TaxTMI 
TaxTMI 
2014 (8) TMI 1179
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....oy, Senior Advocate, J.P. Sen, Senior Advocate and M.S. Doctor, i/b Federal & Rashmikant For Respondents: D.D. Madon, Senior Advocate, Simil Purohit, Amol Baware, V.S. Charalwar, Udwadia Udeshi & Argus Partners, Aspi Chinoy, Senior Advocate, J.P. Sen, Senior Advocate and M.S. Doctor, i/b Federal & Rashmikant JUDGMENT G.S. Patel, 1. Is a dispute brought before the Company Law Board invoking the provisions of Sections 397, 398 and 402 of the Companies Act, 1956 at all referable to a private tribunal, viz., an arbitral panel for resolution? Does a decision of a foreign court on the question of whether a dispute is covered by an arbitration agreement bind the Company Law Board? These are among the questions of law canvassed in this group of appeals. A. Structure 2. The following table of contents is intended to serve as a guide to the structure of this judgment. A list of the authorities cited or referred is appended for convenience. A. Structure....................................................................................... 13 B. Summary....................................................................................... 15 C....
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....bserver by the CLB............................. 139 N. Conclusions & final order ............................................................141 O. Stay of this order & judgment..................................................... 143 List of authorities & decisions cited ................................................ 150 ...continued/- B. Summary 3. All eight appeals, under section 10F of the Companies Act, 1956, are directed against an order dated 31st January 2013 of the Company Law Board ("CLB"). One Rakesh Rajinder Malhotra is the Appellant in the first four appeals: Company Appeal (L) No. 10 of 2013, Company Appeal (L) No. 11 of 2013, Company Appeal No. 23 of 2013 (Company Appeal (L) No. 12 Of 2013), Company Appeal No. 24 of 2013 (Company Appeal (L) No. 13 of 2013). Rakesh Malhotra's father, one Rajinder Kumar Malhotra, is the Appellant in Company Appeal No. 15 of 2013 (Company Appeal (L) No. 16 of 2013). He and his wife, Rakesh's mother, Veena Rajinder Malhotra are the two Appellants in Company Appeal No. 18 of 2013 (Company Appeal (L) No. 19 of 2013). One Sapphire Properties Private Limited is the Appellant in Company Appe....
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....antly, Rakesh was given sole authority to represent the Malhotra family in all these transactions. He also had sole bank account operating authority. Though Rajiv, too, had a similar authority, his was jointly with Rakesh. Clearly, the family had complete faith and trust in Rakesh. 6. RKM claims that Rakesh betrayed this trust. After the transfers were effected, Rakesh, using his sole authority, deployed the funds received by the Indian companies held by RKM not only to grant loans (a matter contemplated by the agreements under certain conditions), but also to guarantee bank loans and facilities to the newly formed Indian company under Rakesh's control. These funds were also used to pay the financial consultants' fees. A peculiar situation had resulted: following the restructuring and transfer agreements, the directors of the RKM-held Indian companies were now all employees of the entities controlled and held by Rakesh. On finding that these liabilities had been incurred and funds deployed, RKM attempted to gain information from the directors of his own companies, the ones he controlled. They refused to divulge this information, being all beholden to Rakesh. 7. RKM fi....
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....he disputes before it were covered by the arbitration clause is incorrect in law. 11. As a result, I have dismissed Rakesh's appeals and allowed in part RKM's cross-objections/cross-appeals. 12. The Company Law Board in the impugned order also appointed a retired Judge of this Court as an independent Observer-cum-Facilitator. That order was subsequently varied by an order of Mr. Justice Jamdar in these Appeals, and another retired judge of this Court was appointed as an Observer. In view of the final disposal of these appeals, those interim orders of this court also do not survive. C. The Factual Background I. The SuperMax Group 13. Founded in the late 1940's, the Supermax group claims to be the world's second-largest manufacturer of razor blades and related products. In its product category, it is said to be among the world's fastest-growing companies. It has a presence in over 70 countries across the globe. 14. Companies in the Supermax Group were held through a Cayman Islands company, Super Max Offshore Holding ("SMOH"). In turn, SMOH was a subsidiary of a Mauritius company, Super Max Mauritius ("SMM"), and the entirety of SMM was held by a ....
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....rolling entities of the Supermax Group: Arvee Foundation, SMM, SMOH and TMPL. The SSD required Actis to bring in US$ 225 million for an equity subscription of 25-29.17% of the holding companies, SMOH and TMPL. The RKM Indian Companies (Transauto and its four subsidiaries) were to transfer or sell their businesses, assets and intellectual property rights to a new company, Super Max Personal Care Private Limited ("SPCPL"). In return, the Indian RKM Companies were to receive an aggregate amount of US$ 53 million (then about Rs. 238 crores) from Actis's private equity investment. These acquisitions and transfers were to be effected through restructuring agreements. The SSD did not, it must be noted, deal with the further activities of the Indian RKM Companies following this proposed transfer. They also did not restrict the Indian RKM Companies' use of these funds. 18. Some clauses of the SSD must be noted in brief. One of these, clause 18.10, bound the Malhotra family to provide loans to the Supermax group should certain conditions be met. I am not concerned with the details of this clause; I only mention it as an indication of how closely involved the individual Malhotra fa....
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.....17% of the equity, as also the manufacturing units, assets and intellectual property rights, with RKM receiving US$ 53 million, or about Rs. 238 crores, in the RKM Companies that he controlled. 21. On 24th March 2011, the SSD and SD were substantially completed. Rakesh was now in control of the Supermax Group and its businesses. Actis had acquired its 25-29.17% stake. The five Indian RKM Companies (the Five Transauto Companies) had transferred their businesses, assets and employees to the Supermax Group. RKM believed that the amounts the Indian RKM Companies were to receive, viz., US$ 53 million (with US$ 15 million set aside for contingencies) had been in fact received. At this time, almost all these matters were in Rakesh's hands; and it was during this period, too, that RKM was away from India on account of a serious illness. IV. The onset of disputes 22. Several months later, on 23rd January 2012, RKM and Rajiv learned from an email from one of Rakesh's employees to an employee of VMPL that, in the interregnum, Rakesh, exercising his clearly vast powers, had arranged for the Indian RKM Companies to guarantee loans made by the Punjab National Bank ("PNB") to SP....
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....rained from dealing with the assets of the companies, except for statutory and salary payments to employees. 26. On 15th February 2012, RKM issued a notice under section 169 of the Companies Act, 1956 requisitioning an extraordinary general meeting of the members of Transauto on 27th March 2012. VI. The UK Commercial Court Ex-parte Injunction & Its Subsequent Dissolution 27. A day before the extraordinary general meeting, on 26th March 2012, RKM was served with a copy of an ex-parte order passed by Mr. Justice Gloster of the Commercial Court, Queen's Bench Division, High Court of Justice, UK. That order was an anti-suit injunction granted at Rakesh's behest. RKM was restrained from proceeding with the petitions before the CLB and from holding the extraordinary general meeting. The papers in this proceeding and Rakesh's witness statement were also served. Rakesh's plaint before the Commercial Court of the QBD proceeded on this basis: (a) That RKM's Company Petitions all raised issues that were within the ambit of the arbitration agreement in the SSD, and that the SSD was governed by English law and provided for arbitration under the LCIA Rules i....
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....estructured Supermax Group; and that Clause 41.1, which gave Rakesh wide authority on behalf of the Malhotra parties, was no carte blanche to him to act beyond his remit as a signatory; certainly not without authorisation from RKM, that clause not being in the nature of a Power of Attorney with unbridled authority. Importantly for our present purposes, Walker J. also found that RKM's claims before the CLB did not fall within the scope of the arbitration Clause 43.2 of the SSD. He also held that the SSD and its arbitration clause did not include the manner in which the directors of the Five Transauto Companies had dealt with the funds of those companies following the restructuring. 30. Several consequences followed. With the injunction vacated, the extraordinary general meeting originally scheduled for 27th March 2012 was held on 31st October 2012 (the day after Walker J. released his order). At this extraordinary general meeting, all existing directors of Transauto were removed and replaced with RKM's nominees. A Board Meeting of Transauto was then held on 6th November 2012. The Board resolved to call extraordinary general meetings of Transauto's four subsidiaries to....
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....present Appeals 33. Rakesh filed the first four of the present group of appeals. These were admitted on 6/7th February 203. The impugned order dated 31st January 2013 was stayed, and the previous status quo orders of the CLB were continued. A few days later, RKM filed four Company Appeals assailing the impugned order to the extent that it appointed an Observer-cum-Facilitator. Certain findings in Rakesh's favour in his Company Applications for reference to arbitration are also challenged. These appeals were also admitted. Even after these appeals were admitted, RKM sought information about the deployment of funds received by the Five Transauto Companies under the business transfer agreements. These disclosures, RKM contends, have either been refused or are incomplete. RKM then filed Company Applications seeking disclosure, on which certain orders were passed. D. Rkm's Company Petitions Before The CLB, Mumbai In Summary 34. The 1st respondent in each of the CLB Mumbai Company Petitions is the corresponding Transauto company. 35. Company Petition No. 11 of 2012--the Transauto Petition: (Rajinder Kumar Malhotra & Veena Malhotra v. Transauto & Mechaids Pvt. Ltd. and....
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....dents are directors. 40. The petitions are broadly similar. They all allege oppression and mismanagement by their respective directors. They all contend that these directors act only on Rakesh's instructions and are under his influence. With some variations, all seek substantially these reliefs: (a) For orders convening extraordinary general meetings to remove the current directors and appoint new directors in their place; (b) For orders under Sections 397-402 of the Companies Act, 1956 to prevent ongoing mismanagement; (c) For orders of disclosure, particularly of financial matters; (d) For an order of compensation payable to the company in question; and (e) For orders to set aside, terminate and modify all dealings with the company's assets after 18th March 2011. 41. Mr. Chinoy, learned Senior Counsel for RKM and his fellow petitioners, at once pointed out that this date of 18th March 2011 was an error. This was admitted before Walker J. in the UK proceedings 2. Any order with effect from this date would undo the restructuring agreements and the corresponding transfers. The intention was to refer to the post-restructuring....
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.... the same as those to the SSD/SD. 44. What did the CLB hold? (a) On the first point, the CLB held itself not bound by the decision of a foreign court, and that it was free to take its own view. It decided the issue against RKM. (b) The submissions on the second point, maintainability, centred on the commonality of parties. Specifically, that since the parties to RKM's Company Petitions were not parties to the SSD/SD, no reference to arbitration under section 45 of the Arbitration Act was maintainable. Chloro Controls was pressed into service. The CLB held that the applications were maintainable. (c) On the third point, as to whether, having regard to the nature of disputes raised and reliefs sought, any reference to arbitration could even be made, the CLB held that no such reference could be made. (d) Fourth, it appointed an independent Observer-cum-Facilitator on the Board of Directors of the Five Transauto Companies. It also freed the Petitioners from the earlier status quo orders and allowed them to proceed with the reconstitution of the first respondent companies' boards. F. The Questions for Determination In These Appeals 45....
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...., then whether it was correct in its finding that the disputes before it in the Company Petitions were covered by the arbitration clause? This is the only situation in which the disputes could be referred to arbitration. In deciding this, the question of dissimilarity of parties would also need to be addressed. 47. For Mr. Madon to succeed in his Appeals, therefore, all three questions must be answered in his favour, viz.: (1) that disputes under Sections 397/398 read with Section 402 are arbitrable; (2) that the decision of Walker J., does not bind the CLB and that the CLB correctly held so; and (3) that the disputes in the Company Petitions before the CLB are covered by the arbitration clause in the SSD. Should he fail on even one of these, no reference to arbitration is possible. G. Submissions On Behalf Of RKM Regarding Arbitration and The Scope of Sections 397-402 of The Companies Act, 1956 48. Given the nature of the controversy before me, and for greater clarity, it seems to me that the correct place to start is not with Mr. Madon's submissions, but those of Mr. Chinoy, learned Senior Counsel for RKM and the other Petitioners before the CLB. For, if he is correc....
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....ake such order as it thinks fit. sec. 398--Application to Company Law Board for relief in cases of mismanagement. (1) Any members of a company who complain (a) that the affairs of the company are being conducted in a manner prejudicial to public interest or in a manner prejudicial to the interests of the company; or (b) that a material change (not being a change brought about by, or in the interests of, any creditors including debenture holders, or any class of shareholders, of the company) has taken place in the management or control of the company, whether by an alteration in its Board of directors or manager, or in the ownership of the company's shares, or if it has no share capital, in its membership, or in any other manner whatsoever, and that by reason of such change, it is likely that the affairs of the company will be conducted in a manner prejudicial to public interest or in a manner prejudicial to the interests of the company; may apply to the Company Law Board for an order under this section, provided such members have a right so to apply in virtue of section 399. (2) If, on any application under subsection (1), t....
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....e generality of the powers of the Company Law Board under section 397 or 398, any order under either section may provide for: (a) the regulation of the conduct of the company's affairs in future; (b) the purchase of the shares or interests of any members of the company by other members thereof or by the company; (c) in the case of a purchase of its shares by the company as aforesaid, the consequent reduction of its share capital. (d) the termination, setting aside or modification of any agreement, howsoever arrived at, between the company on the one hand, and any of the following persons, on the other, namely (i) the managing director. (ii) any other director, (iii) * * * (iv) *** (v) the manager, upon such terms and conditions as may, in the opinion of the Company Law Board, be just and equitable in all the circumstances of the case; (e) the termination, setting aside or modification of any agreement between the company and any person not referred to in clause (d), provided that no such agreement shall be terminated, set aside or modified except after due notice to the party conc....
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....ot that Haryana Telecom arose from a winding up petition and not one alleging oppression and mismanagement. In particular, the powers of the CLB under Section 402 are very wide. They permit orders to be made against third parties and, subject to certain restrictions, in respect even of ancillary transactions. These powers are clearly beyond the remit of any arbitral panel. It is no answer, Mr. Chinoy contends, to say that in this particular case there is no such relief sought. The question is not of any particular relief or any particular party. It is whether the source of power permits any such reference to a private dispute resolution forum. In Company Petition No. 11 of 2012 before the CLB, where Transauto is the 1st Respondent, for instance, RKM sought (a) orders calling an extraordinary general meeting of Transauto to consider the agenda item for removal for removal of the existing directors and for appointment of new directors; (b) orders directing SIPL, Unique and RCC (Transauto's subsidiaries) to similarly call extraordinary general meetings to remove their respective existing directors and to appoint RKM's nominees as new directors; (c) orders and directions under ....
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....some length only because it is the second strut to Mr. Chinoy's case.6 In our view, the submissions made by Mr. Sen on the point of legality or otherwise of the impugned orders will have to be appreciated in the context of the principal question as to what are the powers of the court when it is acting in proceedings instituted under section 397 or 398 read with section 402 of the Companies Act. The questions whether a board of directors of the type indicted in the impugned order could be reconstituted by the court or not and whether the court had power to frame an article inconsistent with the provisions of section 255 of the Act or not must in the ultimate analysis depend upon the true ambit of the powers of the court under section 397 or 398 read with section 402, for, if these sections confer upon the court jurisdiction and powers of the widest amplitude to pass appropriate orders which the circumstances of the case may require, it would be difficult to accept Mr. Sen's submissions that the impugned orders and directions are liable to be set aside on the basis that the reconstituted board or modified article 95 was not in consonance with section 255 of the Act. To cor....
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....or mismanagement and steps are required to be taken to prevent oppression and/or mismanagement in the conduct of the affairs of a company. It is in view of this scheme which is very apparent on a fair reading of the arrangement of chapter and the sections contained in each chapter which are all grouped under Part VI of the Act that the question will have to be answered as to whether the powers of the court under Chapter VI (which includes sections 397 or 398 and 402) should be read as subject to the provisions contained in the other chapters which deal with normal corporate management of a company and, in our view, in the context of this scheme having regard to the object that is sought to be achieved by sections 397 and 398 read with section 402, the powers of the court thereunder cannot be so read. Further, an analysis of the sections contained in Chapter VI of Part VI of the Act will also indicate that the powers of the court under section 397 and 398 read with section 402 cannot be read as being subject to the other provisions contained in sections dealing with usual corporate management of a company in normal circumstances. As stated earlier, Chapter VI deals with the preventi....
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....398 read with section 402 power has been conferred upon the court "to make such orders as it thinks fit" if it comes to the conclusion that the affairs of the company are being conducted in a manner prejudicial to public interest or in a manner prejudicial to the interests of the company or that a material change has taken place in the management or control of the company by reason of which it is likely that the affairs of the company will be conducted in a manner prejudicial to public interest or in a manner prejudicial to the interests of the company, "with a view to bringing to an end or preventing the matters complained of or apprehended". Both the wide nature of the power conferred on the court and the object or object sought to be achieved by the exercise of such power are clearly indicated in sections 397 and 398. Without prejudice to the generality of the powers conferred on the court under these sections, section 402 proceeds to indicate what type of orders the court could pass and clauses (a) to (g) are clearly illustrative and not exhaustive of the type of such orders. Clauses (a) and (g) indicate the widest amplitude of the court's power: under clause (a) the court&....
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....at where the court is of the opinion that the affairs of the company are being conducted in a manner suggested in sub-section (1), then, the court may, with a view to bringing to an end or preventing the matters complained of or apprehended, make such order as it thinks fit. In other words, sections 397 and 398 are intended to avoid winding up of the company if possible and keep it going while at the same time relieving the minority shareholders from acts of oppression and mismanagement or preventing its affairs being conducted in a manner prejudicial to public interest and if that be the objective the court must have power to interfere with the normal corporate management of the company. If under section 398 read with section 402 the court is required by its order to provide for the regulation of the conduct of the company's affairs in future because of oppression or mismanagement that has occurred during the course of normal corporate management, the court must have the power to supplant the entire corporate management, or rather corporate mismanagement by resorting to non-corporate management which may take the form of appointing an administrator or a special officer or a co....
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....acting under section 398 read with section 402 of the Companies Act the court has ample jurisdiction and very wide powers to pass such orders and give such direction as it thinks fit to achieve the object and there would be no limitation or restriction on such power that the same should be exercised subject to the other provisions of the Act dealing with normal corporate management or that such orders and directions should be in consonance with such provisions of the Act. Considerable emphasis was laid by Mr. Sen on the fact that there was absence of a non-obstante clause in any of the relevant sections, viz., section 397, 398 and 402. His contention was that whenever the legislature intended that any of the provisions of the Act should be overridden and the legislature has clearly expressed its intention by using appropriate language, namely, by user of a non-obstante clause and since there was no non-obstante clause in section 397 or section 398 read with section 402 of the Act, the court's powers thereunder could not override the other provisions of the Act but would be subject to such provisions. In the first place, like a deeming provision which is sometimes made with a....
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....se was used at the commencement of section 408. We are, therefore, inclined to take the view that the absence of a non-obstante clause in sections 397 , 398 and 402 does not lead to the inference suggested by Mr. Sen. Moreover, as we have already indicated, there is neither a non-obstante clause contained in any of these sections nor is there language to indicate that the court's powers under these sections are to be exercised subject to any of the other provisions of the Act. In such a situation the ambit of the court's powers must be determined by the scheme of Part VI in which all the concerned sections appear, the language employed in these relevant sections and the object sought to be achieved by them and in this context it would be useful to refer to the rule of construction enunciated in Maxwell on the Interpretation of Statutes, 12th edition, page 45, to which our attention was invited by Mr. Phadke. The relevant rule of construction has been stated thus: "If the choice is between two interpretations, the narrower of which would fail to achieve the manifest purpose of the legislation, we should avoid a construction which would reduce the legislation to futi....
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.... the Calcutta High Court. In that case the question was whether the court had power to appoint an advisory board to assist the special officer who had been appointed by an earlier order under section 402 in a proceeding instituted under section 398 of the Companies Act and while dealing with the nature and scope of the powers conferred upon the court under section 402, Justice Mukharji, at page 550 of his judgment, has observed as follows: "Now the powers of the court under section 402 of the Companies Act are wide. In fact, the court may make any order for the regulation of the conduct of the company's affairs upon such terms and conditions as may, in the opinion of the court, be just and equitable in all the circumstances of the case. Constitution of an advisory board by orders of court in a proper case of company management is, therefore, in my view within the competence of the court under section 402 of the Companies Act, 1956." Further at page 550, the learned judge has observed as follows: "Since the appointment of the special officer attempts are being made by him to put the company's administration on a sound basis. The corporation now makes the ap....
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...., Mr. Chinoy submits, would result in an anomalous situation. It would amount to saying that merely because there exists an arbitration clause, therefore, the CLB's powers under Sections 397-402 of the Companies Act, 1956 are somehow restricted or fettered, and that the CLB is bound to stay further proceedings before it or even perhaps to divest itself entirely of those proceedings and send the parties to a private dispute resolution forum. 55. This, Mr. Chinoy submits, is inconceivable and has been so held by a learned Single Judge of this Court in Manavendra Chitnis & Anr. v. Leela Chitnis Studios P. Ltd. & Ors. 1985(58) Comp Cas 113. The decision of the learned Single Judge in Leela Chitnis Studios specifically noticed the Division Bench decision in Bennet Coleman. The ambit and purpose of sections 397 and 398 read with section 402 was to protect minority share-holders from the acts of oppression and mismanagement, to prevent the affairs of a company being conducted in a manner prejudicial to the interest of the public, while at the same time attempting to avoid winding up of a company to the extent possible. Under Section 402(a), the CLB could even regulate the future co....
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....gerway Wind Turbines Ltd. v. Cynosure Investments P. Ltd. [2009] 147 Comp Cas 149 (Mad). This decision relied on the Supreme Court decision in Haryana Telecom as also another decision of another learned Single Judge of the Madras High Court (referenced below) to hold that that certain reliefs can be granted only by the CLB when provisions of sections 397, 398 and 402 of the Companies Act, 1956, are invoked and that this cannot be referred to arbitration. 59. Then there is a decision of another learned Single Judge of the Madras High court in Sporting Pastime India Ltd. & Anr. v. Kasthuri & Sons Ltd. [2008] 141 Comp Cas 111 (Mad). The facts in Sporting Pastime were that the Respondent-Company was a wholly owned subsidiary of the Petitioner. The Company had a single purpose: to establish, maintain and conduct a golf course and beach resort. It could not achieve this principal objective. The Petitioner entered into an agreement with the 2nd Respondent for a takeover of the company. The 2nd Respondent acquired a 90% stake in the company for a lump sum consideration of Rs. 2.43 crores. It agreed to discharge the debts and liabilities of the company to the Petitioner and others. After....
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....a & Ors. MANU/SC/8182/2008 : (2008) 16 SCC 774 to suggest that the decision in Haryana Telecom notwithstanding, an arbitrator can always find out and adjudicate whether or not the company is functional. In so holding, the learned Single Judge of the Delhi High Court followed the Supreme Court decision in Everest Holding. Now Everest Holding was not a case under section 8 or section 45 at all. It was decided under section 11. No issue arose under sections 397 and 398 of the Companies Act, 1956. It is difficult to see, Mr. Chinoy submits, how either of these decisions is in any way an answer to his proposition. The decision of the learned Single Judge in Vijay Sekhri is at best a casual comment and Everest Holding is not a decision under sections 397, 398 or even sections 433 or 434 of the Companies Act, 1956. 61. Mr. Chinoy does not seek to dislodge even in the slightest, as indeed he cannot, the rule in Foss v. Harbottle (1843) 67 ER 189 and its exceptions: in any action in which a wrong is alleged to have been done to a company, the proper claimant is the company itself. Because Foss v. Harbottle leaves the minority in an unprotected position, several important exceptions have ....
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....and 398. The CLB, when dealing with such a petition, cannot tell a party that it should have filed suit instead, just as a petitioner in a winding up petition cannot be told absent a bona fide defence or disputed questions of fact, that he should simpliciter have filed a civil suit. Orders under section 402, as that section makes clear, are not therefore purely in personam. They can cover third parties. Parts of the reliefs may be in rem and there is intrinsic evidence to show this, as for example the requirements of Section 400 that require notice to be given to the Central Government. Therefore, the nature of the reliefs sought and powers invoked necessarily exclude arbitrability. H. Submissions On Behalf Of Rakesh Regarding The Question Of Reference To Arbitration And Sections 397-402 Of The Companies Act, 1956 63. Mr. Madon's response to this is that there is no apparent reason why there should be any such blanket embargo on reference to arbitration. After all, he submits, it is the nature of the relief sought that is determinative, unlike in the case of special statute (a declaration of tenancy or a probate action). The reliefs sought by RKM are, ex-facie, all arbitr....
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.... CLB at all. All it says is that the CLB is not powerless to pass appropriate orders even if the allegations of oppression are untrue, but where not exercising jurisdiction would result in chaos or mismanagement. This decision, Mr. Madon submits, is no authority for the proposition that Mr. Chinoy canvasses, namely, that no action under Sections 397, 398 of the Companies Act, 1956 read with Section 402 can ever be referred to arbitration. 66. In contrast, Mr. Madon submits, the decision of the Supreme Court in Hindustan Petroleum Corpn. Ltd. vs. Pinkcity Midway Petroleums (2003) 6 SCC 503 is more appropriate. Considering a question under Section 8 of the Arbitration Act, the Supreme Court in terms held that where an arbitration clause exists, as it does in the present case, the Court has a mandatory duty to refer the disputes between the contracting parties to an arbitrator. This is not optional. In such a case, once an application under Section 8 has been filed, the civil court has no jurisdiction to continue with the suit. The position is no different under Section 45 of the Arbitration Act. Now if the jurisdiction of a civil court to continue with a suit is occluded by the me....
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....is concluded. Precisely this question--whether Sections 397 and 398 of the Companies Act excluded the jurisdiction of a civil court--was considered and decided by a Division Bench of this Court in CDS Financial Services (Mauritius) Limited v. BPL Communications Ltd. & Ors. [2004] 121 Comp Cas 374 (Bom). In that case, the Division Bench held, after considering various authorities, that Sections 397 and 398 and their allied sections do not confer exclusive jurisdiction on the Company Court (now the CLB) to grant reliefs against oppression and mismanagement. Suits by minority share holders against oppression and mismanagement have been time-honoured exceptions to the rule in Foss v. Harbottle. Absent words of express or implicit jurisdictional ouster, Sections 397-398 and 402-408 of the Companies Act, 1956, do not exclude the jurisdiction of the civil court. Therefore, there is no legal or logical basis, Mr. Madon submits, for Mr. Chinoy's overbroad proposition. 68. Mr. Madon then turns to the decision of a learned Single Judge of the Kerala High Court in Marikar (Motors) & Anr. v. M.I. Ravikumar & Ors. [1982] 52 Comp Cas 362 (Ker) in support of the proposition that the Compani....
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....an order on a petition under Section 11(4) read with Section 11(6) of the Arbitration Act. Before the Supreme Court, reliance was placed on a decision of the Supreme Court in N. Radhakrishnan vs. Maestro Engineers & Ors. (2010) 1 SCC 72. The ratio of Maestro Engineers to the effect that where there are serious allegations of fraud etc., the disputes cannot be referred to arbitration was not only doubted but held to be per incuriam in Swiss Timings. Nijjar, J. held that in Maestro Engineers, the Supreme Court's earlier decision in Pinkcity, though referred, was neither distinguished nor followed. Another decision in P. Anand Gajapathi Raju & Ors. v. P.V.G. Raju (2000) 4 SCC 539 was not even noticed. The decision in Maestro Engineers was thus held not be good law. The Supreme Court held that the legislative mandate and policy is one of least interference in arbitration proceedings. The duty of the court is to facilitate the arbitration process. Indeed, even the question of whether the main contract is void or voidable can be referred to arbitration. To shut out arbitration at the initial stage is to destroy the very purpose for which the parties agreed to an arbitral dispute reso....
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....al Finance are, respectively, incorrect and no longer good law. The first states as a proposition that the CLB's jurisdiction under Sections 397 and 298 is statutory and, for that reason, cannot be ousted. Mr. Madon's submission is that the jurisdiction of a Civil Court is equally statutory and, therefore, by this reasoning even a civil suit should not be referable to arbitration. As regards Shiv General Finance, his submission is that it is no longer good law since it is a decision predates the 1996 Arbitration Act, the provisions of which, it is now settled, are mandatory. The decision in Das Lagerway is confined, Mr. Madon says, to the facts of that case because the petitioner in that case could not satisfy even one of the three standard conditions under Section 8 of the Arbitration Act. Similarly, the decision in Sporting Pastime displays an incorrect approach. The Court held that if a tribunal has jurisdiction is necessarily excludes the jurisdiction of other Courts. This is clearly incorrect in view of the decision in CDS Financial Services and other judgments. The decisions in Vijay Sekhri and Everest Holdings both support Mr. Madon's proposition and not that of ....
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....tions 8 and 45 of the Arbitration Act use the expression "a judicial authority, when seized of an action in a matter in respect of which the parties have made an agreement" (Section 45), and "a judicial authority before which an action is brought in a matter which is the subject of an arbitration agreement" (Section 8). The operative word here appears to be "matter". The "matter" must be one in respect of which there is an arbitration agreement. This is what can be referred to arbitration. In an oppression and mismanagement "action" before the CLB, the "matter" is the one that lies under Sections 397 and 398 and invokes the CLB's powers under those sections and their statutory brethren, including Section 402. Mr. Madon is of course correct in saying that the jurisdictional section is not Section 402 but Sections 397 and 398. But that only underscores Mr. Chinoy's case. What is being suggested is that disputes in a Section 397 and 398 action are such that they demand the exercise by the CLB of its powers under Section 402. These are not powers that can be exercised by a civil court. They certainly cannot be exercised by an arbitral forum. This is very different from saying t....
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....f certain agreements, including those in Section 402(d) and (e), viz., appointments of the managing director, other directors and the manager, and third party contracts. Section 407(2) provides for penalties in such cases. Section 408 vests in the government the power to prevent oppression and mismanagement. The entire board can be superseded by the Government, too. Section 409 empowers the CLB to prevent any change in the board of directors if this is likely to prejudice the company. 80. I believe Mr. Chinoy is correct when he says that there is a fundamental logical fallacy in Mr. Madon's hypothesis, which may be summarized thus: all civil suits can and must be referred to arbitration where there is an arbitration agreement. The jurisdiction of the CLB under Sections 397 and 398 of the Companies Act does not exclude the jurisdiction of a civil court for oppression and mismanagement. Therefore, all disputes before the CLB in a Section 397 and 398 action can and must also be referred to arbitration. In CDS Financial Services, in an action for oppression and mismanagement by a minority following the only true exception to the Foss v. Harbottle rule, it was argued that the pla....
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....of Mr. Madon's submission, one that I find difficult to accept. 82. In Booz Allen & Hamilton Inc. v. SBI Home Finance Ltd., (2011) 5 SCC 532 the Supreme Court considered the question of arbitrability, i.e., the distinction in law between disputes that are capable of arbitral resolution and those that are not. This decision is of immediate significance not least for its acceptance of the principle enunciated in Haryana Telecom, one from which Mr. Madon is at some pains to distance himself. 34. The term "arbitrability" has different meanings in different contexts. The three facets of arbitrability, relating to the jurisdiction of the Arbitral Tribunal, are as under: (i) Whether the disputes are capable of adjudication and settlement by arbitration? That is, whether the disputes, having regard to their nature, could be resolved by a private forum chosen by the parties (the Arbitral Tribunal) or whether they would exclusively fall within the domain of public fora (courts). (ii) Whether the disputes are covered by the arbitration agreement? That is, whether the disputes are enumerated or described in the arbitration agreement as matters to be decided by....
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....overned by special statutes where the tenant enjoys statutory protection against eviction and only the specified courts are conferred jurisdiction to grant eviction or decide the disputes. 37. It may be noticed that the cases referred to above relate to actions in rem. A right in rem is a right exercisable against the world at large, as contrasted from a right in personam which is an interest protected solely against specific individuals. Actions in personam refer to actions determining the rights and interests of the parties themselves in the subject-matter of the case, whereas actions in rem refer to actions determining the title to property and the rights of the parties, not merely among themselves but also against all persons at any time claiming an interest in that property. Correspondingly, a judgment in personam refers to a judgment against a person as distinguished from a judgment against a thing, right or status and a judgment in rem refers to a judgment that determines the status or condition of property which operates directly on the property itself. (Vide Black's Law Dictionary.) 38. Generally and traditionally all disputes relating to rights in pe....
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....e, a winding-up order...." (emphasis supplied) Mustill and Boyd in their 2001 Companion Volume to the 2nd Edn. of Commercial Arbitration, observe thus (p. 73): "Many commentaries treat it as axiomatic that 'real' rights, that is, rights which are valid as against the whole world, cannot be the subject of private arbitration, although some acknowledge that subordinate rights in personam derived from the real rights may be ruled upon by arbitrators. The conventional view is thus that, for example, rights under a patent licence may be arbitrated, but the validity of the underlying patent may not ... An arbitrator whose powers are derived from a private agreement between A and B plainly has no jurisdiction to bind anyone else by a decision on whether a patent is valid, for no one else has mandated him to make such a decision, and a decision which attempted to do so would be useless." (emphasis supplied) 42. The distinction between disputes which are capable of being decided by arbitration, and those which are not, is brought out in three decisions of this Court. In Haryana Telecom Ltd. v. Sterlite Industries (India) Ltd. [ (1999) 5 S....
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....inding up, and clearly, therefore, a matter in rem, states as a proposition that no agreement between the parties can vest an arbitral panel with the power of winding up. Similarly, no arbitration agreement can vest an arbitral tribunal with the powers to grant the kind of reliefs against oppression and mismanagement that the CLB might. Mr. Madon's submission that it matters not what the arbitral panel does with the dispute so long as the dispute is referred seems to me to strain at the boundaries of the intent of arbitration law. The idea cannot possibly be to shunt parties off the main tracks of a properly brought litigation to some siding with no destination and no way forward. It must be to provide them with an effective, quick and reasonable dispute resolution alternative. 84. Bennett Coleman is a settled authority for the proposition that the powers of the Court under Section 402 are wide enough to permit the CLB to resort to non-corporate management and to supplant corporate management in whole or in part. The CLB may provide for the regulation of the company's future affairs because of previous oppression and mismanagement. In doing so it can appoint an administr....
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....ismissal of the petition on the ground that there exists an arbitration clause. In Sukanya Holdings (P) Ltd. v. Jayesh H. Pandya (2003) 5 SCC 531 the Supreme Court inter alia said: 13. Secondly, there is no provision in the Act that when the subject-matter of the suit includes subject-matter of the arbitration agreement as well as other disputes, the matter is required to be referred to arbitration. There is also no provision for splitting the cause or parties and referring the subject-matter of the suit to the arbitrators. 15. The relevant language used in Section 8 is: "in a matter which is the subject of an arbitration agreement". The court is required to refer the parties to arbitration. Therefore, the suit should be in respect of "a matter" which the parties have agreed to refer and which comes within the ambit of arbitration agreement. Where, however, a suit is commenced--"as to a matter" which lies outside the arbitration agreement and is also between some of the parties who are not parties to the arbitration agreement, there is no question of application of Section 8. The words "a matter" indicate that the entire subject-matter of the suit should be subjec....
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....t is whether that dispute falls within Chapter VI of the Companies Act, 1956. If it does, it cannot be referred to arbitration and the petition proceeds. If it does not, the petition must be dismissed; but this does not ipso facto mean that no disputes exist; only that the disputes are covered by an arbitration clause. Two consequences must then result: a dismissal of the petition with, if applied for, a reference of the disputes to arbitration in an order made on the Section 8 or Section 45 petition. A common order could cover both the dismissal of the petition and the allowing of the application for reference to arbitration. 90. Mr. Chinoy's submission seems to me to be altogether too technical. It would drive a party who succeeds in dislodging a petition brought under Sections 397 and 398 to filing a separate application or petition in some other court or before some other authority and be driven to a second go-around on the same material, and thus to give the CLB petitioner another, undeserved, innings. I see no reason why this should be so. It is one thing to say that disputes validly covered by Chapter VI of the Companies Act, 1956 and, specifically, Section 402, canno....
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....reement/common understanding.12 93. On this basis, Rakesh claimed to be entitled to act as he did, and which acts are the subject matter of the CLB petitions. Therefore, according to Rakesh, the matter ought to be referred to LCIA Arbitration under Cl. 43.2 of the SSD, and a corresponding injunction against RKM and Rajiv from proceeding with the CLB petitions. That the question of whether the CLB disputes were covered by the arbitration clause was squarely before Walker, J cannot be disputed: paragraph 10 of his judgment says so in terms. Before him, it was inter alia argued that even assuming there was any such oral agreement or common understanding, it stood entirely outside the SSD and hence was not covered by the SSD's arbitration clause. Paras 153 and 156 of Walker J.'s decision make it clear that he considered and rejected Rakesh's submission of arbitrability. The injunction earlier granted was vacated on the basis that the CLB proceedings were not covered by the arbitration agreement.13 94. Paragraphs 13 to 17 of the CLB's impugned order of 31st January 2013 indicate that the CLB approached the question of Walker J.'s decision as one of 'res-jud....
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....ter. The High Court in Indore withdrew the case to itself. A learned single Judge made the award a rule of the Court. The plaintiff in the Bombay High Court suit appealed. The two judges of the Division Bench in Indore differed. Under the rules then in place in Indore, in such a situation, the view of the learned single Judge was to prevail. The Prime Minister's award thus became a rule of the Court. This immediately raised a question under Section 13 of the CPC; specifically, Clauses (a), (b) and (d) of that Section. Beaumont, CJ held, with Weston, J. concurring: "I have no doubt that under Section 13 judgment is not used in the sense of a statement of the Judge's reasons. I have no doubt that a foreign judgment means an adjudication by a foreign Court upon the matter before it. It would be quite impracticable to hold that a foreign judgment means a statement by a foreign Judge of the reasons for his order. If that were the meaning of "judgment," the section would not apply to an order where no reasons were given. Section 13 applies to foreign judgments generally, and we must remember that some systems of foreign procedure may not recognise the distinction between decre....
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....ore, the judgment would still be conclusive unless it could be shown that the foreign Court had "refused to recognise the law of British India," and, as has been said, there was no such refusal here. The fact that the error (if error there were) was induced by the appellants themselves does not improve their position. It is desirable to add, in order to prevent a possible misunderstanding, that their Lordships must not be taken to decide that the High Court of Indore did not "directly adjudicate upon" the question whether the law of Indore was applicable. "Directly" does not mean "expressly," and it may well be argued (though it is unnecessary now to decide), that a matter which was not in issue only because all parties were agreed upon it, and was accordingly treated by the foreign Court as an admittedly correct foundation for its decision, can properly be said to have been "directly adjudicated upon." (Emphasis supplied) 99. The substantive issue in our case is whether Walker J.'s decision is not conclusive under Section 13(c) because it is contrary to the Supreme Court decision in Chloro Controls India (P) Ltd. v. Severn Trent Water Purification, Inc. & Ors. MANU/SC/08....
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....ure opted to word Section 45 somewhat dissimilarly. Section 8 of the 1996 Act also uses the expression "parties" simpliciter without any extension. In significant contradistinction, Section 45 uses the expression "one of the parties or any person claiming through or under him" and "refer the parties to arbitration", whereas the rest of the language of Section 45 is similar to that of Article II(3) of the New York Contention. The court cannot ignore this aspect and has to give due weightage to the legislative intent. It is a settled rule of interpretation that every word used by the legislature in a provision should be given its due meaning. To us, it appears that the legislature intended to give a liberal meaning to this expression. 95. The language of Section 45 has wider import. It refers to the request of a party and then refers to an Arbitral Tribunal, while under Section 8(3) it is upon the application of one of the parties that the court may refer the parties to arbitration. There is some element of similarity in the language of Section 8 and Section 45 read with Article II(3). The language and expressions used in Section 45, "any person claiming through or under him" incl....
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....her parties, even if this creates a risk of conflicting decisions. 105. We have already discussed that under the group of companies doctrine, an arbitration agreement entered into by a company within a group of companies can bind its non-signatory affiliates, if the circumstances demonstrate that the mutual intention of the parties was to bind both the signatory as well as the non-signatory parties. 107. If one analyses the above cases and the authors' views, it becomes abundantly clear that reference of even non-signatory parties to an arbitration agreement can be made. It may be the result of implied or specific consent or judicial determination. Normally, the parties to the arbitration agreement calling for arbitral reference should be the same as those to the action. But this general concept is subject to exceptions which are that when a third party i.e. non-signatory party, is claiming or is sued as being directly affected through a party to the arbitration agreement and there are principal and subsidiary agreements, and such third party is signatory to a subsidiary agreement and not to the mother or principal agreement which contains the arbitration clause, then dep....
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....med by a Malhotra Party. I do not understand Mr. Calver to dispute either of these points. I agree with Ms. Weaver that it is impossible to construe the actions alleged in the Indian petitions in relation to the management of the relevant companies as actions "provided for in or contemplated by" the revised transaction. H6. Matters which do not need to be determined 176. For the reasons given in sections H1 to H5 above I conclude that the threshold requirement is not met as regards the base question whether the Indian claims have been shown to a high degree of probability to involve the determination of something which, if the Indian claims had all been brought against Rakesh by Mr. Malhotra senior or Rajiv, falls within clause 43.2. It follows that I do not need to determine issues arising in relation to the dressing up argument (including the BNP Paribas case relied on by Rakesh in the written submission of 13 July 2012 and subsequently) and the good reason requirement. Accordingly I deal with them below only briefly. H 6.1 The dressing up argument 177. In my view Rakesh's dressing up argument, as advanced at the hearing, involved real difficulty. The first point ....
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...."The assets of Unique consist of monies paid into its Citibank account as a result of the conclusion of the restructuring agreements made under the SSD; those are its only assets"--it does not follow that how the directors dealt with those assets falls within the arbitration clause in the SSD. (5) "Prior to that payment in to the Citibank account, Unique's directors with Mr. Malhotra senior's knowledge, passed a resolution authorising Rakesh to have complete control over the Citibank account"; (6) "They did this because they all intended the monies paid in to the Citibank accounts to be used for the purposes of SPCPL, in particular to provide security to enable loans to be made to the new business for provision of operating capital. That was why the consortium of banks transferred the loans to SPCPL with Mr. Malhotra senior's knowledge" and (7) "The funds were paid into Unique's Citibank account, and the guarantees were given by Unique, with the approval of all parties at the time"--these allegations do not show to a high degree of probability that the disputed agreement/understanding existed; see (8) below. (8) "In this regard Rakesh is not relyin....
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....r that the claims against the other respondents in India were vexatious or oppressive. The evidence that the directors were acting under the influence of Rakesh was strong. Particularly alarming in that regard was the refusal of the directors to provide the shareholders with information about what the company was doing, thus preventing the shareholders from even querying whether a transaction proposed by Rakesh was one which they were obliged to acquiesce in. Even taking at face value Rakesh's evidence as to the bitterness of the family dispute, and accepting for present purposes that the Indian petitions formed part of a concerted attack on his ability to keep the business afloat, it seems to me that it would be wrong to condemn as illegitimate a claim designed to enable the shareholders to regain control of the companies they owned. As Ms. Weaver pointed out, the appropriate place to make such a claim was before the Company Law Board, and in so far as the company had entered into transactions which the shareholders were not entitled to complain about the Company Law Board is a judicial body with jurisdiction to determine whether that is the case. (Emphasis supplied) ....
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....e Walker's decision: 10. The jurisdictional basis for seeking an injunction here is that the SSD is governed by English Law. The basis on which the without notice injunction was claimed was that the revised transaction includes an arbitration agreement (clause 43.2 of the SSD) providing for arbitration in Geneva under the auspices of the London Court of International Arbitration. It is alleged by Rakesh that the disputes in the Indian proceedings are within the scope of the arbitration agreement as "arising from or connected with" the SSD and SD. 109. Mr. Justice Walker had decided this. This was the very issue before the CLB. Could the CLB now say it was not bound by Mr. Justice Walker's decision, absent any material putting that decision in one of the exceptions to Section 13 ? The CLB's reasoning on this, if it can be called that, is most unsatisfactory. Paragraph 17, in which the CLB says it is "inclined to accept the contentions of the Learned Senior Counsel representing the Respondent that this Bench is not bound the decision of any Foreign Court" contains no reasoning whatever. There is no reference to Section 13 of the CPC. There is no analysis of wh....
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.... of the petitions and the SSD/SSSD, I have come to the conclusion that the grievances ventilated by the Petitioners in their respective Petitions are covered by the terms and conditions of the SSD/SSSD and the cause of action in each petition flows therefrom only. I, therefore, hold that the clause 43 of the SSD relating to the arbitration is applicable having regard to the facts of the cases in hand. 113. I have very little idea what, if anything, this is supposed to mean. Anyone might arrive at any conclusion. What matters is not only the conclusion, but the process and the reasoning by which one arrives at it, most especially a court. What precisely might be the effect of this "conclusion"? Does it mean that the so-called oral agreement or common understanding that Rakesh claims stands proved? To arrive at this "conclusion", the CLB would necessarily have had to so find; yet there is no reasoning or analysis of this anywhere. The CLB does not consider Mr. Justice Walker's decision, the questions or issues before him, his analysis or, for the purposes of Section 13 of the CPC, what he decided. It does not consider the effect of Section 13 of the CPC at all. 114. Of part....
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....rit in the argument that the High Court exceeded its jurisdiction under Section 10F of the Companies Act while deciding the appeal. (Emphasis supplied) 116. I have no doubt at all that the decision of Mr. Justice Walker on the question of arbitrability was not covered by any of the exceptions to Section 13. Mr. Justice Walker's decision was not contrary to Chloro Controls. It bound the CLB, and the CLB was not, as it held, "free to take its own view". The CLB's assessment is entirely incorrect in law. That being so, there is no question of any reference being made to arbitration. L. Maintainability of Cross Appeals/Cross Objections 117. There remains a subsidiary issue of whether RKM's cross-objections/cross-appeals are maintainable. Mr. Madon argues that an appeal refusing to refer parties to arbitration is not maintainable under Section 50 of the Arbitration Act.14 If that is so, he says, then a finding that resulted in that decision also cannot be assailed. Mr. Chinoy responds, and I believe rightly, by saying that he has a right under Order 41 of the CPC to support any judgment. He refers to a recent decision of a learned single Judge of this Court....
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....'s power to appoint an observer and facilitator. However, I have the gravest misgivings whether, on the basis of its findings, that order is correct particularly in regard to what it is that it asks the observer-cum-facilitator to do. The parties were directed to cooperate with observer-cum-facilitator in smooth discharge of his functions "sorting out the allegations of the Petitioners and the grievances of the Respondents." This is not a substitution of non-corporate management for corporate management. This is a wholly impermissible delegation of a judicial function. It is one thing to charge an independent observer and facilitator with the management of the companies or supervision of their businesses. It is quite another to ask him to resolve or "sort out" the disputes between the two warring parties. What would be the nature of his attempted "sorting out"? Would it be an award under the Arbitration Act? A mediation report? What if it was disobeyed? Is this not a matter that is, and must remain, only within the province of the CLB? There is nothing in Chapter VI of the Companies Act, 1956 that permits the CLB to delegate this dispute-resolution judicial function in this man....
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....y the SSD. (c) The appointment of an observer-cum-facilitator was entirely without warrant and served no effective purpose. 125. The impugned order is upheld only to the extent that it holds that disputes in a properly brought petition under Sections 397 and 398 read with Section 402 of the Companies Act, 1956 are not referable to arbitration. The CLB's finding that the disputes were referable to arbitration is incorrect in law. 126. In consequence, the four appeals filed by Rakesh, viz., Company Appeal (L) No. 10 of 2013, Company Appeal (L) No. 11 of 2013, Company Appeal No. 23 of 2013 (Company Appeal (L) No. 12 of 2013), and Company Appeal No. 24 of 2013 (Company Appeal (L) No. 13 of 2013) are all dismissed. The remaining four cross-appeals filed by RKM are allowed to the limited extent of setting aside the impugned order in so far as it appoints an observer-cum-facilitator. The questions raised in the cross-appeals are answered as indicated above. 127. The CLB shall now proceed to forthwith hear the main Company Petitions that are pending before it. O. Stay Of This Order & Judgment 128. On 12th August 2014, the matter was for pronouncement of judgment. I in....
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....stitution of the boards of directors of the four respondent companies is, Mr. Madon submits, bound to result in an irreversible situation, one with possibly catastrophic consequences to Rakesh's companies in the SuperMax group. The four RKM/Indian Transauto companies have contractual obligations with or to the SuperMax companies, and should these contracts be terminated, the consequences to the SuperMax group would be crippling. 132. Mr. Chinoy opposes this application; enough, he says, is enough. Rakesh has effectively wrested control of the finances of even the Transauto/Indian RKM companies for three long years. The boards of these companies are beholden to him and act at his bidding. The 99.9% shareholders of the companies have been denied even the most basic rights, to information and accounts. Indeed, the very fact that this state of affairs has been allowed to continue for so long is itself reason enough to not grant any stay. Rakesh attempted to stymie his father's petition for relief not once, but twice: in the courts in England and then again before the CLB. He has lost in both actions, including at the venue of his choosing in an action he initiated. There can....
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....his thumb, he not only created significant liabilities in the Indian companies but did so without notice or intimation to their owners, RKM, Transauto and the other family members. When these owners sought information, it was denied. Rakesh went so far as to threaten the directors should they make any disclosure. With orders from the CLB, these directors, all beholden to Rakesh, continued on the RKM Indian companies. This is the very "status quo" of which Mr. Madon now seeks a continuance. 135. There is also evidence that even after these appeals were filed, those directors continued to be obdurate and obfuscatory. By an order dated 21st October 2013, clarified on 29th October 2013, this Court16 appointed Mr. Justice H. Suresh, a retired Judge of this Court, as an Observer in respect of the four respondent companies, viz., Transauto & Mechaids Pvt. Ltd., Unique Properties and Securities Pvt. Ltd., Vidyut Metallics Pvt. Ltd. and Supermax International Pvt. Ltd. Mr. Justice Suresh (retd.) held meetings with the parties. I have seen some of his minutes. He directed inspection and disclosure. Rakesh and the directors of the companies again played truant. On 9th December 2013, N.M. J....