IN THE HIGH COURT OF KERALA AT ERNAKULAM
WA No. 446 of 2008()
1. JOHNY CHANDY,
... Petitioner
Vs
1. THE REGISTRAR OF COMPANIES, KERALA,
... Respondent
2. THE CATHOLIC SYRIAN BANK LTD.,
3. AIF CAPITAL DEVELOPMENT LIMITED,
4. GPE III MAURITIUS DIRECT INVESTMENT LTD,
5. SIGULER TUFF BRIC MAURITIUS,
For Petitioner :SRI.MILLU DANDAPANI
For Respondent :SRI.P.SANTHALINGAM
The Hon'ble the Chief Justice MR.H.L.DATTU
The Hon'ble MR. Justice K.M.JOSEPH
Dated :22/02/2008
O R D E R
H.L.Dattu, C.J. & K.M.Joseph, J.
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W.A.No.446 of 2008
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Dated, this the 22nd day of February, 2008
JUDGMENT
K.M.Joseph,J.
The writ petitioner is the appellant in this Writ Appeal. The writ
petition is filed challenging Exhibit P8 order passed by the Registrar of
Companies permitting allotment of shares.
(2) The appellant filed Exhibit P3 complaint, which is an Investor
Complaint, before the Registrar of Companies pointing out non-compliance with
certain rules contained in Unlisted Public Companies (Preferential Allotment)
Rules, 2003 (“Rules” for short). The appellant and others had also filed a
petition under Sections 397 and 398 of the Companies Act, 1956 (“Act” for
short), before the Company Law Board. This Court directed Exhibit P3
complaint to be considered by the Registrar of Companies. Accordingly, as
directed by the learned Single Judge, the Registrar of Companies proceeded to
pass Exhibit P8 order. In Exhibit P8 order, it is seen that the appellant made
specific reference to Rule 6(a), 6(e) and 6(f) of the Rules besides Rule 7. The
Registrar of Companies called for explanation from the 2nd respondent Bank,
which was forwarded to the appellant and to which appellant filed reply, and
after referring to the contentions, finds that it cannot be said that the Bank has
not complied with the requirements of the Rules. Further, it was found that the
appellant has filed C.P.No.36 of 2006 under Sections 397 and 398 of the Act
before the Company Law Board and the issues raised presently were subject
matter of litigation before the Company Law Board and the Company Law
Board as per order dated 3.8.2006 directed that the Bank is at liberty to
implement the resolution passed by the AGM held on 30.6.2006 pursuant to
W.A.No.446 of 2008 – 2 –
item No.10 of the notice dated 31.5.2006. It is finally stated that:-
“As the Company Law Board has already ordered
implementation of the resolution passed at the AGM held on
30/6/2006 as item 10 of the notice dated 31/5/2006, which is the
subject matter being agitated in Exhibit P-3 by the complainant and
in the light of the order dated 3/8.2006 passed by the Company Law
Board in C.P.36/2006 giving the liberty to the Bank to implement
the resolution, any issue which relates to the passing of the
resolution also stands disposed accordingly. Hence no infirmities
regarding passing of the said resolution exists and the Bank as
directed by the Company Law Board is at liberty to implement the
resolution. Exhibit P3 is disposed of accordingly”.
It was challenging the said order and also seeking a direction to the 1st respondent
to issue necessary directions to the 2nd respondent Bank not to take on record the
allotment made by the 1st respondent in violation of the Rules, that the present writ
petition came to be filed.
(3) The learned Single Judge, taking note of what is stated in
Exhibit P8 and also the fact that the matter is engaging the attention of the
Company Law Board in C.P.No.36 of 2006, took the view that there is no
justification for a parallel proceeding and, accordingly, dismissed the writ petition. It
was made clear that it was open to the appellant to urge all his contentions before
the Company Law Board. It is stated that the Court was sure that the Board will
decide the issue untrammelled by the findings in Exhibit P8. It is being aggrieved
by the aforesaid judgment that the petitioner is before us in the present Writ
Appeal.
(4) We heard Sri.K.P.Dandapani, learned Senior Counsel for the
appellant and Sri.P.Santhalingam, learned counsel for the 2nd respondent.
W.A.No.446 of 2008 – 3 –
(5) Sri.K.P.Dandapani, learned Senior Counsel would point out that
it is a clear case where Rule 6(a), 6(b) and 6(f) besides Rule 7 of the Rules have
been violated. It is further contended that Rule 4 of the Rules has also been
violated, as Rule 4 interdicts that the special resolution should be implemented
within a period of one year. He contends that it is apparent from the facts and
circumstances of this case that there is violation of Rule 4 as the special resolution
was implemented beyond the period of one year. He would submit that it is true
that the appellant had filed C.P.No.36 of 2006 before the Company Law Board, but
that would not prevent the statutory authority from dealing with the Investor
Complaint filed by the appellant and the Registrar of Companies is bound to
consider the matter.
(6) It is not in dispute that the appellant is one of the petitioners in
C.P.No.36 of 2006. It is also not in dispute that while dealing with the said
Company Petition, the Company Law Board has, as an interim measure, permitted
implementation of the very special resolution, which is the subject matter of the
controversy, by order dated 3.8.2006. What the appellant essentially impugning is
Exhibit P8. If the impugned order Exhibit P8 is set aside and the Registrar is
directed to reconsider the matter, it will be in the teeth of the order passed by the
Company Law Board which was seized of the matter on a petition filed by the
appellant among others and as the Senior Counsel submits that the C.P. itself
stand dismissed, it will clearly amount to permitting parallel proceedings. The very
case of the appellant is that the appellant is a minority share holder. He along with
others has sought to challenge the passing of the special resolution before the
Company Law Board. If that be so, the appellant has to work out the remedies
available to him before the appropriate forum. We note that the contention of the
appellant regarding violation of Rule 4 of the Rules, which is sought to be
W.A.No.446 of 2008 – 4 –
projected before us, is not a ground taken by the appellant before the Registrar of
Companies in Exhibit P3 complaint and he cannot certainly be permitted to raise
such a contention in aid of his attack against Exhibit P8 order. In such
circumstances, we are in agreement with the reasoning and conclusion of the
learned Single Judge.
We find no merit in this appeal and it is, accordingly, dismissed.
H.L.Dattu
Chief Justice
K.M.Joseph
vku/- Judge