PRAKASH TIMBERS PRIVATE LIMITED Vs. SUSHMA SHINGLA

JUDGEMENT

(1.) A preliminary objection has been raised in this appeal by the respondents first set that the Special Appeal against the judgment of the learned single Judge, deciding the first appeal under S. 10-F of the Companies Act, 1956, against the order dated 15-9-1995, passed by the Company Law Board, Principal Bench, New Delhi, was not maintainable under Chapter VIII, Rule 5 of the Allahabad High Court Rules (hereinafter referred to as 'Rules').

(2.) The brief facts are that Prakash Timbers Private Limited, appellant No. 1 was incorporated as a company in the year 1961. It decided to bring into existence another subsidiary company and, consequently, Hridaya Narain Yogendra Prakash Properties Private Limited was incorporated as wholly owned subsidiary of Prakash Timbers Private Limited. In August 1991, Smt. Sushma Shingla and Smt. Sandhya Sharan, respondents 1 and 2 requested that a meeting of the Board of Directors be called to discuss the mismanagement in the company but no such meeting was called. In the third week of March, 1992, they received a letter from the Assistant Registrar of the Companies that it had come to their notice that they had sold their shares to one Shri Sonit Tandon, their nephew. They filed a petition before the Company Law Board, under S. 10-E of the Companies Act, 1956 (in short 'the Act') stating that there was mismanagement in the company and they have been wrongly removed from the Board of Directors. They prayed that they be appointed in the Board of Directors of Prakash Timbers Private Limited and the transfer executed by the parent company on 20/04/1992, pertaining to the roof of the building situate at 165, Civil Lines, Bareilly, to Bareilly Corporation Bank, be set aside, and prayed for certain other reliefs. During the proceedings before the Company Law Board; New Delhi, the parties came to a compromise. The Company Law Board passed an order in terms of the said compromise on 15/09/1994. The present appellants filed appeal against the said order before this Court under S. 10-A of the Act challenging the validity of the order passed in terms of the compromise scheme particularly regarding clause (iii) of the order which was a part of the compromise. The appeal was dismissed by the learned single Judge on 15-1-1995 and against this order the present special appeal has been filed.

(3.) Learned counsel for the respondent urged that the appellant had already preferred an appeal-against the order of the Company Law Board before this Court under S. 10-F of the Act. This special appeal does not lie against such an order.