Company Law Board denies interim order in Director removal case under Companies Act, expedites main petition decision.

The Company Law Board, Chennai Bench, declined to grant an interim order sought by the appellant to restrain removal as a Director in an Extraordinary General Meeting under the Companies Act. The Board found no exceptional grounds to interfere with its discretion and noted that the EGM's decision would be subject to the Company Petition's outcome. The Court directed the Board to expedite the main petition's decision, granting the appellant one week to file a rejoinder and instructing the Board to dispose of the main petition within two months. The appeal was disposed of, and a miscellaneous civil application was dismissed as unnecessary.

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Issues:
1. Company Application seeking to restrain removal of petitioner as Director.
2. Allegation of illegal process to remove minority shareholder's rights.
3. Appeal against Company Law Board's order declining interim prayer.
4. Request for interim order to prevent removal from Board of Directors.
5. Discretionary power of Company Law Board in granting interim orders.
6. Direction to expedite decision on the main petition.

Analysis:
The appeal was filed by the petitioner in Company Application No. 107/2011 before the Company Law Board, Chennai Bench, challenging the order dated 11-5-2011 which refused to grant the interim prayer sought by the appellant. The application sought to restrain the respondents from removing the petitioner as a Director in the proposed Extraordinary General Meeting (EGM) under section 284(3) of the Companies Act, alleging an illegal process to remove the minority shareholder's rights. The Company Law Board found that notice of requisite time had been issued for the EGM and declined to grant the interim order, stating that the decision in the EGM would be subject to the outcome of the Company Petition.

The appellant contended that an attempt was made to remove them from the Board of Directors and sought an interim order to prevent this action. The Court noted that it would be slow to interfere with the Company Law Board's discretion in granting or rejecting interim applications unless exceptional grounds were shown. As no exceptional grounds were found, the Company Law Board's decision was upheld, with the observation that the EGM's convening and decision would be subject to the Company Petition's outcome.

Considering the points in dispute, the Court directed the Company Law Board to expedite the decision on the main petition. The appellant was given one week to file a rejoinder, and the Company Law Board was instructed to dispose of the main petition within two months from the date of receipt of the order or production of a certified copy, whichever was earlier. The appeal was disposed of, and a miscellaneous civil application was dismissed as unnecessary in light of the main appeal's disposal.

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