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2013 Supreme(Del) 1727

DELHI HIGH COURT
S.Ravindra Bhat, Najmi Waziri, JJ.
R.P. Khosla & Anr. - Appellant
Versus
Honble Company Law Board & Ors. - Resopndent
W.P.(C) 5889/2013, C.M. 12981/2013 (for ad-interim orders), 12982/2013 (for ad-interim orders), 12983/2013 (for acceptance of advance service), 12984/2013 (for exemption), 12985/2013 (seeking time to pay Court Fees), 13484/2013 (for acceptance of advance service), 13485/2013 (for exemption) & 13486/2013 (seeking time to pay Court Fees)
Decided On : 01-10-2013

Advocates Appeared:
For the Petitioners:Mr. Deepak Khosla, Advocate.
For the DHC/Respondent No. 5:Mr. Rajshekhar Rao, Advocate.

The failure to provide notice under Section 148A of the CPC does not render the order a nullity, and the court's writ jurisdiction is limited in matters before the Company Law Board.

Headnote:

Caveat - Company Law Board Regulations - Section 148A of the CPC - Regulation 32, 44 of the Company Law Board regulations - The court considered the applicability of Section 148A of the CPC and the Company Law Board Regulations in the context of lodging caveats and the right to be heard. It also discussed the wide phraseology of Section 148A, the power of the Bench officer, and the inherent power of the Bench to make orders for the ends of justice. The court cited precedents to establish that the failure to provide notice under Section 148A does not render the order a nullity and emphasized the limited writ jurisdiction of the court in matters before the Company Law Board.

Fact of the Case:

The petitioners sought directions to the Company Law Board (CLB) to frame regulations for lodging caveats and to regulate filing of caveats under Section 148A of the CPC. They claimed that orders of the CLB were a nullity and required to be quashed due to failure to serve requisite papers and provide notice to the caveators.

Finding of the Court:

The court found that the failure to provide notice under Section 148A does not render the order a nullity and emphasized the limited writ jurisdiction of the court in matters before the CLB. It dismissed the petition along with pending applications.

Issues: The main issue was whether the failure to provide notice to the caveators under Section 148A of the CPC renders the proceedings and orders passed by the CLB a nullity.

Ratio Decidendi: The court held that the failure to provide notice under Section 148A does not render the order a nullity and emphasized the limited writ jurisdiction of the court in matters before the CLB.

Final Decision: The petition was dismissed along with pending applications.

S. Ravindra Bhat, J.:--

1. In this writ petition, directions have been sought, inter alia, to the Company Law Board to frame regulations in respect of lodging caveats before that body (hereafter “the CLB”) as well as to this court, to regulate filing of caveats, under Section 148A of the Code of Civil Procedure (CPC). More specifically, a direction that some orders of the CLB are a nullity, and therefore, require to be quashed is also sought.

2. Briefly, the petitioners claim to have filed a caveat before the CLB on 10.09.13 in Vikram Bakshi v. Connaught Plaza Restaurants for notice of any hearings scheduled to take place in the matter, and for the provision of all documents tendered by the parties to the CLB. In the caveat application under Section 148A, CPC, at paragraphs 4- 14, the caveat petitioners also sought to establish their interest in the matter, as also indicating an intention to request for impleadment as an intervenor.

3. It is argued that the CLB heard the matter and made orders without the requisite papers being served or made available to the caveators. It is argued that on 11.09.13 one of the parties before the CLB indicated refusal to serve a copy of the petition to caveators on saying that they were not respondents. Subsequent to this, it is argued that a Judicial Member of the CLB, who is also arrayed as a respondent in his personal capacity in the present writ petition, noted in open court that the petition would not be served upon the caveators. This, contend the caveator petitioners, amounted to an impermissible review of the earlier decision of the Bench Officer to register the caveat, which carried with it the requirement that the petition be served (upon the caveator). The petitioners argue that this amounted to the orders of the CLB being a nullity and consequently without force of law. It was specifically urged that upon the caveat being filed on 9.9.2013, the Bench Officer indicated acceptance; the Chairman could not have then assigned the matter to a CLB member. Reference was made to Regulation 32 of the Company Law Board regulations to say that in such circumstances, if anyone had a grievance, an appeal under Regulation 32 (2) had to be preferred by the other party. In its absence, stated the petitioners, the consequences flowing from the caveat and the right inhering from its being lodged could not have been nullified by a single judicial member, who lacked any authority in this regard. Thus, stated the petitioners, all orders having any adverse impact or consequence to them issued without furnishing copies to them, or without hearing them, were a nullity. They require to be quashed.

4. The limited question requiring consideration of this Court for the purposes of this Petition is whether a failure by the CLB to provide notice to the petitioners as caveators under Section 148A of the CPC renders those proceedings, and the orders passed therein, a nullity.

5. The Company Law Board Regulations, 1991 were framed in exercise of powers under Section 10-E of the Companies Act, 1956. These regulations provide for various situations with respect to filing or presentation of petitions and matters before the CLB, their listing, orders to be made, etc. Regulation 32 empowers the Bench officer, subject to general or special directions, to decide upon routine matters pertaining to scrutiny and processing of the petitions and applications filed before the CLB. Some of these determinations are appealable to the Bench, under Section 32(2). Now, there is no specific provision with regard to applicability of Section 148A of the CPC. Therefore, the petitioners contend that the CLB should be directed to frame regulations in that regard. A look at the 1991 Regulations would clarify that they cater to a specific class of proceedings; there is no indication of the applicability of provisions pertaining to caveats. Yet, Regulation 44 entitles the Bench of the CLB, in the given facts of any particular case, to make such ord










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