1999 (10) TMI 588

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....ision under section 237(a)( ii) of the Companies Act, 1956. It is submitted that the affairs of the company is under total misman-agement both in its functioning and finance. Therefore, a direction shall be issued as prayed for. According to me, that prayer cannot be granted for different reasons. The function enjoined on this Court in terms of section 237(a)( ii) is not to direct the Central Government to conduct investigation but to declare "that the affairs of the company ought to be investigated by an Inspector appointed by the Central Government". So this Court is only to issue a declaration with reference to the affairs of the company, such a declaration is not sought for in this petition. What is sought for is a direction to the Cent....

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....Directors who are said to mismanage the company are not impleaded in this petition. That also is a reason for rejecting this petition. 3. It has to be rejected on yet another reason as well. Of course, section 237(a)(ii ) enables this Court to declare that the affairs of the company ought to be investigated by the Inspector appointed by the Central Government. That is a discretionary relief left to this Court. At the same time, clause (b) to the said section enables a specially constituted statutory body, namely the CLB to pass appropriate orders in such circumstances. The CLB had been invested with such power in terms of the amendment effected in the Companies Act, in 1988. When the said body is constituted only to deal with the affa....

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....rely because the remedy available to the petition- er in terms of section 237(a)(ii ) to approach this Court or under clause (b) of the said section to approach the CLB is concurrent, there is no reason to exercise the discretionary remedy vested with this Court when the petitioner has a statutory remedy available to her. 6. I am more inclined to accept this view because the issue involved in this case is declaration that the company's affairs need an investigation. Necessarily, there shall be an enquiry to be conducted by this Court with respect to the main objects, its conduct of business, financial aspects and dealings. This may necessarily require evidence as to whether there is mismanagement or mal-administration as the petitioner a....