Case: Purnima Manthena  Vs. Dr. Renuka Datla

2. The steeled stand off encased in the decision impugned, projects the members of a family, daughters against their mother in particular, in a combative formation in their bid to wrest the reins of a company, Biological E. Limited (for short, hereinafter to be referred to as ?the company?) engaged in the business of pharmaceutical products and vaccines. The differences that had surfaced soon after the demise of Dr. Vijay Kumar Datla, the predecessor-in-interest of the contending family members, who at his death, was the Managing Director of the company, have grown in acrimonious content with time, stoked by the intervening events accompanied by a host of litigation. The present appeals stem from the judgment and order dated 15.4.2015 rendered by the High Court of Judicature at Hyderabad, for the State of Telangana and State of Andhra Pradesh, in Company Appeal No. 17 of 2014 preferred by the respondent Nos. 1, 2 and 3 herein, under Section 10F of the Companies Act, 1956 (for short hereinafter to be referred to as ?the Act?) assailing the order dated 6.8.2014 passed by the Company Law Board, Chennai Bench (for short, hereinafter to be referred to as ?CLB?) in Company Petition No. 36 of 2014 filed by them3. While entertaining the instant appeals, this Court by order dated 12.5.2015, having regard to the considerations referred to therein and as accepted by the learned counsel for the parties, did make an endeavour to effect an amicable settlement through mediation which, however, did not fructify. The learned counsel for the parties, as is recorded in the order dated 21.7.2015, on instructions, vouched that the day-to-day functioning of the company, however would be allowed to continue. The appeals, in this backdrop have, thus, been analogously heard on merits for disposal4. We have heard Mr. P.S. Raman, learned senior counsel for the appellants in Civil Appeal arising out of S.L.P. (C) No. 12831 of 2015 (who are also respondent Nos.4 & 5 in SLP (C) No. 12835 of 2015 and 5 & 6 in SLP (C) No.20338 of 2015), Mr. Shyam Divan, learned senior counsel for the appellant in Civil Appeal arising out of S.L.P. (C) No. 12835 of 2015 (who is also respondent No. 5 and 4 in SLP (C) No. 12831 of 2015 and SLP (C) No. 20338 of 2015 respectively), Mr. P.P. Rao, learned senior counsel for the appellant in Civil Appeal arising out of S.L.P. (C) No. 20338 of 2015 (who is also respondent No. 6 in S.L.P. (C) Nos.12831 of 2015 and 12835 of 2015) and M/s. Parag P. Tripathi and Sajan Poovaiah, learned senior counsel for Dr. Renuka Datla ( respondent No. 1 in all the three Appeals)5. Since the judgment under challenge is same in all the appeals, for the sake of convenience, the facts are being taken from Civil Appeal arising out of S.L.P. (C) No.12835 of 20156. A skeletal account of the facts in the bare minimum, as available presently on the record, would outline the contours of the respective assertions7. The company, which was initially promoted by the father of respondent No. 1, with time took in its fold, Mr. Venkata Krishnam Raju Datla, the father of Dr. Vijay Kumar Datla (since deceased and husband of respondent No.1). After the demise of the father of respondent No. 1, Dr. Vijay Kumar Datla, who was inducted as the Chairman and Managing Director of the company on 1.5.1972 stewarded, nurtured and nourished it from strength to strength. The respondent No. 1, his wife, joined him initially as a Medical Director, as she is a qualified medical professional and w.e.f. 29.8.1991, was drafted in as the Executive Director of the company. Dr. Vijay Kumar Datla, who continued as the Chairman-cum-Managing Director of the company over the years, expired on 20.3.2013 and at his death, he, respondent No. 1 and Mr. G.V. Rao (respondent No. 6) did constitute the Board of Directors of the company. Noticeably Dr. Vijay Kumar Datla, in his individual capacity, then did hold 81% of the shares thereof8 As the facts evince, Mr. G.V. Rao (respondent No. 6) offered his resignation as a director vide his letter dated 6.4.2013 with immediate effect. It has been pleaded, however, on behalf of the appellant that Mr. G.V. Rao (respondent No. 6), on being requested by the family not to abandon the company at its hour of crisis, its guardian and mentor Dr. Vijay Kumar Datla having departed, did reconsider his decision and addressed another letter dated 9.4.2013 to the Board of Directors expressing his inclination to continue as the Director of the Board, intimating as well that thereby he was withdrawing his resignation letter dated 6.4.20139. On the same day i.e. 9.4.2013, a meeting of the Board of Directors was convened by Mr. G.V. Rao, in the capacity of a Director of the company, which was attended amongst others, by the three daughters of the respondent No.1 i.e. Ms. Purnima Manthena (respondent No. 4), Ms. Indira Pusapati (respondent no. 5) and Ms. Mahima Datla (appellant). The respondent No. 1 did not attend the meeting and as the minutes of the proceedings would record, leave of absence was granted to her. In the same meeting, Mrs. Indira Pusapati (respondent No. 5) was inducted as the Director of the company to fill up the casual vacancy caused by the death of Dr. Vijay Kumar Datla. Mr. G.V Rao (respondent No. 6), was authorised, inter alia, to verify all acts and deeds as would be necessary, expedient and desirable to give effect to the resolutions adopted10. Thereafter, on 10.4.2013 and 11.4.2013 as well, meetings of the Board of Directors of the company were held. In these meetings also, respondent No. 1 did not attend and leave of absence was granted. In the meeting dated 10.4.2013, along with two directors namely; Mr. G.V. Rao (respondent No. 6) and Ms. Indira Pusapati (respondent No. 5), Mrs. Purnima Manthena (respondent No. 4) and Ms. Mahima Datla (appellant), amongst others, were present. The meeting took note of a will dated 14.2.2005, said to be executed by Dr. Vijay Kumar Datla in favour of Ms. Mahima Datla (appellant) and resolved to transmit the equity shares held by him and as referred to in the aforesaid will, in favour of Ms. Mahima Datla (appellant). In the same meeting, it was further resolved to appoint Ms. Mahima Datla (appellant) and Ms. Purnima Manthena (respondent No. 4) as the Additional Directors of the company, to hold the said office up to the conclusion of next annual general meeting. Mr. G.V. Rao (respondent No. 6), Director of the company was authorised to verify all acts, deeds as would be necessary, expedient and desirable to give effect to the resolutions adopted11. In its next meeting held on 11.4.2013, in which respondent No. 1 was absent and leave of absence was granted to her, Ms. Mahima Datla (appellant) was appointed as the Managing Director of the company for a period of three years w.e.f. 11.4.2013. It was resolved as well to request the Chairman to advise respondent No. 1 to officially communicate the appointment of Ms. Mahima Datla (appellant) as Managing Director of the company12. Though the pleaded assertion of respondent No. 1 is that she was neither noticed nor informed of the meetings held on 9.4.2013, 10.4.2013 and 11.4.2013 and that the proceedings thereof were a nullity, as the meeting dated 9.4.2013 could not have been validly convened by Mr. G.V. Rao (respondent No. 6), who had, prior thereto, resigned from the company and further that the meeting dated 9.4.2013 was sans the prescribed quorum, the progression of events attest that on 15.4.2013, a letter had been addressed by her (respondent No. 1) to the constituent fraternity of the company, conveying the news of appointment of her daughters i.e. Mrs. Purnima Manthena (respondent No. 4), Mrs. Indira Pusapati (respondent No. 5) and Ms. Mahima Datla (appellant) as the Directors of the Board thereof, with particular reference to the appointment of Ms. Mahima Datla (appellant) as the Managing Director, thereby seeking the ?blessings and guidance? of all concerned for enabling her to discharge her new responsibility. Respondent No. 1, however, at a later point of time, did allege exertion of pressure and undue influence by the other Directors to which she wilted, being in an anguished and forsaken state of mind, still mourning the sudden demise of her husband, Dr. Vijay Kumar Datla13. While the matter rested at that, the respondent No. 1, Mrs. Purnima Manthena (respondent No. 4), Mrs. Indira Pusapati (respondent No. 5) and Ms. Mahima Datla (appellant) addressed a letter dated 24.5.2013 to the Board of Directors conveying the decision of the members of the HUF on consensus to divide 4594 shares thereof (HUF) held by Dr. Vijay Kumar Datla, in equal shares. They also appended to the letter, a Memorandum Of Undertaking to this effect and requested the company to effect transmission of shares in their favour, on the said basis14. Incidentally on the same day i.e. 24.5.2013, a meeting of the Board of Directors was convened in which, as respondent No. 1 was absent, leave of absence was granted to her. In the said meeting, amongst other, taking note of the Memorandum Of Understanding referred to in the aforementioned letter dated 24.5.2013 signed by the respondent No. 1 and Mrs. Purnima Manthena (respondent No. 4), Mrs. Indira Pusapati (respondent No. 5) and Ms. Mahima Datla (appellant), 4594 equity shares held by Dr. Vijay Kumar Datla (HUF) were transmitted in their favour in equal shares15. A meeting of the Board of Directors was thereafter convened on 22.8.2013 of which a notice was served on the respondent No. 1. She did attend the meeting albeit with reservations, whereafter through a host of letters, addressed to the Board of Directors, she highlighted her objections, inter alia, to the validity of the meetings held on 9.4.2013, 10.4.2013 and 11.4.2013 in particular and the resolutions adopted therein16. On the receipt of notice of the Annual General Meeting of the company, which was scheduled to be held on 28.11.2013, respondent No. 1 filed an application under Section 409 of the Act before the CLB, which was registered as Company Petition No. 1 of 2013, seeking principally a declaration that the appointments of her three daughters namely; Ms. Purnima Manthena (respondent No. 4), Mrs. Indira Pusapati (respondent No. 5) and Ms. Mahima Datla (appellant) as Directors of the company by virtue of the meetings held on 9.4.2013, 10.4.2013 and 11.4.2013 to be a nullity. While seeking a further declaration that Mr. G.V. Rao (respondent No. 6) having resigned from the Board of Directors of the company on 6.4.2013 with immediate effect, he was neither entitled to continue as the Director nor did he have any authority to convene the aforesaid meetings and transact the business therein, she also prayed that all acts, deeds and decisions taken in and pursuant to the resolutions in the said meetings be adjudged to be void and not binding on the company. Apart from seeking a permanent injunction restraining her three daughters namely; Ms. Purnima Manthena (respondent No. 4), Ms. Indira Pusapati (respondent No. 5), Ms. Mahima Datla (appellant) and Mr. G.V. Rao (respondent No. 6) from functioning as Directors of the company, by way of interim relief, she prayed for a restraint on the ensuing Annual General Meeting fixed on 28.11.2013 and to appoint two ad hoc Directors for administering the day-to-day affairs of the company along with her17. By its ruling dated 17.12.2013, the CLB, after considering the rival pleadings and the documents laid before it, observed on a prima facie evaluation of the facts portrayed, that the respondent No. 1 had recognised her three daughters Ms. Purnima Manthena (respondent No. 4), Mrs. Indira Pusapati (respondent No. 5) as the Directors and Ms. Mahima Datla (appellant) to be the Managing Director of the company. It was of the view that, though she received the letter of withdrawal of resignation of Mr G.V. Rao respondent No. 6, she had not responded thereto either accepting or rejecting the same. On an appraisal of the pleaded facts and the documents on record, the CLB returned a finding that there was neither any change in the Board of Directors nor in the management of the company nor there was any likelihood of change in the ownership of the company nor any likelihood of the new management taking over the company nor any change in the shareholding pattern of the company and concluded in the context of Section 409 of the Act that respondent No. 1 had not made out any ground for grant of any interim relief, as prayed. Noting the assertion of the respondents therein that the company had the necessary reserves to meets its debts and that Mahima Datla (appellant herein) had stood as a guarantor for the loans obtained from the banks, the CLB was, thus, of the view that the apprehension of the respondent No. 1, as expressed, was not substantiated by any documentary evidence. Having recorded that the respondent No. 1 was continuing as the Executive Director of the company and that Mahima Datla (appellant herein) being associated with its affairs was well acquainted therewith and that in the proposed Annual General Meeting to be held on 18.12.2013 (which got deferred to this date from 28.11.2013), the company was going to transact the business, as notified, which did not disclose any proposed change in the management or the ownership or taking over by external agency, the CLB declined to grant stay of the said meeting. This was more so, in view of the statutory mandate qua Annual General Meeting of a company under the Act. The respondent No. 1 was left at liberty to participate in the said Annual General Meeting and the company was permitted to conduct the same and take resolutions as per the notice. The resolutions to be passed in the Annual General Meeting were, however, made subject to the outcome of the Company Petition No.1 of 201318. Though the respondent No.1, being aggrieved by this order, did prefer an appeal under Section 10F of the Act being Company Appeal No. 1 of 2014, she participated in the Annual General Meeting held on 18.12.2013 in which, resolutions on the appointment of the appellants as Directors/Managing Director and amongst others, the enhanced remuneration of respondent No. 1 were adopted. Eventually on 24.2.2014, the appeal stood disposed of as infructuous on the concurrence of the parties to join for the necessary endeavours for early disposal of the Company Petition No. 1 of 201319 Close on the heels of the disposal of aforesaid Company Appeal No. 1 of 2014, the respondent No. 1 instituted a suit being O.S. No. 184 of 2014 in the Court of Chief Judge, City Civil Court, Hyderabad substantially traversing the above facts and seeking a decree for a declaration to be the absolute owner of the shares of the company as enumerated in Schedule A to the plaint, on the strength of a will claimed to have been executed in her favour by Dr. Vijay Kumar Datla (since deceased) and a direction to the defendants therein to transfer the same by recording her name in relation thereto and to hand over the possession of the share certificates to her. Her alternative prayer, without prejudice to this relief, was for delineating her extent of claim to the shares in the capacity of a working spouse/widow of late Dr. Vijay Kumar Datla20. As the flow of the developments thereafter would demonstrate, the respondent No. 1 withdrew the Company Petition No. 1 of 2013 in July, 2014 with a liberty to approach the appropriate forum for appropriate reliefs in a manner known to law. The Company Petition No.1 of 2013, was, accordingly closed21 The respondent No. 1, in her renewed pursuit for redressal of her grievances as perceived by her, next instituted another petition before the CLB, which was registered as Company Petition No. 36 of 2014 under Sections 111A, 237, 397,398,402,403,404,406 of the Act, 1956 and Sections 58 and 59 of the Companies Act, 2013. As the pleaded assertions made therein would attest, those were in substantial reiteration of the facts narrated hereinabove, with the added imputation that the respondents therein were contemplating to transfer and consign the undertakings of the company to other companies incorporated and managed by the appellant herein and other Directors so as to enable them, to dispose of the said assets through their companies and appropriate the proceeds to their benefits to the irreparable loss and detriment to the company i.e. Biological E. Limited and its genuine shareholders. She, however admitted, that the concerned Directors in the meanwhile, had filed a scheme of arrangement under Sections 391 to 394 of the Act before the High Court of Andhra Pradesh for demerger of the undertakings of the company as listed out in the said petition. A copy of the scheme of arrangement was also appended to the petition alleging over all mis-management and oppression by the Directors therein in particular, consciously driving the company and its shareholders to a state of ruination chiefly through the process of demerger. The respondent No.1 prayed for a declaration of the acts of the said Directors to be oppressive and prejudicial to the interest of the company and to appoint an administrator and/or Special Officer to manage the affairs thereof by superseding the existing Board of Directors. In the alternative, she also prayed for constitution of a committee comprising of her representative to function as the administrator and/or Special Officer for the management and control of its affairs. She reiterated her prayer for (i) declaring the Board meetings held on 9.4.2013, 10.4.2013 and 11.4.2013 as void ab-initio, (ii) removal of the appellant herein and the other Directors from the office of the Directors of the company and (iii) adjudging the transmission of 400951 equity shares held by Dr. Vijay Kumar Datla (since deceased) to the appellant (Ms. Mahima Datla) as illegal, null and void. A declaration to adjudge the resolutions passed in the Board meetings held on or after 20.03.2013 and also the Annual General Meeting held on 18.12.2013 as non est was also sought for. By way of interim relief, she prayed for supersession of the Board of Directors and appointment of interim administrator and/or Special Officer to assume the charge of the affairs of the company and in the alternative, prayed for constitution of a committee comprising of her representative to discharge the said role22. The petition was taken up on 6.8.2014, on being mentioned. In course of the arguments, though the contesting respondents could not file their pleadings, understandably it being the date of first hearing, the primary facts, as adverted to hereinabove, having a bearing on the dissensions were addressed and the CLB, after taking note of the fact that the meeting of the company for considering the scheme of demerger was scheduled to be held on 7.8.2014, as directed by the High Court, construed it to be inexpedient to intervene in that regard. It observed as well, that meanwhile a suit had been filed by the respondent No.1 on the basis of a will said to have been executed in her favour and that the same was pending adjudication and concluded that it would not be appropriate to restrain the appellant (Ms. Mahima Datla) from exercising her voting right in respect of 400961 equity shares. Noticeably, in course of the submissions, it was pleaded on behalf of the respondent No. 1 that the suit would be withdrawn. Qua the alienation of immovable properties of the company, the CLB recorded the submission on behalf of the respondents therein that there was no intention to do so vis-a-vis the movable and immovable properties of the company except that may arise under the scheme of demerger. In response to the submissions made on behalf of the respondent No. 1 that she ought not to be removed from the post of Executive Director, it was submitted on behalf of the respondents therein that no step would be taken to dislodge her without the leave of the CLB. Taking note of these submissions/undertakings, the CLB ruled that the respondent No. 1 had not been able to make out any case for grant of interim relief ?at the time of mentioning of the Company Petition? and permitted the respondents therein to file their counter within a period of six weeks and fixed 9.10.2014 to be the next date23. The respondent No. 1 herein, being aggrieved, preferred an appeal being Company Appeal No. 17 of 2014 which has since been allowed by the judgment and order dated 15.4.2015 impugned in the instant batch of appeals24. The High Court, as the decision assailed would reveal, traversed the entire gamut of the facts involved as available from the company petition and the documents appended thereto and recorded its findings on all the aspects of the discord and eventually granted the following reliefs?1. An ad hoc Board of Directors constituted with appellant No. 1 as the Executive Director and respondent Nos. 2 to 4 as the Directors of respondent No. 1-company. Appellant No. 1 shall discharge the functions of the Managing Director of the company2. The ad hoc Board is responsible for the day-today functioning of the company and shall carry out the statutory obligations under the Act3. All the decisions shall be taken by the Board based on unanimity and consensus. If consensus on any aspect relating to the day-to-day affairs of the company is eluded among the Board members, appellant No. 1, as the Managing Director, shall approach the Company Law Board for appropriate directions4. The Board shall not transfer or deal with 81% shares held by late Dr. Vijay Kumar Datla in any manner till the dispute on the issue of succession is adjudicated in O.S. No. 184 of 20145. The Board shall not take any major policy decisions unless there is unanimity among all its members and without the prior approval of the Company Law Board6. The ad hoc Board shall continue to function till O.S. No. 184 of 2014 is disposed of and appropriate orders in C.P. No. 36 of 2014 are passed thereafter7. The Company Law Board shall keep C.P. No. 36 of 2014 pending till O.S. No. 184 of 2014 is finally disposed of.?25. The appeal was allowed and the accompanying applications were disposed of as infructuous. In arriving at its penultimate conclusions, leading to the arrangement configured by the operative directions, as extracted hereinabove, the High Court elaborately delved into the factual details bearing on all facets of the surging disputes between the parties, tracing from the issue of validity or otherwise of the continuance of Mr. G.V. Rao as the Director of the company, to the imputation of mis-management and oppression, allegedly indulged in by the appellants and other Directors including the perceived imminent possibility of slicing off the assets of the establishment through a process of demerger26. En route to the final deductions, the High Court did dwell upon the validity of the Board meetings held on 9.4.2013, 10.4.2013 and 11.4.2013 in particular and also of the Annual General Meeting conducted on 18.12.2013, the claim made by the respondent No. 1 in her suit based on a will claimed to be executed in her favour by Dr. Vijay Kumar Datla (since deceased), the letter dated 15.4.2013 written by the respondent No. 1 as well as the accusation of manipulation of the transfer of the majority of the shares of the company in favour of Ms. Mahima Datla (appellant). It held in no uncertain terms, that in fact there was no Board of Directors legally in existence, thus necessitating a workable arrangement for regulating the conduct of the affairs of the company. Having regard to the contesting claims to the shares on the basis of two wills and the pendency of the suit instituted by the respondent No. 1, the High Court construed it to be appropriate to proceed on the premise that the appellant, her sisters and the respondent No. 1 had more or less equal shares. In the backdrop of this determination, the High Court, being of the view, that it would be preferable to make an interim arrangement to conduct the administration of the company, without the induction of an outsider as an administrator/receiver, issued the above-mentioned directions to ensure the same27. As would be evident from the steps enumerated in the impugned judgment and order in this regard, an ad hoc Board of Directors was directed to be constituted with respondent No. 1 as the Executive Director and her three daughters as the Directors with the rider that the respondent No. 1 would discharge the functions of the Managing Director of the company. Thereby, the ad hoc Board was allowed to continue to function till the suit i.e. O.S. No. 284 of 2014 was disposed of and appropriate orders in the pending Company Petition No. 36 of 2014 were passed. It was ordered that the CLB would keep the Company Petition No. 36 of 2014 pending till the suit was finally disposed of28. To put it differently, by the impugned verdict, the existing Board of Directors was substituted by an ad hoc body adverted to hereinabove and the respondent No. 1 was entrusted with the charge of office of the Managing Director of the company. Further the arrangement, as directed, was to continue till the disposal of the suit. The restraint on the CLB from proceeding with Company Petition No. 36 of 2014 till the suit was decided, understandably was to postpone the adjudication therein, till after the final determination of the issues in the suit. For all essential purposes, therefore, the adjudication of Company Petition No. 36 of 2014 was made conditional on the disposal of the suit

Reasoning:
38. As the quoted provision would reveal, a person aggrieved by a decision or order of the CLB, may file an appeal before the High Court within 60 days from the date of communication of the decision or order to him on any question of law arising out of such order. The period of limitation prescribed, however, is extendable by the High Court by another 60 days on its satisfaction that the appellant had been prevented by sufficient cause in doing so39. The expression ?decision or order? and ?any question of law arising out of such order? persuasively command for an inquest, to appropriately address the issue in hand. The right to appeal under Section 10F of the Act unambiguously being one conferred by a statute, the aspect of circumscription, if any, of the contours of the enquiry by the appellate forum, would be of formidable significance. The precedential guidelines available offer the direction45. The unequivocal legal propositions as judicially ordained, to ascertain the emergence and existence of a question of law, the scope of examination thereof by a court of appellate jurisdiction and the balancing of the competing factors in the grant of interlocutory remedy, hallowed by time, indeed are well settled. A question of law, as is comprehended in Section 10F of the Act, would arise indubitably, if a decision which is the foundation thereof, suffers from perversity, following a patent error on a fundamental principle of law or disregard to relevant materials or cognizance of irrelevant or non-germane determinants. A decision however, on the issues raised, is a sine qua non for a question of law to exist. A decision logically per-supposes an adjudication on the facets of the controversy involved and mere deferment thereof to a future point of time till the completion of the essential legal formalities would not ipso facto fructify into a verdict to generate a question of law to be appealed from. However, an omission to record a finding even on a conscious scrutiny of the materials bearing on the issues involved in a given case, may be termed to be one. Be that as it may, in any view of the matter, the appellate forum though exercising a jurisdiction which otherwise may be co-ordinate with that of the lower forum, ought to confine its judicial audit within the layout of the adjudgment undertaken by the forum of lower tier. This is imperative, more particularly in the exercise of the appellate jurisdiction qua a decision on discretion rendered at an introductory stage of any proceeding, otherwise awaiting final adjudication on merits following a full contest. It is settled that no adjudication at the preliminary stage of a proceeding in a court of law ought to have the attributes of a final verdict so as to prejudge the issues at that stage, thereby rendering the principal determination otiose or redundant. This is more so, if the pleadings of the parties are incomplete at the threshold stage and the lower forum concerned seeks only to ensure a working arrangement vis-a-vis the dissension and postpone fuller and consummate appreciation of the rival assertions and the recorded facts and the documents at a later stage47. Reverting to the present facts, noticeably the parties are contentiously locked on several issues, legal and factual, a brief outline whereof has been set-out hereinabove. While seeking the intervention of the CLB on the key accusation of oppression and mis-management as conceptualised in Sections 397 and 399 of the Act, the respondent No. 1 had retraced the march of events from 9.4.2013, the date on which, according to her, when the meeting of the Board of Directors, invalid in law, was convened and conducted by Mr. G.V. Rao , who allegedly had no authority to do so, he having resigned from the company. She had asserted her express and implicit reservation in this regard and her disapproval not only of the constitution of the Board of Directors since then but also of the decisions taken from time to time. Without recapitulating the stream of developments that had occurred, suffice it to mention, that after a series of intervening legal proceedings, she finally did submit a petition before the CLB amongst other under Sections 397, 398,402/403/404 and 406 of the Act alleging oppression and mis-management and highlighting in that regard, the imminent possibility of alienation of the vital assets of the company through a purported scheme of demerger to the undue benefit of other Directors of the Board of the company. In contradiction, the appellants and the contesting Directors have not only endorsed the validity of the meetings on or from 9.4.2013 contending that respondent No. 1 though intimated thereof, had opted out therefrom and on the basis of the record, have sought to demonstrate her participation in the meetings, amongst others on 24.5.2013, 22.8.2013 and the Annual General Meeting held on 18.12.2013 as permitted by the CLB, they have also emphatically adverted to the letter dated 15.4.2013 addressed by the respondent No. 1 seemingly acknowledging the lawful induction of the appellant (Ms. Mahima Datla) as the Managing Director and her two sisters as the Directors in the Board. The appellants and other contesting respondents have also endeavoured to underline that the respondent No. 1 has accepted the distribution of the shares held by Dr. Vijay Kumar Datla in the HUF as decided in the meeting dated 24.5.2013 and also the enhancement in her remuneration as the Executive Director as minuted in the Annual General Meeting dated 18.12.2013. There is no denial by her as well as of the pendency of the demerger proceeding before the High Court48. In the above overwhelming factual premise, the High Court, as the impugned decision would demonstrate, being fully conscious that the proceeding before the CLB was pending for final adjudication, proceeded to undertake an in-depth exercise to fathom and analyse the facts and the law involved and has recorded its decision on merits in total substitution of the order of the CLB. This to reiterate, is in absence of any pleadings by the appellants, the contesting Directors before the CLB. This assumes importance as the High Court did resort to a full-fledged scrutiny of the factual and legal aspects, to test the legality and/or validity of the order dated 6.8.2014 of the CLB at the stage of mentioning. Having regard to the fact that the appeal before the High Court under Section 10F of the Act was one from an interim order passed in exercise of judicial discretion at the stage of mentioning, in our view, bearing in mind the permissible parameters of exercise of appellate jurisdiction in such matters, the elaborate pursuit so undertaken by it, is neither contemplated nor permissible. The High Court, in any view of the matter, was not dealing with a regular appeal under Section 10F of the Act on a question of law from a decision rendered by the CLB on merits, after a complete adjudication. The appeal before it, being one on principle and from an order rendered by the CLB in the exercise of its discretion at the preliminary stage awaiting the pleadings of the respondents therein, we are of unhesitant opinion that the scrutiny in the appeal ought to have been essentially confined to the aspects of which the CLB had taken cognizance, to pass its order at that stage, and not beyond49. As it is, though a colossus of facts with the accompanying contentious issues are involved, having regard to the stage at which the order of the CLB had been passed, no exhaustive examination of the factual and legal aspects ought to have been undertaken by the High Court to record its conclusive deductions on the basis thereof. Keeping in view the stage wise delineation of the jurisdictional frontiers of the forums in the institutional hierarchy as codified by law, the High Courts quest to unravel the entire gamut of law and facts involved at the preliminary stage of the proceeding before the CLB and to record its findings on all issues involved on merits did amount to prejudging those, thereby rendering the petition before the CLB redundant for all intents and purposes50. In the instant case, though the CLB, as a matter of fact, did not record any view on the merits of the case while deferring the consideration of the interim relief , being satisfied with the undertakings offered on behalf of the appellants and other contesting Directors, the High Court has, by the impugned decision, decisively furnished its views and conclusions on all vital issues, as a consequence, leaving little or none for the CLB to decide. This is not the role of the appellate forum as is contemplated under Section 10F of the Act qua the stage from which the appeal had been preferred from the order of the CLB51. Noticeably in the face of the undertaking given by the appellants and the pendency of the demerger proceeding separately before the High Court, in our view, there did not exist any searing urgency to substitute the existing Board of Directors as done and to continue with it till the disposal of the suit and at the same time to keep the proceeding of the CLB pending till then. This is more so, as can be culled from the order dated 6.8.2014 of the CLB, the status of the respondent No.1 as Executive Director of the Company has been secured and further alienation of the assets of the company, otherwise has been restrained. Assuredly, these are based on undertakings before the CLB as given by the appellants, the contesting Directors and the CLB having taken note thereof, the same are as good as binding directions on the parties. The aspect of demerger as adverted to hereinabove, is the subject matter of adjudication in a separate proceeding on which, at this stage, no observation is called for. Suffice it to state however, that the aspect of demerger for the present cannot ipso facto be an impelling factor to conclude in favour of allegation of oppression and mis-management as made by the respondent No. 152. In the wake up of above, we feel persuaded to interfere with the impugned decision of the High Court, without observing any final opinion on the merit of the contrasting assertions. In our comprehension, having regard to the relief provided by the CLB by its order dated 6.8.2014 to the parties, it ought to be left to decide the petition on merits after affording them a reasonable opportunity of furnishing their pleadings. As in the course of hearing, some grievance was expressed on behalf of respondent No. 1 that her status as the Executive Director of the company, stands undermined due to uncalled for surveillance imposed at the instance of the existing Board of Directors, we make it clear, as has been assured before us, that she ought to be allowed to function in the aforesaid capacity being provided with all facilities and privileges attached to the office as permissible in law, so much so that she does not have any occasion to complain in this regard. This indeed ought to be in accord with the letter and spirit of the undertaking offered by the Board of Directors to the CLB. The respondent No. 1 too would cooperate in the day to day management of the affairs of the company in her said capacity. The existing Board of Directors would also abide by the undertaking as recorded in the order dated 6.8.2014 of the CLB qua the alienation of the assets of the company. The set-up of the Board of Directors and the arrangement vis-a-vis the administration of the affairs of the company, as was existing on the date on which the order dated 6.8.2014 was passed by the CLB, would continue until further orders by it. The CLB is, however, directed to dispose of the proceeding before it as expeditiously as possible. As the suit filed by the respondent No. 1, as noted hereinabove, is also pending, we hereby direct the Civil Court before which it is pending, to deal with the same with expedition as well, so as to provide a quietus to the lingering family discord in the overall well being of the company and its constituents53. Before parting, we need to take note of the submission of Mr. P.P. Rao, learned senior counsel appearing for Mr. G.V. Rao that the averments made in subparagraph 2 of the counter-affidavit filed by the respondent No. 1 at page 720 thereof besides being utterly incorrect and defamatory are liable to be effaced from the records. We are of the considered view that this assertion needs to be sustained. We thus, expunge these averments being wholly inessential for deciding the issues involved