ORDER
K.K. Balu, Vice-Chairman
1. In the company petition filed by Devendra Gupta (“the petitioner”) under sections 397 and 398 of the Companies Act, 1956 (“the Act”), alleging certain acts of oppression and mismanagement in the affairs of M/s. Picnic Park Hotels P. Ltd. (“the company”):
(i) The petitioner filed an application in C. A. No. 121 of 2006, for appointment of a commissioner to manage the company’s affairs ;
(ii) Sunitha Gupta, the fifth respondent herein filed an application in C. A. No. 181 of 2006 for dismissal of the company petition in view of the amicable settlement of the disputes ; and
(iii) Sanjay Gupta, the second respondent herein filed an application in C. A. No. 182 of 2006 seeking directions against the petitioner to transfer all his shares held in the company in favour of the applicant or in the alternative stay all the proceedings in the company petition, pending disposal of the civil suit in C.S. No. 498 of 2005 on the file of the High Court of Judicature at Madras.
2. This Bench, after considering the elaborate arguments advanced on these applications, passed a common order on January 22, 20071, the following order:
In view of my foregoing conclusions the proceedings of the present company petition must be stayed till disposal of the civil suit in C.S. No. 498 of 2005. There is, however, no justification either for appointing a commissioner for management of the day-to-day affairs of the company contrary to the terms of the consent order dated October 14, 2005, as urged by the petitioner in C. A. No. 121 of 2006 or for dismissing the company petition, as claimed by Sunitha Gupta in C.A. No. 181 of 2006. Ordered accordingly. With these directions, all the company applications stand disposed of.
3. The petitioner, aggrieved by the common order dated January 22, 2007, has come out with the present application (C. A. No. 24 of 2007) to recall the same passed in C. A. No. 121 of 2006, C. A. No. 181 of 2006 and C. A. No. 182 of 2006, in support of which Shri V. Ayyadurai, learned Counsel, submitted:
The disputes came to be amicably settled among the parties and the terms of compromise were to be placed before this Bench during April, 2006. In the meanwhile, the contesting parties, as borne out by the order dated October 14, 2005, had agreed, inter alia, for the following (page 163 of 141 Comp Cas):
(i) The business of the Picnic Park Hotels P. Ltd., along with the restaurants therein will be under the management of Sanjay Kumar Gupta with effect from October 15, 2005, at 11.00 a.m. Towards this end the commissioner appointed by this Bench will hand over the management of the Picnic Park Hotels P. Ltd., to Sanjay Kumar Gupta on October 15, 2005, at 11.00 a.m. and obtain acknowledgment;
(ii) The business of the Hotel Picnic Plaza along with 30 rooms licensed bar, restaurant and banquet halls will be under the management of Devendra Gupta, with effect from October 15, 2005, at 11.00 a.m.
4. However, the settlement reached between the parties broke as recorded in the order dated November 8, 2006 and, therefore, the order dated October 19, 2005, became unworkable, in which case, the common order dated January 22, 2007, has to be recalled.
The High Court of Judicature at Madras by an order dated November 29, 2006, made in W. P. No. 44954 of 2006 at the instance of the petitioner, directed the Company Law Board to dispose of the company petitions (C. P. Nos. 56 and 57 of 2004) within four weeks. A copy of the order dated November 29, 2006, was produced before the Bench on December 18, 2006, and amended copy of the order was also produced on December 21, 2006. In view of this both the company petitions ought to have disposed on merits within four weeks from December 21, 2006. In this context, the common order dated January 22, 2007, passed by the Bench is inconsistent, contradictory and inequitable, more so, in view of the orders dated July 27, 2006 and August 21, 2006, when counsel for the petitioner concluded his arguments on the main petition. It is detrimental, causing hardship to the petitioner.
The petitioner had only taken symbolic possession of the Mylapore property at the intervention of the Company Law Board, but could not enjoy the same and realise any income at all. The licence in respect of the Mylapore property has not been terminated, but unlawfully instigated a third party at the instance of the second respondent to file civil suit against the petitioner.
The memorandum of understanding not having been signed, prima facie are not enforceable and the conduct of the respondents will not entitle them to any relief as claimed by them. Furthermore, mere pendency of the suit before the High Court without any order of stay is not sufficient to stay the present proceedings.
5. Shri S.R. Raghunathan, learned Counsel, representing the second respondent opposed the application on the following among other grounds:
The application filed without even mentioning the provisions of law invoked by the petitioner to recall the common order dated January 22, 2007, is liable to be dismissed.
There is no provision under the Act or the Company Law Board Regulations, 1991, for recalling of an order passed by the Company Law Board. By virtue of the order dated January 22, 2007, the Company Law Board has become functus officio in respect of the issues raised in those applications, namely, C. A. Nos. 121, 181 and 182 of 2006 and the reliefs sought therein.
The petitioner is guilty of misrepresentation and fraud in the manner in which the petitioner has misled the High Court in W. P. No. 44954 of 2006. The second respondent has preferred an application in M. P. No. 1 of 2007, for recalling the High Court order dated November 29, 2006, which has been obtained by misrepresentation and behind the back of the second respondent, suppressing material facts and the subsequent developments, which have taken place in the company petition. The application for recalling the order dated November 29, 2006, is pending before the High Court and, therefore, the petitioner is not entitled to make any submissions with regard to W. P. No. 44954 of 2006.
The disputes between the parties have resulted in the memorandum of understanding dated January 8, 2005 and October 10, 2005. The parties have acted upon the memorandum of understanding and, therefore, nothing survives in the company petition. The various pleadings between the parties, their subsequent conduct and litigations instituted by the parties would clearly show that the parties have duly acted upon the memorandum of understandings reached between them. This respondent has already filed a memo dated February 2, 2007, withdrawing C. P. No. 57 of 2006 filed by him, in terms of the understanding reached between the family members, including the petitioner, the petitioner has filed a suit in O.S. No. 14 of 2007 before the High Court, Madras, among other things, for appointment of an advocate-commissioner to administer the entire affairs of the hotel business at Poonamallee High Road, Madras-600 003 and at Ramakrishna Mutt Road, Chennai-600 004. The petitioner is seeking the very same reliefs before the Company Law Board, which must be declined.
6. I have considered the arguments of the learned Counsel for the parties. The short issue for my consideration is whether the common order dated January 22, 2007, made in C. A. Nos. 121, 181 and 182 of 2006 is capable of being recalled in the facts and circumstances of the present case. The allegations of the petitioner made pursuant to the writ petition (W. P. No. 44954 of 2006) are not being dealt with, in view of the contempt proceedings initiated in C. A. No. 161 of 2007, by the petitioner. The impugned order came to be ultimately passed after weighing the claim and counter claim of the contesting parties, which has become final. The Act does not empower the Company Law Board to review any final order passed by it. Regulation 27 of the Company Law Board Regulations, 1991, which originally bestowed upon the Company Law Board the power of review of its order now stands deleted with effect from May 14,1992.
7. The Company Law Board is no more vested with such powers so as to recall its order dated January 22, 2007, as urged by the petitioner. It is not the case of the petitioner that(a) any new and important matter or evidence is discovered ; (b) the error was wrangled through fraud or misrepresentation of such a dimension as would affect the very basis of the claim; (c) the order suffers from the inherent lack of jurisdiction and such lack of jurisdiction is patent; (d) there exists fraud or collusion in obtaining the order, which are essential circumstances, enunciated in several judgments of the apex court, for recalling by a court its own order. The common order dated January 22, 2007, having become final, the only remedy open to the petitioner is to prefer an appeal under Section 10F of the Act, which has been reportedly filed before the High Court of Madras by the petitioner and, therefore, cannot seek to recall the order dated January 22, 2007. It will not be out of context to point out that the petitioner in the civil suit filed in December, 2006, against the respondents (C.S. No. 14 of 2007) sought for appointment of an advocate-commissioner to maintain, manage and administer the entire affairs of the hotel business at Poonamallee High Road, Chennai-600 003, the relief which has been pursued by him and declined in the present proceedings for the reasons elaborated in the impugned order. Therefore, the prayer for recalling the common order dated January 22, 2007, does not survive and accordingly stands rejected. Ordered accordingly.