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TMI Blog1998 (6) TMI 583X X X X Extracts X X X X X X X X Extracts X X X X ..... ed an application C. A. No. 133 of 1997, dated April 24, 1997, seeking interim reliefs as sought for in the petition. The interim reliefs sought for in the petition are more or less on the same lines as provided under Section 250(2). However, when the matter was heard as per the directions of the High Court, the applicant sought for restraining the company from registering any shares allotted as promoters' quota, on the ground that the lock-in period in respect of these shares was coming to an end on May 25, 1998. 3. The issue that came up for our consideration was whether Section 248 or 250(1) confers any powers on the Company Law Board for granting any interim relief pending consideration of the petition on the merits. According to Shri Mathur, advocate, appearing on behalf of the respondents, neither Section 248 nor Section 250(1) confers any powers on the Company Law Board in respect of grant of any interim relief during the pendency of the proceedings. According to him, the restrictions on shares as provided in Section 250(2) can be imposed only when an order of investigation is made by the Company Law Board and no restriction on shares could be imposed till such order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e ends of justice. He further submitted that one has to go by the purpose and objective of the provisions of a statute and as long as the interim relief sought is within the objective, then even in the absence of a specific provision, a judicial body is empowered to grant interim relief. According to him the interpretation of the provisions of the statute should be with a purpose to avoid the final relief becoming infructuous. Relying on ITO v. Mohamad Kunhi (M.K.) [1969] 71 ITR 815 (SC) and also on Gujarat Maritime Board v. Haji Daud Haji Harun Abu [1996] JT 11 SC 43 ; [1997] 89 Comp Cas 710, he submitted that the Supreme Court has held in the first case that even in the absence of any specific power of stay granted to the ITAT, the same should be treated as available to the Tribunal as an incidental and ancillary power to its jurisdiction. In the second case he pointed out that the Supreme Court has held that, where a substantive power is conferred on a court or Tribunal, all incidental and ancillary powers necessary for an effective exercise of the substantive power have to be inferred. Even otherwise, according to him, as per regulation 44 of the Company Law Board Regulations, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lature had intended to confer powers of the Company Law Board to grant interim relief during the pendency of any proceedings, the same has been specifically conferred on the Company Law Board. Reference may be made to Section 111(6) and Section 403 which covers proceedings under Section 397/398. As we have pointed out earlier the interim reliefs sought for in the petition which were sought to be obtained through an application are more in line with those indicated in Section 250(2). These reliefs admittedly can be granted only after an order of investigation is made and not during the pendency of the proceedings. This is clear from the wording of the Section That there is good reason to find out facts about any shares (whether issued or to be issued) and the Company Law Board is of the opinion that such facts cannot be found out unless the restrictions specified in Sub-section (2) are imposed. The Company Law Board may by an order direct that the shares shall be subject to the restrictions imposed by Sub-section (2) for such period not exceeding three years as may be specified in the order. A reading of the above makes it clear that only when the Company Law Board is of the opini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eking this prayer, he seeks to invoke our inherent powers which according to him are incidental and ancillary to our substantive power as held in cases cited by him. The case referred to in ITO v. Mohamad Kunhi (M. K.) [1969] MANU/SC/0087/1968MANU/SC/0087/1968 : 71 ITR 815 ; [1969] 2 SCR 65, relates to the power of the Income-tax Appellate Tribunal in its appellate jurisdiction and the issue was whether in the absence of specific provision in the statute conferring on it power to stay recovery of penalties pending the disposal of the appeal. On this issue, the Supreme Court held that the power to order the stay of recovery of the penalty was an incidental and ancillary power to its appellate jurisdiction. In the case of Gujarat Maritime Board v. Haji Daud Haji Harun Abu [1996] JT 11 SC 43 ; [1997] 89 Comp Cas 710, 716, the issue was whether the National Consumer Disputes Redressal Commission had the power to adjudicate rival claims of the parties in the dispute in a complaint filed under the Consumer Protection Act. The Supreme Court, after examining the provisions of that Act, came to the conclusion that The jurisdiction of the Commission to entertain and decide complaints necess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rlier. Therefore, we feel that, granting the prayer of the petitioners, as modified by us hereinafter, especially when we have kept the petition in the next few months, is not likely to cause any hardship to the respondents, and as such, we hereby order that, the company shall not register the transfer of any shares comprised in the promoters' quota as impugned in the petition and the additional affidavit, till disposal of this petition. This is as against the prayer of the petitioners seeking restraint order on all the shares comprised in the promoters' quota of about 34 lakhs shares. Shri Mathur indicated to us that, the promoters' quota shares impugned in the petition and the additional affidavit work out to only about 10,88,440. Subject to verification of this figure by the parties, our restraint order will cover only these shares. 9. The respondents are yet to file their replies on the additional affidavit filed by the petitioners. The respondents may file their reply to the same by July 15, 1998, and the petitioners will file their rejoinder by August 15, 1998. The petition will be heard on September 14, 15 and 16, 1998, at 2.30 p.m. on each day. - - TaxTMI ..... X X X X Extracts X X X X X X X X Extracts X X X X
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