Shree Consultations and Services Pvt. Ltd. vs K.N. Sankaranarayanan and others

Raju, J.—The above appeal has been filed against the judgment of a learned single judge of this court dated January 28, 1994, in A.A.O.

No. 483 of 1993 (since reported in [1994] 80 Comp Cas 558; [1994] 1 LW 602 whereunder the learned judge, while allowing the appeal, set

aside the order of the Company Law Board dated May 14, 1993, in Company Petition No. 59 of 1992 holding, overruling the preliminary

objection of respondents Nos. 1 and 2 before us in this appeal, that the petition presented under sections 397, 398 and 402 of the Companies

Act, 1956, by some of the members/shareholders of the company in question is maintainable and has chosen to take up for further hearing the

company petition as also C.A. Nos. 98, 133 and 134 of 1993.

Having regard to the nature of the order under challenge and the stage of the proceedings at which the challenge has been undertaken by the

parties to the proceedings, we desist from dealing with the merits of the claims pertaining to the main dispute in detail and suffice it to advert to

certain salient features of the case strictly relevant to the controversy before us. Respondents Nos. 1 and 2 before us (the appellants before the

learned single judge) were the managing director and director, respectively, at the relevant point of time of Senka Carbon Private Limited, the third

respondent in this appeal. The fact remains that, some of the administration of the affairs of the company by the above two persons from the

beginning on the view that the financial affairs of the company were being grossly mismanaged and that the director, Mr. K. Krishnan, has made

personal gain at the cost of the company and its shareholders. In substance, the grievance appears to be that the actions of the managing director

and the other named director are not only mala fide but also amounted to gross abuse of power with the avowed object of excluding the majority

of the shareholders and enriching themselves at the expense of the company and its shareholders, by allegedly making huge secret profits. On that

view, Shree Consultations and Services Private Limited (the appellant in this appeal) moved the Company Law Board at New Delhi by filing

Company Petition No. 59 of 1992 for a declaration that the managing director and another named direction (appellants before the learned judge)

ceased to be the directors of the company and sought for the appointment of some fit and proper person as administrators of the company in the

place of the existing board of directors, seeking rendition of accounts from the erstwhile management and for other appropriate and incidental

reliefs by way of orders and directions for management, regulation and conduct of the affairs of the company as claimed by the petitioners before

the Company Law Board. At this stage, we are not concerned with the genuineness or the legality, propriety or the justification for such claims.

The appellant-company before us in this appeal has chosen to file Company Petition No. 59 of 1992, both on its own behalf and on behalf of

some of the other members/shareholders of the company, who claimed to have accorded their consent for the presentation of the petition on their

behalf also. Such letter of consent was also filed as annexure 2 to the schedule of the company petition. Respondents Nos. 1 and 2 before us,

while opposing the petition, filed before the Company Law Board, among other things, contended that the petition filed did not comply with the

specific and mandatory requirements of section 399(2) of the Act, in that according to them, the consent filed as found enclosed in annexure 2 was

neither a proper nor valid one and since the said infirmity goes to the very root of jurisdiction, the company petition was not maintainable, as

presented and, therefore, the same is liable to be rejected. In the light of such objections the Company Law Board for short ""the CLB"" has chosen

to consider the question of maintainability, as a preliminary issue and thereupon passed the order dated May 14, 1993, overruling the preliminary

objection, as noticed supra. It may also be stated at this stage that in C.A. No. 94 of 1992, in Company Petition No. 59 of 1992 on a consensus

arrived at between both parties before the Company Law Board, an order dated December 24, 1992, came to be passed constituting an interim

board of directors with an independent chairman, with certain consequential directions regarding the administration of the affairs of the company,

pending further course of action and final orders and it is unnecessary to deal at length with the details thereof.

Aggrieved against the decision on the preliminary issue relating to the maintainability of the petition before the Company Law Board, an appeal

in A.A.O. No. 483 of 1993 came to be filed u/s 10F of the Companies Act, 1956. The learned single judge, by his order under appeal before us,

held that the consent obtained in the form as contained in annexure 2 to the schedule to the company petition did not constitute a valid consent in

writing in terms of section 399(3) of the Act, and, therefore, the company petition filed before the Company Law Board had to fail, not only for the

said reason, but also for the further reason that Mr. C. P. Sodhani had no valid authority to present the company petition. On that, the learned

judge while allowing the appeal, ordered the dismissal of Company Petition No. 59 of 1992. In arriving at the said conclusion, the learned judge

was of the view that there was no indication or disclosure made on record that the consenting shareholders subscribed their consent to the

particular course of action in form and substance as projected for in Company Petition No. 59 of 1992 and that the consent letter failed to indicate

that the signatories/shareholders had applied their minds to the allegations to be made and the reliefs to be sought in the proposed action and have

thereupon given their consent for seeking those reliefs.

The learned single judge also adverted to some of the decisions placed before him and the principles laid down therein and observed that

considered in the light of those principles the consent in the form contained in annexure 2 does not spell out any nexus between the draft of the final

petition stated to have been perused and consented to by the signatories and the actual petition filed and there was nothing further to indicate that

all the contents of the final draft find its place in the petition ultimately filed. The learned judge did not agree with the plea on behalf of the appellant

that the requirements as stipulated by the Division Bench judgment of this court in M. C. Duraiswami v. Sakthi Sugars Ltd. [1980] 50 Comp Cas

154 have been fully satisfied in this case.

Mr. G. Subramanian, learned senior counsel appearing for the appellant, contended that the consent as expressed in annexure 2 of the schedule

to the petition satisfied the requirements of law and the principles laid down in the decision in M. C. Duraiswami v. Sakthi Sugars Ltd. [1980] 50

Comp Cas 154 (Mad) and the conclusion of the learned single judge to the contrary are not sustainable. According to learned counsel for the

appellant, the conclusion of the learned judge that the non-production of any resolution of the board of directors authorising Mr. C. P. Sodhani to

file the company petition also seriously undermined the very maintainability of the company petition itself is not sustainable in law and that so long as

there was a conscious approval of the proposal as in the company petition no exception could be taken to the legality and propriety of the claim. In

substance, the contention on behalf of the appellant is that the consent in question is a self-contained one satisfying all the statutory requirements

and the learned judge was in error in interfering with the orders of the Company Law Board. It was also contended that the respondents having by

consensus agreed for providing an interim management cannot raise such a preliminary objection regarding the very maintainability of the company

petition in which without demur an interim administration was agreed to be made.

Mr. T. Raghavan, learned senior counsel for respondents Nos. 1 and 2, while adopting the reasons contained in the judgment under appeal,

contended that the consent in annexure 2 lacks relevant and vital particulars and does not also satisfy the criteria laid down in M. C. Duraiswami v.

Sakthi Sugars Ltd. 1980 50 Comp Cas 154 Mad and in the absence of proper and sufficient establishment of the link or nexus between the draft

of the final petition and the actual petition filed, the consent could not be claimed to have been accorded after due and proper application of mind.

Mr. Vedantam Srinivasan, learned senior counsel appearing for the third respondent, while adopting the submissions of the learned senior counsel,

Mr. T. Raghavan, also contended that the consent in the form in annexure 2 does not conform to the requirements of law. Learned counsel also

adverted to the relevant portions of the pleadings before the Company Law Board to highlight the varying stand said to have been taken for the

appellant at different stages and the impossibility of getting the consent said to have been obtained on the same day from different persons residing

at different places separated by long distances. The variation in the number of consenting shareholders also was claimed to undermine the propriety

and legality of the procedure adopted. While controverting the submission on behalf of the appellant, that, if at all, the learned single judge ought to

have remitted the matter for the consideration afresh of the Company Law Board, Mr. Vedantam Srinivasan, learned counsel, contended that

having regard to the stand taken by the appellant before the Company Law Board there was no need or occasion to conduct any enquiry afresh

and that the order of the learned single judge does not call for any interference in our hands. Mr. R. Viduthalai, learned counsel, appeared for the

fifth respondent herein.

Before actually taking up for consideration the various contentions raised we consider it necessary to advert to some of the judicial

pronouncements referred to before us by learned senior counsel appearing on either side. There is no controversy that the decision of a Division

Bench of this court in M. C. Duraiswami v. Sakthi Sugars Ltd. [1980] 50 Comp Cas 154; [1979] 93 LW 148 contains the leading statement of

law on the subject. The Division Bench was dealing with an appeal against the order of Ramaprasada Rao J. (as the learned judge then was) in

C.P. No. 9 of 1976 dated August 25, 1977. In that case also, the petition was filed under sections 397 and 398 of the Companies Act, 1956. and

along with the petition, a letter of consent signed by 147 shareholders was also obtained and filed. The consent filed as annexure in that case

contained a statement that the undersigned members of the company whose particulars were given below therein gave consent to the appellant

therein for filing a petition on their behalf under sections 397 and 398 of the Act. The particulars given also appear to be the name of the member,

address of the member, number of shares held by him. whether all the calls or other dues on shares have been paid or not and the signature. A

preliminary objection was taken by the company contending that the petition did not satisfy the requirements of sections 397 and 398 of the Act

and, therefore, the same was not maintainable. In support of such objection 73 affidavits sworn to by 73 out of 147 persons whose signatures

found a place in the annexure to the petition, were also filed, stating that they were asked to sign a letter or statement of consent to call for an

extraordinary general meeting and the signatures were subscribed in that context and that they never gave consent to a company petition being

filed, as it was done in that case. The consent therein was thus claimed to have been given on misrepresentations and there was no consensus as

between them and the person who filed the petition. The learned single judge before whom the company petition came up for hearing held that the

petition was not maintainable and dismissed the same. The same was challenged before the Division Bench of this court. After a careful and

meticulous analysis of the provisions of the Act as also the scheme and purpose underlying sections 397, 398 and 399 of the Act, the Division

Bench, speaking through M. M. Ismail J. (as the learned judge then was), declared the position of law as hereunder :

(a) The foundation of a petition u/s 397(1) will be the allegation or complaint that the affairs of the company were being conducted in a manner

prejudicial to the public interest which will necessarily and naturally involve giving particulars as to how it was prejudicial to the public interest.

Similarly an averment or allegation as to the affairs of the company being conducted in a manner oppressive to any member or shareholder must

necessarily involve giving particulars as to what constituted ""oppressive manner"".

(b) Section 398(1) contemplates three different complaints one of them being namely, that the affairs of the company are being conducted in a

manner prejudicial to the public interest, being common to section 397(1) and section 398(1) and the other two being that the affairs of the

company are being conducted in a manner prejudicial to the interests of the company and that a material change has taken place in the management

or control of the company. Consequently, for any petition to be filed u/s 397 or section 398 or under both, it is necessary that the petition should

make a reference to any one of these complaints as the foundation for invoking the jurisdiction of the court under the relevant sections.

(c) As to what constitutes ""consent in writing"" contemplated in section 399(3) has to be in the background of those requirements. From the very

nature of the case ""consent in writing"" contemplated in section 399(3) of the Act is a consent to the filing of a particular petition with particular

allegations for a particular relief u/s 397 or 398 or under both. There cannot be a blanket consent like a certain member or members consenting to

some other member filing a petition under sections 397 and 398 or under both.

(d) While adverting to the form, substance and contents of the consent found given in the case before the Division Bench and holding that such a

consent cannot be said to be a valid consent as contemplated by section 399(3) of the Act, it was stated that before a member can be said to have

consented to a particular action, the said member should have known what was the action to be taken, what was the relief to be prayed for and

what was the ground to be urged in support of the relief claimed. It was also held therein that it was one thing to say that the member who gives

consent should have applied his mind to the question before him before giving consent and another thing to say that before giving consent the actual

petition prepared to be filed must be before him.

(e) The language ""they should have applied their minds to the question before them"", necessarily implies that the application of the mind was to the

particular relief sought to be prayed for and the ground on which that relief was sought to be prayed for and that a mere consent for filing an

application u/s 397 and section 398 or under both, without any particulars such as the nature of the allegations or complaints to be made in the

petition and the nature of the relief sought to be claimed in the petition, cannot be the result of an application of the mind to the question before

them and, therefore, such a consent cannot be a valid consent.

(f) The consent contemplated u/s 399(3) is an intelligent consent, in the sense, a consent given for the purpose of making a particular allegation in

the petition and for the purpose of claiming a particular relief therein and consequently a blanket consent, as in that case, cannot be a consent as

contemplated u/s 399(3) of the Act.

That apart, on behalf of the respondents, the unreported decisions of some of the learned single judges of this court to which a reference will be

made hereinafter were also referred to. The decision in C.P. No. 9 of 1976 was one against which the matter was pursued on appeal resulting in

the Division Bench in M. C. Duraiswami v. Sakthi Sugars Ltd. [1980] 50 Comp Cas 154 (Mad).

(a) The decision in Kathare (N.G.) v. Madras Oxygen and Acetylene Co. Ltd. (C.P. No. 106 of 1977 dated 30-6-1978) was that of

Nainarsundaram J. (as the learned judge then was) who was a party to the Division Bench which rendered the decision in M. C. Duraiswami v.

sakthi Sugars Ltd. [1980] 50 Comp Cas 154 (Mad). The petition therein was also filed under sections 397 and 398 of the Act with letters of

consent in support thereof, in view of the preliminary objections raised regarding the maintainability of the petition on the ground of non-compliance

with section 399(3) of the Act. After adverting to the two decisions referred to supra, the learned judge proceeded to refer to the form of consent

in that case which stated that the shareholders who subscribed to the letters of consent confirmed that they have perused the company petitions

prepared in the matter and are in full agreement with the averment contained in the said allegations and they also give consent to the applicant

therein to file a petition either individually or along with any other shareholders. The learned judge ultimately held that the petition filed before the

court, in its form and substance was not appended to the form of consent given therein and the signatories have not subscribed their signatures in

the said petition. It is necessary to be stated by us at this stage itself that this reasoning and approach of the learned judge runs directly contrary to

the Division Bench judgment in M. C. Duraiswami v. Sakthi Sugars Ltd. [1980] 50 Comp Cas 154 (Mad) to which he himself was earlier a party

and those observations and reasoning cannot have our approval. On the above reasoning, the learned judge also held in that case that it cannot be

said that the petition actually filed in the court was the one perused by the signatories and it was also not possible to establish any link between the

actual petition filed in the court and the one referred to in the annexure which was the letter of consent and that there was no indication in the

annexure which was the letter of consent filed therein that the signatories applied their mind to the question before them, viz., the particular relief to

be sought for. Thus, in spite of a recital in the letter of consent filed as annexure that the signatories have perused the company petition, the learned

judge found it impossible to establish a nexus between the petition presented before the court and the petition referred to in the annexure and if

only the company petition in the same form or in substance was appended to the letter of consent and the signatories have signed such a petition

there would not have been any difficulty. Under the guise of undertaking an explanatory exercise this decision runs diametrically opposite to the

Division Bench decision in M. C. Duraiswami v. Sakthi Sugars Ltd. [1980] 50 Comp Cas 154 (Mad).

(b) In C.P. No. 30 of 1979 dated February 8, 1980, S. Padmanabhan J., after adverting to the case law on the subject, observed that it was not

held by this court that all the consenting members should be aware of each and every averment contained in the petition and that it is sufficient if the

consenting members are shown to be conscious of the various grounds of oppression and mismanagement on the part of those in charge of the

management and that they must have thereupon reached the conclusion that a petition under sections 397 and 398 should be filed and must have

agreed to the filing of the petition. On the facts and circumstances of the case, the consent produced therein was found to be not in conformity with

section 399(3) of the Act.

(c) In Gnanagiri Nadar (K.C.A.) v. Santha Chemicals Ltd. (C.P. No. 42 of 1979 dated 20-8-1981) and Raja Shankar (G.) v. Tuticorin Spinning

Mills Ltd. (C.P. No. 69 of 1985 dated 1-12-1987) the learned single judge of this court who dealt with them applied only the principles laid down

by the Division Bench and, on the facts and circumstances of the peculiar cases before them, sustained the preliminary objections raised.

In Nibro Ltd. v. National Insurance Co. Ltd. [1991] 70 Comp Cas 388, a learned single judge of the Delhi High Court held that u/s 291 of the

Companies Act, 1956, except where express provisions have been made that the powers of a company in respect of a particular matter are to be

exercised by the company in general meeting, in all other cases the board of directors are entitled to exercise all its powers and individual directors

have such powers only as are vested in them by the memorandum and articles and, therefore, unless a power to institute a suit is specifically

conferred on a particular director he has no authority to institute a suit on behalf of the company. This decision was relied upon to substantiate the

objection that C. P. Sodhani had no valid authority, in the absence of any resolution of the board of directors of the appellant-company to present

the company petition.

The appellant before us has filed C.M.P. No. 10581 of 1994 praying for orders to receive the copy of the resolutions of the board of directors

dated October 12, 1992, as additional evidence, and by producing the same, the appellant seeks to substantiate before us that C. P. Sodhani had

been authorised to file the necessary application before the Company Law Board in the matter under sections 397 and 398 of the Act and to file

necessary affidavits therefore also. This application is strongly and seriously opposed by Mr. Vedantam Srinivasan reiterating the stand taken in the

counter-affidavit filed on behalf of respondents Nos. 1 to 3, opposing the application. Apart from contending that such material which was never

spoken to or produced before the Company Law Board or the learned single judge could not be allowed to be produced at this second appellate

stage, learned senior counsel also in effect questioned even the authenticity of the same, by making particular reference to the stand taken and

nature of plea raised in the reply filed by Mr. C. P. Sodhani to the counter of respondent No. 2 before the Company Law Board, stating that the

plea of absence of authorisation by the board of directors is wholly irrelevant and was of no concern of the second respondent and the conduct

before the learned single judge wherein admittedly no such resolution was produced in spite of a specific issue raised in that regard. In an attempt

to get over this obstacle on behalf of the appellant certain decisions were relied upon to which a reference could now be made. K. Venkataramiah

Vs. A. Seetharama Reddy and Others, , arose in connection with a challenge made to an election to the Legislative Council of Andhra Pradesh

from Telengana Graduates Constituencies before the Election Tribunal. During the pendency of an appeal before the High Court against the order

of the Election Tribunal, an application was filed invoking. the provisions of Order 41, rule 27 of the Civil Procedure Code, 1908, to produce

additional evidence. In that context, the apex court held while dealing with the powers of the appellate court, that the High Court was justified in

doing so and that where additional evidence was taken with the consent of both sides or without objection at the time when it was taken, it was not

open to a party to complain of it later. In Billa Jagan Mohan Reddy and Another Vs. Billa Sanjeeva Reddy and Others, , it was held that the

appellate court can receive additional evidence if it considers it to be needed in the interests of justice. In the case before the apex court it is seen

that the documents were produced at a belated stage before the trial but the delay was not condoned and when it was produced at the appellate

stage before the High Court the claim was not properly considered necessitating the interference of the apex court.

In Punnaiah (P.) v. Jeypore Sugar Co. Ltd. [1994] 81 Comp Cas 1, the apex court was considering the scope of section 399(3) and rule 88

of the Companies (Court) Rules, 1959. That was a case in which ""R"" the holder of certain shares in a company executed a general power of

attorney in favour of her father and left India in 1973, the power of attorney joining together with certain other shareholders filed an application

under sections 397 and 398 of the Act in the High Court and in order to comply with the requirement of one-tenth shareholding u/s 399 on behalf

of ""R"" the power of attorney gave consent in writing. A preliminary objection was raised as to the maintainability of the application on the ground

that it did not comply with the requirements of section 399 of the Act since the consent of ""R"" was not that of her personally but that of her power

of attorney. To counteract the objection the affidavit of ""R"" has been filed wherein she had affirmed that on her recent visit to India she was

apprised by her father of the affairs of the company and its management alleging oppression and mismanagement and that she authorised her father

to act be her behalf as general power of attorney to take all steps as he deemed proper to protect her interest. The question that was raised before

the apex court was as to whether the consent given by her power of attorney holder for and on her the If and not by her personally was a valid

consent within the meaning of section 399(3) of the Act. The apex court held that section 399 or sub-section (3) thereof does not either expressly

or by necessary implication indicate that the consent to be accorded thereunder should be given by the member personally nor does rule 88 of the

Rules in any manner indicate that the consent should be given by the member personally and that the consent given by the general power of

attorney holder ""R"" for or on her behalf as such power of attorney is a valid consent within the meaning of section 399(3) of the Act and, therefore,

the preliminary objection was not sus-tainable.

We have carefully considered the submissions of learned counsel appearing on either side. A perusal of the memorandum of grounds of appeal

filed in this court against the order of the Company Law Board also shows that the appellants before the learned single judge (respondents Nos. 1

and 2 before us) were equally aggrieved against the manner of disposal of the preliminary objection and contended that the Company Law Board

ought not to have decided the issue in such a summary fashion and the laconic order passed without objective consideration or assigning any

reasons therefore cannot be sustained. That apart, several factual issues such an discrepancies in the signatures found in the consenting letter, the

varying numbers of such persons who subscribed their signature to the letter of consent are very serious as also vital questions of fact which

deserve a proper and effective enquiry or trial at the hands of the Company Law Board. That apart, the locus standi or authority of Mr. C. P.

Sodhani, to present the application in the absence of a resolution of the board of directors authorising him to do so was also raised. We also find

from the order of the Company Law Board challenged on appeal before the learned single judge that the Company Law Board has passed a

cryptic order holding that after carefully considering the views of both counsel and the facts of the case they came to the conclusion that the

consent given in annexure 2 meets the requirements of section 399 and, therefore, the petition was maintainable. No reasons or judicious

discussion or consideration of any of the contentions or the facts and circumstances of the case have been assigned or made in the order which

involve serious consequences. In the background of such contentions and serious lapse and omission on the part of the Company Law Board the

learned single judge ought to have in our opinion, set aside the order of the Company Law Board and remitted the matter for fresh consideration of

the Company Law Board instead of undertaking an adjudication of some of the legal issues which depend very much on vital issue of facts. There

can be no dispute over the position that the Company Law Board which was substituted in the place of the company court to entertain deal with

and dispose of petitions under sections 397 and 398 of the Act and pass such orders as it thinks fit is empowered to conduct such enquiry as it

thinks proper and necessary in the interests of justice. Though the Company Law Board has chosen to deal with the petition in question in a

summary fashion for reasons best known to it, the learned single judge instead of setting aside the order of the Company Law Board and remitting

the matter for consideration afresh by the Company Law Board has himself undertaken the task of going into the matter to find out the factual

realities as also the probabilities of the case and pass final orders disposing of claims and counter-claims which are more mixed questions of fact

and law than mere questions of law. The Company Law Board had every jurisdiction and authority to require the parties or any one or more of

them to produce such further documentary or other evidence as the Company Law Board may consider necessary for the purpose of satisfying

itself as to the truth of the allegations made in the petition or for ascertaining any information which in the opinion of the Company Law Board is

necessary for the purpose of enabling it to pass orders on the petition. But for reasons which are not clear or apparent, there was no initiative or

attempt in this regard by the Company Law Board. The appellant before us also appears to have been indifferent to some extent before the

Company Law Board.

Further, the learned single judge in our view committed the same error as the learned single judge who dealt with C.P. No. 106 of 1977 in

applying the principles laid down by the Division Bench in M. C. Duraiswami v. Sakthi Sugars Ltd. [1980] 50 Comp Cas 154. The appellant, in

our view, is right in contending that it is not necessary for the consenting members giving their consent to have before them the final petition as filed

ultimately before the Company Law Board, while according consent. Though the learned single judge has taken great pains to analyse the case law

on the subject, when the question of applying the ratio of those decisions reached for consideration the learned judge appears to have been merely

carried away by the fact that no effort has been made to establish any nexus between the draft of the final petition which was stated to have been

perused and consented to by the signatories and the actual petition filed and presented before the Company Law Board, and that there was

nothing further to indicate that all the contents of the final draft found place in the petition actually filed, while rendering the judgment. Even that

apart, the learned single, judge has also omitted to consider the legal significance and the consequences flowing from the recitals in the letter of

consent filed in this case and in addition thereto the further recital about the signatories to the letter of consent having read the final draft of the

petition and having accorded their consent thereupon. when taken together and finding out whether those materials per se, notwithstanding the non-

production of the final draft of the petition satisfied the requirements of law and particularly section 399(3) of the Act.

Thus, on a careful analysis of the entire matter, we find that at every stage there appears to have been some lapse or other which has resulted

only in the perfunctory consideration of the matter at every stage. While that be the position, we do not consider it either appropriate or proper to

undertake ourselves the exercise which ought to have been properly and effectively so made by the Company Law Board initially and later in the

appeal in this court against the order of the Company Law Board. Consequently, we are of the view that the best course, in the interests of all

parties and in the larger interests of justice, to be adopted in the matter would be to set aside the orders of the learned single judge under challenge

before us and also the order of the Company Law Board on account of the simple reason that there was no objective consideration of the

preliminary objection by the Company Law Board, the initial authority, and relegate the parties and remit the matter to the Company Law Board

for considering the same afresh and in accordance with law. This course of action, in our view, will ensure justice to both parties concerned. We

may also point out that it will also be open to the petitioner before the Company Law Board if considered necessary to file a fresh petition keeping

in view the objections raised by the respondents as there is no prohibition in law for so doing. In that event, the present petition becomes otiose.

So far as the application filed to receive additional evidence in C.M.P. No. 10581 of 1994 is concerned apart from the futility of entertaining

the same at the second appellate stage before us and also for the further reason that we have remitted the matter to the Company Law Board the

entire matter for consideration, there is no need or necessity for us to pass any orders on the said application as the same can also be considered

by the Company Law Board. Therefore, we remit the application along with the main case.

For all the re sons stated supra, we set aside the orders of the learned single judge dated January 28, 1994, and the order of the Company

Law Board dated May 14, 1993, in so far as it related to the decision on the preliminary objection regarding the maintainability of the petition

before the Company Law Board and remit the case along with C.M.P. No. 10581 of 1984 and direct the Company Law Board to consider the

matter afresh in accordance with law and in the light of the observations made herein and pass appropriate orders. Since the matter has been

pending for long even at the preliminary stage, we direct the Company Law Board to ensure that the matter is heard expeditiously and the issue

relating to the preliminary objection is disposed of within three months from the date of receipt of a copy of this judgment or on production of such

copy by any of the parties before the Company Law Board. In the above circumstances, there will be no order as to costs.