Rajasthan High Court - Jaipur
Sunshine Buildhome P. Ltd. And Ors. vs Madhusudan Garg And Ors. on 20 November, 2007
Equivalent citations: [2008]143COMPCAS598(RAJ)
Author: Ajay Rastogi
Bench: Ajay Rastogi
JUDGMENT Ajay Rastogi, J.
1. At the joint request, both these appeals arising out of common disputes have been finally heard and disposed of at admission stage by this order.
2. These appeals under Section 10F of the Companies Act, 1956 ("the Act") are directed against the interlocutory orders dated August 24, 2007 and September 13, 2007, in Company Petition No. 39 of 2007. Section 10F of the Companies Act, 1956, expressly provides that an appeal would lie to the High Court against the decision or order of the Company Law Board ("the Board") on any question of law arising out of such order.
3. The respondents herein filed company petition before the Board raising grievance about prevention of oppression and mismanagement of the company's affairs by invoking Sections 397 and 398 of the Companies Act, 1956. Pendente lite the company petition, Company Applications Nos. 201 and 202 of 2007 were filed by the respondents herein, on which after hearing both the parties, the Board passed an order dated August 24, 2007 and infra:
The pleadings have not been completed as yet as directed by the Company Law Board's earlier orders. The petitioners received the reply to the company petition on August 21, only. Two weeks time is allowed to file rejoinder. The reply to C.A. No. 201 was also filed by the respondents on August 21, 2007. The petitioner is allowed to file rejoinder to the CA. The petitioner filed reply to the respondents' C.A. No. 202 on May 17, 2007. The respondents do not wish to file rejoinder. Heard the parties on opening of bank account with Yes Bank. Operations out of this account are stopped till further orders. Adjourned to September 13, 2007, at 2.30 p.m. For arguments on C.P. and CAs.
4. Further, Company Application No. 383 of 2007 was also filed and after hearing both the parties, the Board passed an order dated September 13, 2007, ad infra:
C.A. No. 383 of 2007 mentioned that the respondents seek three days time to file reply to the CA. Allowed. Meanwhile, the respondents are restrained from opening any other bank account in respect of the respondent-company. To let the operations of the business of the company continue R1 and P1 are hereby directed to operate the bank a/c other than Yes Bank a/c with their joint signatures only till the disposal of C.P. No. 39 of 2007. Adjourned to November 5, 2007, at 10.30 a.m.
5. It is relevant to mention here that pleadings of Company Petition No. 39 of 2007 as informed to this court, are complete and it has ripened for final hearing fixed on November 5, 2007. Since the hearing could not have been completed, matter has been adjourned till January, 2008, before the Board.
6. The appellants herein are arrayed as the respondents in company petition before the Board and assailed interlocutory orders dated September 13, 2007 and August 24, 2007 and strenuously raised two questions of law in course of arguments, ad infra:
(i) Whether, the Company Law Board has jurisdiction to pass any interim order without any relief sought with regard to the same in the main petition filed before it?
(ii) Whether, a person, who has already been removed from directorship of company, can be allowed to sign on the cheque on behalf of the company?
7. While passing the interlocutory order dated August 24, 2007, the Board, after hearing the parties, considered it proper not to permit the parties to operate "Yes Bank" accounts till further order ; and it appears that on account of the operation of "Yes Bank" being stayed, it was causing greater hardship ; as such taking into consideration material on record, the Board passed further interim order dated September 13, 2007, that let the parties operate the bank account other than "Yes Bank" but with their joint signatures till disposal of Company Petition No. 30 of 2007. The company petition has basically been filed for oppression and mismanagement of the company's affairs and these interlocutory orders relate only in regard to management and for better functioning of the company's affairs. The Board in the contextual facts has exercised discretion and user of discretion could not by any stretch be termed to be so perverse in any event, so as to warrant interference and intervention by this Court as provided in terms of the statute.
8. That apart, from the reply filed by the appellants herein before the Board to the company applications, it appears that no such objection was raised about its jurisdiction. In the opinion of this court, none of the questions raised at the bar can be said to be questions of law having arisen out of the interlocutory order impugned so as to entertain instant appeals in terms of Section 10F of the Companies Act, 1956.
9. Consequently, both the appeals fails and are hereby dismissed. No costs.