- (1.) The authority of the Company Law Board (CLB) to receive a stand-alone 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 May 29, 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.
(2.) 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.
(3.) 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 Sec 247 alongwith Sec 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. " ;