IN THE HIGH COURT OF KERALA AT ERNAKULAM
WP(C) No. 35174 of 2007(K)
1. JOHNY CHANDY,
... Petitioner
Vs
1. THE REGISTRAR OF COMPANIES,
... Respondent
2. THE CATHOLIC SYRIAN BANK LTD.,
3. AIF CAPITAL DEVELOPMENT LIMITED,
4. GPE III MAURITIUS DIRECT INVESTMENT
5. SIGULER GUFF BRIC MAURITIUS,
For Petitioner :SRI.MILLU DANDAPANI
For Respondent :SRI.MANOJ RAMASWAMY, ADDL.CGSC
The Hon'ble MR. Justice ANTONY DOMINIC
Dated :10/12/2007
O R D E R
ANTONY DOMINIC, J.
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W.P. (C) No. 35174 OF 2007 - K
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Dated this the 10th December, 2007
J U D G M E N T
The prayer sought for in this writ petition is to quash Ext. P8
order passed by the 1st respondent.
2. The petitioner is one of the shareholders of the 2nd
respondent, a company incorporated under the provisions of the
Companies Act, 1956. In relation to the resolution increasing the
share capital passed at the annual general meeting held on 30-6-
2006, petitioner submits that he had filed an investor complaint
before the SEBI. According to him, the complaint was forwarded to
the 1st respondent for necessary action. Thereupon notice was
issued by the 1st respondent the bank filed Ext. P4 objection and the
petitioner submitted his reply.
3. As orders were not passed, petitioner approached this
Court and filed W.P.(C) No. 28419/07 which was disposed of by Ext.
P7 judgment. By Ext. P7 judgment the 1st respondent was directed
to take a decision on the complaint of the petitioner. It is stated
WPC No.35174/07
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that in pursuance thereof final orders were passed by the 1st
respondent and that is produced as Ext. P8. In Ext. P8, the 1st
respondent found that the company has not violated the
requirements of the Unlisted Public Companies (Preferential
Allotment) Rules, 2003. It is also found that the petitioner and
others are agitating the very same issue before the Company Law
Board and that the 1st respondent cannot be expected to pass an
order on a matter which is pending consideration of the Company
Law Board. In the process the 1st respondent has also taken note of
the Company Law Board’s order permitting the 2nd respondent Bank
to act upon the impugned resolution passed at the Annual General
Meeting held on 30-6-2006.
4. Impugning Ext. P8 order, the learned senior counsel for the
petitioner submits that the finding of the 1st respondent that the
petitioner has concealed the pendency of the proceeding before the
Company Law Board is incorrect. It is also stated that though the
issue including the one which is the subject matter of Ext. P3
complaint is being agitated before the Company Law Board, the 1st
respondent ought to have decided the matter on merits.
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5. On the other hand, the Learned Counsel for the respondent
Bank who appeared on notice submits that the the petitioner is none
other than 1st petitioner before the Company Law Board in C.P. No.
36/06. It is stated that on these very allegations the Company Law
Board had passed interim order restraining the 2nd respondent from
proceeding with the resolution taken on 30.6.2006. It is stated that
after hearing the parties the Company Law Board has passed Ext. P9
order. In sum and substance the contention is that the issue is
pending with the Company Law Board and therefore it is for the
Company Law Board to decide that issue.
6. A reading of Ext. P8 itself discloses that this is one of the
issues that is agitated by the petitioner himself along with others in
C.P. No. 36/06 before the Company Law Board. It is seen that the
Company Law Board also has passed the order permitting the Bank
to implement the decision. If that be so, it necessarily means that
the Company Law Board is considering the correctness or otherwise
of the disclosures made by the Company in the notice calling the
AGM, in the petition filed by the petitioner and others under
Sections 397 and 398 of the Companies Act, 1956. Once the
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Company Law Board is seized of the matter and is competent to
decide the issue there is no justification for a parallel proceeding
before the 1st respondent.
7. It is contended by the petitioner that the scope of the
proceedings before the Company Law Board and the 1st respondent
are different. I cannot agree with the contention. In both
proceedings, the issue is regarding the legality of the resolution
passed at the Annual General Meeting of 30.06.2006. The validity
of this resolution being one of the issues now agitated before the
Company Law Board, it is open to the petitioner to urge all his
contentions before the Company Law Board and I am sure that the
Company Law Board will decide the issue untrammelled by the
findings in Ext. P8.
The writ petition fails and is dismissed.
ANTONY DOMINIC
JUDGE
jan/-