1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION COMPANY APPEAL NO. 33 OF 2009 IN COMPANY PETITION NO. 27/397-398/CLB/MB/2009 WITH COMPANY APPLICATION (L) NO. 654 OF 2009 Esquire Suite Pvt. Ltd. ..Appellants versus Rakesh M. Shah & Ors. ..Respondents Mr. Pradeep Sancheti i/b. M/s. Niranjan Jagtap & Co. for Appellants. Mr. Rahul Chitnis with Mr. Pankaj Kode i/b. Swapna Kode for Respondent No. 3. Mr. N. H. Seervai – Sr. Advocate with Sanober Nanavati for Respondent Nos. 4 to 8 CORAM : A. M. KHANWILKAR, J. DATED : JUNE 19, 2009. P.C. : 1. Heard learned counsel for the parties. 2. Having regard to the limited controversy brought before this Court by way of present Appeal, both the sides consented for final disposal of the Appeal in view of the Order that I propose to pass. In that, the present Appeal is directed against ad interim order passed by the Company Law 2 Board in Company Petition No. 27/397-398/CLB/MB/2009. It is filed by the original Respondent No. 6 in the said Company Petition. 3. For the nature of the Order that I propose to pass, it is not necessary to deal with every singular argument which has been canvassed before this Court. As aforesaid, the present Appeal is directed only against ad interim order passed by the Company Law Board in the pending Petition in which application for interim relief has been moved by the Petitioners therein. 4. However, before I deal with the core issue that arise for my consideration, I will straightway answer the preliminary objections raised by the Respondents According to the Respondents, the Appeal is not maintainable as it is directed against the ad interim order. This argument will have to be stated to be rejected. The provisions in the Companies Act do not make any distinction between the ad interim order or interim order or final order. It merely provides that Appeal is available against any order passed by the Board in the proceedings initiated before it provided question of law is raised. 5. The next preliminary objection is that none of the questions formulated in the Memo of Appeal are questions of law and in any case 3 would arise for consideration in the present Appeal. Even this submission does not commend to me. I am in agreement with the arguments of the Appellants that the question of law formulated in the Memo of Appeal are loosely drafted. It is always open to the Appellants during the arguments to re-formulate the question of law or modulate the question of law and it is for the Court to examine whether the same arises for its consideration. It is also open to the Court on its own to formulate the question of law even though it is not expressly stated in the Memo of Appeal in the interest of justice. Accordingly, I find no substance even in the second preliminary objection. 6. The third preliminary objection taken by the Respondents about the maintainability of the Appeal, is that the tenor of the Order would indicate that it is consent order between the parties. This argument is an argument of desperation. On reading the impugned order as a whole it is obvious that it is invited only by the Petitioners and the Respondents 1 to 5. They alone consented for passing the impugned order. The Respondent No. 6 did not consent for passing of any such order. Instead, the Respondent No. 6 contested the grant of such order. But the Board has loosely mentioned Respondents in the impugned order. That does not mean that Respondent No. 6 consented for passing such order. 4 7. That takes me to the merits of the Appeal. The Petitioners before the Company Law Board have claimed several reliefs against Respondents 1 to 5. In so far as Respondent No. 6, who is Appellants before this Court, the substantive relief is that the Agreement and Power of Attorney dated 8th December 2008 executed in favour of the Respondent No. 6 in respect of immovable property of the Company be quashed and set aside. Other substantive relief is to direct the Respondent No. 6 to deliver a copy of the Agreement and Power of Attorney dated 8th December 2008 for cancellation and further that officers, servants and agents of the Respondent No. 6 be restrained by a perpetual order and injunction to be passed by the Board from in any manner dealing with, disposing of, negotiating, alienating, transferring, encumbering or creating any third party right, title or interest in respect of or parting with possession of the said property in any manner whatsoever. These are the main three reliefs claimed against the Respondent No. 6 – Appellants. The Petitioners however, asked for interim reliefs against Appellants, which read thus :- “j. that Respondent No. 6, its officers, servants and agents be restrained by a perpetual order and injunction of this Hon’ble Board from in any manner dealing with, disposing of, negotiating, alienating, transferring, encumbering or creating any third part right, title or interest in respect of or parting with possession of the 5 said property, in any manner whatsoever. “m. that Respondent Nos. 2 to 5 be ordered and directed by this Hon’ble board to open a new bank account in the name of the Company to be operated under the joint signatures of one representative of the Petitioners and one representative of Respondents Nos. 2 to 5, and Respondent No. 6 be ordered and directed by this Hon’ble Board to deposit the amount of Rs. 11,60,00,000/- (Rupees Eleven Crores Sixty Lacs only) in that joint account only.” 8. When the matter was moved for ad interim order before the Board, the Petitioners and the Respondents 1 to 5 in the proceedings by consent invited the Board to pass the following interim order which essentially was to operate only against the Respondent No. 6 – Appellants herein, which reads thus : “3. On 31st March 2009 the counsels of both petitioner and Respondents have agreed by consent on interim relief which are as follows:- a) That Respondent No. 6, its officers, servants and agents be restrained by a perpetual order and injunction of this Hon’ble Board from in any manner dealing with, disposing of, negotiating, alienating, transferring, 6 encumbering or creating any third party right, title or interest in respect of or parting with possession of the said property, in any manner whatsoever. b) That Respondents Nos. 2 to 5 be ordered and directed by this Hon’ble Board, to open a new bank account in the name of the Company to be operated under the joint signatures of one representative of the Petitioners and one representative of Respondents Nos. 2 to 5, and Respondent No. 6 be ordered and directed by this Hon’ble Board to deposit the amount of Rs. 11,60,00,000/- (Rupees Eleven Crores Sixty Lacs only) in that joint account only.” Essentially, the Order is invited by the Petitioners and Respondents 1 to 5 by consent and the Board has not itself analyzed the merits of the contentions which would arise between the Petitioners and the Respondent No. 6 as such. 9. Be that as it may. The argument which impresses me and persuades me to allow this Appeal, is that, the Board has granted interim relief, in particular, the second part of the relief - directing the Respondent No. 6 to deposit amount of Rs.11,60,00,000/- in the joint account of the Petitioners and the Respondents 2 to 5, which relief, prima facie, does not appear to be in aid of the substantive relief claimed against the Respondent No. 6 by the 7 Petitioners. I am prima facie in agreement with the submission of the Petitioners that the second part of the said ad interim relief granted by the Board runs contrary to the main relief claimed by the Petitioners of declaration that the Agreement and Power of Attorney dated 8th December, 2008, is illegal and not binding on the Company and to be quashed and set aside. If the substantive relief claimed by the Petitioners is for not to act upon the Agreement executed in favour of the Respondent No. 6, the question of requiring the Respondent No. 6 to perform his part of the Agreement as per the terms of the same Agreement, does not arise. That too, by way of ad interim relief, which has the colour of mandatory order passed at this stage without recording any tangible reason to do so except to observe that the Respondent No. 6 was trying to delay the process in paying the outstanding amount. Notably, to assuage the grievance of the Petitioners and Respondents Nos. 1 to 5, the Appellants – Respondent No. 6 has given undertaking before this Court which is in supersession of whatever stand taken on Affidavit before the Board to the effect that it would deposit the balance amount payable under the Agreement in question being Rs. 10,10,00,000/- with interest at the rate of 12% per annum from 16th March 2009 within a period of one month from the dismissal of the Company Petition filed by the Petitioners and would thus discharge his obligation under the said Agreement and has no intention to protract the proceedings 8 except reserving its right to challenge the decision of the Board in the event the same is adverse to the Appellants – Respondent No. 6. This undertaking is accepted. 10.. Respondents Nos. 4 to 8 herein agree that the balance amount payable by the Appellants under the Agreement is only Rs.10,10,00,000/- (as sum of Rs.1,50,00,000/- has already been received by them). In the event the Agreement in question is required to be taken to its logical end, as on today, the balance amount payable by the Appellant / Respondent No. 6 would be only Rs.10,10,00,000/- and interest at the rate of 12% per annum from 16th March, 2009. The offer given by the Appellants – Respondent No. 6, in my opinion, addresses the concern of the Petitioners as well as Respondents Nos. 1 to 5 in the proceedings before the Board. 11. In the interest of justice, therefore, it would be appropriate to set aside only the second part of the ad-interim relief granted by the Board which operates against Respondent No. 6 requiring the Respondent No. 6 – Appellants herein to deposit a sum of Rs.11,60,00,000/- in the joint account of Petitioners and Respondents Nos. 2 to 5. Only that part of the Order is set aside. Rest of the ad interim order will operate as it is. Even the Appellants before this Court are not assailing that part of the Order which 9 position is stated across the bar by the counsel for the Appellants 12. Accordingly, the Appeal succeeds only to the above extent. It is however, made clear that the Board shall decide all the issues that may arise either for considering grant of interim relief or for final disposal of the Petition on its own merits in accordance with law uninfluenced by any of the observations made in this Order, which is only to consider the limited grievance of the Appellants with regard to second part of the ad interim order, as aforesaid. 13. Counsel for the Respondents No.3 submits that he would file Vakalatnama in due course. 14. Needless to observe that both the parties would be free to take recourse to such legal remedy, as may be available to them for enforcement of their rights arising out of the Agreement in question. 15. Since the Appeal is disposed of, nothing survives for consideration in the Application, the same is also dismissed. (A. M. KHANWILKAR, J.)