Civil Appeal No 1501 of 1978
Appeal by Special Leave from the Judgment and Order dated 18 1 1978 of the Delhi High Court in Civil Misc
Petition No 1120 W of 1977 and 10978 in Writ Petition No 58577
Soli J Sorabjee Addl
General Girish Chandra for the Appellant
13 549 SCI78 736 section T Desai B P Maheshwari and Suresh Sethi for Respondent No 1
A K Sen and Vineet Kumar for Respondent No 2
ORDER An ad interim order of stay passed by the High Court of Delhi has been challenged before us in this appeal
We should have hesitated to interfere with an interlocutory order following the usual practice in this Court
But where repercussions are incalculable and the basis of the direction though interlocutory is obscure the ends of justice dominate and we may interfere if public interest so dictates
Here is an order of the Company Law Board under sec
4081 of the  which gives a wealth of facts and a variety of reasons to support an ultimate direction which runs thus Since all the three conditions referred to in sub section 1 of sec
408 of the  are established on the facts and circumstances of the case the Company Law Board hereby appoint officers for three years in addition to the existing directors of the company 1
Shri B M Kaul Member Railway Board Retd 5 J 4 Jawahar Nagar Jaipur
Shri A K Mazumdar Chief Secretary Orissa Govt
Retd 262 Dover Road Apartment No 4 Calcutta 19 3
Shri P K Choksi Senior Partner Price Water house Pest  Co B 4 Gillander House Calcutta 1 4
Shri section K Mitra President Institute of Cost  Works Accounts of India 14 A6 Western Extension Area Karol Bagh New Delhi 5 5
Shri P A section Rao Formerly President of the Institute of Company Secretaries of India C 77 Vasant Vihar New Delhi
Shri M C Bhatt Joint Secretary Govt
of India Retd B 22 Defence Colony New Delhi 24 7
Shri Triloki Nath Sharma Business Executive 247 Mohan Nagar G T Road Sahibabad Ghaziabad UP 737 The Company Law Board direct further under sub section 6 of sec
408 of the Act that Shri B M Kaul will act as Chairman of the Board of Directors of the Company
In accordance with the order passed by the Delhi High Court on 24th August 1977 referred to hereinbefore the implementation of this order will be subject to any order that may be passed by the Delhi High Court in the matter pending before it This order which inducted seven additional directors was based on the ground that the affairs of the company in question are being conducted in a manner which is prejudicial to the interests of the company and to public interest The High Court after hearing counsel on both sides passed a laconic order that We consider that the proper order to be made in view of the circumstances of the case is to stay the operation of the order of the Company Law Board dated 17th December 1977 except as regards Shri P K Choksi Shri section K Mitra and Shri P A Rao and also to direct that the said three gentlemen will not vote at the meetings of the Board of Directors till the disposal of the writ petition
We order accordingly
 A company of considerable financial dimensions and involved in operations using public resources as investment naturally becomes the concern not merely of the Company Law Board but also of the economic process of the country
The specialised body with responsibility to watchdog corporate process is the Company Law Board
When it investigates and reaches a definite conclusion and makes a consequential direction it is entitled to prima facie respect unless there are glaring circumstances to the contrary
We do not wish to make any observations on the merits of the matter since the High Court is seized of the case
It may well be that the order of the Board may be vitiated by infirmities legal or other
It may also be that the reasoning of the Board and the factual foundation for it is sound
In such situations acting at an interlocutory stage the benefit of reasonable doubt belongs to the specialised body
Of course as stated earlier if there are good grounds to strike down the order certainly the High Court has jurisdiction to stay its operation
However we find nothing stated in the order itself indicating why the High Court prima facie thought it necessary substantially to stay the operation of the Company Law Board s order of induction of seven persons as directors
Nor have we any light regarding the total eclipse of four directors and the partial eclipse of the other three
Unfortunately the inscrutable face of a sphinx does not go well with the judicial process
Whatever might have been 738 the basis of the High Court s order we do not make any comments thereon we are inclined to nullify the interim stay
Our inclination is explained by the prefatory observations we have earlier made in this order
To expatiate more may prejudice one side or the other
To indicate this much is obligatory to explicate ourselves
There was some argument at the Bar about an order under sec
18AA of the Industries Development and Regulation Act 1951 and its impact upon the order impugned before us
Maybe by virtue of that appointment the entire company comes under the control of the authorised person appointed under that provision
It is not for us to explore here the effect and import of the order of the Central Government under section 18AA and we desist from doing so
All that we need do and that we can do in the present appeal is to allow it so that the Company Board s direction in regard to seven additional directors will come into full force until the final decision of the High Court
We allow the appeal
We may make it clear that the learned Additional Solicitor General did assure the court that nothing which will stultify the two writ petitions before the High Court will be done by the Company Law Board or the Central Government
We hope the High Court will dispose of the case very expeditiously
SR Appeal allowed


Summary:
The Company Law Board by its order dt
17th December 1977 inducted several additional directors in addition to the existing directors of the respondent company under section 4081 of the  since it was of the opinion that the affairs of the company in question are being conducted in a manner which is prejudicial to the interest of the company and to public interest
But the Delhi High Court passed an ad interim stay of the said orders while admitting the writ Petition
Allowing the appeal by special leave the Court  HELD Where repercussions are incalculable and the basis of the direction though interlocutory is obscure the ends of justice dominate and the Supreme Court may interfere if public interest so dictates under article 136 of the Constitution
736B 2 A company of considerable financial dimensions and involved in operations using public resources as investment naturally becomes the concern not merely of the Company Law Board but also all of the economic process of the country
The specialised body with responsibility to watchdog corporate process is the Company Law Board
When it investigates and reaches a definite conclusion and makes a consequential direction it is entitled to prima facie respect unless there are glaring circumstances to the contrary
It may well be that the order of the Board may be vitiated by infirmities legal or other
It may also be that the reasoning of the Board and the factual foundation for it is sound
In such situations acting at an interlocutory stage the benefit of reasonable doubt belongs to the specialised body
If there are good grounds to strike down the order certainly the High Court has jurisdiction to stay its operation
737D G