1. The Appellant – Union of India, represented by the Ministry of Corporate Affairs, through the Regional Director, Western Region, has filed the present Appeal under Section 10F of the Companies Act, 1956 (“the Act”) seeking to set aside the Order dated 28th March, 2013, passed by Respondent No. 1 –the Company Law Board, Mumbai Bench (“the CLB”), disposing of Company Petition No. 62 of 2009 under Sections 397, 398 and 402 of the Act, chiefly on the ground that notice under Section 400 of the Act was not served by the CLB on the Appellant.

2. The above Appeal was admitted on 11th June, 2013, and is now taken up for final hearing.

3. The following Questions of Law are framed for consideration in the present Appeal:

(a) Whether the Order passed by the CLB, Mumbai Bench, dated 28th March, 2013 is nonest, ex facie not valid and the entire proceedings in Company Petition No. 62 of 2009, stand vitiated since the notice of the Application/Petition made by the Original Petitioner (Respondent No. 2) to the CLB under Sections 397 and 398 of the Act was not served on the Central Government by the CLB itself under the provisions of Section 400 of the Act?

(b) Whether the CLB, whilst passing a final order in the Petition alleging oppression and mismanagement, can by exercising its powers under Section 402 of the Act, remove the Auditor duly appointed by the Respondent No. 3 Company, in view of the provisions contained in Section 224 (7) of the Act which stipulates that, “any auditor appointed under Section 224 (7) of the Act may be removed from office before expiry of his term only by the Company in general meeting, after obtaining the previous approval of the Central Government in that behalf”.

4. The relevant facts in brief are as set out hereunder:

5. Respondent No.3 – M/s. SAF Yeast Company Pvt. Ltd. (“M/s. Saf Yeast”) is incorporated under the Companies Act, 1956 (“the Act”), having its Registered Office at Mumbai. It is a Joint Venture Company between the Respondent No.2, a foreign shareholder and Respondent Nos. 4 to 8 being the Indian Shareholders holding approximately 49% of the total shareholding of Respondent No.3. The Respondent No.2

– Nafan B.V. (“original Petitioner”) is a Company incorporated under the laws of Netherlands. Respondent No. 2 owns 80772 equity shares of Respondent No. 3, which constitutes approximately 51 per cent of the total shareholding of Respondent No. 3. Respondent No. 2 is a subsidiary of Respondent No. 10 – M/s. LESAFFRE ET CIE (“M/s. Lesaffre Group”) which is incorporated in France. The entire shareholding of Respondent No.3 is therefore held between the Respondent No.2 and Respondent Nos. 4 to 8.

6. The main grievance of the Respondent No. 2 in Company Petition No. 62 of 2009 is that Respondent Nos. 4 to 8 have transferred the shares of the Respondent No. 2 in the Board Meetings of Respondent No.3 held on 23rd May, 2009, and 25th May, 2009. According to the Respondent No. 2, the said Board Meetings were held without issuing notices to the Respondent No. 2 and therefore are nonest, illegal and unlawful and the Resolutions passed thereat are invalid and ineffective, and thus liable to be set aside. According to the Respondent No. 2, in an earlier meeting held on 29th January, 2009, again without giving notice to the Respondent No. 2, a decision was taken to appoint Respondent No.9 – SHARP & TANNAN as the Statutory Auditor for determining the fair value of the equity shares of Respondent No. 3 and forwarding the valuation report to the Lesaffre Group. According to the Respondent No. 2, this meeting was also illegal for want of notice upon the Directors of the Respondent No. 2 and for noncirculation of agenda, etc. According to the Respondent No. 2, the valuation report obtained by M/s. Saf Yeast is also not based on the recognized principles for the valuation of a Company and the duplicate shares issued by Respondent Nos. 3 to 6 are illegal, being issued in contravention of the statutory p