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TMI Blog2015 (1) TMI 1351X X X X Extracts X X X X X X X X Extracts X X X X ..... the award has been challenged on numerous grounds and some of the grounds support the reasoning assigned by the CLB rejecting in the impugned order. Undisputedly the award has not attained finality and the grounds raised by the appellants in the application under Section 34 of the Arbitration and Conciliation Act reflect that the entire award is under challenge on numerous grounds. Under Section 397-398 of the Companies Act, the tribunal/CLB has power to grant relief in case of oppression and mismanagement of the affairs of the Company. The distribution of the assets in terms of the award has not taken place, therefore, in the facts of the present case the jurisdiction of the Company Law Board will not cease on the passing of the award. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri B.M. Maheshwari, learned counsel for the respondent O R D E R 1. This appeal under Section 10-F of the Companies Act, 1956 (for short the Act ) is at the instance of respondents No.2 to 5 before the Company Law Board challenging the interlocutory order dated 5.9.2014 rejecting the Company Application being C.A. No.231/2014, questioning the maintainability of the Company Petition No.17/2014 and making a prayer for dismissal of the company petition. 2. In brief, an application under Section 397-398 of the Companies Act has been filed by the respondents No.2 to 10 alleging oppression and mismanagement in respect of the affairs of the respondent No.1 Company Krishidhan Seeds Private Limited. In the said company petition, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mandatory in nature. He has further submitted that the Company Law Board has failed to appreciate the effect of the award passed in the arbitration proceedings. 6. As against this, learned counsel for the respondents submits that the Company Law Board has not committed any error in rejecting the C.A. No.231/2014 by assigning proper reasons and that the award passed by the arbitrator itself has been challenged by the appellants under Section 34 of the Arbitration and Conciliation Act, and the appellants cannot be permitted to take contradictory stands before the Company Law Board. He has also submitted that the scope of the two proceedings is different. 7. I have heard the learned counsel for the parties and perused the record. 8. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e arbitration agreement is entered into during the pendency of the matter. [See: (2000) 4 SCC 539, P. Anand Gajapathi Raju and others Vs. P.V.G. Raju (Dead) and others]. The reference to adjudicatory ADR process (arbitration or conciliation) can be made only with consent of all the parties. [See: (2010) 8 SCC 24, Afcons Infrastructure Limited and another Vs. Cherian Varkey Construction Company Private Limited and others]. The provisions of Section 8 are all comprehensive and of a mandatory character. [See: (2002) 1 SCC 203, Kalpana Kothari (Smt.) Vs. Sudha Yadav (Smt.) and others]. 10. In the present matter the case of the appellants is that on 2.6.2014 a meeting of Board of Directors of respondent No.1 Krishidhan Seeds Private Limited i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o during the trial of the case, any private arrangement between the shareholders and members of the company has no material bearing in the petition filed under Section 397/398 of the Companies Act and that the arbitration award has not attained finality since the award is under challenge under Section 34 of the Act. 12. The appellants are questioning the maintainability of proceedings under Section 397-398 of the Companies Act on the ground that the dispute between the parties has been settled on the basis of the arbitration award dated 31.7.2014 whereas the appellants themselves have questioned the said award by filing an application under Section 34 of the Arbitration and Conciliation Act. Learned counsel for the respondents has drawn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... concerning the rights of the parties flowing from the terms contained in the agreement, but it is about the oppression and mismanagement and inspite of the widely worded arbitration clause the matter before the CLB cannot be termed as the same as of the subject of arbitration agreement. The ratio of these judgments is yet to be considered by the CLB while considering effect of the arbitral award at the time of final disposal of the matter. 15. So far as the judgment in the matter of Sukanya Holdings Pvt. Ltd. Vs. Jayesh H. Pandya and another reported in AIR 2003 SC 2252 relied upon by counsel for the parties is concerned, the said judgment does not relate to the arbitration pending the application under Section 397-398 of the Companies ..... X X X X Extracts X X X X X X X X Extracts X X X X
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