9911796707
TMI Blog1997 (11) TMI 539X X X X Extracts X X X X X X X X Extracts X X X X ..... no petition can He under Section 250(1) inasmuch as this Section deals only with interim relief and not final relief. (3) No order can be passed against the company under Section 248. (4) Since Section 248 deals with an alternate action to that of Section 247, the conditions specified in that Section should be satisfied before any order is passed under Section 248. (5) Since the petitioners have already withdrawn the petition under Section 247/250 filed by them earlier, and since no independent petition lies under Section 248, this petition cannot proceed under Section 250 which has already been withdrawn along with Section 247. (6) Since the prayer is for seeking details of shares, all the shareholders whose shares are being sought to be brought under the purview, should have been made parties and the petition thus suffering from nonjoinder of parties, cannot be proceeded with. (7) Since the proceedings under these Sections are not adversarial proceedings, the Company Law Board cannot collect evidence for the benefit of the petitioners under Section 248. (8) Finally, since no final order is possible after collection of information under Section 248, no pet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecision in Padrna Taparia v. Assam Brook Ltd. [199G] 3 Comp L) 396 ; [1997] 88 Comp Cas 838 and dismiss this petition as not maintainable under Section 250(1). Once such an order is passed, this petition cannot stand on its own under Section 248. 3. Shri Seervai, advocate appearing for the petitioners, pointed out, that, they have not withdrawn their petition under Section 247/250. They had only not pressed for any reliefs in that petition, in view of their having filed this instant petition. In other words, according to him, the filing of the petition under Section 248/250 has the permission of the Company Law Board and as long as liberty has been granted to file this petition, not pressing the Section 247/250 petition cannot be a ground for dismissing the instant petition. In regard to the filing of an independent petition under Section 250(1), he submitted that in view of the recent judgment given by the Company Law Board in Padma Taparia v. Assam Brook Ltd. [1996] 3 Comp LJ 396 ; [1997] 88 Comp Cas 838, he relies on the same regarding the maintainability of the petition under Section 250(1). In regard to the argument that the provisions of Section 248 are alternative to Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the respondents that, having withdrawn the petition under Section 247/250, the petitioners cannot file the instant petition in view of the fact that the main thrust of the allegation contained in this petition is similar to those in the earlier petition except that some additional information has been added. In this connection, it is pertinent to point out that, originally the petitioners filed a petition under Section 247/250 which we had dismissed as not maintainable in view of the conditions prescribed under Section 247 having not been fulfilled. Against this order, the petitioners filed a writ petition in the Delhi High Court on the ground that they were not given an opportunity of filing a rejoinder to the reply before hearing the maintainability of the petition. The Delhi High Court, while setting aside our order of dismissal of the petition, remitted the case back to us for considering the case afresh after filing of the rejoinder by the petitioner. When the matter had been fixed for hearing, the petitioners filed the instant petition under Section 248/250 and sought for hearing both the petitions together. Counsel for the respondents, Shri Sarkar submitted that since t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n which a reference could be made by the Central Government. Alaknanda Manufacturing and Finance (P.) Ltd. v. Bahubali Services Ltd. [1996] 86 Comp Cas 291 (CLB) related to a petition under Section 247/250 of the Act wherein a prayer under Section 250(3) and (4) had been sought. After going through the merits of the case, the Company Law Board held that in the facts of the case there was no scope to grant any of the reliefs under Section 250(3) or (4) and, therefore, the question of any action under Section 247 did not arise. The issue relating whether the petition can be filed under Section 250(1) was not discussed in that case. 9. Shri Sarkar submitted that the decision in Padma Taparia v. Assam Brook Ltd. [1996] 3 Comp LJ 396 ; [1997] 88 Comp Cas 838 (CLB) requires a review in view of the various submissions made by him. Since this issue has been raised, we consider it appropriate that we should deal with this issue in detail. Section 250(1) reads as follows : Where it appears to the Company Law Board, whether on a reference made to it by the Central Government in connection with any investigation under Section 247, 248 or 249 or on a complaint made by any person in this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aint can be made under Section 250(1), it appears to us, without any doubt whatsoever, that with a complaint under this section, independent proceedings can be started. In other words, the proceedings under Section 250(1) become the main proceedings and it is for the Company Law Board to decide whether the restrictions as contemplated under Section 250(2) are to be imposed provided it comes to the conclusion that there are good reasons to find out facts about the shares, (emphasis supplied). 12. Shri Sarkar attempted to strengthen the above arguments by stating that Section 250(1) deals only with interim relief and when a Section deals only with interim relief, then no petition under that Section can stand by itself. In other words, no petition under Section 250(1) can be entertained. 13. A reading of Section 250(1) would indicate that there are two circumstances under which the jurisdiction of the Company Law Board can be invoked. One is by way of a reference by the Central Government. The Central Government, by virtue of the powers conferred on it under Sections 247, 248 and 249, while invoking such powers under these sections, may make a reference to the Company Law Board ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Company Law Board decides to impose restrictions, a composite order can be issued for investigation under Section 247(1A) and imposing restrictions in terms of Section 250(2). Then also the order becomes final. An order can be considered to be of interim nature, i.e., that it contains interim relief only when there is scope for passing a final order in which either the interim order gets merged or gets vacated. As we have explained earlier, any order under Section 250(1) could be only a final order, and tf as interpreted by Shri Sarkar, such an order is to be treated as an interim order, we do not find any scope under Section 250(1) for passing any further order. Perhaps, his argument in this regard stems from the fact that the duration of the order has been restricted to a maximum period of three years and, therefore, it has to be of interim nature or that since such an order could be in force only during the period of investigation under Section 247, the same has to be treated as an interim order. When we are dealing with the provisions of law conferring certain powers we do not look into the contents of the order but only the nature of order. The powers under Section 250(1) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held that a petition under Section 250(1) is maintainable, we shall now examine whether, in proceedings under Section 250(1), we can invoke our powers under Section 248. The words in this behalf as used in Section 250(1) would appear to provide the answer in the affirmative. The Company Law Board also has held in Assam Brook Ltd.'s case [1996] 3 Comp LJ 396 ; (1997] 88 Comp Cas 838 that proceedings under Section 250(1) have to be in situations contemplated in Section 247, 248 or 249. While in paragraph 13 of this order, we have concluded that the powers under Section 247(1A) can be invoked under Section 250(1), we left open the issue of invoking powers under Section 248. When we invoke the powers under Section 247(1A) and order an investigation, then the whole matter of investigation and follow up action on the report of the investigation rests with the Central Government. The Company Law Board has nothing to do afterwards, as nothing is provided in Section 247(1A) to the contrary. 18. However, if by invoking our powers under Section 248, in a proceeding under Section 250(1), we collect information as contemplated in that section, the immediate question that arises is, as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs. In other words the question whether an inspector is to be appointed or not is to be decided by the Company Law Board on its own. We do not think, a complainant could, on his own, seek the Company Law Board to exercise its power under Section 248 without a prayer under Section 247, in which it becomes an alternate prayer, thus leaving the matter to the discretion of the Company Law Board either to invoke the provisions of Section 247(1A) or 248. 21. Notwithstanding our findings above we would like to make it abundantly clear that invoking the powers of the Company Law Board under Section 250 need not always be in the form of an independent proceeding. In the course of any proceedings, may be under Sections 235, 237 or 397/ 398 or for that matter under Section 111, if any one feels that there is need for invoking our powers under Section 247 or 248, they can make an application to that effect and at the same time they can also seek an order under Section 250(1) in terms of Section 250(2). 22. In view of the legal position which emerges above, we are inclined to agree with Shri Sarkar that in a proceeding under Section 250(1), there is no scope to invoke the provisions of Se ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
