Review Application Nos. 94, 95 of 2015 in Company Appeal Nos. 13 and 14 of 2014. Case: S. Natarajan and Ors. Vs S.V. Global Mills Limited and Ors.. High Court of Madras (India)

Case NumberReview Application Nos. 94, 95 of 2015 in Company Appeal Nos. 13 and 14 of 2014
CounselFor Appellant: R. Murari, SC for Preethi Mohan, Adv. and For Respondents: R. Venkatavaradhan, Adv.
JudgesR. Mahadevan, J.
IssueCode of Civil Procedure, 1908 (CPC) - Order XLVII Rule 1; Section 141
Judgement DateDecember 18, 2015
CourtHigh Court of Madras (India)

Order:

R. Mahadevan, J.

1. These Review Petitions have been filed against the orders in C.A. Nos. 13 and 14 of 2014, dated 27.04.2015, contending that the questions of law raised in the appeals have not been considered and therefore, the appeals were erroneously dismissed, as not maintainable.

2. The appeals were filed against the against the order dated 23.10.2014 passed in C.P. No. 62/2014 by the Company Law Board, Chennai, dismissing the interim reliefs sought for by the Petitioners therein, who are the petitioners in RP No. 95 of 2015 and the 7th respondent therein, who is the petitioner in R.P. No. 94 of 2015. The Company Petition was filed after the 7th respondent was defeated in the election for the post of Director. Alleging irregularity in the election process and oppression, the petition was filed seeking many reliefs. Interim reliefs in the nature of injunction to enable the 7th respondent to continue as a Director and also for certain directions were also filed. The Company Law Board refused to grant the interim reliefs. Aggrieved the appeals were filed. This court after elaborately hearing the parties, dismissed the appeals concurring with the views of the Company Law Board and issued directions for the early disposal of the Company petition. The orders were passed by this Court on 27.04.2015. It appears that though the present revision petitions were filed, the petitioners were not in a hurry to give life to it and moved Special Leave Petitions before the Supreme Court. Ultimately, they withdrew the SLP's with a liberty to rejuvenate the sleeping review petitions. While disposing of the SLP's, the Honourable Supreme Court has directed this Court to consider the review petitions at the earliest preferably within two weeks. The Review Petitions were listed on several dates at the convenience of the parties and heard at length.

3. The Learned Senior Counsel Mr. P. Chidambaram, appearing for the petitioner in R.P. No. 95 of 2015 articulously contended that this court has failed to consider the questions of law raised in the appeal referring to questions of law Nos. 7, 8, 9 and 10 and therefore, the appeals under Section 10F of the Companies Act were maintainable. The Learned Senior Counsel contended that the above questions are pure questions of law and therefore, non-consideration of the same is an error apparent on the face of the record. The Learned Senior Counsel also relied upon Sections 106 to 109 of Companies Act, 2013 and Rule 20 of the Companies (Management and Administration) Rules to contend that once the Company decides to have election by e-voting, the voting by other means are barred and the same is a pure question of law. The Learned Senior Counsel also drew the attention of this court to the notice issued to the shareholders and pointed out that the scrutinizer was also duty bound to block the votes registered in the e-voting in the presence of two independent witnesses and submit a report to the chairman. Therefore, the voting by paper ballot poll was not contemplated and cannot be permitted. The Learned Senior Counsel also submitted that the notification dated 19.03.2015 issued by the Ministry of Corporate Affairs, amending the Companies (Management and Administration) Rules 2014 will only have prospective effect and therefore, the votes by paper ballot are invalid. Further according to the Learned Senior Counsel, once a prima facie case is made out as to the bar of other forms of voting, the interim reliefs sought for ought to have been granted and the failure of the CLB to consider the questions of law and grant interim injunction is itself a question of law and under those circumstances, the interim reliefs sought for must be granted by this Court. The Learned Senior Counsel, in reply to the contention of the respondents that the review application is not maintainable, placed reliance upon Rule 2(4) and (5) and Rule 6 of the Company Court Rules, Section 141 and Order 47 Rule 1 of CPC to contend that unless the applicability of the provisions of CPC relating to review are expressly barred, the review application is maintainable. The Learned Senior Counsel also submitted that the case of the appellant has all along been that the paper ballot in addition to e-voting was not contemplated and hence, the contention that the appellants are arguing against their own case before the CLB is incorrect. The Learned Senior Counsel in support of his contentions relied upon the judgements reported in AIR 1961 SC 1633 (Commissioner of Income Tax, Bombay v. scindia Steam Navigation Co. Limited), AIR 1957 SC 49 (Sree Meenakshi Mills Limited v. Commissioner of Income Tax, Madras), AIR 1969 SC 460 (Oriental Investment Co. P. Limited v. Commissioner of Income Tax, Bombay), AIR 1964 SC 1379 (Naunihal Kishan and others v. R.S. Ch. Partap Singh and another), 2014 7 BOMB CR 464 (Godrej Industries Limited), 2010 15 SCC 118 (Gian Singh v. State of Punjab and another) and 1990 69 Company Cases 372 (Guj) (Saurashtra Cement and Chemicals Industries Limited and others v. Esma Industries P. Limited).

4. The Learned Senior Counsel Mr. R. Murari, appearing for the petitioners in R.P. 94/15, adopting the arguments of the Learned Senior Counsel Mr. P. Chidambaram submitted that in view of the non-consideration of the questions of law raised in the appeals, there is an error apparent on the face of the record and also contended that each of the appellants are espousing their own cause and the petitioner has been defeated by adopting oppressive means and hence, the CLB ought to have granted the interim relief. Non consideration of this aspect is an error apparent on the face of the record and hence, the order ought to be reviewed.

5. The Learned Senior Counsel Mr. P.S. Raman, representing Mr. T.K. Baskar, counsel for the 2nd and 3rd Respondents countenanced the contentions of the Learned Senior Counsel for the petitioners, contending that the review as against the orders passed in an appeal under Section 10F is not maintainable. The Learned Senior Counsel also contended that there is no error apparent on the face of the record of this court's order dated 27.04.2015 as this court has already considered the pleas raised now and given a finding in para 18, 20 and 23 holding that this court is in consonance with the views of the CLB and there is no perversity in the order. The Learned Senior Counsel also contended that various High Courts under similar circumstances have refused to interfere with the interim orders of the CLB. The Learned Senior Counsel also contended that once this court has held that the questions raised are not questions of law, it is not an error apparent on the face of record and in consonance with the Clause 37 of the Letters Patent Act, the High Court has framed the rules under the Original Side and only a clerical or an arithmetical error can be rectified. However, even such rules cannot be applied while exercising jurisdiction under the Companies Act and the Company Court Rules. The Learned Senior Counsel also brought to the notice of this court that the petitioners also failed in their attempt to convince the Supreme Court and are now once again agitating the matter only to protract the proceedings before the CLB. The Learned Senior Counsel also contended that the provisions do not bar the voting at the place of meeting. The Learned Senior counsel also relied upon the judgements reported in AIR 1960 SC 137 (Satyanarayanan Laxminarayan Hedge and others v. Millikarjun Bhavanappa Tirumale), 1997 3 CTC 134 (A.C. Muthiah v. Madras Refineries Limited), 2000 3 Callt 434 (Manohar Rajaram Chhabaria v. Union of India), 2008 144 Company Cases 619 (Palanisamy and another v. Milka Nutrients P. Limited), 2012 108 CLA 25 Kar (D. Victor Samuel v. Pretechplast (P) Limited), 2015 128 CLA 353 SC (Purnima Manthena and others v. Renuka Datla and others) and 2010 9 SCC 437 (Kalabharati Advertising v. Hemant Vimalnath Narichania and others) and sought for dismissal of the review petitions.

6. The Learned Senior Counsel Mr. T.K. Seshadri, representing Mr. T.K. Baskar, counsel for the Respondents 10 to 12 in Rev. A. No. 94/2015/Respondents 4 to 6 in Rev. A. No. 95/2015, contended that there is no error apparent on the face of the record and hence the review petitions are not maintainable. The Learned Senior Counsel relied upon para 45 of the judgement reported in 2015 128 CLA 353 (SC) to contend that the deferment of the adjudication to a future point cannot constitute a question of law to be appealed therefrom. Since the CLB has held that the issue needs to be adjudicated at the final hearing after the counter of the parties are filed, there is no necessity to interfere. The Learned Senior Counsel also contended that the rights of the shareholders to vote cannot be ousted on technicalities and therefore, the orders of this Court does not require any reconsideration and sought for dismissal of the review petitions.

7. The Learned Counsel, Mr. R. Venkatavaradhan, appearing for the 1st respondent painstakingly contended that there is no error apparent on the face of the record. The Counsel also relied upon the findings of this court in the order dated 27.04.2015 in paragraphs 18, 19 and 23 to contend that considering all the facts and contentions, including the ones which are raised now, this court thought it fit not to interfere with the orders of the CLB and issued appropriate directions leaving all the issues open and protecting the rights of the parties. The counsel also contended that in para 8.4 of the prayer in the petition before the CLB, the petitioners therein has pleaded to include the paper ballot by other members by excluding only the votes of second and third respondent therein. Therefore, the petitioners cannot now contend that the entire paper ballot is bad in law. The counsel also contended that the notification dated 27.03.2015 is only clarificatory in nature and therefore, paper...

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