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TMI Blog2007 (9) TMI 421X X X X Extracts X X X X X X X X Extracts X X X X ..... missed. - A.P.O.T. NO. 566 OF 2006 AND A.C.O. NO. 97 OF 2006 - - - Dated:- 26-9-2007 - SANJIB BANERJEE, J. Tilok Bose, R. Bhattacharjee and D.N. Sharma for the Appellant. S. Chowdhury for the Respondent. JUDGMENT 1. The appellant raises the principal legal question as to whether an application for investigation under section 237 of the Companies Act, 1956, is an alternative to proceedings for oppression and mismanagement or rectification. Such question clearly arises on the reading of the order of dismissal of the appellant s petition under section 237 of the Act by the Company Law Board - Mayank Kocher v. Transport of Handling Equipments Mfg. Co. (P.) Ltd. [2008] 143 Comp. Cas. 601 1 (CLB). 2. The appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant s remedy against the same could not be pursued. It is the Company Law Board s finding to such effect that the petitioner makes the basis for the principal question of law raised under section 10F of the Act in this appeal. 4. The appellant relies on the judgment in Barium Chemicals Ltd. v. CLB [1966] 36 Comp. Cas. 639 (SC) and another judgment rendered by a Single Judge of the Madras High Court at Shankar Sundaram v. Amalgamations Ltd. [2002] 111 Comp. Cas. 252 1 . The appellant relies on the following passage from the judgment of Hidayatullah J., part of the majority view taken in Barium Chemicals Ltd. s case ( supra ) : "An action, not based on circumstances suggesting an inference of the enumerated kind will n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e questioned because the inference is to be drawn subjectively and even if this court would not have drawn a similar inference that fact would be irrelevant. But if the circumstances pointed out are such that no inference of the kind stated in section 237( b ) can at all be drawn the action would be ultra vires the Act and void." (p. 661) 5. The appellant places the following passage from the Madras judgment in support of the contention that the powers under section 237 of the Act; are distinct from the powers available under other provisions of the Act which a petitioner before the Company Law Board can invoke in furtherance of his substantive rights: "I am of the view, merely because specific provisions are made granting a right o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pite upholding the respondents objections, proceeded to consider the petition on merits and found it unworthy upon concluding that the allegations made in the petition had "not been substantiated to enable this Board to be able to form a prima facie opinion to satisfy itself that the circumstances of the case fall under one or the other" of the limbs recognised by section 237. The respondents also rely on Barium Chemicals Ltd. s case ( supra ), and the following passage from the judgment of Shelat J., who also subscribed to the majority view of the Supreme Court taken in that case : "There must, therefore, exist circumstances which in the opinion of the authority suggest what has been set out in sub-clause ( i ), ( ii ) or ( iii ). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act would not mean that the power of investigation under sections 397 and 398 of the Act would have to be read down. The view that was taken by the Madras High Court was that notwithstanding section 237, the Company Law Board had authority to investigate under sections 397 and 398 of the Act. The recognition of such principle cannot further the appellant s case herein. 8. By the impugned order the Company Law Board held that the nature of investigation that the petitioner before it had sought could be more meaningfully conducted in proceedings under section 111 or under sections 397 and 398 of the Act. What the Company Law Board implied was that there would be a logical consequence of such investigation if ordered in the course of secti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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