Company Law Board
A.R. Lakshmi And Ors. vs Sri Krishna Tiles And Potteries ... on 18 February, 2008
Equivalent citations: [2008]144COMPCAS716(CLB)
ORDER
K.K. Balu, Vice-Chairman
1. This is an application made under Regulation 26(2) of the Company Law Board Regulations. 1991 ("the Regulations") on behalf of the petitioners to the main petition invoking the jurisdiction of Sections 397 & 398 of the Companies Act. 1950 ("the Act") for reliefs against the alleged acts of oppression and mismanagement in the affairs of M/s. Sri Krishna Tiles and Potteries (Madras) Private Limited ("the Company"), to set aside the order dated 22,10.2007. dismissing the main petition for non-prosecution, in support of which, Shri N.V. Srinivasan, learned Counsel submitted:
This Bench by an order dated 04.05.2007, while disposing the company application in C.A. No. 154 of 2006, on the question of impleadment of M/s. Ozone Projects Private Limited, purchaser of the immovable properties belonging to the Company, found that any such need for impleadment would arise only when the main petition is maintainable and the sale is against the interest of the Company or against the provisions of the articles of association of the Company and therefore, the prayer of the petitioners for impleading the purchaser was disallowed. The petitioners preferred an appeal in C.M.A. No. 1454 of 2007 on the file of High Court of Madras against the aforesaid order and the appeal came to be dismissed, against which the petitioners have filed a review petition. The petitioners sought, on this ground, to adjourn the main petition to a future date and accordingly, in consultation with Counsel appearing for various parties, fixed the matter for hearing on 23.10.2007. However, the main petition was not listed on 23.10.2007 and when junior Counsel mentioned the matter on the hearing date, she was informed that the matter was called on 22.10.2007 and was dismissed for non-prosecution.
Non-appearance of Counsel for the petitioners on 22.10.2007 was neither wilful nor wanton, but due to the bonalide reasons elaborated hereabove. The petitioners do not resort to any delay tactics prejudicing the interests of the respondents. If the main petition is not restored, serious prejudice and hardship would be caused to the petitioners and they will be put to irreparable loss if the main petition is not disposed on merits.
The respondents have filed a defamatory suit claiming an amount of one crore of rupees against the petitioners, who have every right to gel the company petition restored.
2. Shri V. Rajamani, learned Counsel representing the respondents 1, 4 to 6, vehemently opposed the company application for the following reasons.
The application is a gross abuse of process. The petitioners are in the regular habit of initiating some vexatious proceedings for the past one decade, against the Company in one legal forum or the other and adopting several methods to drag on the proceedings by adopting dilatory tactics. The petitioners are also adopting extra legal methods by effecting publications in the local press and writing to other corporate entities in a defamatory language.
The main petition was posted for hearing on 22.10.2007 and the petitioners deliberately allowed the matter to be dismissed for default, with a view to revive at a future date, and thereby prolong the pendency of the present proceedings.
This Bench circulated a copy of the order dated 14.09.2007 to all the parties intimating the hearing date as 22.10.2007 and therefore, the application lacks bonafides. The petitioners deliberately avoided to attend the hearing, with a view to get the matter dismissed for default. The order dated 14.09.2007 shows that the matter was posted only on 22.10.2007 and the petitioners had knowledge of the hearing date fixed for 22.10.2007.
The petitioners deliberately allowed the matter to be dismissed for default, with a view to harass the respondents. Non-appearance of the petitioners or their Counsel is not owing to erroneous note of the hearing date, but it is a ruse to keep the matter pending one way or another.
3. According to Shri Vineet Subramani, learned Counsel, appearing for the respondents 2 & 3, the prayer of the petitioners to set aside the exparte order will prejudice the interest of his clients and also the innocent third party purchaser of the immovable properties of the Company. No purpose would be served by allowing the application, as the Company's assets have already been sold in its interest and of its shareholders. The present proceedings, by means of an order dismissal, have given quietus to the entire controversies. There are no bonafides on the part of the petitioners and therefore, the application need not be entertained.
4. Shri J. Swaminathan, learned Counsel representing the seventh respondent adopted the arguments advanced on behalf of other respondents.
5. I have considered the arguments of learned Counsel for the parties. The short issue that arises for consideration is whether there was sufficient cause for default or non-appearance of the petitioners on the hearing date in order to make an order setting aside the dismissal of the main petition for non-prosecution.
A careful perusal of the records available before me would reveal that the main petition filed in January, 2006 came up for hearing from time to time and after completion of the pleadings on 08.08.2007, when the petitioners sought an adjournment on the ground that they were preferring a review petition against the order of the High Court of Madras made in CMA No. 1454 of 2007, wherein the order dated 04.05.2007 of this Bench, on the impleadment of third parties was under challenge and therefore, the main petition came to he adjourned to 14.09.2007 at 11.00 A.M. on the condition that "If no slay is obtained, in the meanwhile, the petition will he heard on that date". Again on 14.09.2007, at the request of the petitioners, the hearing was adjourned finally to 22.10.2007 at 11.00 A.M. The attendance-cum-order sheet dated 14.09.2007 clearly discloses that among others. Shri N.V. Srinivasan, learned Counsel, representing the petitioners duly took note of the order, adjourning the matter finally to 22.10.2007, by signing the attendance-cum-order sheet which forms part of the proceedings. It is on record that certified copies of the aforesaid attendance-cum-order sheet are found to have been sent by ordinary post to Shri R.L. Narayanan and Shri R. Ramesh, learned Counsel on record for the respondents (1, 4 to 6) and the petitioners respectively, while Shri P.H. Arvindh Pandian, Shri T.K. Bhaskar and Shri R. Venkata Varathan, learned Counsel representing other respondents have been served by hand delivery, as borne out by the dispatch registers maintained duly by the Bench Office. The dispatch register indicates the amount incurred for having sent the certified copies to the petitioners and the respondents 1, 4 to 6. In the light of illustration (e) to Section 114 of the Indian Evidence Act, the official acts of the Bench Officer, in the absence of contrary established by the petitioners, are presumed to be duly performed. It is relevant to observe that certified copies of the attendance-cum-order sheet sent to the petitioners or the respondents (1, 4 to 6) were never returned by the postal authorities. In this connection the explicit averment of the respondents that "The. Hon'ble Board has circulated the order copy to all the parties intimating the hearing date as 22.10.2007", (para 5 of common counter of the respondents 1, 3 to 6) remains uncontroverted by the petitioners, especially when no rejoinder has been filed to the common counter of the respondents (1, 3 to 6). The sequence of events coupled with documentary proof, elucidated hereabove would unequivocally show that the petitioners failed to make out any sufficient cause for their non-appearance on 22.10.2007, in terms of the order dated 14.09.2007 and therefore, I am constrained to come to the irresistible conclusion that the petitioners had deliberately allowed the matter to be dismissed for non-prosecution. There is no material even to suggest that the mailer was adjourned to 23.10.2007 in consultation with learned Counsel appearing for the parties in the matter or the proceedings of the CLB got stayed by any order of the High Court. The present application is nothing but abuse of process of law. The reliefs in case of oppression and mismanagement, being equitable are discretionary character, will be granted only to persons who approach the CLB with a clean record and in good faith. In view of the foregoing conclusions, I am of the considered view that the applicants have not shown any sufficient ground for recalling the exparte order made by this Bench. Accordingly, the application is rejected.