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TMI Blog2016 (12) TMI 1914X X X X Extracts X X X X X X X X Extracts X X X X ..... onsent of the parties. In such circumstances, the Petition was filed in Mumbai which had jurisdiction to entertain such Petition. An Order was passed dated 29.06.2015 by the Government in exercise of the powers contained in sub- Section 4(B) of Section 10(E) of the Companies Act 1956 read with Regulation 4 of the Company Law Board Regulations 1991 thereby constituting the benches for the purpose of exercising and discharging the Board s powers and functions in the manner specified therein. In the present case, in consonance with the said Orders, the Company Application nos. 122 of 2015 and 133 of 2015 wherein the Appellants on one hand and the Respondent nos. 1 and 2 on the other hand, filed applications for interim reliefs and in view of the urgency shown by the parties, the matter was placed for hearing on such application before the Bench at New Delhi - No doubt, the learned Board has elaborately examined the material on record whilst passing the impugned Judgment but the law recognizes that a view has to be taken after giving an appropriate notice and opportunity to the parties to advance their arguments. The ultimate decision taken by the Company Law Board would affect the sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of 2015 and 133 of 2015. The said interlocutory Company Applications were heard by the Company Law Board, New Delhi and by Order dated 16.03.2016, the said Company Applications were kept for Orders. It is further contended by the Appellants that shockingly when the impugned Judgment came to be pronounced on 25.04.2016, the Company Law Board, New Delhi, finally disposed of the main Company Petition instead of pronouncing Orders on the two interlocutory applications bearing nos. 122 of 2015 and 133 of 2015 which in fact were heard and fixed for orders. Being aggrieved by the said Order/Judgment, the Appellants preferred the above Company Appeal essentially on the ground of the breach of the principles of natural justice. 4. It is contended by the Appellants that the Appellant no. 6 is incorporated with the Registrar of Companies at Goa. The Respondent nos. 1 and 2 are initial subscribers to the Memorandum of Association and the authorised Share Capital is Rs. 100 lacs divided into 1,00,000 equity shares of 100 each. The Appellant no. 1, Shalby Limited, is incorporated as a registered Office at Ahmedabad, Gujarat which is incorporated to provide world class facilities and offer the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 1 and 2. The Company Law Board at Mumbai passed an interim Order on 10.04.2015 by which the Resolution passed on 13.03.2015 were stayed and resultantly, the Appellant no. 6 was restrained from giving effect to the letter of offer of Right Issues. Thereafter, the Appellant nos. 1 to 5 filed before the Company Law Board at Mumbai on 13.04.2015 Company Application no. 72 of 2015 praying for an Order to permit the Appellant no. 6 to convene a fresh meeting of its Board of Directors followed by that of its shareholders to consider to increase the authorised equity share capital and the paid up equity share capital with full compliance of the provisions of the Companies Act, 2013. The present Respondent nos. 1 and 2 filed their affidavit in reply to the Company Application no. 72 of 2015. The said application was disposed of by the Mumbai Bench on 28.04.2015 by permitting the Company to hold a fresh Extraordinary General Body Meeting for consideration of the Rights Issue and the Respondent nos. 1 and 2 were free to raise the objections and it was directed that the Company Application be listed on 05.05.2015. The Appellant no. 6 issued notice of the meeting to be held on 02.06.2015 to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r recording the Resolution passed an Order recording that the settlement arrived at between the parties. The Original Petitioners-Respondent nos. 1 and 2 herein, filed Company Application no. 162 of 2015 seeking extension of time for making the payment in terms of the settlement. The Respondent nos. 1 and 2 thereafter filed written arguments in Company Application no. 122 of 2015 on 05.11.2015 as settlement could not be worked out. The matter was thereafter heard on 05.11.2015 and thereafter posted for filing written arguments on 23.11.2015. The present Appellant nos. 1 to 5 filed their written arguments on 23.11.2015. Both the sides thereafter filed written submissions and the matter was adjourned for clarification. Additional written submissions were thereafter filed on 13.12.2015 in Company Application no. 122 of 2015 and Company Application no. 133 of 2015 by the Appellant nos. 1 to 5 herein. The Respondent nos. 1 and 2 thereafter filed written arguments in respect of Company Application no. 122 of 2015 and 133 of 2015 on 14.12.2015. Additional synopsis were filed by the Appellant nos. 1 to 5 on 05.03.2016 in the said two applications. The hearing of the Company Application nos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Company Law Board Delhi was empowered to entertain and dispose of all urgent and mentioning matters falling in the State of Goa mentioned before it. It is further pointed out that in view of the urgency in deciding the main Company Petition, the Mumbai Company Law Board by Order dated 10.04.2015 and 24.04.2015, had fixed the main Company Petition for final hearing on 05.05.2015 which itself suggested that in view of the urgency, the main Company Petition was agreed to be disposed of. It is further pointed out that the reliefs and the grounds in the two Misc. Applications as well as Company Applications are similar and, as such, there shall be no injustice occasioned in disposing of the main Petition. The Respondents elaborately point out that there is no infirmity in the findings of the learned Company Law Board and looking into the facts of the case and the oppression sought to be committed by the Appellant no. 1 to the Minority Shareholders of the Dr. Naik Group, the Company Law Board has minutely concluded to come to the conclusion that the Respondent nos. 1 and 2 were entitled for reliefs as directed in the impugned Judgment. It is vehemently disputed that there is any breach ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d was justified to pass the impugned Judgment looking into the rival contentions in the main Company Petition filed by the Respondent nos. 1 and 2. Learned Senior Advocate further submits that as the Company Law Board found that disposing of the main Company Application would be justified in the circumstances of the case and as the Appellants were notified to that effect, the question of interference of this Court in the present Writ Petition would be totally unjustified. Learned Senior Advocate further pointed out that the Appeal against the Judgment of the Company Law Board is on a substantial point of law and, in the present case, the Appellants have failed to show any such question in the above Appeal. Learned Senior Advocate further pointed out that the Company Law Board at Delhi was dealing with the core issue in the main Company Petition that the whole exercise by the Appellants was to decimate the Dr. Naik Group which cannot be decided at an interim stage. It was further pointed out that the Bench at Delhi found that there was an urgency to adjudicate the issues between the parties and, as such, proceed to decide the Company Application along with the main Petition. Learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the matter fixed before the Delhi Bench was heard only on the two Company Application nos. 122 and 133 of 2015 and the disposal of the main Company Petition was in breach of the principles of natural justice. The records clearly reveal that the Company Petition filed by the Respondent nos. 1 and 2 was before the Bench at Mumbai, In fact, the Company Law Board Regulations of 1991 clearly provides in Regulation (7) that all proceedings other than the proceedings before the Principal Bench under Regulation 4 shall be instituted before the Bench within whose jurisdiction the registered office of the Company is situated or at any other place outside the region with the consent of the parties. In such circumstances, the Petition was filed in Mumbai which had jurisdiction to entertain such Petition. An Order was passed dated 29.06.2015 by the Government in exercise of the powers contained in sub- Section 4(B) of Section 10(E) of the Companies Act 1956 read with Regulation 4 of the Company Law Board Regulations 1991 thereby constituting the benches for the purpose of exercising and discharging the Board's powers and functions in the manner specified therein. Thereafter, on 23.09.201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent further records that the Courts are not obliged to put on hold passing effective remedy just for want of hearing the main case. It is also recorded to that when the relief in Company Applications make the main Petition infructuous, such Company Petition could be disposed of along with the application and, as such, proceeded to dispose of the main Company Petition. The said observation in the impugned Judgment clearly suggests that it was a view taken by the learned Bench of the Company Law Board that whilst deciding the said applications, it would be appropriate to dispose of the main Company Petition along with the said Company Application nos. 122 and 133 of 2015. Admittedly, this view was not placed before the parties at the time of the hearing of the Company Applications. It was as such incumbent upon the learned Company Law Board to place such views before the concerned parties so as to give them an opportunity to advance final arguments on the main Company Petition. The parties are always at liberty to fashion their arguments in the manner they find it more suitable and considering that only the Company Applications were under consideration, it was not open to the learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stice as there was no effective hearing on the main Company Petition. 15. In such circumstances, without going into the merits of the rival contentions raised by the Appellants and the Respondents in the main Petition, I find it appropriate and in the interest of justice to quash and set aside the impugned Judgment passed by the Company Law Board and direct the Company Law Board to decide the Company Petition and the said two Applications afresh after hearing the parties in accordance with law. 16. In view of the above, I pass the following : ORDER (i) The impugned Order/Judgment dated 25.04.2016 is quashed and set aside. (ii) The Company Petition no. 18 of 2015 and Company Application nos. 122 of 2015 and 133 of 2015 are restored to the file of the learned Company Law Board, Mumbai Bench. (iii) The Company Law Board is directed to decide the Company Petition and the said two Applications afresh in the light of the observations made herein above after hearing the parties in accordance with law. (iv) Ad-interim reliefs, if any, in operation before the Company Law Board, to continue until further orders in the said Petition. (v) The parties are directed to appearing befo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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