Calcutta High Court
Birla Corporation Ltd. & Ors vs Rameshwara Jute Mills Co. Ltd. & Ors on 24 October, 2008
Author: Dipankar Datta
Bench: Dipankar Datta
T No. 108 of 2008
T.NO.109 OF 2008
A.P.O.T NO. OF 2008
C.P.NO.57 OF 2004
IN THE HIGH COURT AT CALCUTTA
Civil Appellate Jurisdiction
ORIGINAL SIDE
BIRLA CORPORATION LTD. & ORS. Plaintiff/Petitioner/Applicant
Versus
RAMESHWARA JUTE MILLS CO. LTD. & ORS. Defendant/Respondent
BEFORE:
The Hon'ble JUSTICE DIPANKAR DATTA Date : 24th October, 2008.
VACATION BENCH The Court : Supplementary affidavit filed by the respondent no.1 shall be retained with the record.
The appeal is treated as on day's list. It is under Section 10F of the Companies Act and is directed against the order dated 15.10.2008 passed by the Company Law Board (hereafter the Board) which is to the following effect :
"Application mentioned. Counsel appearing for the Respondents seek time to file reply to the same by 25th October, 2008 and rejoinder by 2nd November, 2008. The application will be heard on 5th November, 2008 at 2.30 p.m. In the meanwhile, there shall be no Board Meeting in any of the Respondent Companies except that for the purpose of approving quarterly results, Board Meeting may be held, if required."
A bare perusal of the aforesaid order would indicate that the Board has not assigned any reason in support of the order of injunction. 2
This Court in its decision reported in 2007[4] CHN 712 while dealing with an appeal under Section 10F of the Act observed as follows :
"11. In passing the order under appeal, the Company Law Board has completely abdicated its jurisdiction, and obligation, as to the decision making process. The order passed may as well be a rubber stamp prepared to be used in every case where the Company Law Board is of the opinion that the amendments prayed for should be allowed. There is no reference to any fact or the context in which the amendments were sought to be allowed. There is no mention of what grounds were urged in opposition and why such grounds were unmeritorious. The Tribunal need not have expended pages over the matter but it was necessary to indicate why the order came to be passed.
14. The order impugned does not show inadequacy of reasons, it has no reasons at all. And in giving no reasons in making the order, a question of law has arisen that can be taken up under section 10F of the Act."
The impugned order is bereft of reasons and in the light of the decision of this Court extracted above, this Court holds the appeal to be maintainable. The Board while passing the order impugned ought to have ensured that the materials considered by it are reflected therein. The order granting injunction suffers from gross jurisdictional error and as such is set aside. The Board shall proceed to hear out the application filed by the respondent on the date fixed by it, i.e. 5.11.2008 without granting adjournment to any of the parties. However, the time for exchange of affidavits stands modified as follows :
An advance copy of the affidavit in opposition shall be served on the applicants by 2nd November, 2008; reply thereto, if any, may be filed by 4th November, 2008.
Having regard to allegations and counter-allegations levelled by the parties in respect of factual events which transpired before the Board on 15.10.08 leading to the impugned order, this Court is of the considered view 3 that the parties ought to maintain the status quo on that date for ends of justice. Accordingly, it is further directed that the appellant shall be entitled to conduct Board Meetings, if any, without inclusion of any further Director in its Board in place of its erstwhile Chairman, R.S. Lodha(since deceased) until disposal of the application pending before the Board whereon the impugned order was passed. However, the Chairman of the Board Meeting scheduled to be held later this month shall be elected by the Directors present in such meeting. In so far as appointment of Chairman of the Board of Directors is concerned, the parties shall await disposal of the application, as aforesaid, by the Board.
With these directions, the appeal alongwith the application for stay stand disposed of. Parties shall, however, bear their own costs.
It is recorded that since no opportunity has been given to the appellants to counter the contents of the said supplementary affidavit, the allegations contained therein shall not be deemed to have been admitted by them.
All parties concerned are to act on a xerox signed copy of this order on the usual undertakings.
(DIPANKAR DATTA, J.) sb/