TaxTMI 
TaxTMI 
2016 (1) TMI 466
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....ly 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 a hurry to give life to it and moved Speci....
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....le, 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 and Chemicals Industries Limited and others V....
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....rayanan 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 adjudicated at the final hearing after the counter of the p....
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....tion 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 his proxy, where allowed, or other person entitled to vote for him, as the case may be, need not, if he votes, use al....
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....visions 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 general meeting convened in that behalf. 11. Rule 20 of the Companies (Management and Administration) Rules as it stood before amendment reads as under:- "20. Voting through electronic means:- (1) Every listed Company....
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....ng 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 sent the notice of the meeting and specifying therein, inter alia, the following matters, namely:- (a) statement that the business may be transacted by electronic voting; (b) the date of completion of sending of notices; (c) the date and time of commencement of voting through electronic means; (d) the date and time of end of vot....
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.... 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 following judgements. 13. In AIR 1961 SC 1633 (Commissioner of Income Tax, Bombay Vs. scindia Steam Navigation Co. Limited), the Honourable Supreme Court has held as under :- "10. On these provisions, the question that arises for decision is whether in a reference under section 66, the High Court can consider a question which had not been raised before the Tribunal and/or dealt with by it in its order even though it be one of law. On the answer to be given to it there has been a differenc....
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....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 which the final determination equally with the finding or ascertainment of basic facts does not involve the application of any principle of law. The proposition that an inference from facts is one of law will be correct in its application to mixed questions of law and fact but not to pure questions of fact. The following observations of Lord Atkinson' in Herbert v. Samuel Fox and Co., Ltd.(1) clearly bring out the principle above stated: ".... Your Lordships were pressed with the usual argument, that as the County Court jud....
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....ere 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 finding of fact recorded by the Appellate 'Tribunal must be regarded as conclusive in a proceeding under s. 66(1). But i would be open to challenge the conclusion of fact drawn by the Appellate Tribunal on the ground that it is not supported by any legal evidence or material or that the conclusion of fact drawn by the Appellate Tribunal 'is perverse and is not ration,ally possible. It is within these narrow limits that the conclusions of fact by the Appellate Tribunal can be challenged under s. 66(1). Such conclusions can never be challenged on the ground that they are based on m....
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....s 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 that the questions should be modified as suggested by the assessee Company in its .petition under s. 66(1) of the Act to the High Court and the Appellate Tribunal should be asked to make a fresh statement of the case." 16. In AIR 1964 SC 1372 (M/s.Thungabhadra Industries Limited Vs. The Government of Andhra Pradaesh), it has been held as under:- "What, however, we are now concerned with is whether the statement in the order of September 1959 that the case did not involve any substantial question of law is an "error apparent on the face of the record". The fact that on the earlier....
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....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 remote location or at the meeting itself." 18. In 2010 15 SCC 118 (Gian Singh Vs. State of Punjab and another), it has been held as under:- "7. We are of the opinion that the above three decisions require to be reconsidered as, in our opinion, something which cannot be done directly cannot be done indirectly. In our, prima facie, opinion, non compoundable offences cannot be permitted to be compounded by the court, whether directly or indirectly. Hence, the above three decisions do not appear to us to be correctly decided." 19. Per contra, the Learned Senior Counsel for the respondent has relied upon th....
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....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 law is involved to entertain the CMA. " 23. In 2012 108 CLA 25 Kar (D.Victor Samuel Vs. Pretechplast (P) Limited), it has been held as under:- "6. We have given careful consideration to the contention of the learned counsel for the Appellant and scrutinised the material on record. The appeal is filed against an interim order passed by the Company Law Board. The prayer that was sought for in the application and considered by the Company Law Board in the impugned order was to restrain holding of the meeting on 12.5.2011 and to prevent Respondents 2 and 3 from removing the Appellant from the Board of Directors of 1st Respondent Company under Section....
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....y 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. In the present case, admittedly the contentions raised now were also raised earlier before this Court and also before the CLB. This court after considering the contentions, is of the view that the questions have already been answered in paragraphs 18,19,20 and 23 of the order dated 27.04.2015 which is extracted as under:- "18. Upon consideration of the grounds and the impugned order, this court is of the view that the questions that have been raised before this court are not purely questions of law, but are only mixed questions of law and fact, which cannot be entertained by this court. Even though, as per the judgement relied upon by the learned senior counsel for ....
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....ne 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 trial court's exercise of discretion. After referring to these principles Gajendragadkar, J. in Printers (Mysore) Private Ltd. v. Pothan Joseph : "These principles are well established, but as has been observed by Viscount Simon in Charles Osention & Co. v. Johnston the law as to the reversal by a court of appeal of an order made by a judge below in the exercise of his discretion is well established, and any difficulty that arises is due only to the application of well settled principles in an individual case." 20. The grant of interim relief is only discretionary. Hence, sitting in appeal, this court is not inclined to interfere with the impugned order of the Company Law Board. The a....
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.... 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 circumstances narrated above, it is only a mixed question of fact and law. It is the main relief and it cannot be isolated from the questions of facts as indicated above and decided at the introductory stage. 28. The judgements relied upon by the Learned Senior Counsel for the Appellants, clearly lay down the propositions regarding the question of law and the question of fact. What emerges is that when a question of construction of a provision is raised, it is a pure question of law. Also, the facts have to be applied to give a finding on the question of law. The Judgements are not relevant at this stage because, what was under appeal before this court is the order of refusal by the CLB, exercising its discretionary relief b....
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.... 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 elections. Again considering all these aspects only, this court in a nutshell held that there is no perversity in the findings of the CLB and the questions raised are not pure questions of law. Hence, there is no error apparent on the face of the record, warranting interference. 31. In so far as oppression is concerned, any decision on the same can be arrived at only if the other questions are decided. On the face of it, the 7th respondent has been permitted to participate in the elections and his family members have been permitted to vote. Therefore, again mindful of the prejudice, that may be caused before the CLB, this court held in para 23 that the same would have to be decided by the CLB during the final hearing. 32. The ....
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....hhajju 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 be maintainable:- (i) A repetition of old and overruled argument is not enough to reopen concluded adjudications. (ii). Minor mistakes of inconsequential import. (iii). Review proceedings cannot be equated with the original hearing of the case. (iv). Review is not maintainable, unless the material error, manifest on the face of the order, undermine its soundness or results in miscarriage of justice. (v). A review is by no means an appeal in disguise whereby an erroneous decision is re-heard and corrected but lies only for patent error. (vi). The mere possibility of two views on the subject cannot be a ground for review. (vii). The error apparent on the face of the record should not be an error which has to be fished out ....