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TMI Blog2014 (2) TMI 762X X X X Extracts X X X X X X X X Extracts X X X X ..... transferred his entire shareholding in the respondent no.1 company in favour of the respondent no.2 and is also stated to have tendered his resignation as a Director of the Company. The appellant is stated to have executed various documents and also signed an MOU thereby divesting all his interest in the respondent no.1 company. Respondent no. 3 is stated to have been co-opted as a Director on the Board of the respondent no. 1 company and the respondents have filed the requisite forms with the Registrar of Companies reflecting the change in the constitution of the Board of Directors. The MOU, resignation and the resolutions of the Board of Directors are disputed by the appellant, who claims that his signatures were obtained by coercion. 4. The appellant filed a company petition (CP No. 88(ND) of 2012), under Sections 397, 398, 401 and 403 of the Act, before the Company Law Board, inter alia, seeking setting aside the alleged decisions taken in the Board Meeting held on 09.05.2012. The appellant filed the said petition on the allegations that respondent no.2 had obtained the signatures of the appellant on various documents under coercion and intoxication. It is, therefore, contend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s further contended that the Company Law Board does not have powers under Section 403 of the Companies Act, 1956 to suo moto vacate the restraint order. 8. The appellant has further contended that, the fact that a closure report with respect to the FIR filed by the appellant could not be considered by the Company Law Board, while deciding the rival contentions. The learned counsel for the appellant has argued that the decisions in criminal proceedings cannot be considered by civil courts while adjudicating inter se disputes between parties. 9. The appellant has framed the following questions in the present appeal:- "1. Whether the Hon'ble Company law Board is bound by an order of a criminal court, against which Revision is pending before the Competent Court? 2. Whether the Hon'ble Company Law Board on an application questioning the maintainability on factual aspects, without deciding the same can vacate the interim order? 3. Whether the Hon'ble Company Law Board without considering the merits of the case may vacate the status quo order, which may result in creation of third party rights? 4. Whether the Hon'ble Company Law Board cannot decide a dispute that falls within the sc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The said application being CA No.572/12 also remained pending and was finally taken up for hearing on 07.06.2013. On the said date, the Company Law Board considered the factual matrix of the case and came to the conclusion that the facts did not warrant any interim order in favour of the appellant. The Company Law Board has concluded that the appellant had not made out a case for passing a restraint order. However, as the pleadings in the matter were complete and the application also raised certain factual issues, the same was dismissed and the petition was set down for hearing. 13. I find no infirmity in the approach adopted by the Company Law Board. The interim order was passed on a concession made by the learned counsel for the respondent on the first date. Subsequently, the case of the respondent was brought before the Company Law Board by way of an application challenging the maintainability of the petition. The case of the respondent was noted and on consideration of the same the Company Law Board concluded that an interim injunction was not warranted in the facts of the case. The contention that the Company Law Board did not consider the merits of the case is ex-facie erron ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quoted below:- "403-Interim order by (Tribunal):- Pending the making by it of a final order under section 397 or 398, as the case may be, the (Tribunal) may, on the application of any party to the proceeding, make any interim order which it thinks fit for regulating the conduct of the company's affairs, upon such terms and conditions as appear to it to be just and equitable." 16. The said Section is also couched in wide terms and empowers the Company law Board to make any interim order which it thinks fit. It necessarily follows that the Company Law Board would also have the power and discretion to modify or vacate an interim order granted earlier. The words "..may, on the application of any party to the proceedings,.." at best qualify only making of an interim order and not vacating or modify an interim order granted earlier. As such, no restriction on the Company Law Board to vacate or modify interim orders can be read in Section 403 of the Act. As stated above, the powers conferred on the Company law Board under Section 397 and 398 of the Act are very wide and Section 402 and 403 of the Act cannot be read to limit the scope of the powers of the Company law Board to regulate t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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