IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT:- THE HONOURABLE THE CHIEF JUSTICE MR.H.L.DATTU & THE HONOURABLE MR. JUSTICE K.M.JOSEPH FRIDAY, THE 22ND FEBRUARY 2008 / 3RD PHALGUNA 1929 W.A.No.446 of 2008 --------------------------------------- AGAINST THE JUDGEMENT IN W.P.(C).NO.35174/2007 DATED 10/12/2007 .................... APPELLANT/PETITIONER IN W.P.(C):- ------------------------------------------------------- JOHNY CHANDY, CHANDY BHAWAN, ANCHANGADY, TRICHUR - 690 005. BY ADV.SRI.K.P.DANDAPANI (SENIOR ADVOCATE) SRI.MILLU DANDAPANI. RESPONDENTS/RESPONDENTS IN W.P.(C):- --------------------------------------------------------------- 1. THE REGISTRAR OF COMPANIES, KERALA, COMPANY LAW BHAWAN, B.M.C. ROAD, TRIKKAKKARA, COCHIN - 682 021. 2. THE CATHOLIC SYRIAN BANK LTD., CATHOLIC SYRIAN BANK BHAWAN, PO BOX 502, ST.MARY'S COLLEGE ROAD, TRICHUR - 680 020. 3. AIF CAPITAL DEVELOPMENT LIMITED, 10, FR'CRE FELIX DE VALOIS STREET, PORT LOUIS, MAURITIUS. 4. GPE III MAURITIUS DIRECT INVESTMENT LTD., 608, ST.JAMES COURT, ST.DENI'S STREET, PORT LOUIS, MAURITIUS. 5. SIGULER GUFF BRIC MAURITIUS, C/O.CITCO (MAURITIUS) LTD., 5TH FLOOR, ONE CATHEDRAL SQUARE, JULES KOCING STREET, PORT LOUIS, MAURITIUS. R1 BY ADDL.C.G.S.C. SRI.MANOJ RAMASWAMY, R2 BY STANDING COUNSEL SRI.P.SANTHALINGAM. THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 22/02/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:- H.L.Dattu, C.J. & K.M.Joseph, J. ---------------------------------------------- W.A.No.446 of 2008 ---------------------------------------------- Dated, this the 22nd day of February, 2008 JUDGMENT K.M.Joseph,J. The writ petitioner is the appellant in this Writ Appeal. The writ petition is filed challenging Exhibit P8 order passed by the Registrar of Companies permitting allotment of shares. (2) The appellant filed Exhibit P3 complaint, which is an Investor Complaint, before the Registrar of Companies pointing out non-compliance with certain rules contained in Unlisted Public Companies (Preferential Allotment) Rules, 2003 (“Rules” for short). The appellant and others had also filed a petition under Sections 397 and 398 of the Companies Act, 1956 (“Act” for short), before the Company Law Board. This Court directed Exhibit P3 complaint to be considered by the Registrar of Companies. Accordingly, as directed by the learned Single Judge, the Registrar of Companies proceeded to pass Exhibit P8 order. In Exhibit P8 order, it is seen that the appellant made specific reference to Rule 6(a), 6(e) and 6(f) of the Rules besides Rule 7. The Registrar of Companies called for explanation from the 2nd respondent Bank, which was forwarded to the appellant and to which appellant filed reply, and after referring to the contentions, finds that it cannot be said that the Bank has not complied with the requirements of the Rules. Further, it was found that the appellant has filed C.P.No.36 of 2006 under Sections 397 and 398 of the Act before the Company Law Board and the issues raised presently were subject matter of litigation before the Company Law Board and the Company Law Board as per order dated 3.8.2006 directed that the Bank is at liberty to implement the resolution passed by the AGM held on 30.6.2006 pursuant to W.A.No.446 of 2008 - 2 - item No.10 of the notice dated 31.5.2006. It is finally stated that:- “As the Company Law Board has already ordered implementation of the resolution passed at the AGM held on 30/6/2006 as item 10 of the notice dated 31/5/2006, which is the subject matter being agitated in Exhibit P-3 by the complainant and in the light of the order dated 3/8.2006 passed by the Company Law Board in C.P.36/2006 giving the liberty to the Bank to implement the resolution, any issue which relates to the passing of the resolution also stands disposed accordingly. Hence no infirmities regarding passing of the said resolution exists and the Bank as directed by the Company Law Board is at liberty to implement the resolution. Exhibit P3 is disposed of accordingly”. It was challenging the said order and also seeking a direction to the 1st respondent to issue necessary directions to the 2nd respondent Bank not to take on record the allotment made by the 1st respondent in violation of the Rules, that the present writ petition came to be filed. (3) The learned Single Judge, taking note of what is stated in Exhibit P8 and also the fact that the matter is engaging the attention of the Company Law Board in C.P.No.36 of 2006, took the view that there is no justification for a parallel proceeding and, accordingly, dismissed the writ petition. It was made clear that it was open to the appellant to urge all his contentions before the Company Law Board. It is stated that the Court was sure that the Board will decide the issue untrammelled by the findings in Exhibit P8. It is being aggrieved by the aforesaid judgment that the petitioner is before us in the present Writ Appeal. (4) We heard Sri.K.P.Dandapani, learned Senior Counsel for the appellant and Sri.P.Santhalingam, learned counsel for the 2nd respondent. W.A.No.446 of 2008 - 3 - (5) Sri.K.P.Dandapani, learned Senior Counsel would point out that it is a clear case where Rule 6(a), 6(b) and 6(f) besides Rule 7 of the Rules have been violated. It is further contended that Rule 4 of the Rules has also been violated, as Rule 4 interdicts that the special resolution should be implemented within a period of one year. He contends that it is apparent from the facts and circumstances of this case that there is violation of Rule 4 as the special resolution was implemented beyond the period of one year. He would submit that it is true that the appellant had filed C.P.No.36 of 2006 before the Company Law Board, but that would not prevent the statutory authority from dealing with the Investor Complaint filed by the appellant and the Registrar of Companies is bound to consider the matter. (6) It is not in dispute that the appellant is one of the petitioners in C.P.No.36 of 2006. It is also not in dispute that while dealing with the said Company Petition, the Company Law Board has, as an interim measure, permitted implementation of the very special resolution, which is the subject matter of the controversy, by order dated 3.8.2006. What the appellant essentially impugning is Exhibit P8. If the impugned order Exhibit P8 is set aside and the Registrar is directed to reconsider the matter, it will be in the teeth of the order passed by the Company Law Board which was seized of the matter on a petition filed by the appellant among others and as the Senior Counsel submits that the C.P. itself stand dismissed, it will clearly amount to permitting parallel proceedings. The very case of the appellant is that the appellant is a minority share holder. He along with others has sought to challenge the passing of the special resolution before the Company Law Board. If that be so, the appellant has to work out the remedies available to him before the appropriate forum. We note that the contention of the appellant regarding violation of Rule 4 of the Rules, which is sought to be W.A.No.446 of 2008 - 4 - projected before us, is not a ground taken by the appellant before the Registrar of Companies in Exhibit P3 complaint and he cannot certainly be permitted to raise such a contention in aid of his attack against Exhibit P8 order. In such circumstances, we are in agreement with the reasoning and conclusion of the learned Single Judge. We find no merit in this appeal and it is, accordingly, dismissed. H.L.Dattu Chief Justice K.M.Joseph vku/- Judge