ABA BUILDERS LIMITED Vs. ANJULA NAGPAL

JUDGEMENT

(1.) The appellants in this appeal under Section 10F of the Companies Act, 1956 are the respondents in a petition under, inter alia, Sections 397 and 398 of the Act before the Company Law Board (CLB). The first appellant is the concerned company and the other appellants are the persons in apparent control of the first appellant. The appellants claim that though the disputes with the respondents in the proceedings before the CLB have been settled and the respondents' shares in the appellant company transferred to the nominees of the persons in control of the company, the CLB has declined to dismiss the petition complaining of oppression and mismanagement despite the appellants' application therefor. At the time that this appeal was received on August 10, 2012, the primary legal issue canvassed by the appellants was that the CLB could not have looked beyond the executed terms of settlement to record that there were other disputes between the parties to the settlement that were required to be resolved. The question of law that is of pre-eminence and dislodges the legal issue initially noticed is as to whether proceedings under Sections 397 and 398 of the Act may be continued by the petitioners who have relinquished their shareholding in the subject company during the pendency of the proceedings. To be slightly more precise, the primary question of law, on the facts of the present appeal, is whether a petition under Sections 397 and 398 of the Act comes to an end upon the petitioners therein transferring their shares in the subject company and the transferees not seeking to pursue the matter. The ancillary issue that arises is as to the jurisdiction of a tribunal established by law that does not have the plenary or residuary authority that a regular court possesses.

(2.) The respondents herein launched the petition in September, 2010, before the CLB, Kolkata Bench, complaining of their being oppressed as shareholders of the company and mismanagement in the affairs of the company. In March, 2012, the respondents before the CLB, who are the appellants herein, applied for the dismissal of the petition filed before the CLB by taking on record a settlement said to have been executed on September 17, 2011. Two sets of affidavits were filed by the first respondent herein to the appellants' application before the CLB.

(3.) The parties here have expended considerable effort in seeking either to establish that the disputes qua the company stood resolved by the settlement of September 17, 2011 or that there was no settlement at all; and it appears that since a similar exercise must have been carried out before the CLB previously, the CLB got taken in by the same and chartered a course which may have been both beyond what was necessary and outside the realms of its authority. The appellants, however, insinuate something sinister. They say that their application was adjourned on specious pretexts before the regular member in charge of the Eastern Region Bench; that the matter remarkably ripened for hearing before a technical member who took charge for a short tenure; and, the inference drawn by the member from the recorded facts is so outlandish that a bit more than mere arbitrariness and unreasonableness has to be attributed to the order impugned. But it is unnecessary to bark up such fruitless tree when the legal question that has arisen can be answered on the basis of a solitary admitted fact.