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TMI Blog2016 (6) TMI 243X X X X Extracts X X X X X X X X Extracts X X X X ..... t time to file reply. They were granted four weeks time to file the reply and the respondents, who are petitioners before the board were granted two weeks thereafter to file the rejoinder. On 14th December, 2015 the appellant nos.1 and 3 did not file any reply but sought extension by another four weeks to file the reply. The time was granted and consequently the respondents herein, i.e., petitioners before the Company Law Board were granted two weeks time to file rejoinder after receiving a copy of the reply. The matter is now stood over to 25th January, 2016 and the interim order is continued. The board has also noted that the reason why the alienation of land in question was stayed was because the counsel for the respondents viz., counsel for the appellants herein had accepted that no construction for flats has commenced and the site plan is awaiting sanction from the authorities. The order does not stop the appellants business of developing the land by constructing apartments. If according to the appellants now the site plans have been sanctioned, in other words, the circumstances have changed, it will be open to the appellants to move the Company Law Board for suitably alter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... served if alienation of land in question is stayed till the next date of hearing. Accordingly the respondents are restrained from alienating property situated in the village Bhandup, Taluka Kurla, District Bombay (the detailed description of the property is available at pages 122 and 123 of C.P.) The aforesaid order has been necessitated to safeguard the interest of the petitioner particularly when learned counsel for the respondent has accepted that no construction for flats has commenced so far and the site plan is awaiting sanction from the authorities. 2. Section 10F reads as under : 10F. Appeals against the order of the Company Law Board. Any person aggrieved by any decision or order of the Company Law Board 2[made before the commencement of the Companies (Second Amendment) Act, 2002] may file an appeal to the High Court within sixty days from the date of communication of the decision or order of the Company Law Board to him on any question of law arising out of such order: Provided that the High Court may, if it is satisfied that the appellant was prevented by sufficient cause from filing the appeal within the said period, allow it to be filed with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... minants. The Apex Court in Purnima Manthena case (supra) has held that the Appellate Court should generally not interfere if the pleadings of the parties are incomplete at the threshold stage and the lower forum concerned seeks only to ensure a working arrangement visavis the dissension and postpone fuller and consummate appreciation of the rival assertions and the recorded facts and the documents at a later stage. The Appellate Court may decide to entertain an appeal or not, based on the nature of the impugned order, whether it is interlocutory or final, if the order is arbitrary or perverse. It will be useful to reproduce paragraphs 41 to 50 and 52 of the Purnima Manthena case (supra) : 41. In Dale Carrington Invt. (P) Ltd. (supra), this Court had an occasion to dwell upon the scope of Section 10F of the Act qua an appeal preferred against the decision of the Company Law Board after a fullfledged adjudication before the High Court. While negating the argument, that the High Court could not have disturbed the findings arrived at by the Company Law Board and record its own findings on certain issues which it could not go into, this Court held that if a finding of fact is per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave been exercised arbitrarily or capriciously or perversely or where the Court whose order has been appealed from, had ignored the settled principles of law, regulating grant or refusal of interlocutory injunctions. It was enunciated, that appeal against exercise of discretion is an appeal on principle and the appellate court would not reassess the materials and seek to reach a conclusion different from the one reached by the court below, if it was reasonably possible on the materials available. It was held as well, that the appellate Court in such a situation would normally not be justified in interfering with the exercise of discretion of the Court below, if made reasonably and in a judicial manner, solely on the ground that if it had considered the matter at the trial stage, it would have come to a contrary conclusion. It was proclaimed that an interlocutory remedy is intended to preserve in status quo, the rights of the parties which may appear on a prima facie examination of a case. It was held that the prayer for grant of interlocutory injunction, being at a stage when the existence of the legal right asserted by the plaintiff and its alleged violation are both contested and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on qua a decision on discretion rendered at an introductory stage of any proceeding, otherwise awaiting final adjudication on merits following a full contest. It is settled that no adjudication at the preliminary stage of a proceeding in a court of law ought to have the attributes of a final verdict so as to prejudge the issues at that stage, thereby rendering the principal determination otiose or redundant. This is more so, if the pleadings of the parties are incomplete at the threshold stage and the lower forum concerned seeks only to ensure a working arrangement visavis the dissension and postpone fuller and consummate appreciation of the rival assertions and the recorded facts and the documents at a later stage. 46. Section 10F of the Act engrafts the requirement of the existence of a question of law arising from the decision of the CLB as an essential precondition for the maintainability of an appeal thereunder. While the language applied therein evinces that all orders, whether final or interlocutory, can be the subjectmatter of appeal, if it occasions a question of law, in our comprehension, the Section per se defines the perimeters of inquisition by the appellate foru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... through a purported scheme of demerger to the undue benefit of other Directors of the Board of the company. In contradiction, the appellants and the contesting Directors have not only endorsed the validity of the meetings on or from 9.4.2013 contending that respondent No. 1 though intimated thereof, had opted out therefrom and on the basis of the record, have sought to demonstrate her participation in the meetings, amongst others on 24.5.2013, 22.8.2013 and the Annual General Meeting held on 18.12.2013 as permitted by the CLB, they have also emphatically adverted to the letter dated 15.4.2013 addressed by the respondent No. 1 seemingly acknowledging the lawful induction of the appellant (Ms. Mahima Datla) as the Managing Director and her two sisters as the Directors in the Board. The appellants and other contesting respondents have also endeavoured to underline that the respondent No. 1 has accepted the distribution of the shares held by Dr. Vijay Kumar Datla in the HUF as decided in the meeting dated 24.5.2013 and also the enhancement in her remuneration as the Executive Director as minuted in the Annual General Meeting dated 18.12.2013. There is no denial by her as well as of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cord its findings on all issues involved on merits did amount to prejudging those, thereby rendering the petition before the CLB redundant for all intents and purposes. 50. In the instant case, though the CLB, as a matter of fact, did not record any view on the merits of the case while deferring the consideration of the interim relief , being satisfied with the undertakings offered on behalf of the appellants and other contesting Directors, the High Court has, by the impugned decision, decisively furnished its views and conclusions on all vital issues, as a consequence, leaving little or none for the CLB to decide. This is not the role of the appellate forum as is contemplated under Section 10F of the Act qua the stage from which the appeal had been preferred from the order of the CLB. 51. . 52. In the wake up of above, we feel persuaded to interfere with the impugned decision of the High Court, without observing any final opinion on the merit of the contrasting assertions. In our comprehension, having regard to the relief provided by the CLB by its order dated 6.8.2014 to the parties, it ought to be left to decide the petition on merits after affording them a re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te of hearing. The order has been passed on 29th October, 2015 and the next date of hearing was 4th December, 2015. The reason why this interim arrangement was also ordered can be found in the last paragraph of the order. It is because only respondent no.2, who is appellant no.2 herein, had filed the reply and appellant nos.1 and 3 herein had sought time to file reply. They were granted four weeks time to file the reply and the respondents, who are petitioners before the board were granted two weeks thereafter to file the rejoinder. On 14th December, 2015 the appellant nos.1 and 3 did not file any reply but sought extension by another four weeks to file the reply. The time was granted and consequently the respondents herein, i.e., petitioners before the Company Law Board were granted two weeks time to file rejoinder after receiving a copy of the reply. 10. The matter is now stood over to 25th January, 2016 and the interim order is continued. The board has also noted that the reason why the alienation of land in question was stayed was because the counsel for the respondents viz., counsel for the appellants herein had accepted that no construction for flats has commenced and the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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