TaxTMI 
TaxTMI 
2016 (1) TMI 466
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....and therefore, the appeals were erroneously dismissed, as not maintainable. 2. The appeals were filed against the against the order dated 23.10.2014 passed in C.P.No.62/2014 by the Company Law Board, Chennai, dismissing the interim reliefs sought for by the Petitioners therein, who are the petitioners in RP No 95 of 2015 and the 7th respondent therein, who is the petitioner in R.P No 94 of 2015. The Company Petition was filed after the 7th respondent was defeated in the election for the post of Director. Alleging irregularity in the election process and oppression, the petition was filed seeking many reliefs. Interim reliefs in the nature of injunction to enable the 7th respondent to continue as a Director and also for certain directions were also filed. The Company Law Board refused to grant the interim reliefs. Aggrieved the appeals were filed. This court after elaborately hearing the parties, dismissed the appeals concurring with the views of the Company Law Board and issued directions for the early disposal of the Company petition. The orders were passed by this Court on 27.04.2015. It appears that though the present revision petitions were filed, the petitioners were not in....
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....that the review application is not maintainable, placed reliance upon Rule 2 (4) and (5) and Rule 6 of the Company Court Rules, Section 141 and Order 47 Rule 1 of CPC to contend that unless the applicability of the provisions of CPC relating to review are expressly barred, the review application is maintainable. The Learned Senior Counsel also submitted that the case of the appellant has all along been that the paper ballot in addition to e-voting was not contemplated and hence, the contention that the appellants are arguing against their own case before the CLB is incorrect. The Learned Senior Counsel in support of his contentions relied upon the judgements reported in AIR 1961 SC 1633 (Commissioner of Income Tax, Bombay Vs. scindia Steam Navigation Co. Limited), AIR 1957 SC 49 (Sree Meenakshi Mills Limited Vs. Commissioner of Income Tax, Madras), AIR 1969 SC 460 (Oriental Investment Co. P Limited Vs. Commissioner of Income Tax, Bombay), AIR 1964 SC 1379 (Naunihal Kishan and others Vs. R.s.Ch.Partap Singh and another), 2014 7 BOMB CR 464 (Godrej Industries Limited), 2010 15 SCC 118 (Gian Singh Vs. State of Punjab and another) and 1990 69 Company Cases 372 (Guj) (Saurashtra Cement ....
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....e judgements reported in AIR 1960 SC 137 (Satyanarayanan Laxminarayan Hedge and others Vs. Millikarjun Bhavanappa Tirumale), 1997 3 CTC 134 (A.C.Muthiah Vs. Madras Refineries Limited), 2000 3 Callt 434 (Manohar Rajaram Chhabaria Vs. Union of India), 2008 144 Company Cases 619 (Palanisamy and another Vs. Milka Nutrients P Limited), 2012 108 CLA 25 Kar (D.Victor Samuel Vs. Pretechplast (P) Limited), 2015 128 CLA 353 SC (Purnima Manthena and others Vs. Renuka Datla and others) and 2010 9 SCC 437 (Kalabharati Advertising Vs. Hemant Vimalnath Narichania and others) and sought for dismissal of the review petitions. 6. The Learned Senior Counsel Mr.T.K.Seshadri, representing Mr.T.K.Baskar, counsel for the Respondents 10 to 12 in Rev.A.No.94/2015/ Respondents 4 to 6 in Rev.A.No.95/2015, contended that there is no error apparent on the face of the record and hence the review petitions are not maintainable. The Learned Senior Counsel relied upon para 45 of the judgement reported in 2015 128 CLA 353 (SC) to contend that the deferment of the adjudication to a future point cannot constitute a question of law to be appealed therefrom. Since the CLB has held that the issue needs to be adjudica....
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....e adopted by the Respondents 2 and 3 in the meeting held on 26.09.2014 in relation to the method of voting violated the guidelines provided by Securities Exchange Board of India vide circular dated 17.04.2014? Question No 10:- Whether the procedure adopted by the Respondents 2 and 3 in the meeting held on 26.09.2014 in relation to the method of voting violated the guidelines provided by the Ministry of Corporate Affairs contained in the circular dated 17.06.2014? 10. The relevant provisions are as under. Sections 106:- Restriction on voting rights:- (1) Notwithstanding anything contained in this Act, the articles of a Company may provide that no member shall exercise any voting right in respect of any shares registered in his name on which any calls or other sums presently payable by him have not been paid, or in regard to which the Company has exercised any right of lien. (2) A Company shall not, except on the grounds specified in sub-section (1), prohibit any member from exercising his voting right on any other ground. (3) On a poll taken at a meeting of a Company, a member entitled to more than one vote, or ....
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.... of persons, as he deems necessary, to scrutinise the poll process and votes given on the poll and to report thereon to him in the manner as may be prescribed. (6) Subject to the provisions of this section, the Chairman of the meeting shall havepower to regulate the manner in which the poll shall be taken. (7) The result of the poll shall be deemed to be the decision of the meeting on theresolution on which the poll was taken. 1) Notwithstanding anything contained in this Act, a Company (a) shall, in respect of such items of business as the Central Government may, by notification, declare to be transacted only by means of postal ballot; and (b) may, in respect of any item of business, other than ordinary business and any business in respect of which Directors or auditors have a right to be heard at any meeting, transact by means of postal ballot,in such manner as may be prescribed, instead of transacting such business at a general meeting. (2) If a resolution is assented to by the requisite majority of the shareholders by meansof postal ballot, it shall be deemed to have been duly passed at a genera....
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.... (c) through courier service; (ii) the notice shall also be placed on the website of the Company, if any and of the agency forthwith after it is sent to the members; (iii) the notice of the meeting shall clearly mention that the business may be transacted through electronic voting system and the Company is providing facility for voting by electronic means; (iv) the notice shall clearly indicate the process and manner for voting by electronic means and the time schedule including the time period during which the votes may be cast and shall also provide the login ID and create a facility for generating password and for keeping security and casting of vote in a secure manner; (v) the Company shall cause an advertisement to be published, not less than five days before the date of beginning of the voting period, at least once in a vernacular newspaper in the principal vernacular language of the district in which the registered office of the Company is situated, and having a wide circulation in that district, and at least once in English language in an English newspaper having a wide circulation in that district, about having s....
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....es cast in favour or against, if any, forthwith to the Chairman; (xii) the scrutinizer shall maintain a register either manually or electronically to record the assent or dissent, received, mentioning the particulars of name, address, folio number or client ID of the shareholders, number of shares held by them, nominal value of such shares and whether the shares have differential voting rights; (xiii) the register and all other papers relating to electronic voting shall remain in the safe custody of the scrutinizer until the chairman considers, approves and signs the minutes and thereafter, the scrutinizer shall return the register and other related papers to the Company. (xiv) the results declared along with the scrutinizers report shall be placed on the website of the Company and on the website of the agency within two days of passing of the resolution at the relevant general meeting of members; (xv) subject to receipt of sufficient votes, the resolution shall be deemed to be passed on the date of the relevant general meeting of members. ' 12. The Learned Senior Counsel for the review petitioners has relied upon the followin....
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....ty by adverse possession. It is found on the facts that the land is a vacant site that the defendant is the owner of the adjacent. residential house and that he has been drying grains and cloth and throwing rubbish on the plot. The further question that has to be determined is whether the above facts are sufficient to constitute adverse possession in law. Is the user continuous or fugitive? Is it as of right or permissive in character? Thus, for deciding whether the defendant has acquired title by adverse possession the court has firstly to find on an appreciation of the evidence what the facts are. So far, it is a question of fact. It has then to apply the principles of law regarding acquisition of title by adverse possession, and decide whether on the facts established by the evidence, the requirements of law are satisfied. That is a question of law. The ultimate finding on the issue must, therefore, be an inference to be drawn from the facts found, on the application of the proper principles of law, and it will be correct to say in such cases that an inference from facts is a question of law. In this respect, mixed questions of law and fact differ from pure questions of fact in ....
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....ts decision as to the legal effect of those finding is a question of law which can be reviewed by the court. (3) A finding on a question of fact is open to attack, under section 66(1) as erroneous in law when there is no evidence to support it or if it is perverse. (4) When the finding is one of fact, the fact that it is itself in inference from other basic facts will not alter its character as one of fact." 15. In AIR 1969 SC 460 (Oriental Investment Co. P Limited Vs. Commissioner of Income Tax, Bombay), it has been held as follows:- "6. There is no doubt that the jurisdiction conferred on the High Court by s. 66(1) of the Act is limited to entertain references involving questions of law. If, for instance, the point raised on reference relates to the construction of a document of title or interpretation of relevant provisions of a statute, it is a pure question of law. In dealing with it, the High Court may have due regard for the view taken by the Tribunal, but its decision would not be lettered by that view. In some cases, the point sought to be raised in a reference may turn out to be a pure question of fact and if that be so, the findi....
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....on theground that the relevant legal principles have been mis-applied by the Tribunal in reaching its decision on the point; and such a challenge is open under s. 66(1) because it is a challenge on a ground of law. It is because the question involved in this case was not a question of pure fact but was a mixed question of fact and law that this Court allowed the appeal on the last occasion and set aside the judgement of the Bombay High Court dated June 15, 1952 and directed the Appellate Tribunal to state a case, but owing possibly to some mistake or inadvertence the actual questions framed by this Court (quoted at page 676 of 32 I.T.R.) and the form in which the questions were framed by this Court seem to assume that the questions involved are questions of fact. The reason is that it is only in regard to a finding of fact that the question can be properly framed "as to whether there was material to support the said finding". We are accordingly of the opinion that the questions actually framed by this Court on the last occasion are not appropriate and (1) 35 I.T.R. 594 54 do not reflect the real controversy between the parties. It is therefore, expedient in the interest of justice ....
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....rned Counsel for the respondent did not seek to argue that the earlier order of September 1959 was not vitiated by such error." 17. In 2014 7 BOMB CR 464 (Godrej Industries Limited), it has been held as under:- "20. There is also question about the determination of electronic votes cast. The rules seem to indicate that electronic voting must stop three days before the meeting. The chairman of the meeting is to be given a tally of the electronic votes cast and the decision on any item of business is supposed to have been passed or not passed only on the basis of these electronic votes. Ex facie this is an untenable mechanism. If, as I have said, electronic voting is not limited to voting from a remote location but must also include electronic voting at the meeting in addition to postal ballots received, then it is a sum total of all these votes that must be taken into account. 21. This means that while a meeting must be held provision must also be made for electronic voting at the meeting by those shareholders who desire it. Every shareholder being given that option of exercising their votes by postal ballot or by electronic voting, the later being either from a....
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....t be sustained by any process of reasoning. The Court cannot under cover of review arrogate to itself the power to decide the case over again because it feels then that the assessment of evidence, etc., done formerly was faulty or even incorrect. An erroneous view of evidence of law is not a ground for review. A wrong exposition of the law, a wrong application of the law and failure to apply the correct law have been held to be not a ground for review." 22. In 2008 144 Company Cases 619 (Palanisamy and another Vs. Milka Nutrients P Limited), it has been held:- "7. Under Section 10F of the Companies Act, an appeal lies to the High Court on any question of law arising from any decision or order of the Company Law Board. Finding of fact recorded by the Company Law Board is final and is therefore not appealable. The jurisdiction of the High Court in appeal is expressly confined to the determination of question of law. The mere fact that the High Court would have come to a different conclusion on the facts also does not make the matter appealable. 10. No question of law, much less, substantial questions of law is involved in this appeal. No substantial question of....
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....onscious 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 stage. " 25....
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.... 9. The appeals before the Division Bench were against the exercise of discretion by the Single Judge. In such appeals, the Appellate Court will not interfere with the exercise of discretion of the court of first instance and substitute its own discretion except where the discretion has been shown to have been exercised arbitrarily, or capriciously or perversely or where the court had ignored the settled principles of law regulating grant or refusal of interlocutory injunctions. An appeal against exercise of discretion is said to be an appeal on principle. Appellate Court will not reassess the material and seek to reach a conclusion different from the one reached by the court below if the one reached by the court was reasonably possible on the material. The appellate court would normally not be justified in interfering with the exercise of discretion under appeal solely on the ground that if it had considered the matter at the trial stage it would have come to a contrary conclusion. If the discretion has been exercised by the Trial Court reasonably and in a judicial manner the fact that the appellate court would have taken a different view may not justify interference with the ....
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....27. The relevant provisions extracted above deal with the voting procedures. It was contended that when e-voting is contemplated, voting by poll is prevented. This argument requires an adjudication of the main petition before the CLB as it requires an adjudication as to whether e-voting bars other types of voting. Again, was it the intention of the Board of Directors to exclude the poll by ballot and prescribe only e-voting is a question of fact. The provisions as it stood before the notification does not clearly specify, as to whether, the electronic voting bars the other types of voting at the venue. The notice to the shareholders convening the meeting for election is available and the contents therein again has to be gone into only at the final hearing of the Company petition. Further, whether, the 7th respondent is liable to retire or not is also a relevant and preliminary question of fact which will have a binding on the question regarding the voting process.. Though the question as to whether voting by poll is excluded when e-voting was contemplated could appear to be a question of law, the same cannot be decided without rendering factual findings. Therefore, in the circumsta....
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.... on the day, the 7th respondent was declared to have lost. It was also observed that he did not raise any objections during the voting. So the CLB has held that no prima facie case was made out. It has considered the questions of law but has only refrained itself from adjudicating on the issue of voting pattern for the time being. The CLB has given findings on all the tests required for grant of interim reliefs. It is not necessary for the CLB to specifically use the words, prima facie case, balance of convenience and irreparable loss. It is sufficient if specific findings on the tests are given. Upon perusal of the order it is clear that the CLB has given findings in page 6, 7 and 8 of its order. Therefore, this court does not agree with the contentions of the Learned Senior Counsel for the petitioners that the CLB has not considered the questions raised before it. 30. In so far as the personal grievance of the 7th respondent is concerned, there are specific findings in para 6 of the order of the CLB at pages 6 and 7 of the order. The communication of the 7th respondent has been referred to in page 7 of the order of the CLB indicating that the grievance is not just the electi....
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.... as the point is already dealt with and answered, the parties are not entitled to challenge the impugned Judgment in the guise that an alternative view is possible under the review jurisdiction. Summary of the principles: 20. Thus, in view of the above, the following grounds of review are maintainable, as stipulated by the statute: 20.1 When the review will be maintainable:- (i). Discovery of new and important matter or evidence which, after the exercise of due diligence, was not within knowledge of the petitioner or could not be produced by him; (ii). Mistake or error apparent on the face of record; (iii). Any other sufficient reason. The words 'any other sufficient reason" has been interpreted in Chhajju Ram Vs. Neki, AIR 1922 PC 112 and approved by this Court in Moran Mar BasseliosCatholicos Vs. Most Rev.MarPoulose Athanasius & others [1955] 1 SCR 520, to mean, "a reason sufficient on grounds at least analogous to those specified in the rule". The same principles have been reiterated in Union of India Vs. Sandur Manganese & Iron Ores Ltd., ors., JT (2013) 8 SC 275. 20.2. When the review will not....