Ashok Agarwal & Ors v. Amar Ujala Publications Ltd & Ors

INDERMEET KAUR, J. (Oral)

¶1This appeal has impugned the order of the Company Law Board

(CLB) dated 05.10.2012 whereby the application filed by Mr.Ashok Aggarwal and others (hereinafter referred to as the appellants) seeking an amendment under Order VI Rule 17 of the Code of Civil Procedure (hereinafter referred to as the Code) of the petition filed by them under Section 397 read with Section 398 of the Companies Act had been dismissed.

¶2This is the grievance of the appellants. Record shows that a petitioner under Section 397 read with Section 398 of the Companies

Act has been filed by the appellant group against the respondent which is now ripe for arguments and is pending before the CLB. This petition has been filed on 27.10.2009. Almost two years later i.e. on 08.8.2011 an application under Order VI Rule 17 of the Code has been filed by the appellants.

¶3Record shows that Amar Ujala Publication Limited is a company comprising of the Maheshwari Group and the Aggarwal Group; a foreign investor D.E. Shaw Composite Investments had infused capital into the company. Disputes had thereafter arisen between the parties.

¶4Averments contained in the application under Order VI Rule 17 of the Code have been perused. Submission of the appellant is that he is not pressing his plea qua the submission that the aforenoted company was really in the nature of a partnership; he is also not aggrieved by the finding returned by the CLB that Ashok Aggarwal will continue to remain as a director in the company till the disposal of the petition pending before the CLB; his grievance is limited to the submission that Manu Anand, another director, had been noted by the CLB to have retired; submission being that Manu Anand having got the requisite educational qualification was always agreed to be retained as a whole time director and it was an understanding between the parties that his term would be continued to be extended even beyond the initial period of five years; he being an integral part of the management of the company.

¶5Amendment to the said effect has accordingly been sought in para 5 of the petition; the other amendments as detailed in the body of the application have not been pressed.

¶6On advance notice, the respondent has put in appearance. His submission is that the controversy now sought to be raised by the petitioner by filing the present application has been set to rest by the various orders of the CLB and by the High Court; last of which was passed by the High Court on 09.4.2012.

¶7This submission of the learned counsel for the respondent is well substantiated.

¶8On 29.10.2009 the CLB had passed an order that petitioner no.2 Manu Anand shall not be removed as a whole time director of respondent no.1; this was on the undertaking of the respondent that in the Board meeting proposed for 03.11.2009 there will be no change in the interse shareholdings of the parties.

¶9On 20.4.2010 the CLB had noted that Manu Anand had been appointed as a whole time director for a period of five years i.e. w.e.f.

02.4.2005 which period had expired on 01.4.2010; no status quo qua the position of Manu Anand had been granted.

¶10The order dated 20.4.2010 was the subject matter of an appeal before the High Court which was disposed on 31.5.2010. The appeal was withdrawn with liberty granted to the appellant to redress his

grievances before the CLB by fresh proceedings which the respondent was permitted to contest on merits and as per law.

¶11Thereafter an application i.e. C.A. No.385/2010 had been filed by the appellants before the CLB which was disposed of on 03.12.2010 vide which the CLB had directed the appellants to obtain clarification from the High Court before examining the said application.

¶12Appeal against the directions of the CLB dated 03.12.2010 had been disposed of on a consent order dated 01.4.2011. Parties had agreed that the appellant would file an application seeking amendment of his petition where the appellant was permitted to raise all such averments which are permissible under the law with right to the respondent to respond to the same.

¶13It was in this scenario that the application under Order VI Rule 17 of the Code came to be filed on 08.8.2011 which has since been disposed of by the impugned order.

¶14Submission of the respondent that the controversy about the whole time directorship of Manu Anand had already been set at rest by the order of the CLB dated 20.4.2010 and which order has since attained a finality as the appeal against the said order has been withdrawn, is a submission with force. On 20.4.2010 CLB had noted that appointment of Manu Anand expired on 01.4.2010 and no justification was noted for granting status quo qua the position of Manu Anand; appeal against this order had been withdrawn by the appellant on 31.5.2010.

¶15On 09.4.2012 this Court had disposed of the two appeals assailing the interlocutory orders passed by the CLB on 24.9.2010 and

13.10.2011 wherein both the appellants i.e. Ashok Aggarwal and Manu Anand had sought their re-instatement as whole time directors. While disposing of these appeals on 09.4.2012 this Court had noted that it was only an interim arrangement which has been put in place; plea of Ashok Aggarwal that he continued to be as a whole time director till the final hearing of the petition by the CLB had been noted; no relief to Manu Anand has been granted.

¶16By way of the present petition under Order VI Rule 17 of the Code the petitioner is seeking a relief from the CLB which has already been declined by a higher court. All these facts have been noted in the correct perspective by the CLB while rejecting the application for amendment.

¶17An application under Order VI Rule 17 of the Code may be entertained by the Court only if it is necessary for deciding real issue in controversy between the parties. The applicant party must also show to the court that the application has been filed bonafide and not to only prolong the proceedings which appears to be so in the present case. The High Court had set the matter at rest; Ashok Aggarwal had continued to be retained as a whole director of the respondent but the relief sought for by Manu Anand was declined. What the appellant is now trying is to get out of the rigour of those orders by seeking an amendment which would in fact be contrary to the order passed by this Court on 09.4.2012.

No amendment is permissible which is prejudicial to the other party; a prayer which would amount to an obstruction of substantial justice cannot be granted. Impugned order had noted these contentions; sound reasons have been detailed for disallowing the amendment which order in no manner calls for any interference.

¶18Reliance by the learned counsel for the appellants upon the judgment 1957 AIR 357 L.J.Leach and Company Ltd. Vs. Jardine Skinner and Co. and the judgment in Appeal (Civil) 4983-4984 of 2004 Pankaja & Anr. Vs. Yellappa (D) disposed of by Supreme Court on

05.8.2004, is misplaced. There is no doubt that the law of amendment should be liberally construed and where it does not change the nature of the case the same may be permitted.

¶19The facts of the instant case are distinct. As noted supra, if the amendment as sought for by the appellants is allowed it would be in derogation of the order already passed by this Court setting the controversy at rest qua the role of Manu Anand.

¶20The present appeal is nothing but an abuse of the process of the Court. It is dismissed with cost of Rs.25000/-.

INDERMEET KAUR, J DECEMBER 17, 2012 nandan

* IN THE HIGH COURT OF DELHI AT NEW DELHI % Date of Judgment:17.12.2012 + CO.A(SB) 103/2012 ASHOK AGARWAL & ORS ..... Appellants Through: Mr.Yatish Mohan, Advocate. versus AMAR UJALA PUBLICATIONS LTD & ORS ..... Respondents Through: Mr. Vibhu Bakhru, Sr. Advocate with Mr.ArunKathpalia, and Mr.P.R.Rajhans, Advocates for R-1 to R-7. Mr.Shank Sengupta and Ms.Priyani Deep Shah, Advocates for R-8,9 and 10. CORAM: HON'BLE MS. JUSTICE INDERMEET KAUR