Review application granted, previous orders set aside. Errors found, new opportunity for petition under Companies Act.

The High Court allowed the review application, setting aside the previous orders of the CLB and the High Court. The Court found errors in the previous judgments, granting the Review Applicants the opportunity to re-present their petition under the Companies Act, 2013, to the National Company Law Tribunal for adjudication on merits.

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Issues Involved:
1. Maintainability of the composite petition under Sections 111(4), 397, and 398 of the Companies Act, 1956.
2. Compliance with the Share Subscription Agreement (SSA) and the implications of foreign direct investment (FDI) under the automatic route.
3. Errors in the previous judgments by the Company Law Board (CLB) and the High Court.
4. Scope of review jurisdiction under Order 47 Rule 1 CPC.

Detailed Analysis:

1. Maintainability of the Composite Petition:
The Review Applicants filed C.P.No.25 of 2011 under Sections 111(4), 397, and 398 of the Companies Act, 1956, alleging that the Hospital and its promoters failed to allot shares despite receiving remittances towards equity shares. The CLB rejected the petition on the grounds that the Review Applicants did not meet the eligibility requirements under Section 399 of the Companies Act, 1956, as they did not hold 10% or more of the paid-up share capital of the Hospital. The CLB also suggested that the Review Applicants have an alternative remedy through arbitration as per the SSA. The High Court upheld this decision, stating that the disputes involved complex questions that should be decided by a civil court or through arbitration.

2. Compliance with the SSA and FDI Regulations:
The Review Applicants invested Rs.2.5 crore in the Hospital, which was acknowledged by the Hospital in communications to the Reserve Bank of India (RBI) and through Foreign Inward Remittance Certificates (FIRCs). The Review Applicants argued that these documents conclusively indicate that the investment was towards equity shares. The CLB and the High Court failed to appreciate the significance of these documents, leading to the rejection of the petition. The Review Applicants contended that the Hospital and its promoters should not benefit from their default in issuing and allotting shares after receiving remittances under the automatic approval route as per the Foreign Exchange Management Act (FEMA).

3. Errors in the Previous Judgments:
The Review Applicants pointed out that the CLB and the High Court committed errors by not considering the implications of the communications to the RBI and the FIRCs. The High Court's conclusion that the investments should be treated only as investments and not otherwise was deemed patently erroneous. The Review Applicants argued that the Hospital's failure to allot shares should not be used to dismiss their petition. The High Court's findings that the Review Applicants did not fulfill their obligations under the SSA and that the petition involved complex questions were also challenged.

4. Scope of Review Jurisdiction:
The Review Applicants relied on several judgments to argue that the scope of review jurisdiction includes correcting errors apparent on the face of the record to prevent miscarriage of justice. They cited cases such as Board of Control for Cricket in India v. Netaji Cricket Club and others, S.Bagirathi Ammal v. Palani Roman Catholic Mission, and Kamlesh Verma v. Mayawati and others. The Hospital countered that review jurisdiction is limited and should only be exercised in specific circumstances, such as errors apparent on the face of the record or the discovery of new and important evidence.

Conclusion:
The High Court allowed the review application, setting aside the previous orders of the CLB and the High Court. The Court found that the errors in the previous judgments were apparent on the face of the record and that the Review Applicants had made a case for review. The Review Applicants were granted the liberty to re-present their petition under the equivalent provisions of the Companies Act, 2013, to the National Company Law Tribunal, Chennai, for adjudication on merits.

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