RIMPAL SANJAY PAREKH v. M/s. STORSACK INDIA PVT.LTD. & ORS.

Mr. A. V. Anturkar i/b Khaitan Jayakar for the appellant Mr. Vibhav Krishna i/b S.S. Israni for R-1,2 & 6. Ms. C. S. Thorat i/b P. S. Gidwani for R-5 CORAM: S.C.DHARMADHIKARI, J. DATED: 21/12/2011 P.C. With the consent of the appellant and the respondents, the Appeal is taken up for hearing and final disposal at the stage of admission. COAPP3 2

#2. The appellant is the original petitioner in Company Petition No. 1 of 2008 which invokes the powers of the Company Law Board under Sections 397 to 402, 403, 407 and 408 of the Companies Act, 1956. The appellant petitioner is aggrieved by the order of dismissal of this Company Petition by the Member of Company Law Board, Mumbai Bench, Mumbai dated 30/8/2010.

#3. In the submission of Shri Anturkar, learned counsel appearing on behalf of the appellant-petitioner, the Company Law Board completely ignores an application which was made by the appellant-original petitioner in this company petition for production of additional documents under Regulation 23 read with 24 and 47 of the Company Law Board Regulations

#1991. In the further submission of Mr. Anturkar, this application was on the file of the Company Law Board from 23/6/2010. Once it is on the file of the Company Law Board, then, the Member was obliged to consider the request therein before passing the final orders on the company petition. That having not been done, the impugned order contravenes principles of natural justice inasmuch as the appellant-petitioner was denied fair and reasonable opportunity to substantiate her allegations of oppression and mismanagement which have been made in the main company petition.

#4. Mr. Anturkar submits that by sheer inadvertence and mistake in the COAPP3 3 memo of appeal of the present appeal under Section 10F of the Companies Act, 1956, this ground which is being argued, as raising a question of law is not incorporated. Therefore, a company application is moved on 18/4/2011 being Company Application No. 25 of 2011. Shri Anturkar submits that this company application be allowed and the grounds be permitted to be incorporated in the memo of appeal and at this stage since it is a question of law on the basis of the admitted facts, it be allowed to be argued as well.

#5. I have perused the company application seeking to amend the memo of appeal. Upon a perusal of the application and the schedule thereto, so also the affidavit-in-support thereof, I am of the opinion, that with a view to enable this court to appreciate the challenge to the order of the Company Law Board, the amendment as prayed deserves to be granted.

#6. The company application is, therefore, made absolute in terms of prayer clause (a). The amendment be carried out within a period of one week from today.

#7. Having perused this ground which is sought to be incorporated and the documents in support thereof, I enquired from Mr. Krishna, learned counsel appearing on behalf of the contesting respondents as to whether the Company Law Board was obliged to consider the application for additional evidence, he submitted that such an application was not on the file and was COAPP3 4 not brought to the notice of the Company Law Board, during the course of final arguments. Once the Company Petition was pending from 2008 and even the reliefs sought therein being barred by law of limitation, then, all the more the conduct of the appellant-petitioner in not bringing to the notice of the Member, the filing of such an application, speaks volumes about the conduct of the appellant-petitioner. The appellant-petitioner, therefore, is unable to point out any question of law which would enable this court to entertain this appeal. The appeal be, therefore, dismissed.

#8. After having perused the order under challenge, the application, copy of which is annexed to the company Application No. 25 of 2011, I am of the opinion, that the same was admittedly on the file of the Company Law Board, that the Company Law Board registry received it and acknowledged its receipt, is evident from the application itself. That the registry of the Company Law Board did not place it on the file of the main proceedings or that it was not brought to the notice of the Member, does not mean that the same was not pressed. Even otherwise, if the same was not pressed at the time of final arguments, today, a grievance can still be made that such application though made and already on the file, but inadvertently it was not argued or not pressed. The principles of natural justice and principles of fair play would require that the appellant-petitioner gets an opportunity to COAPP3 5 substantiate her allegations based on production of the additional documents.

#9. In such circumstances, to my mind, a question of law arises for consideration and determination of this court in the subject appeal and particularly by scrutiny of the memo of appeal and the additional ground incorporated therein. Once the allegations are of oppression and mismanagement and the relief sought being of a nature seeking to rectify the affairs of the company in question, then, all the more, it would be in the interest of justice that the order under challenge is set aside and the Company Law Board considers the petition afresh, on merits and in accordance with law after giving an opportunity to the appellant-petitioner to substantiate her challenge based on the additional documents.

#10. In the light of the agreed position before me, the Company Law Board should proceed on the basis that the application for production of additional documents has been granted by this court and that the appellant- petitioner can rely on those documents in support of her contentions and allegations in the main petition.

#11. Needless to state that by giving her such liberty and opportunity this court has not expressed any opinion, either on the merits of the controversy or on the contents of the documents. It would be open for the respondents COAPP3 6 to point out that even with these additional documents the appellant- petitioner is unable to or has failed to substantiate and prove her allegations and, therefore, the company petition deserves to be dismissed. All contentions of both sides on the merits are, therefore, kept open and this order shall not be construed as any expression of opinion thereon.

#12. Equally both sides are at liberty to rely on such material as is permissible in law including opinion of handwriting expert.

#13. As a result of the above discussion, the order under appeal is set aside and the company petition is restored to the file of the Company Law Board for decision on merits and in accordance with law as expeditiously as possible and within a period of three months from the date of receipt of copy of this order. (S. C. DHARMADHIKARI, J.)