THE HONOURABLE MR v. S.Balasubramanian2.P.Kannan3.K.Murugan4.S.Murugan5.K.Muthukrishnan6.S.Venkatachalam7

Appeal under Section 10F of the Companies Act, 1956 againstthe order dated 09.08.2007 of the Company Law Board, AdditionalPrincipal Bench at Chennai passed in Company Application No.41 of2007 in Company Petition No.64 of 2006.For Appellants : Mr.R.Gandhi, Sr.Counsel for Mr.V.RamakrishnanFor Respondents : Mr.P.H.Aravindh Pandian for R1 to R5 Mr.G.Ramu for R6 Mr.K.S.Natarajan for R7 Mr.A.K.Raghavalu for R8 and R9 Mr.Satish Parasaran for R10 to R14 Mr.S.Subbiah for R15 Mr.N.V.Srinivasan for R16, R17 and R19 Mr.S.S.Kumar for R20 Mr.C.Umasankar for R21 No appearance for R18JUDGMENTThis Civil Miscellaneous Appeal is filed by the appellantsagainst the order dated 09.08.2007 of the Company Law Board,Additional Principal Bench at Chennai passed in Company ApplicationNo.41 of 2007 in Company Petition No.64 of 2006, raising thefollowing substantial question of law:-"Whether in the facts and circumstances of thecase, the Company Law Board erred in law ingranting interim relief to the respondents bydirecting the implementation of the resolutionsfor removal of the existing Directors, pendingdisposal of the main Company Petition?" 2.By consent of both the sides, the main Appeal itself istaken up for disposal.3.The background facts leading to the above substantialquestion of law are as follows:-The respondents 1 to 5 filed a Company Petition in C.P.No.64of 2006 under Sections 397, 398, 402 & 403 read with Section 235,237 and Schedule XI of the Companies Act. The first appellant is aPrivate Limited Company. The second and third appellants are theDirector-cum-Share Holders of the company. All the respondents are https://hcservices.ecourts.gov.in/hcservices/ shareholders except the seventh respondent who was appointed asCommissioner by the Debts Recovery Tribunal ("DRT" in short), tomanage the affairs of the company. The first appellant is aPrivate Limited Company incorporated on 09.11.1979, under theCompanies Act having its Registered Office at No.3, Ashok PillarRoad, Ashok Nagar, Chennai-600083. The main objects of the companyare as under:-"To carry on the business of Proprietors and Managers ofTheatres, Cinemas Picture Palaces, Concert halls andStudios and to provide for the distribution, production,representation, exhibition of Cinematograph films,theatrical performances, dances, Musical and otherentertainment of all kinds, open air theatres and toprovide for production and representation of Films,operas, stage plays, Corettes, Burlesques, Vaudevilles,Reviews, ballets, pentomines, spectacular pieces,promenade and other concerts and other musical anddramatic performances of all kinds whatsoever whether bymechanical means or otherwise."The authorised share capital of the company is Rs.20,00,000/-divided into 20,000 equity shares of Rs.100 each and the issued,subscribed and paid up share capital is Rs.7,59,600/- consisting of7,596 equity shares of Rs.100 each. The shareholding pattern ofthe company is as follows:-"1.S.Narayana Pillai (died)... 766 i.N.Arunachalathammal,W/o S.Narayana Pillai... 500 2. S.Subramanian Pillai (died)... 766i.S.Shanmugathammal (died),W/o S.Subramania Pillai... 500 3. S.Karuppasamy Pillai (died)... 166i.K.Parameswariammal, W/o S.Karuppasamy Pillai... 100ii.K.Muthulakshmi, D/o S.Karuppasamy Pillai... 200iii.S.Indira, D/o S.Karuppasamy Pillai ... 200iv.K.Vadivel Murugan, S/o Karuppasamy Pillai... 200 https://hcservices.ecourts.gov.in/hcservices/ v.K.Muthukrishnan, S/o S.Karuppasamy Pillai... 200vi.K.Muthuselvakumar,S/o S.Karuppasamy Pillai... 200 4. S.Paramasivam Pillai... 766i.P.Baghavathiammal (died),W/o S.Paramasivam Pillai... 500 5. S.Sundaram Pillai (died)... 100i.S.Gomathiammal,W/o S.Sundaram Pillai... 500ii.S.Balasubramanian,S/o S.Sundaram Pillai... 666 6. S.Kalyanasundaram (died) had 766 sharesi.K.UlageswariammalW/o S.Kalyanasundaram 500 sharesii.K.Muthusamy, S/o S.Kalyanasundaram... 100iii.K.Shanmugasundaram, S/o S.Kalyanasundaram... 350iv.K.Murugan, S/o S.Kalyanasundaram... 200v.V.Ananthi, D/o S.Kalyanasundaram...43vi.K.Vallidevi, D/o S.Kalyanasundaram... 41vii.M.Sundari, D/o S.Kalyanasundaram ...41viii.C.Sankari, D/o S.Kalyanasundaram ...41ix.M.Kanthimathy, W/o K.Muthusamy... 100x.M.Kalyanasundaram, S/o K.Muthusamy ... 75xi.M.Sathya, S/o K.Muthusamy... 75xii.M.Sharmila, W/o K.Murugan... 200 ------- Total shares issued 7,596 ======= https://hcservices.ecourts.gov.in/hcservices/ The appellants and the respondents belong to same family group,hailed from the native Udhayathur Village, Tirunelveli District.The family consists of six brothers. One Narayana Pillai alongwith his fifth brother Sundaram Pillai came over to Chennai insearch of establishing a business as at that time, there was noscope of any business activities in their native village. Thefirst business they started was a Food Grains business. Itflourished very well. They brought their other four brothers,namely, (1) Subramania Pillai (2) S.Karuppasamy Pillai (3)S.Paramasivam Pillai and (4) S.Kalyanasundaram Pillai, also toChennai and engaged them in the said business which grew monetarilyvery well giving scope for establishing more number of businesses.The first business was started in the name and style of "AsokaTraders", a wholesale business in food grains. The said businesswas started in a premises measuring 336 sq.ft. at Door No.15, AnnaPillai Street, Chennai-600 001. The six brothers started anotherwholesale food grains business called "ANANTHA MALIGAI" in a rentedplace at No.139, Audiappa Naicken Street, Chennai-600 001. Tomanage the said two wholesale business namely, "Asoka Traders" and"Anantha Maligai", the brothers purchased a property measuring 1 ½grounds at No.6, Davidson Street, Chennai-600 001, constructed ownbuilding and kept their office. The brothers thereafter started aconcern called "ANANDA INDUSTRIES" for hulling dhal items in a bigmanner. They also started a steel re-rolling mill under the nameand style of "ARAVIND INDUSTRIES". Later they have also purchased50% shareholdings in the company called M/s.Century Flour MillsLtd. Later, the six brothers also started a Biscuit businesscalled "Dollar Biscuit Co. Pvt. Ltd." over a land purchased for thesame measuring 3.80 acres at No.9, Old Mahabalipuram Road, Chennai-600 096. To sum up, the six brothers started totally 7 businessconcerns and out of the same, 4 were partnership concerns and 3were Private Limited Companies. All the six brothers and theirchildren alone have been the only group of persons enjoyingownership rights over the said businesses. Even over the 3 PrivateLimited Companies all the six brothers jointly held rights byallotting equal shares and whenever any single brother died, thedeceased brother's legal heirs inherited joint shareholding both inthe Private Limited Companies and in the partnership businesses.The first appellant Company was promoted by six brothers of afamily during the year 1979. In late 1980, when the Tamil NaduHousing Board earmarked in the Ashok Nagar Scheme an area of 23grounds and 1930 sq.ft. for housing a Cinema Theatre and theadjacent plot of land measuring 5 grounds and 800 sq.ft. forallotting to a petrol pump, all the brothers unanimously decided toobtain allotment of the said two properties for their family. Asat that time if theatre and petrol pump would not have beenoperated over the respective lands allotted by Tamil Nadu HousingBoard, the authorities were to cancel the allotment of land andfurther due to such an eventuality the properties were to be https://hcservices.ecourts.gov.in/hcservices/ affected by the Urban Land Ceiling Act, the appellant Companycommenced construction of the Udayam Theatre Complex over the 23grounds 1930 sq.ft. of the land. After the demise of the firstrespondent's father in January 2003, the first respondent becamethe Director of the appellant Company. But the first respondenthas not received any notice of the Board Meetings of the appellantcompany ever since he became a Director of the Company and in spiteof several requests to the second and third appellants herein, as aDirector of the Company, they have failed to send notices for theBoard Meetings of the company. Then there was a misunderstandingbetween the appellants as well as the respondents and there wereallegations and counter allegations against each other. Respondents1 to 5 filed a Company Petition in C.P.No.64 of 2006 under Section397, 398, 402 & 403 read with Section 235, 237 and Schedule XI ofthe Companies Act and prayed as follows:-"RELIEF SOUGHT:-a) To direct the respondents 2 to 4 to restore themoney and property which has been retained and misappliedand to compensate such sum to the assets of the companytowards guilty of misfeasance and breach of trust in relation to the company.b)To appoint one or more competent persons to investigate into the affairs of the company for theperiod between 2000-2005 and submit a report before thisHon'ble Bench.c)To dissolve the present board of directors and callan Extra-ordinary General Meeting of the company toconstitute a new board of directors.d) To declare all the resolutions passed at the Board Meetings since January 2003 as null and void.e) To pass such other further orders in the interestof the 1st respondent company and the shareholders.INTERIM RELIEF:a)To appoint the receiver / administrator Hon'bleJustice Swamidurai as an independent Chairman to managethe affairs of the company till the disposal of thepetition.b)To appoint an advocate commissioner to authenticatethe books of accounts and other statutory records ofthe 1st respondent company.c) To convene an Extra-ordinary general meeting ofthe 1st respondent company as requisitioned by some of theshareholders of the company by a requisition letter dt.14/11/06.d) To restrain the respondents 2 to 4 from callingand convening any Board meetings without the priorsanction of this Hon'ble Bench. https://hcservices.ecourts.gov.in/hcservices/ e)To direct the present Board of directors to submit a weekly report before this Hon'ble Bench on thedaily collections made by the 1st respondent companyfrom the cinema theatres owned by it."Later the appellants 2 and 3 and also the sixth respondent herein,who were the ex-Directors of the company were acting against theinterest of the company and hence majority of the shareholders ofthe company representing about 64% of the share capital of thecompany sent a requisition notice under Section 169 of theCompanies Act, 1956 for convening an Extraordinary General Meetingof the company for the removal of the appellants 2 and 3 and thesixth respondent from the Board of Directors of the company and intheir place appointing the respondents 2 to 5 as the Directors ofthe company. The said Requisition Notice was sent by theshareholders to the company on 14.11.2006 and in spite of no bar inholding the Board Meetings, the previous Board failed to complySection 169(6) of the Companies Act, 1956 to call the ExtraordinaryGeneral Meeting within 21 days of deposit of the said notice by theshareholders and hence the requisitionists themselves proceeded tocall the Extraordinary General Meeting on their own by sending 21days clear notice dated 08.12.2006 to all the shareholders callingan Extraordinary General Meeeting on 05.01.2007 at 10.20 a.m. atthe registered office of the company. Pursuant to the calling ofExtraordinary General Meeting by majority of shareholders of thecompany as aforesaid, few shareholders prayed before the Hon'bleCompany Law Board for an interim stay of the Extraordinary GeneralMeeting called on 05.01.2007. The Company Law Board by its orderdated 14.12.2006 passed the following order:-"1.The impleading applications are allowed, permitting the applicants to be arrayed as parties tothe company petition. Accordingly, the petitionerswill file amended petition by 29.12.2006.2.The Company as and when convenes any extra ordinarygeneral meeting pursuant to the requisition given bythe shareholders will not implement any of theresolutions which may be passed at such meeting,without leave of this Bench.3.The Company is at liberty to convene the boardmeeting with leave of this Bench."From a reading of the above order, it is clear that the Company LawBoard refused to grant stay of the Extraordinary General Meetingand therefore permitted the holding of the meeting with a conditionnot to implement the same except with the leave of the Company LawBoard. The matter was also posted on 08.01.2007. Later one of theshareholders of the company even filed a Civil Suit No.4 of 2007along with O.A. No.2 of 2007 before this Court seeking interiminjunction restraining the requisitionists from holding the https://hcservices.ecourts.gov.in/hcservices/ Extraordinary General Meeting of the company on 05.01.2007. ThisCourt, dismissed the application in O.A. No.2 of 2007 recording thefact that the Company Law Board has seized of the issue and hasalready permitted the holding of the meeting with a condition thatthe resolutions shall not be implemented except with the leave ofthe Company Law Board and hence the request was dismissed and thesaid order become final. In consequence of the orders, theExtraordinary General Meeting duly called by the requisitionists asper the provisions of law was held on 05.01.2007 wherein 36 memberstotally participated at the meeting and members holding 5,359shares (constituting about 78%) voted for the resolutions for theremoval of the appellants 2 and 3 and the 6th respondent herein andappointed in their place the respondents 2 to 5 herein and onlymembers holding 1,459 shares voted against the said resolutions.It is also not disputed that none of the shareholders of thecompany including the appellants 2 and 3 and the sixth respondentherein have challenged the said meeting till date. Later therespondents 1 to 5 filed an application in C.A.No.41 of 2007requesting the Company Law Board for implementation of theresolutions passed at the Extraordinary General Meeting held on05.01.2007 and the appellants 2 and 3 and the sixth respondent haveresisted the implementation. After hearing the arguments advancedby both the sides, the Company Law Board, by order dated 09.08.2007allowed the Company Application No.41 of 2007 and ordered that therespondents 2 to 5 are at liberty to implement the resolutionspassed in the Extraordinary General Meeting on 05.01.2007, withcertain conditions. Aggrieved by the order, the appellants havefiled the present appeal.4.Learned counsel appearing for the appellants submittedthat the Company Law Board erred in permitting implementation ofthe resolutions passed at the Extraordinary General Meeting held on05.01.2007 directing the removal of the appellants 2 and 3 and thesixth respondent as Directors and reconstituting the Board ofDirectors pending disposal of the main Company Petition. It isalso further submitted that the Company Law Board failed toappreciate that the interim order tantamounts to allowing theCompany Petition at the interim stage itself. It is also submittedthat the issues raised were mixed questions of fact as well as thelaw which cannot be adjudicated at an interim stage in granting theinterim relief. Hence granting interim relief is against theprovision of law. It is also further submitted that the interimrelief granted by the impugned order is identical to the finalrelief prayed for in the Company Petition and that interim reliefwas sought on the basis of an entirely new case neither pleaded norproved in the Company Petition. It is also submitted when theReceiver appointed by the Debts Recovery Tribunal was in charge ofthe day to day management and the affairs of the company, there wasno necessity for the implementation of the resolutions. It is also https://hcservices.ecourts.gov.in/hcservices/ submitted that the respondents had not established any prima facieacts of oppression and mismanagement committed by the appellantsand the entire acts complained by the respondents are past andconcluded acts and which do not fall within the ambit of Sections397 and 398 of the Companies Act. It is also further submittedthat if the resolutions are implemented it would cause irreparablehardship and damage to the appellants. It is also furthersubmitted that if the present resolutions are implemented, theBoard of Directors will consist of six Directors, which amounts toviolation of Articles of Association. Chinnammal cannot be said tobe impliedly removed since the provisions of section 284 of theCompanies Act has not been followed in respect of Chinnammal. Itis also further submitted that the appellants are not against theappointment of a Commissioner to manage the company. It istherefore submitted that giving effect to the resolutions passed inthe Extraordinary General Meeting held on 05.01.2007 is contrary tolaw, illegal, without basis and justification and hence the orderpassed by the Company Law Board is not in accordance with law. 5.Counsel appearing for respondents 1 to 5, submitted thatthe majority of the shareholders of the company representing about64% of the share capital of the company sent a requisition noticeunder Section 169 of the Companies Act, 1956 for convening anExtraordinary General Meeting of the company for the removal of theappellants 2 and 3 and the sixth respondent from the Board ofDirectors of the company and the said notice was sent by theshareholders to the company on 14.11.2006. Pursuant to the callingof Extraordinary General Meeting by majority of shareholders of thecompany as above, some of the shareholders prayed for interim stayof the Extraordinary General Meeting called on 05.01.2007 and thesame was rejected by the Company Law Board on 14.12.2006. Also oneof the shareholders moved before this Court seeking interiminjunction restraining the requisitionists from holding theExtraordinary General Meeting of the company and this Court alsodismissed the same with a direction that the resolutions shall notbe implemented except with the leave of the Company Law Board.Thereafter, none of the shareholders of the appellant Companychallenged the said meeting or resolutions till date. Hence theGeneral Meeting held as well as resolutions passed are inaccordance with law. The Company Law Board strictly has giveneffect to the resolutions passed in the Extraordinary GeneralMeeting with certain directions. Further it is submitted that theimplementation of the resolutions passed by the majority of theshareholders removing the appellants 2 and 3 and the 6th respondentfrom the Office of Directors would neither amount to ordering offinal relief nor adjudicating the main petition itself. It is onlyan interim order which is subject to the outcome of the finalorder. Therefore, the Company Law Board is right in implementingthe resolutions passed by the majority of the shareholders at the https://hcservices.ecourts.gov.in/hcservices/ Extraordinary General Meeting of the company held on 05.01.2007.Hence the order passed by the Company Law Board granting interimstay with certain conditions, is in accordance with law. 6.The counsel appearing for respondents 8 and 9 vehementlycontended that the Company Law Board ought not to have given effectto the resolutions passed in the Extraordinary General Meeting,when the issue is common for both the main petition as well as theinterim application. It is also stated that the Commissionerappointed by the DRT, the 7th respondent herein should not beremoved from managing the affairs of the company. He also made analternative submission that the Court may give suitable directionto the Company Law Board to dispose of the main petition and tillthat time, the Directors should not take any major policy decision.7.Counsel appearing for the respondents 10 to 14 submittedthe Company Law Board is right in granting permission to implementthe resolutions passed in the Extraordinary General Meeting on05.01.2007 subject to certain conditions. There is no dispute thatthe majority of the shareholders decided to remove the appellants 2and 3 and the 6th respondent from the Office of Directors. Alsothe members holding more than 70% of the shares have expressedtheir support for such removal by way of filing affidavits. Hencethe Company Law Board had considered the relevant materials andcome to the correct conclusion. Hence the order passed by theCompany Law Board is in accordance with law. 8.Counsel appearing for the 16th, 17th and 19th respondentssubmitted that the order of the Company Law Board is erroneous andit ought not to have given effect to the resolutions passed in theExtraordinary General Meeting held on 05.01.2007 directing theremoval of the appellants 2 and 3 and the sixth respondent asDirectors, pending disposal of the main Petition. The issueinvolved are mixed questions of fact as well as the law and theCompany Law Board ought not to have held and it cannot beadjudicated at the interim stage and thereby erroneously grantingthe interim relief. Further the counsel vehemently contended thatthe 7th respondent must continue as a receiver and attend to the dayto day affairs of the company. He alternatively submitted thatsuitable direction may be given to the Company Law Board to take upthe main matter and dispose of the same and that till the same isdisposed off, the Board of Directors shall not take any majorpolicy decision. 9.Counsel appearing for respondents 6, 7, 15, 20 and 21also submitted that the order passed by the Company Law Board is inaccordance with law and further adopted the arguments of thecounsel for respondents 1 to 5. https://hcservices.ecourts.gov.in/hcservices/

10.Heard the counsel. There is no dispute to the fact thata large number of shareholders of the first appellant Companyholding about 64% of the paid up capital of the Company, sent arequisition dated 14.11.2006 to the Board of Directors underSection 169 of the Act to convene an Extraordinary General Meetingfor removal of the appellants 2 and 3 and also the 6th respondentfrom the office of Directors and to appoint the respondents 2 to 5as Directors of the Company. The appellants 2 to 4 and the 6threspondent herein, failed to call a meeting as required under lawand therefore, the requisitionists were constrained, in terms of anotice dated 08.12.2006, to call an Extraordinary General Meetingof the Company on 05.01.2007 at the Registered Office of thecompany. It is also on record that, in the Extraordinary GeneralMeeting convened and held on 05.01.2007 by the requisitionists /shareholders, as many as 36 members took part in the meeeting, outof whom, members holding 5359 shares voted for the resolutions forremoval of the appellants 2 and 3 and the 6th respondent asDirectors and appointment of respondents 2 to 5 as Directors of theCompany. Members holding 1459 shares voted against the resolutionsas borne out by the scrutineer's report dated 05.01.2007. All theitems in the agenda relating to removal and appointment ofDirectors have been approved in terms of the proceedings of theExtraordinary General Meeting recorded by the Chairman of themeeting. Also, there is no dispute that no proceduralirregularities have been pointed out by any members in the conductof the proceedings of the Extraordinary General Meeting. Callingfor Extraordinary General Meeting satisfies the requirement ofSection 169 of the Act. It was found on a close scrutiny that asmany as 34 shareholders controlling 70.59% of shares haveindividually filed affidavits with the Bench affirming support infavour of the newly constituted Board of Directors of the Company.The Company Law Board has to recognise the collective wisdom ofmajority of the members and respect the corporate democracy of acompany in managing its affairs. The Company Law Board will notnormally interfere with the day to day functions, management andadministration of a company, unless it is shown that the decisionstaken by the members at the Extraordinary General Meeting are ultravires the Act or the Articles of Association of the company. Italso cannot be said that the implementation of the resolutionspassed by the majority of the shareholders would amount to orderingof final reliefs nor adjudicating the main petition itself. In thepresent case, some shareholders went and challenged to call for theExtraordinary General Meeting before the Company Law Board and thesame was dismissed on 14.12.2006, and the Company Law Board rightlycalled for the meeting subject to a condition that any resolutionpassed in the Extraordinary General Meeting will not be giveneffect to without the consent of the Bench and posted the matter on08.01.2007 for hearing. After passing of that order, one of theshareholders challenged the same before this Court. This Court https://hcservices.ecourts.gov.in/hcservices/ also by order dated 05.01.2007 dismissed the Original Applicationin O.A.No.2 of 2007 in C.S.No.4 of 2007. The prayer in the saidOriginal Application is to declare that the notice dated 08.12.2006issued for convening an Extraordinary General Meeting on 05.01.2007at 10.30 a.m. is illegal, invalid and ultra vires and forconsequential permanent injunction restraining the defendants 5 to30 therein from holding the Extraordinary General Meeting of thecompany on 05.01.2007 or on any subsequent date. After hearing thearguments, this Court held as follows:-"Further, in the meeting to be held on 5.1.2007, if anyresolution is passed, the same cannot be implementedautomatically, whereas the approval should be obtained orleave should be obtained from the Company Law Board. Inthis view, even if any resolution is passed on 5.1.2007,for its implementation, the parties have to approach theCompany Law Board and the applicant, if he desires, canget himself impleaded as a party in C.P.No.64 of 2006 andquestion the resolution, if any passed in theExtraordinary General Meeting to be held on 05.01.2007."There is no dispute that the Extraordinary General Meeting was heldon 05.01.2007 and resolutions were also passed. The saidresolutions were passed by the majority of shareholders. The ApexCourt in the case of Life Insurance Corporation of India Vs.Escorts Ltd. and Others, [1986] 59 Company Cases 548 (SC)considered the scope of passing resolution in the companiesExtraordinary General Meeting wherein it was held that the onlyeffective way the members of a company in a general meeting canexercise their control over the directorate in a democratic manneris to alter the articles of association so as to restrict thepowers of the directorate and appoint other directors in theirplace. It was also held that the holders of the majority of thestock of a corporation have the power to appoint, by election,directors of their choice and the power to regulate them by aresolution for their removal. It was also held that an injunctioncannot be granted to restrain the holding of a general meeting toremove a director and appoint another. Applying the aboveprinciples, the Company Law Board correctly held that if theresolutions are not given effect to, it will cause great prejudiceto the majority of the shareholders. After considering the factsand circumstances of the case, especially the allegations and thecounter allegations made by each parties, the Company Law Boardpassed the following order:-"In view of my foregoing conclusions, it is herebyordered that the applicants are at liberty to implementthe resolutions passed at the extra ordinary generalmeeting held on 05.01.2007 on the following conditions:-(i)The board of directors of the Company shall actsubject to the order dated 17.05.2005 made in I.A.No.414 of 2004 in O.A. No.178 of 2004 by the DRT. https://hcservices.ecourts.gov.in/hcservices/ (ii)The notice of board meetings together with agendathereon shall be forwarded to the 18th respondent fifteendays prior to every board meeting of the company.(iii)The 18th respondent is entitled to attend theboard meetings convened periodically by the Companyas an invitee and shall not exercise any of the rightsof a director.(iv)This order is subject to the outcome of the main petition."The majority of the shareholders of the company representing 70% ofthe shareholders of the company extended their support for theimplementation of the resolutions passed in the ExtraordinaryGeneral Meeting on 05.01.2007. Only thereafter, they requested theCompany Law Board to permit implementation of the resolutions.Also it has to be noted here that the appellants 2 and 3 and the 6threspondent never challenged the order of the Company Law Boarddated 14.12.2006 permitting the holding of the ExtraordinaryGeneral Meeting, nor subsequent to the holding of the ExtraordinaryGeneral Meeting on 05.01.2007. Hence, it is too late in the day toquestion the resolutions passed in the Extraordinary GeneralMeeting by the majority of the shareholders. It is also not indispute that there are no procedural irregularities orillegalities. I am also conscious of the fact that the order soughtfor was in the nature of one of the main relief. It is wellsettled that in the given circumstances, the Court can always passinterim relief in the nature of final relief, provided thesituation warrants. In this case, it is necessary to grant suchrelief in view of the resolutions passed by the majority of theshareholders in the Extraordinary General Meeting. In the presentcase the Company Law Board excercised its discretion judicially andgranted the relief only after taking into consideration the variousrelevant factors as discussed above. The Company Law Board hasgiven effect to the decision of the majority. It is only aninterim measure and a temporary one. It is also subject to theoutcome of the final order in the main petition. The findings givenby the Company Law Board are based on valid materials and evidenceon record. The Company Law Board has considered all the relevantmaterials, especially the Extraordinary General Meeting convened bythe majority of shareholders and thereafter resolutions were passedby the majority of the shareholders. I do not find any error orillegality in the order of the Company Law Board so as to warrantinterference. The order of the Company Law Board is in accordancewith law and it is therefore confirmed. 11.Taking into consideration the facts and circumstances ofthe case, especially in the interest of justice, and also theallegations and the counter allegations made by both the sides andin view of the alternative submission made by the respondents, itwould be more appropriate to give direction to the Company Law https://hcservices.ecourts.gov.in/hcservices/ Board to dispose of the main petition pending before it.Therefore, the Company Law Board is directed to take up the mainpetition in C.P.No.64 of 2006 and consider the same after givingopportunity to all the parties to raise their contention, and passorders in accordance with law ON OR BEFORE 31.01.2008. Further Ialso direct the counsel appearing on both the sides to complete allthe formalities and extend their full cooperation to the CompanyLaw Board to dispose of the matter within the stipulated time asstated above. In view of the alternative submission made by therespondents, it is necessary to give further directions in additionto the directions already given by the Company Law Board, which areas under:- a)No major policy or important decisions to be taken by theBoard of Directors without the consent of the Company Law Board.b)No alienation, transfer, encumberances of the companyassetswithout the consent of the Company Law Board.c) The Board of Directors shall take only decisions tomanagethe day to day affairs of the company till the Company Law Boardpasses final order. 12.In view of the foregoing reasons, the Civil MiscellaneousAppeal is dismissed. Consequently, M.P.No.1 of 2007 is closed. Nocosts. Sd/-Asst. Registrar./true copy/Sub Asst. Registrar.kmTo1. Company Law Board, Additional Principal Bench, Chennai. 2. The Section Officer, VR Section, High Court, Madras.1 cc to Mr.A.K.Raghavalu, Advocate, sr. 586481 cc to Mr.K. S. Nataraan, Advocate, sr. 586011 cc to Mr.S.S.Kumar, Advocate,SR. 58274 https://hcservices.ecourts.gov.in/hcservices/ 2 ccs to Mr.Sathish Parasaran, Advocate, Sr. 582181 cc to MR.C. Umashankar, Advocate, sr. 583561 cc to Mr.S. Subbiah, Advocate, SR. 583011 cc to Mr.P.H. Arvindh Pandian, Advocate, SR. 583071 cc to Mr.V. Ramakrishnan, Advocate, str. 58340 C.M.A.No.1900 of 2007NG (CO)kk 1/10