In Re: Legend Technologies (India) ... vs Unknown on 15 February, 2008
10. The complaint of the petitioner on the wrongful collection of the amounts I due to M/s. Legend Designers, the partnership firm, from one of the customers, namely. HAL towards the account of the Company by the second respondent without his knowledge though serious in nature, despite the justification putforth by the second respondent, does not survive any more consequent upon withdrawal of such complaint made with HAL. There is no material to suggest that any pressure was brought on the petitioner to withdraw the complaint, made in relation to wrongful appropriation of the funds of the partnership by the second respondent. KSFC in furtherance of the default committed by the partnership firm, look possession of the unit of the partnership, leading to its closure and ultimate sale of the property of the firm, after causing public notices on several occasions, as elaborated by Shri Murari, learned Counsel, in favour of the fourth respondent, being the highest bidder for Rs. 97 lakhs, inthe presence of the petitioner and the second respondent. Any irregularity on account of sale of the unit of the partnership by KSFC, as suggested by the petitioner, cannot arise in a Section 397/398 proceeding. In this background, the charges relating to diversion of business of the partnership firm having already come to an end, for the aforesaid reason, require no order for any remedial measures. Furthermore, there is no scope under Section 397/398 to agitate the grievances on account of diversion of the funds or business of the partnership firm to the Company, especially when such grievances are not in relation to the affairs of the Company. It may be observed that in order to attract the provisions of Section 397/398, one of the essential requirements as found necessary in Arun Kumar Mohta v. Ganesh Commercial Co. Ltd. (supra) is that the complaint must necessarily be in relation to the affairs of the Company. Any complaint against the second respondent in the affairs of the partnership firm cannot be entertained by the CLB.