JAGDAMBA DYEING AND PRINTING MILLS PVT LTD & 3 Vs. RAGHUNANDAN DYEING AND PRINATING MILLS PVT LTD & 1

JUDGEMENT

(1.) BY way of this appeal, the appellants challenge the order dated 11.07.2013 passed by the Company Law Board, Mumbai Bench, Mumbai in Company Petition No.74 of 2008 filed u/s.397 r/w. 398 of the Companies Act, 1956 whereby, the said petition was disposed of with certain directions.

(2.) MR . Navin Pahwa learned counsel appearing for the appellants submitted that the Company Law Board (for short, "the CLB") failed to appreciate the provisions of Sections 397 r/w. Section 398 of the Act in its proper perspective. It was submitted that the appellants, who are in minority shareholders, could not have oppressed the respondents, who claim that they are the majority shareholders. The CLB erred in coming to the conclusion that the remedy u/s. 397 and 398 of the Act are available only in cases of lack of probity and unfairness in the affairs of the respodnentCompany. It was submitted that that the CLB ought to have appreciated that this principle would apply only when it is first established that the case involves oppression by the majority on the minority shareholders. If this prerequisite condition is not satisfied, the CLB cannot take into consideration the aspect of lack of probity and unfairness in the affairs of the respondentCompany in isolation.

(3.) IN support of his submissions, Mr. Pahwa has placed reliance upon the following decisions;