MAYANK KOCHER Vs. COMPANY LAW BOARD

JUDGEMENT

(1.) THE appellant raises the principal legal question as to whether an application for investigation under section 237 of the Companies act, 1956 is an alternative to proceedings for oppression and mismanagement or rectification. Such question clearly arises on the reading of the order of dismissal of the appellant's petition under section 237 of the Act by the Company law Board.

(2.) THE appellant sought an investigation into the affairs and conduct of business of a company which he claims was born out of funds of a partnership business carried on by the deceased patriarchs of the two groups of parties fighting these and other proceedings. The appellant claimed that as an heir of a partner who held fifty per cent share in the firm, he was entitled to be apprised of the conduct of the company's affairs and participate therein. He cited fraud being practised on him by the other group in the manner in which the company's affairs were being conducted. The appellant urges that the Company Law Board exercising powers under section 237 of the Act is obliged to form an opinion as to the nature of conduct of the company's affairs and upon such opinion, direct or decline to order investigation. It is submitted that it is such formation of opinion that is central to the authority accorded to the Board under section 237 and the refusal to form an opinion by the order impugned amounted to abdication of jurisdiction.

(3.) THE Company Law Board noticed the preliminary objections raised by the opposing group, found such objections to be meritorious and proceeded to dismiss the petition. The Board took a view that in the absence of proceedings for oppressions; and mismanagement or proceedings for rectification being lodged by the appellant, the investigation would be futile for the petitioner could not obtain any benefit thereof as the matters complained of were stale and the appellant's remedy against the same could not be pursued. It is the company Law Board's finding to such effect that the petitioner makes the basis for the principal question of law raised under Section 10f of the Act in this appeal.