- (1.) In this appeal, under challenge is an order of the Company Law Board (CLB) passed on 17th June 2011, in an application, registered as C.A. No. 302/2011, seeking certain interim reliefs. The application was taken out by the petitioners in C.P. No. 1 of 2010, (the main petition) which is pending for final adjudication before the CLB. The respondent nos. 1 to 6, who instituted both the proceedings before the CLB have made various allegations over mismanagement of the affairs of Birla Corporation Ltd. I shall refer to them as petitioners later in this judgment. There are also allegations of conducting affairs of the company in a manner prejudicial to public interest, causing oppression to the members of the company. On behalf of the appellants such allegations have been denied. The appellants have attributed motive behind institution of the original proceeding, C.P. No. 1 of 2010. There is an ongoing dispute of the respondent no. 2 over succession to the estate of Priyamvada Devi Birla (PDB), widow of late M.P. Birla. That dispute originates from an application for grant of probate of a Will said to be the last Will of PDB, which was filed by Rajendra Singh Lodha (since deceased), as the executor of the said Will. Now the said proceeding is being prosecuted primarily by the respondent no. 2, being the younger son of late Rajendra Singh Lodha. A Division Bench of this Court A.P.O.T. No. 551 of 2010 arising out of PLA No. 242 of 2004 has appointed a three member panel as Administrators pendente lite (APL) over the estate of PBD. In the main proceeding before the CLB, the petitioners have applied in substance for supersession of the Board of Directors of the appellant company. Several applications have been filed from time to time seeking interim reliefs concerning operations of the said company in connection with the said proceeding. Before I refer to the finding of the CLB in the impugned judgment, I consider it necessary to refer to substance of the allegations and rebuttal thereof before the CLB.
(2.) The application out of which the present appeal arises was registered as C.A. 302 of 2011. The main grievance of the respondents/petitioners in that application stems from a notice for postal ballot notice dated 28th April, 2011, for the purpose of passing a special resolution for amending the object clause contained the memorandum of the company permitting it to commence a new line of business. It was proposed to introduce two new clauses in the memorandum, 17(O) and 17(P) in the object clause of the company in the following terms:- "(17O) To undertake the business as general traders and merchants, and buy, sell, export, import, deal in commodities, goods, things, contracts of all types, to deal in any commodity market, commodity exchange, spot exchange, for itself or for others, transaction in the nature of hedging, spot trading, forward commodity contracts, rate swaps, commodity future/swaps, commodity options, futures and options and in derivatives of all the commodities, whether for the purpose of trading, investment, hedging, arbitrage, or any other purpose, whether in India or abroad and to undertake the activity of warehousing and processing as may be required for the aforesaid purpose(s). (17P) To invest, acquire, subscribe, purchase, hold, sell, divest or otherwise deal in securities, financial instruments, financial products, shares, scrips, stocks, equity/index linked securities, units, bonds, commercial papers, acknowledgements, deposits, notes, obligations, warrants, government securities, loans, loan certificates, all kinds of derivatives including interest derivatives, futures, forwards, options, calls, swaps, rights or interest in securities, foreign currencies, carbon credits financial securities and any other securities issued by any entity whether for the purpose of hedging, arbitrage, or for any other purpose."
(3.) In the said application, the right of the respondent No. 7 in this appeal (HVL) to continue as a director in the company has also been questioned and additional prayer is for freezing of voting rights in respect of 62.9% shares of the company which was earlier controlled by PDB through different commercial entities. On behalf of the appellants, certain element on inconsistency in describing source of control of 62.9% shares of the company on the part of the petitioners have been referred to. In the main petition, petitioners have alleged that these shares belong to certain charitable trusts and societies. According to the appellant, in C.A. No. 302, it has been stated that these shares form part of estate of PBD. I am not addressing this question in this judgment as the petitioners have framed the action as a petition by minority shareholders only, and the instant appeal being an appeal from an order in an interlocutory proceeding, I do not think I ought to examine this issue in detail.;