Rule 9 inherent powers cannot determine shareholder exit pricing or compel compulsory listing in scheme proceedings

Rule 9 of the Companies (Court) Rules, 1959 gives the Company Court only inherent procedural powers to prevent abuse of process and secure justice; it does not authorise creation or determination of substantive shareholder rights. A sanctioned scheme under Sections 391(2) and 394 of the Companies Act, 1956 remains subject to supervisory control under Section 392, but that supervision cannot extend to fixing an exit price, compelling compulsory listing, or directing statutory regulators to exercise listing discretion in a particular way. Reliefs such as board representation and compensation for delayed listing were also beyond the scope of the application. The substantive reliefs were held not maintainable and the petition was dismissed.

---

---

Issues: Whether, in proceedings under Rule 9 of the Companies (Court) Rules, 1959, the Court could direct compulsory listing of the company's shares, fix a price for the minority shareholders' exit, or grant ancillary reliefs such as board representation and compensation.

Analysis: A scheme sanctioned under Sections 391(2) and 394 of the Companies Act, 1956 binds the parties and may be supervised by the Company Court under Section 392, but the Court's powers remain supervisory and are confined to securing the satisfactory working of the scheme. Rule 9 embodies inherent powers meant to prevent abuse of process and to do justice in procedural matters; it does not confer authority to create or determine substantive rights. Determination of share price for an exit option is a substantive question of fact affecting rights and cannot be adjudicated in a Rule 9 application. Likewise, the Company Court cannot compel SEBI or the stock exchanges to exercise their statutory discretion for listing in a particular manner. Reliefs such as appointment of a minority shareholder director and compensation for delayed listing were also outside the scope of the sanctioned scheme and beyond the remit of the application.

Conclusion: The application was not maintainable for the substantive reliefs claimed and no direction for compulsory listing or determination of exit price could be issued in these proceedings. The reliefs sought were rejected and the application was dismissed, leaving the applicants to pursue any other remedy available in law.

Ratio Decidendi: Inherent powers under Rule 9 of the Companies (Court) Rules, 1959 cannot be used to determine substantive shareholder rights or to compel statutory authorities to grant listing, and issues of exit pricing must be pursued in the appropriate forum.

---