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TMI Blog2014 (6) TMI 676X X X X Extracts X X X X X X X X Extracts X X X X ..... ions, violation of accounting practices, breach of Foreign Investment Promotion Board approvals and so on and so forth and a prayer was made that the CLB may form an opinion in this regard and submit the same to the Central Government which will carry out an investigation into the affairs of these companies. 4. The order was passed by the CLB on 18.12.2013 in which it held that the petitioners were not qualified under any of the clauses of Section 237(b) to seek its opinion. The order also refers to the conduct of the petitioner. Ultimately the petition was dismissed as misconceived. 5. The appellant (petitioner before the CLB) moved applications before the CLB seeking recall of the order dated 18.12.2013 passed in Company Petition No.130/2013 and also sought deletion of the alleged personal remarks made against him in the order after tendering an apology in the application. The CLB passed an order on 30.12.2013 deleting the remarks made in the earlier order, accepting the apology. On the merits of the matter the CLB reiterated its view that the appellant had no locus standi under Section 237(b) and that if he had any grievance against the companies mentioned above on the ground ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . This involves judicial consideration and application of mind to the facts brought before it. This would be judicial or quasi-judicial act. The decision would, therefore, be appealable under Section 10F. The question seems to be concluded by the judgments of the Supreme Court in Barium Chemicals Ltd. v. CLB AIR 1967 SC 295 and Rohtas Industries Ltd. v. S.D. Agarwal AIR 1969 SC 707. 8. Having cleared the preliminary point, the next question to be considered by me is whether the appellant had locus standi to invoke the suo motu jurisdiction of the CLB under Section 237(b). Section 237 reads as follows: - "237. Investigation of company's affairs in other cases. - Without prejudice to its powers under section 235, the Central Government - (a) shall appoint one or more competent persons as inspectors to investigate the affairs of a company and to report thereon in such manner as the Central Government may direct, if - (i) the company, by special resolution; or (ii) the Court, by order, declares that the affairs of the company ought to be investigated by an inspection appointed by the Central Government; and (b) may do so in its opinion or in the opinion of the Tribunal there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... larities will have to be taken up by the appellant before the appropriate authorities under the different statutes regulating those matters. The power is obviously given to the CLB to look into all the irregularities and violations allegedly perpetrated by the companies, which cannot be abdicated by it in the manner done by it. So ran the argument of the appellant. 10. The argument seems attractive but has been examined and rejected by this court thirty-four years back in V.V. Purie v. E.M.C. Steel Ltd. [1980] 50 Comp. Cas. 127 (Delhi).The identical objection regarding locus standi was raised in that case also and was upheld. In that case, certain persons who owned a property in Panchsheel Park entered into an agreement of tenancy with a company on certain terms and conditions. Disputes thereafter arose between those persons and the company regarding payment of rent, misappropriation of the amounts paid as rent and so on, with mutual allegations. The owners of the property (who were neither shareholders nor creditors of the company) filed an application before this court under section 237 for investigation into the affairs of the company. The company raised a preliminary objection ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould also be an offence which can read to a criminal prosecution. Nevertheless whenever there is a violation of the statute, a right to seek redress from the courts is conferred only upon the statutory authorities who are entrusted with the supervision of the companies or on members, creditors or other persons interested in the company. Under Section 397-398, where the affairs of a company, inter alia, are being conducted in a manner prejudicial to the public interest, the intervention of the court may be sought but only by a specified number of members of the company though even a smaller number may apply subject to certain conditions and restrictions. A petition for the winding up of a company even where such winding up is occasioned by the conduct of its affairs in disregard of the statute and to the detriment of public interest, can be presented only by the company, its creditors or contributories or by the designated officers of the Government. Where a company is being wound up and it appears that the business of the company has been carried on in a fraudulent manner, only the liquidator, creditor or contributory can seek appropriate orders from the court against the persons w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cial resolution passed. These are all some illustrations of persons who would be able to move the court u/s 237(a). It is, therefore, not as if the scope of the remedy enacted by this provision would be unreasonably curtailed or would become illusory by reading into the section an implied limitation to exclude persons having no manner of interest or concern with the company, from availing of it." The judgement of Ranganathan, J (supra), being a judgment of this court, is binding on me. It covers the entire gamut of the arguments advanced before me by the appellant on the point of locus standi. It has been followed by a Division Bench of the Madras High Court in G. Haresh Chand V. Gee Gee Granites Ltd. [2009] 149 Comp. Cas 353/95 SCL 285 in the following words : "In the case of V.V. Purie v. E.M.C. Steel Ltd. (1980) 50 Comp Cas 127, decided by the Delhi High Court it was held that though Section 237 of the said Act is couched in very wide language, the basic limitation under this section is that the Courts will not entertain any petition on behalf of private persons under the said section unless the private persons have a pers ..... X X X X Extracts X X X X X X X X Extracts X X X X
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