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TMI Blog2016 (3) TMI 466X X X X Extracts X X X X X X X X Extracts X X X X ..... riefly, in each of the appeals. 2.1 Before, I proceed further, I must indicate that the three appellants in CO.A. (SB) 4/2014 and the appellant in CO.A.(SB) 69/2014, will be collectively referred to hereafter as "appellants". CO.A.(SB) 4/2014 3. The appellants herein had filed a petition under Section 397, 398 and 402 of the Companies Act, 1956 (in short the 1956 Act), alleging oppression and mismanagement by the respondents. This petition was filed before the CLB. The petition was numbered as: CP 106(ND)/2013. The said petition was titled as: Jasmohan Singh & Ors. vs Freeze King Industries Private Limited & Ors. In the said petition several reliefs had been prayed for including a prayer for interim relief, whereby, inter alia, inspection of statutory record of respondent no.1 company i.e. Freeze King Industries Private Limited (in short FKIPL) was sought, albeit, in the presence of a Chartered Accountant (CA). 3.1 On 03.09.2013, the aforementioned company petition was mentioned before the CLB. Notice issued in that petition was accepted on behalf of the respondents. Time was sought to file a reply in the said petition. On that date, on behalf of the respondents, an undertaking ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellants filed the instant appeal. CO.A.(SB) 69/2014 4. Similarly, in the aforementioned appeal, the appellant filed a petition under Section 397, 398 and 402 of the 1956 Act, alleging oppression and mismanagement by the respondents. This petition was numbered as: CP 101(ND)/2014. The said petition was titled as: Shri Jasmohan Singh. vs M.S. Koldhold Industries Private Ltd & Ors. 4.1 As in the other company petition filed before the CLB, the appellant prayed for various reliefs, including, for issuance of an interim direction to respondents to allow inspection of the statutory records, in the presence of a CA. The petition was mentioned on 18.09.2014, when arguments were heard by the CLB. The CLB, after hearing arguments, passed the impugned order dated 18.09.2014. 4.2 On the said date (i.e. 18.09.2014), the CLB, while giving time to the respondents to file a reply to the main company petition, directed maintenance of status quo as regards the assets and shareholding till the next date of hearing, save and except in the usual and normal course of business. In so far as inspection of records was concerned, the following directions were issued, which are contained in paragraph ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d before the CLB on 24.09.2013 and 01.10.2013 qua CA No. 51/C-I/2013. The conditions were put forth by the respondents, for the first time, in their communication dated 05.10.2013. (vi) The CLB has no jurisdiction and/or power to injunct the appellants from instituting any proceedings which otherwise, the said persons are entitled to prosecute, in a court or an appropriate forum, which is, not subordinate to the CLB. In this behalf, learned counsel relied upon the provisions of Section 41(b) of the Specific Relief Act, 1963, as also the judgement of the Supreme Court in the case of Cotton Corporation of India Ltd. vs United Industrial Bank Ltd. & Ors.(1983) 4 SCC 625. (vii) The law mandates that anyone, who is in possession of information pertaining to commission of a cognizable offence, can make a report with regard to such offence to the police. The police, after registration of the case, based on that report, in accordance with Section 154 of the Code of Criminal Procedure, 1973 (in short the Code) can investigate the matter. If the investigation, reveals that an offence has been committed, the police are required to file a challan in the concerned court, whereupon, trial of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... based on the extract of the aforementioned report, was that, the right to inspection could not be abused and, therefore, ought not to become a tool of harassment or oppression in the hands of those, who have been conferred the said right. 8. Having heard the learned counsels for the parties, and perused the record, what has come to fore is briefly as follows: (i) That while the petitions under Section 397, 398 and 402 of the 1956 Act were pending adjudication, request was made both by the appellants in CO.A.(SB) 4/2014 as also the appellants in CO.A.(SB) 69/2014, to seek inspection of the statutory records. (ii) By virtue of the impugned orders, referred to above, dated 13.01.2014 and 18.09.2014, inspection was allowed subject to certain conditions being imposed. (iii) In the order dated 13.01.2014, the condition imposed was that the information retrieved could only be used before the CLB and not before any other forum, without seeking prior approval of the CLB. The relevant part of the order dated 13.01.2014 is extracted hereinbelow: ".... The Respondents are hereby directed to grant inspection of the statutory records of the Company to the petitioners on 29.1.2014 from 10.3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IPL and KIPL. The information so derived will be placed before the CLB. The CLB will, thereafter, ascertain as to the manner and the forum before which the appellants wish to use the information. (ii) In case the CLB, on receipt of such information, if inclined to injunct the appellants from using the information, it would first deal with the submission of the appellants that it would have no jurisdiction to prevent them from using the information, so derived, before a forum which is not subordinate to it. (iii) In this context, the CLB will, inter alia, keep in mind the fact that, if, information derived discloses a cognizable offence, whether it would have the jurisdiction to prevent its use, by the appellants, while exercising powers under Section 402 and 403 of the 1956 Act. 11. Accordingly, the impugned order dated 13.01.2014, passed in CO.A.(SB) 4/2014 and order dated 18.09.2014, passed in CO.A.(SB) 69/2014, are set aside. 11.1 The appellants will thus, as indicated above, be entitled to inspection of the statutory record; which information, in the first instance, they will place before the CLB, along with an affidavit, indicating therein, as to the manner and the forum b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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