TaxTMI 
TaxTMI 
TaxTMI 
2025 (8) TMI 1305
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....er related matters arising out of it was to be decided by Company Law Board (hereinafter, "CLB"). 3. The Appellants before us are Mr. Vikram Bakshi, Mr. Vinod Surha and Mr. Wadia Prakash while Mr. R.P. Khosla is the Contesting Respondent No.1 and Mr. Anand Mohan Mishra is Proforma Respondent No.2. 4. Briefly, the facts relevant for adjudication of the case in hand is that two groups, namely, the Khosla Group (comprising of Mr. R.P. Khosla, Mr. Deepak Khosla - son of R.P. Khosla and Ms. Sonia Khosla - wife of Mr. Deepak Khosla) and the Bakshi Group (comprising of Mr. Vikram Bakshi, Mr. Vinod Surha and Mr. Wadia Prakash) came together in relation to development of a resort at Kasauli in the State of Himachal Pradesh on the land owned by the Khosla Group where the Bakshi Group was to finance and manage the entire project. 5. The undisputed facts as presented and extracted from material on record are that a Memorandum of Understanding dated 21.12.2005 (hereinafter "MoU") was entered between Mr. Deepak Khosla (representing Khosla Group), Mr. R.P. Khosla, Mr. Vikram Bakshi and Montreaux Resorts Private Limited (hereinafter "MRPL") for development of the project. 6. The MRPL was a Spe....
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....greed to maintain status quo with respect to their shareholding in MRPL as it stood at the time of filing of CP 114 of 2007. 11. It needs mention here that Ms. Sonia Khosla had also assailed the same Order dated 31.01.2008 passed by the CLB in Company Appeal (SB) No. 6 of 2008 in which the High Court relying extensively upon the Order dated 11.04.2008 passed in Company Appeal (SB) No. 7 of 2008 dismissed the said appeal vide Order dated 22.04.2008 noting that agreement in terms of maintaining of status quo in shareholding and Board of Directors of MRPL has been achieved between parties. 12. In an attempt to prolong the litigation and not to be confined to 36% shareholding in MRPL, Mr. R.P. Khosla and Ms. Sonia Khosla had filed review petitions against Order dated 11.04.2008 in Company Appeal (SB) No. 7 of 2008 and Order dated 22.04.2008 in Company Appeal (SB) No. 6 of 2008 respectively before the High Court, these came to be dismissed on 06.05.2008. 13. In the interregnum, Bakshi Group filed an application being C.A. No. 1 of 2008 in CP 114 of 2007 before CLB seeking vacation of its Order dated 24.12.2007 leading to deferment of the meeting of MRPL scheduled on 26.12.2007. It wa....
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....d Senior Counsel Mr. Cama appearing for Khosla Group suggested for an early decision of the Company Petition before the CLB as a better alternative so that at least main dispute between the parties is adjudicated upon at an early date. He was candid in his submission that the issues which are subject matter of these two Special Leave Petitions and arise out of the proceedings in the High Court, have their origin in the orders dated 31.1.2008, which is an interim order passed by the CLB. He thus, pointed out that once the Company Petition itself is decided, the issues involved therein namely whether Board meeting dated 14.12.2007 was illegal or whether Board meeting dated 30.9.2006 was barred in law would also get decided. In the process the CLB would also be in a position to decide as to whether minutes of AGM of the Company allegedly held on 30.9.2006 are forged or not and on that basis application under Section 340 Cr. PC which is filed before the Company Law Boared [sic] Board would also be taken care of by the CLB itself. Learned Senior Counsels appearing for the Bakshi Group immediately agreed with the aforesaid course of action suggested by Mr. Cama. We are happy that at leas....
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....ld be open to the parties to approach the CLB for appropriate directions. 24. Both these petitions are disposed of in the aforesaid terms. All other pending I.As including criminal contempt petitions and petitions filed under Section 340 Cr. PC are also disposed of as in the facts of this case, we are not inclined to entertain such application. No costs." 19. The Criminal Miscellaneous (Co.) No. 3 of 2008 came to be dismissed vide Order dated 03.12.2018 of the High Court in consonance with Judgment dated 08.05.2014 passed in SLP (Criminal) No. 6873 of 2010 by this Court. 20. Reverting to the High Court's Orders dated 11.04.2008 and 22.04.2008 in Company Appeal (SB) No. 7 of 2008 and Company Appeal (SB) No. 6 of 2008 respectively, a Contempt Petition being C.C.P. (Co.) No. 1 of 2009, was filed by the Khosla Group before the High Court alleging wilful disobedience of abovesaid Orders dated 11.04.2008 and 22.04.2008, this petition came to be withdrawn with liberty to file afresh with a proper array of parties. 21. Thereafter, the Khosla Group filed another application being Criminal Miscellaneous (Co) No. 4 of 2019 under Section 340 CrPC before the High Court alleging that the Ba....
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....reme Court directed the CLB to decide the Co. Pet. No. 114/2007 as also the Application under Section 340 Cr.PC. Apposite would it be to emphasize that the Supreme Court categorically directed the High Court not to proceed with Crl. Misc. (Co.) No. 3/2008 and the said petition has been dismissed by this Court, in the light of the observation of the Supreme Court. 23. It is not disputed by Mr. Khosla that the NCLT is even currently seized of the Petitions/ Applications, as referred to in the order of the Supreme Court, between the two Groups. Thus in the light of the order of the Supreme Court, it is not proper for this Court to entertain the present Petition at this stage. Petitioner may approach the NCLT, in accordance with law, if so advised. 24. In all probability once the proceedings pending before the NCLT end, the creases shall be ironed out with respect to the EGM also. Nonetheless, in case the issues raised herein still survive after the proceedings end before NCLT, it shall be open to the Petitioner to approach this Court, in accordance with law. 25. It is made clear that this Court has not expressed any view on the merits of this case or with respect to any inter-se....
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....ons are met out in the Impugned Order. He further highlighted that the High Court in Impugned Order agreed with the proposition that review was not maintainable, yet decided to review and recalled its Judgment dated 13.08.2020. He contends that this Court while dealing with the litigation between two groups involving similar applications under section 340 of CrPC, vide Judgment dated 08.05.2014 had directed CLB/NCLT to decide the matter and restrained the High Court to proceed with the application under section 340 of CrPC. The learned Counsel contends that the High Court acted in violation of this Court's above judgment while passing the Impugned Order. He prays for setting aside of Impugned Order dated 05.05.2021 passed by the High Court. 25. Per contra, the learned Counsel for the Respondents, contends that the Impugned Order dated 05.05.2021 is a classic manifestation of the court undoing its own wrong. He submits that the Order was not passed under any statutory provision but by the court acting ex debito justitiae in order to undo the injurious effect flowing from its factually erroneous observation included in Judgment dated 13.08.2020. He relied on the order passed by this....
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.... a clerical or arithmetical error." 27A. The comparison of the power of review of a civil court vis- a-vis power of criminal court to review or recall its own judgment or order arising out of criminal proceedings has been put to rest by numerous decisions of this Court. It would be appropriate at this juncture to discuss the relevant decisions of this court pertaining to review or recall power of criminal courts to ascertain the correct position of law before proceeding to refer and deal with the factual matrix of the present case. 28. The scope of Section 362 of CrPC has been discussed and elaborated by a three-judge bench decision of this Court in State of Kerala vs. M.M. Manikantan Nair, (2001) 4 SCC 752 wherein it held that CrPC does not authorize High Court to review its judgment or order passed either in exercise of its appellate, revisional or original jurisdiction. Section 362 explicitly prohibits the court after it has signed its judgment or final order disposing of case from altering or reviewing the said judgment or order except to correct a clerical or arithmetical error. This prohibition is complete and no criminal court can review its own judgment or order after it ....
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....at application for recall seeking "procedural review" and not "substantive review" to which Section 362 of CrPC be attracted is permissible. This Court upheld the order of the High Court wherein it recalled the earlier order passed in the absence of the Respondent and based on false information. 34. A careful consideration of the statutory provisions and the aforesaid decisions of this Court clarify the now-well- settled position of jurisprudence of Section 362 of CrPC which when summarize would be that the criminal courts, as envisaged under the CrPC, are barred from altering or review their own judgments except for the exceptions which are explicitly provided by the statute, namely, correction of a clerical or an arithmetical error that might have been committed or the said power is provided under any other law for the time being in force. As the courts become functus officio the very moment a judgment or an order is signed, the bar of Section 362 CrPC becomes applicable, this, despite the powers provided under Section 482 CrPC which, this veil cannot allow the courts to step beyond or circumvent an explicit bar. It also stands clarified that it is only in situations wherein an ....
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....minal Procedure". Further, Section 4 of CrPC provides for scope of the CrPC which is reproduced herein: "4. Trial of offences under the Indian Penal Code and other laws. (1) All offences under the Indian Penal Code (45 of 1860) shall be investigated, inquired into, tried, and otherwise dealt with according to the provisions hereinafter contained. (2) All offences under any other law shall be investigated, inquired into, tried, and otherwise dealt with according to the same provisions, but subject to any enactment for the time being in force regulating the manner of place of investigating, inquiring into, trying or otherwise dealing with such offences." The provisions of Sub-section (1) of Section 4 of CrPC expressly mandates an investigation, inquiry or trial of offences under Indian Penal Code of 1860 to be conducted strictly as per the procedure provided in the provisions of the CrPC. The definition of "inquiry" as stipulated in Section 2 (g) of CrPC means every inquiry, other than a trial, conducted under the CrPC by a Magistrate or Court. 37. The intent of proceedings as can been seen from provision of Section 340 of the CrPC, is to determine as to whether a complaint o....
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....ure initiated under CrPC. As a result, the said petition filed by Khosla Group under provisions of CPC 1908 could not have been entertained by the High Court for being patently not maintainable in light of above discussion. This finding itself leads to the disposal of case at hand, however, in our view, it is pertinent to delve into the merits of the review application so moved by the Khosla Group and leading to the Impugned Order vis-à-vis the jurisdiction and expanse of Section 362 of CrPC. 41. To deal with the case at hand, it is essential to peruse the material-on-record, especially the Impugned Order dated 05.05.2021 and the Judgment dated 13.08.2020 in juxtaposition to the scope and applicability of Section 362 CrPC. While it appears that the withdrawal of the CP 114 of 2007 pending before the CLB/NCLT (now) impressed the High Court to recall its Judgment dated 13.08.2020 vide the Impugned Order dated 05.05.2021 but a perusal of the former would show that it was not premised exclusively on the pendency of the CP 114 of 2007. The High Court had gone on to observe the intertwined nature of the allegation with the on-going proceedings between the parties before the NCLT.....