Sanjib Banerjee, J. - (1.) THE authority of the Company Law Board ('CLB') to receive a standalone petition under section 247(1A) of the Companies Act, 1956 has been called into question in this appeal under section 10F of the Act. Indeed, the interpretation hinges on the purport of the expression "in the course of any proceedings before it" that appears in the relevant provision. The CLB is of the opinion in the judgment and order impugned dated 29th May, 2012 that in the absence of the word 'other' before the word 'proceedings' in the relevant expression, an independent petition under section 247(1A) may be carried before it for an order of investigation thereunder. Though the facts are almost irrelevant in the quest for an answer to the pristine legal issue, it may only be noticed that the petitioner before the CLB claimed to be a creditor of the appellant -company and alleged that the business of the appellant -company was being conducted to defraud the creditors of the company and such conduct warranted an investigation to discover "the true and actual persons behind the....company" since "its control and its policies" were not known and "corporate cross -holdings" were in place to conceal the identities of those who were able to control or materially influence the policy of the company. The opinion of the CLB was rendered on an application in the nature of demurer filed by the company.
(2.) THE respondent's petition before the CLB referred, in its cause -title, to both section 247 and section 237(b) of the Act and summarised the purport of the application in the following words: Petition under section 247 along with section 237(b) of the Companies Act for investigation of ownership of the respondent -company as well as appointment of inspectors to investigate the affairs of the company. The reliefs claimed by the respondent in its petition before the CLB were: (a) to appoint inspectors to investigate the ownership of the respondent -company to see who are really in control of the respondent -company, (b) to order investigation by the Central Government into the affairs of the respondent -companies and their promoter directors, (c) to freeze and/or maintain the accounts of the respondent -company, (d) to make the present Board defunct and appoint neutral directors, and (e) pass such order and further orders, as this hon'ble Board may deem fit and proper in the facts and circumstances of the present case. It is necessary, at the outset, to refer to the provisions invoked by the respondent before the CLB: 237. Investigation of company's affairs in other cases. - Without prejudice to its powers under section 235, the Central Government - (a) shall appoint one or more competent persons as inspectors to investigate the affairs of a company and to report thereon in such manner as the Central Government may direct, if - (i) the company, by special resolution; or (ii) the court, by order, declares that the affairs of the company ought to be investigated by an inspector appointed by the Central Government; and (b) may do so if, in the opinion of the Company Law Board, there are circumstances suggesting - (i) that the business of the company is being conducted with intent to defraud its creditors, members or any other persons, or otherwise for a fraudulent or unlawful purpose, or in a manner oppressive of any of its members, or that the company was formed for any fraudulent or unlawful purpose; (ii) that persons concerned in the formation of the company or the management of its affairs have in connection therewith been guilty of fraud, misfeasance or other misconduct towards the company or towards any of its members; or (iii) that the members of the company have not been given all the information with respect to its affairs which they might reasonably expect, including information relating to the calculation of the commission payable to a managing or other director or the manager of the company. 247. Investigation of ownership of company -.... (1A) Without prejudice to its powers under this section, the Central Government shall appoint one or more inspectors under sub -section (1), if the Company Law Board, in the course of any proceedings before it, declares by an order that the affairs of the company ought to be investigated as regards the membership of the company and other matters relating to the company, for the purpose of determining the true persons - (a) who are or have been financially interested in the success or failure, whether real or apparent, of the company; or (b) who are or have been able to control or materially to influence the policy of the company....
(3.) THE appellant shows that sections 235 to 251 of the Act have been clustered in a separate segment entitled 'Investigation'. The appellant advocates that the scope of the provisions in such segment should be contextually interpreted. The appellant submits that the powers conferred under these sections bunched together in the statute at the end of the general provisions relating to the management and administration of companies should be seen as a whole and no part thereof, or a sub -section or clause from any section, be seen in isolation. The appellant says that the nature of the petition carried by the respondent to the CLB and the purport thereof have to be seen not in the light of the provisions invoked at its head but by the spirit of the orders sought in its tail. The appellant contends that notwithstanding section 237(b) of the Act having been referred to atop the respondent's petition, if the prayers made therein did not conform to such provision, the mere reference to section 237(b) of the Act would not make such provision applicable to the matter. If then, the appellant submits, the petition has to be regarded as one made only under section 247(1A) of the Act, it would be incompetent since the expression "in the course of any proceedings before it" appearing in the relevant provision indicates to the authority there under being exercised in any pending proceedings, whether suo motu or upon an application by a party thereto, and the power there under cannot be invoked by way of any standalone, independent petition which is unconnected to any proceedings pending before the CLB.;