THE HON’BLE Ms. JUSTICE G. ROHINI REVIEW APPLICATION No.205 OF 2011 in COMPANY APPEAL No.18 OF 2010 A N D REVIEW APPLICATION No.207 OF 2011 in COMPANY APPEAL No.19 OF 2010 DATED: 19.04.2011 In Review Application No.205 of 2011: Between: Mr. Ravi Sanghi … Petitioner And 1. Mr. Sudhir Sanghi and 11 others. …Respondents In Review Application No.207 of 2011: Between: Mr. Ravi Sanghi … Petitioner And 1. Mr. Anand Prakash Sanghi and 11 others. … Respondents THE HON’BLE Ms. JUSTICE G. ROHINI REVIEW APPLICATION No.205 OF 2011 in COMPANY APPEAL No.18 OF 2010 A N D REVIEW APPLICATION No.207 OF 2011 in COMPANY APPEAL No.19 OF 2010 COMMON ORDER : These two Review Applications are filed seeking review of the common judgment dated 15.12.2010 in Company Appeal Nos.18 and 19 of 2010. The said Appeals were allowed by this Court thereby setting aside the order of the Company Law Board, Additional Principal Bench, Chennai, dated 8.11.2010 made in C.P.No.1 of 2010 and remanding the matter for consideration afresh strictly in terms of the directions of this Court in the judgment dated 1.10.2010 in Company Appeal Nos.10 & 14 of 2010. Review Application No.205 of 2011 has been filed by the respondent No.7 in Company Appeal No.18 of 2010 and Review Application No.207 of 2011 has been filed by the respondent No.9 in Company Appeal No.19 of 2010. I have heard the learned counsel for both the parties and perused the material available on record. Company Appeal Nos.18 & 19 of 2010 were filed under Section 10-F of the Companies Act, 1956 (for short, ‘the ‘Act’) assailing the order dated 8.11.2010 passed by the Company Law Board suspending temporarily the operation of the Board of Directors of M/s. Sanghi Polyesters Limited (hereinafter referred to as ‘the company’) and appointing the review petitioner and five independent directors in the Board as Managing Committee to take care of all aspects in running the plant of the company. The said order was set aside by this Court holding as under: “In the instant case, apparently the Company Law Board had ignored the material facts placed on record by the respondents 2 to 5 which in turn resulted in wrong inferences in favour of the respondent No.7. The failure of the Company Law Board to exercise the discretion conferred under law reasonably and judicially, particularly its failure to make a proper decision on consideration of the proposals of the rival groups on merits as directed by this Court in Company Appeal Nos.10 & 14 of 2010, in my opinion rendered the impugned order perverse and arbitrary warranting interference under Section 10F of the Act. For the aforesaid reasons, I hold that the Company Law Board in passing the impugned order had not only failed to exercise the jurisdiction conferred under law but also had gone beyond the scope of the remand order passed by this Court in Company Appeal Nos.10 & 14 of 2010. Hence the impugned order cannot be sustained and it is liable to be set aside in toto. Accordingly, the impugned order is hereby set aside and the Company Appeals are allowed remanding the matter to the Company Law Board for consideration afresh of the proposals made by the rival groups and render a decision thereon strictly in terms of the directions of this Court in the Common Judgment dated 1.10.2010 in Company Appeal Nos. 10 & 14 of 2010. It is made clear that the contributions that have already been made by the respondents 7 and 8 pursuant to the order under Appeals for revival of the working capital of 1st respondent company shall not be disturbed and the parties are at liberty to seek appropriate directions in that regard depending on the fresh decision that may be taken by the Company Law Board on the proposals made by the rival groups. There shall also be a direction to the Company Law Board to complete the enquiry in the light of the observations made above and pass appropriate orders afresh as expeditiously as possible preferably on or before 31.01.2011. The Appeals are accordingly allowed with the above directions. No costs.” It is pleaded in the review petitions that after the order dated 15.12.2010 was passed by this Court in Company Appeal Nos. 18 & 19 of 2010, the review petitioner came to know that the letter dated 26.03.2010 allegedly addressed by Allahabad Bank to the appellant No.1 in C.A.No.19 of 2010 had not been sent by the Bank. It is stated that in response to the letter dated 3.1.2011 addressed by the Review petitioner requesting the Allahabad Bank to confirm whether such letter had in fact been issued by the Bank, by reply dated 17.01.2011 it was confirmed by the Allahabad Bank that no such letter dated 26.3.2011 had been issued by the Bank from its Head Office. It is contended that since the common judgment dated 15.12.2010 in Company Appeal Nos.18 & 19 of 2010 was rendered by this Court relying upon the said fabricated/forged letter dated 26.03.2010 the matter requires review in the interest of justice. It is also contended that the assertion of the appellants before this Court that they would obtain Rs.10 Crores from the Central Excise Department to run the plant was absolutely false since the refund of CENVAT credit was rejected by the Central Excise Department on 20.12.2007 itself. Similarly whereas the 44 cheques issued by the appellants towards payment of arrears of salaries to employees were dishonoured by the Bank for insufficient funds, it was misrepresented before this Court that the cheques were dishonoured on technical grounds. It was also falsely asserted before this Court that the company was continuously engaged in production activities right from the day of the restart of the plant on 4.2.2010, whereas the company had closed its operations permanently from 8.5.2010 onwards. The appellants had also misrepresented that recovery proceedings were pending before the Debts Recovery Tribunal for recovery of Rs.24 Crores from the review petitioner. The respondents 1 & 2 in Review Application No.205 of 2011 filed a detailed counter denying all the allegations as well as the plea of the review petitioner that he had no knowledge of the letter dated 26.03.2010 prior to the date of the common judgement in Company Appeal Nos.18 & 19 of 2010. While pointing out that the letter dated 17.01.2011 was purportedly issued by the Branch Office of Allahabad Bank in Hyderabad disowning the letter dated 26.03.2010 addressed by the Head Office, the authenticity of the letters dated 3.1.2011 and 17.1.2011 has also been questioned by the respondents. It is also pleaded that after the matter had been remanded back to the Company Law Board, the Company Law Board had directed the petitioner and the respondents to explore the scope of an amicable settlement by order dated 25.01.2011 and the matter had been getting adjourned from time to time at the request of the parties in order to pursue talks so as to amicably settle their disputes. While alleging that the petitioner is engaging in dilatory tactics and the Review petition has been filed with a mala fide intention, it is contended that the review application which is without any substance is liable to be dismissed. The respondents 1 & 2 in Review Application No.207 of 2011 vide memo dated 22.03.2011 adopted the above said counter filed by the respondents 1 and 2 in Review Application No.205 of 2011. Sri R.Venkata Varadan, the learned counsel appearing for the review petitioner while reiterating the grounds in the Review petitions vehemently contended that the judgment dated 15.12.2010 in Company Appeal Nos.18 & 19 of 2010 requires review. It is also contended that the respondents 1, 2, 8 & 9 are liable to be punished for perjury for stating falsehood on oath and production of false documents before this Court. Sri P. Gangaiah Naidu, the learned Senior Counsel appearing for the workmen of the company who are sailing with the Review petitioner while relying upon MEGHMALA v. G. NARASIMHA REDDY[1] contended that since the common judgment in Company Appeal Nos.18 & 19 of 2010 was obtained playing fraud on this Court, the Judgment is liable to be recalled. I have also heard Sri Vedula Venkata Ramana and Sri S. Ravi, the learned Senior Counsel appearing for the respondents. Both the learned Senior Counsel submitted that the Review petitions are not maintainable firstly on the ground that the Companies Act, 1956 does not contain any provision for review of the order made under Section 10F of the Act. While relying upon a decision of the Supreme Court in MEGHMALA’S case (1 supra), it is also contended that since the petitioner had already filed a Special Leave Petition before the Supreme Court and the same was disposed of with directions, the review petition subsequently filed is not maintainable. Even on merits, it is contended that the petitioner’s allegation that the letter dated 26.03.2010 issued by the Allahabad Bank was forged/fabricated is absolutely false and without any basis and the review cannot be sought on the said ground. At the outset, it is to be noticed that against the judgment dated 15.12.2010 in Company Appeal Nos.18 & 19 of 2010 the review petitioner filed a Special Leave Petition (C) No.1085 of 2011 before the Supreme Court and after hearing both the parties it was disposed of by order dated 14.01.2011 which reads as under: “Since the matters are kept for final hearing on 25th January, 2011, before the Company Law Board (‘CLB’, for short), we are directing the CLB to hear these matters on day-to-day basis if not adjourned, particularly, in view of the fact that the wages of the workers are not being paid for the last two-three months. We are requesting the CLB to complete the matter within the time prescribed by the High Court. Before taking up the mattes on 25th January, 2011, each of the two groups will file an undertaking in the form of an affidavit that, in the event of any of them succeeding, the successful party will first undertake to pay the salary of the workers, which has accumulated for the last two-three months as well as electricity dues upto date. As far as the other liabilities including disposal of closing stock of polyester yarn is concerned, we leaved the said question to be decided by the CLB according to law. The special leave petitions are disposed of accordingly.” These Review petitions have admittedly been filed on 1.2.2011 after the disposal of the Special Leave Petition by order dated 14.01.2011. It is also clear from the order in SLP (C) No.1085 of 2011, dated 14.1.2011 that it is not a case where the SLP was dismissed in limini by a non-speaking order, but having taken into consideration the facts and circumstances of the case, the Special Leave Petition was disposed of with certain directions. The Supreme Court in KUNHAYAMMED v. STATE OF KERALA[2] while dealing with the doctrine of merger has also explained the effect of the order refusing Special Leave to Appeal by a non-speaking order or a speaking order as under: “An order refusing special leave to appeal may be a non-speaking order or a speaking one. In either case it does not attract the doctrine of merger. An order refusing special leave to appeal does not stand substituted in place of the order under challenge. All that it means is that the Court was not inclined to exercise its discretion so as to allow the appeal being filed. If the order refusing leave to appeal is a speaking order, i.e. gives reasons for refusing the grant of leave, then the order has two implications. Firstly, the statement of law contained in the order is a declaration of law by the Supreme Court within the meaning of Article 141 of the Constitution. Secondly, other than the declaration of law, whatever is stated in the order are the findings recorded by the Supreme Court which would bind the parties thereto and also the Court, tribunal or authority in any proceedings subsequent thereto by way of judicial discipline, the Supreme Court being the Apex Court of the country. But, this does not amount to saying that the order of the Court, tribunal or authority below has stood merged in the order of the Supreme Court rejecting special leave petition or that the order of the Supreme Court is the only order binding as res judicata in subsequent proceedings between the parties.” So far as the order rejecting a Special Leave Petition by a speaking order is concerned, it is further explained that in such cases the doctrine of merger would not apply, but the law stated or declared by the Supreme Court in its order should attract applicability of Article 141 of the Constitution and that the reasons assigned in the order of the Supreme Court expressing its adjudication (expressly or by necessary implication) on point of fact or law should take away the jurisdiction of any other Court, tribunal or authority to express any opinion in conflict with or in departure from the view taken by the Supreme Court because permitting to do so would be subversive of judicial discipline and an affront to the order of the Supreme Court. Having considered the ratio of the judgment in KUNHAYAMMED’S case (2 supra) it was held in K. RAJAMOULI v. A.V.K.N. SWAMY[3] that if a review application has been filed before the High Court prior to filing Special Leave Petition before the Supreme Court and the Review Petition is decided/rejected, Special Leave Petition against that order of review would be maintainable. However in case the Review application has been filed subsequent to dismissal of the Special Leave Petition it would amount abuse of process of the Court. After considering all the above referred judgments as well as a later decision in KUMARAN SILKS TRADE (P) LIMITED v. DEVENDRA[4] a two-judge Bench of Supreme Court in MEGHMALA’S case (1 supra) held as under: “Thus, the law on the issue stands crystallised to the effect that in case a litigant files a review petition before filing the special leave petition before this Court and it remains pending till the special leave petition stands dismissed, the review petition deserves to be considered. In case it filed subsequent to dismissal of the special leave petition, the process of filing review application amounts to abuse of process of the court.” In the light of the settled position of law noticed above, I am of the opinion that filing of the present review petitions which are filed after the Special Leave Petitions were disposed of by the Supreme Court with directions amounts to an abuse of process of the Court and therefore on that ground itself they are liable to be dismissed. Even on merits, it is to be noticed that this Court while allowing Company Appeal Nos.18 & 19 of 2010 though referred to the letter issued by the Allahabad Bank, dated 26.03.2010, did not rely upon the same. As a matter of fact, this Court did not express any opinion on any of the rival submissions made by the parties, but the order of the Company Law Board dated 8.11.2010 was set aside only on the ground that the Company Law Board failed to examine the viability of the proposals submitted by the rival groups taking into consideration the merits and demerits of the same as directed by this Court in Company Appeal Nos.10 & 14 of 2010. Thus it was concluded by this Court that the entire approach of the Company Law Board was contrary to the purport of the remand order made by this Court and the purpose for which the matter was sent back had been defeated. Accordingly the matter was again sent back for consideration afresh. Absolutely no case could be made out by the review petitioner to show that the said judgment suffered from any error of fact or law apparent on the face of the record. The allegation that the letter of Allahabad Bank, dated 26.03.2010, was fabricated has been categorically denied by the respondents and it is neither necessary nor possible for this Court to record any finding on that issue. At any rate, as expressed above, the said letter was never relied upon by this Court while allowing the appeals. Therefore I do not find substance in any of the contentions raised by the review petitioner. Accordingly, both the Review Petitions are dismissed. No costs. ______________ G. ROHINI, J. Dt. 19.04.2011 gbs [1] (2010) 8 SCC 383 [2] (2000) 6 SCC 359 [3] (2001) 5 SCC 37 [4] (2006) 8 SCC 555