate the matter before the Company Law Board was impermissible under Order 23 Rule 3 of the CPC. The respondents, on the other hand, maintained that the order was not prejudicial to the applicant's interests, and if aggrieved, the applicant should prefer an appeal. The court had to determine the legality and implications of reserving liberty for the respondents to pursue the matter before the Company Law Board.

3. The court considered the arguments presented by both parties and examined the relevant records. It was noted that the respondents had filed an application to amend the company petition due to subsequent events, including the passing of adverse resolutions at the Annual General Body Meeting. The respondents sought to withdraw the amendment application to address the matter before the Company Law Board. The court emphasized that no blanket permission was granted for the respondents to pursue the issue before the Board, and any application would be considered on its merits. The court found no irregularity in permitting the withdrawal of the application and concluded that the order dated 27-03-2013 would not harm the applicant's interests.

4. The court ultimately rejected the application seeking to recall the order dated 27-03-2013, as it found no grounds to do so. The decision highlighted the discretionary nature of pursuing legal matters and the role of the Company Law Board in addressing any delays or issues related to the application. The court emphasized that the respondents could proceed before the Board with the necessary applications regarding oppression and mismanagement, without any blanket permission granted to them.