Bikki Raveendra Babu, Member - (1.) The original respondents in TP No. 94/2016 filed this application seeking to annul the appointment of hon'ble Shri Justice Ramesh A. Mehta (Retd.) as independent observer and instead appoint another independent observer to supervise the sale of assets of the first respondent-company and for a direction to original petitioners not to obstruct the process of sale of assets of company in any manner whatsoever and abide by the directions of the Company Law Board ('CLB') in the order dated 11th May, 2015. The parties in this order are referred to as they are arrayed in the TP N. 94/2016 as original petitioners and original respondents for the sake of convenience.
(2.) The following are the facts that led to the appointment of hon'ble Shri Justice Ramesh A. Mehta (Retd.) as independent observer to closely monitor the process of sale of the assets of the first respondent-company and ensure that the same fetch the maximum price.
(3.) The original petitioners who are having 13.86 per cent of paid-up share capital of the first respondent-company alleged certain acts of oppression and mismanagement in the conduct of the affairs of the first respondent company by the original respondents. The original petitioners sought for an interim relief restraining the respondents from in any manner alienating the assets of the company. The hon'ble Member of the CLB while considering the said interim relief after hearing both sides, passed an elaborate order on 11th May, 2015. The relevant portion of the order dated 11th May, 2015 passed by the hon'ble Member of the CLB is as follows: "Having given my serious thoughts to both the aforesaid elements required for grant of interim relief I am of the opinion that the proposition advanced by the learned senior counsel appearing on behalf of the respondents that the CLB should not interfere in the commercial decision taken by the company, has substance. Time and again it has been held that the CLB should refrain itself from stepping into the shoes of the management of the company which is best in position to assess and evaluate the requirement of the company's benefit and eventually for the benefit of its shareholders. The duty of the CLB is to keep a watch on the company's decision/action and scrutinise it as to whether the impugned decision action is wrongful, harsh, burdensome, unfair and lacks in probity and, thus, oppressive to the aggrieved shareholders and to do justice between the parties by passing appropriate directions to bring an end to the acts of oppression and mismanagement complained of I, therefore, would like to refrain myself from interfering in the decision of the company as to the sale of its assets which obviously is likely to take enough time and during this period, I believe the CLB would be able to examine all other aspects. However, taking into consideration all the facts and circumstances and in keeping in mind the paramount interest of the company and to balance the equity, I hereby dispose of the interim reliefs with the following directions: ORDER (a) The petitioners are directed to disclose, by way of an affidavit, together with necessary documents, the entire particulars of the investments made by the petitioner No. 6 in SVL. The names of the directors and the shareholders of the SVL shall also be provided by the petitioners on an affidavit. (b) The company may proceed to take necessary steps for sale of its assets as decided by its Board of directors preferably in phases and in a strategic manner, applying the principles governing the corporate governance under supervision of an independent observer, who will closely monitor the process of sale of the assets of the company and ensure that the same fetch the maximum price. For this purpose, the parties are granted time-to-suggest a name of an independent observer by consensus, failing which the Bench may nominate an independent observer for the said purpose on the next date fixed. (c) The company shall get the approval of sale of the assets from its shareholders as required in law. (d) In the event, the company gets a prospective buyer(s), the petitioners will be given an opportunity to match the offer of their prospective buyer(s) within thirty days thereof and the assets of the company shall be sold to the person(s) offering best price.";