9911796707
TMI Blog2000 (12) TMI 839X X X X Extracts X X X X X X X X Extracts X X X X ..... dertaking. The dispute raised by the respondents with the appellants was imaginary and even prima facie not real. We are further of the opinion that the Board in its order had dealt with all aspects of the matter and rightly concluded that ONGC’s case (1994 (1) TMI 88 - SUPREME COURT OF INDIA) judgment was not applicable in the facts and circumstances of the present case. - CIVIL APPEAL NOS. 7103 AND 7104 OF 2000 - - - Dated:- 5-12-2000 - K.T. THOMAS AND R.P. SETHI, JJ. R.N. Trivedi, Gopal Subramaniam and Dr. A.M. Singhvi, N. Menon, Jay Salva, Ms. Sunita Dutt, Rakesh K. Sharma, Ciccu Mukhopadhaya, Manish Kumar, V. Krishnamurty, Pramod Dayal for the Appearing parties . JUDGMENT Sethi, J. - Leave granted. 2. As the question of law in both the appeals is common and the facts similar, the appeals are being disposed of by this common judgment. 3. The appellants are aggrieved of the impugned judgment passed by the High Court in company appeals by which the orders passed by the Company Law Board have been set aside and disputes allegedly existing between the parties referred to the High-Powered Committee in terms of the judgment of this Court in ONGC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of FV ₹ 50 lakh with the corporation with a request to register the same in the name of Canara Bank, trustee CBMF. Again on 11-2-1993 CBMF lodged the bonds of FV ₹ 113 lakh with the respondent-corporation for registration in the name of Canara Bank, trustee CBMF after removing the objections. The corporation wanted the CBMF to produce no-objection certificate from the official liquidator of the Bank of Karad for the purpose of registering the transfer of the bonds for which letter dated 17-5-1993 of the Bank of Karad was furnished with all documentary proof of the purchase of bonds of FV of ₹ 2.17 crore from the Bank of Karad on 5-8-1988. Request was made to the liquidator, appointed in the winding up proceedings against the said bank, to confirm to respondent-corporation that the CBMF s purchase was bona fide and the transaction had taken place much prior to the relevant period prescribed under section 531 of the Act. On 17-5-1993 a letter was sent to the respondent-corporation setting out the particulars of the purchase of the bonds and re-stating that the relevant document had already been submitted in proof of the bona fide title to the bonds. The reques ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 10,00,000 10.00 0006647 0006651 5 1,00,000 5.00 0006684 0006541 58 1,00,000 58.00 Total value of certificates endorsed by Box Ltd. 217.00 ( b )Respondent No. 1 be ordered and directed to rectify the register of bond holders and delete the name of Bank of Karad or any other holder appearing in such register and instead insert the name of Canara Bank : Trustee Canbank Mutual Fund. ( c )Respondent No. 1 be ordered and directed to pay to Canara Bank : Trustee Canbank Mutual Fund the redemption amount in respect of the said bonds along with other interest at 24 per cent from the date of maturity till the payment. 6. The petition was resisted by the respondents on various preliminary objections raised in the reply filed before the CLB. On merits it was stated : It is respectfully submitted that the company ought not to have returned to the bond certificates which were lodged for registration. The company was indulging in dilatory tacti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ress, implied or constructive. This statutory prohibition was the reason for the Company Law Board (Western Bench) in not granting a similar prayer of the petitioners in Bharat Petroleum Ltd. v. Stock Holding Corpn. Ltd. [pp. 99-100] 9. Rejecting the alleged dispute raised by the corporation, the CLB held : NTPC has no right to adjust the proceeds of redemption against dues if any from Canara Bank as this would result in a breach of trust to which the trustees would be forced to. It should also be remembered that these bonds are secured bonds and there is a trustee for these bonds. Applying the equitable principle the holder of the bond is also entitled to enforce the security and those trustee would be bound to realise the security. Hence, from whatever angle one looks at the case, the proceeds has to be given to the mutual fund. . . . [p. 101] 10. The Board also found that the dictum of this Court in ONGC s case ( supra ) was not applicable to the facts of the present case. 11. In ONGC s case ( supra ) the Cabinet Secretary was shown to have taken appropriate initiative as per direction of the court dated 11-9-1991 and reported to the court that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Registry beginning from 1st January, 1992. 13. What the court has directed in ONGC s case ( supra ) is that frivolous litigation between the Government departments and public sector undertakings of the Union of India should not be dragged in the courts and be amicably resolved by the committee. The judgment is intended to prevent avoidable litigation between the Government departments and the undertakings of the Union of India. In the present litigation there does not appear to be a genuine dispute between the Government of India undertakings. In this case one of the public sector undertakings is shown to be acting not as an undertaking but as trustee of a trust. The Board was, therefore, justified in holding that the real litigation in this case, therefore, is between Mutual Fund and NTPC and not between the two undertakings. The meaning of word dispute is a controversy having both positive and negative aspects. It postulates the assertion of a claim by one party and its denial by the other . In the instant case the claim preferred on behalf of the CBMF was not denied by the Corporation but in turn a counter claim with respect to the liability of a subsidiary of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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