1 16.ca.1083.09==.sxw IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION skt COMPANY APPLICATION NO. 1083 OF 2009 WITH COMPANY APPEAL NO. 10 OF 2009 IN CLB/COMPANY PETITION NO. 17 OF 2007 Mr.Bharamgouda Adgouda Patil & Ors. ..Applicants /Appellants. vs. Sanjay Founders Pvt. Ltd. & Ors. ..Respondents. .... Mr. Dinesh Kumar Jain i/by Mr.Ajay V. Mishra for the Applicants/Appellants. Mr.Sean Wassoodew, Advocate for respondent nos. 1 to 5. .... CORAM : S.J. KATHAWALLA, J. DATE : 31st MARCH 2010. P. C. 1 The Applicants/Appellants have filed the present appeal under Section 10F of the Companies Act, 1956 impugning the order passed by the Company Law Board (for short ‘the C.L.B.’) dated 2nd December 2008 whereby the Company Petition filed by the Applicants/Appellants under Section 397, 398 of the Companies Act has been dismissed. The appeal was admitted 2 16.ca.1083.09==.sxw by this Court on 19th June 2009. In so far as the interim relief is concerned, it was recorded in the order dated 19th June 2009 that the respondent no.5 had sough time to file reply and/or consider engaging an advocate. Accordingly, the matter was listed on 3rd July 2009 for interim reliefs. Thereafter, on 3rd July 2009, time was granted to the other respondents to file reply on or before 13th July 2009. Rejoinder, if any, was ordered to be filed on or before 22nd July 2009. The appeal was directed to be listed on 24th July 2009 and the statement of the respondent was recorded that status-quo in respect of the immovable property of the Company will be maintained. 2 The learned advocate appearing for the Applicants/Appellants in support of the above Company Application has pointed out to this Court that the learned Member of the C.L.B. by its order dated 2nd December 2008 dismissed the Company Petition filed by the Applicants/Appellants. However, the C.L.B. has passed certain directions in favour of the Applicants/Appellants as can be seen from the operative part of the order which reads thus : “In view of the foregoing, there is no way that the prayers in Company Petition No.17 of 2007 can be 3 16.ca.1083.09==.sxw granted. However, keeping in view the facts and circumstances of the Company and that the respondent no.1 is a family Company in the nature of quasi partnership wherein the petitioners hold more than 46% shares, the respondent no.1-Company is hereby directed to give adequate representation to the petitioners in the management of the business of the company. C.P. No. 17 to 2007 is hereby disposed of in the above terms. All C.As. stand disposed off. All interim orders stand vacated. No order as to cost.” 3 The learned advocate appearing for the appellants/applicants has submitted that till date, respondent nos. 1 to 5 have not complied with the order passed by the C.L.B. dated 2nd December 2008 i.e. giving adequate representation to the petitioners in the management of the business of the Company. It is further submitted that the meetings of the Board of Directors of the Company as well as the A.G.M./E.O.G.M. are held in complete breach of the order of the C.L.B. i.e. without giving any representation to the petitioners in the management of the business of the Company. It is, therefore, submitted that the Applicant/Appellants be granted reliefs in terms of prayer clauses (a) to (f) of the Company Application. 4 16.ca.1083.09==.sxw 4 The learned counsel appearing for the respondent nos.1 to 5 states that though the C.L.B. has recorded in its order that the C.L.B. cannot adjudicate the issue of transfer of the 536 shares and cannot grant any relief in respect thereto, the C.L.B. has wrongly taken into account the 536 shares whilst holding that the shareholding of the Applicants/Appellants in the Company is more than 46%. It is submitted that even otherwise the C.L.B. has made a mistake in coming to the conclusion that the petitioners have more than 46% shares in the respondent no.1- Company. It is submitted that in the same order, the C.L.B. has also held that the petitioners have approached the C.L.B. with unclean hands. It is submitted that cross objections have been filed by respondent nos. 1 to 5 in November 2009. 5 All the above submissions made on behalf of the respondent nos. 1 to 5 are in my view untenable and deserves to be rejected at the threshold. The impugned order is dated 2nd December 2008. The respondent nos. 1 to 5 had no grievance against the order upto November 2009, when cross objections were filed. It is obvious that the cross objections were filed only when the above Company Application was filed by the 5 16.ca.1083.09==.sxw Applicants/Appellants in August 2010 complaining about the breach of the C.L.B. order by the respondents. Even if the C.L.B. order is incorrect, the respondents cannot breach the same since the said order is admittedly in force till date and the respondents have not obtained any stay of the order passed by the C.L.B. Even if the C.L.B. has observed in its order that the Applicants/Appellants have approached this Court with unclean hands, since the C.L.B. has in its order directed the respondents to give adequate representation to the Applicants/Appellants in the management of the business of the Company, the respondents are bound to obey the said order. 6 The learned advocate appearing for the respondent nos. 1 to 5 has stated that as of date respondent nos. 1 to 5 have three Directors on its Board. Under the circumstances, I pass the following order : (i) Respondent nos.1 to 5 shall appoint two Directors on its Board from the petitioners group i.e. Appellant No.2 & 3. (ii) No meeting/s of the Board of Directors of the Company and/or any other meetings including A.G.M./E.O.G.M. shall be held without giving seven days clear notice in writing to the appellant nos. 2 & 3. 6 16.ca.1083.09==.sxw (iii) The minutes of the meetings shall be forwarded to the Appellant Nos.2 & 3 not later than four days after each meeting and the acknowledgment of Appellant Nos. 2 & 3 shall be obtained. (iv) The Resolution passed earlier pertaining to the reappointment of the statutory auditors of the Company viz. K.M.Doshi is not stayed and shall continue to be in force. 7 The Company Application is accordingly disposed of. The parties shall act on a copy of this order duly authenticated by the Associate of this Court. 8 Place the appeal for final hearing on 7th June 2010. [ S.J.KATHAWALLA, J. ]