Allowed

M/S Aar Kay Chemicals Pvt. Ltd. & Ors. v. M/S a P Refinery Pvt. Ltd. & Ors.

Punjab & Haryana HC20 Mar 2013CAPP/32/2012

Case brief

AI extract

What is this about?

This appeal concerned the Company Law Board's inaction on an appellant's prayer to inspect the respondent company's accounts and minute books. The High Court allowed the appeal in part, directing the Board to facilitate joint inspection of relevant records pending the main dispute, leaving the specific determination of relevancy to the Board.

What did the court decide?

The order dated 20.11.2012 passed by the Company Law Board is modified; the Board is directed to produce original records for joint inspection and decide the main dispute thereafter.

M/S Aar Kay Chemicals Pvt. Ltd. & Ors. Vs M/S… — Company and Corporate | Punjab & Haryana HC (2013)

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CAPP-32-2012 (O&M) Date of Decision: 20.03.2013

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M/s Aar Kay Chemicals Pvt. Ltd. & Ors. . . . . Appellants

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VS.

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M/s AP Refinery Pvt. Ltd. & Ors. . . . . Respondents ****

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Present: Mr. Vibhu Bhakru, Senior Advocate with Messrs Ranjana Roy Gawai, Tushita Ghosh, Aashish Chopra, GS, Sullar, Advocates for appellants

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Mr. Chetan Mittal, Senior Advocate with Mr. Alok Kumar Jain, Advocate for the respondents

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(1). This appeal is directed against the following order dated 20.11.2012 passed by the Company Law Board, New Delhi (in short, ‘the

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Board’):-

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“Learned senior counsel for the respondent sought

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time to file response while undertaking to maintain status quo on shareholdings as on today till the next date of hearing. It was further stated by learned senior counsel that solvent extraction plant which is also a refinery of the company shall not be sold without seeking prior approval of this Board till the next date of hearing.

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Response be filed within six weeks. Rejoinder, if

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any, be filed within two weeks thereafter.

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List on 1.3.2013 at 10:30 am.”

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(2). The appellants’ grievance in this appeal is that notwithstanding a specific prayer made by them before the Board for production and authentication of the Statement of Accounts, Accounts Book and the Minutes Book of the respondent-company, no order in relation thereto was passed, hence their aforesaid prayer is deemed to have been declined. It was in this backdrop that the respondents were called upon to show cause as to why the appellants be not permitted to inspect and authenticate the records of the respondent-company? (3). Learned counsel for the parties were heard at some length on 31.01.2013 and the following order was passed:-

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“Mr. Alok Kumar Jain, learned instructing

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counsel states that the Statement of Accounts/Accounts Book of the respondent-company for the periods commencing from 01.04.2010 to 31.10.2012 as well as the Minute books pertaining to the decisions taken by the Board of Directors from time to time shall be produced in Court on the date fixed.

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List for further consideration on 13.02.2013.” (4). The order passed on 13.02.2013 was to the following effect:-

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“Mr. Mittal, learned Senior Counsel for the respondents states that the Statement of Accounts/Account Books for the period commencing from 01.04.2010 to 31.10.2012 as well as the Minutes

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Books pertaining to the decisions taken by the Board of Directors, have been brought and the same can be jointly inspected by Mr. Aashish Chopra and Mr. Alok Kumar Jain, along with authorized representatives of the parties.

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List on 28.02.2013.”

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(5). It was informed on behalf of the appellants on 28.2.2013 that the original records agreed to be produced on 31.01.2013 were actually not made available at the agreed venue for joint inspection by learned counsel for the parties along with their authorized representatives. Taking notice of the aforesaid contention that this Court passed the following order on 28.02.2013:-

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“It is stated by counsel for the appellants that the Statement of Accounts/Accounts Book for the periods from 01.04.2010 to 31.10.2012 or the Minute books containing the decisions taken by the Board of Directors which the respondents agreed to produce for joint inspection, were actually not produced for such inspection as per the orders dated 31.01.2013 and 13.02.2013.

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The matter is stated to be listed for 01.03.2013 before CLB.

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Keeping in view the above-stated categoric plea taken on behalf of the appellants, the respondents are

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directed to produce the afore-stated records before the CLB on the date fixed or any other subsequent date to facilitate joint inspection of such records.

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The Board may accordingly grant one more opportunity to the parties to complete the pleadings after such inspection.

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Post again on 20.03.2013.”

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(6). The appellants have moved CA-12-13-2013 for initiating contempt of Court proceedings as the respondents are said to have willfully and deliberately breached their undertaking/settlement made before this Court on 31.01.2013. According to the appellants, instead of the ‘relevant’ records which the respondents are obliged to produce in terms of the order dated 31.01.2013, they brought only a few documents for inspection, the details whereof are mentioned in the Minutes of Meeting held in the office of Mr. Aashish Chopra, Advocate on 14.02.2013 and which have been appended as Annexure A4 (colly) along with the application.

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(7). Counsel for the respondent, on the other hand, states that the ‘relevant’ documents would comprise those records only which are relevant to the ‘issue’ pending before the Board and not the entire record which the appellants insist on inspecting or authenticating for a fishing enquiry.

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(8). Having heard learned counsel for the parties and in the light of the stand taken by the respondents on 31.01.2013, there can indeed

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be no doubt that the appellants are entitled to inspect the ‘relevant’ records comprising the Statement of Accounts, Accounts Book as well as Minutes Book containing the decisions taken by the Board of Directors of the respondent-Company. However, the determination of the relevancy of the documents/record can be left to the discretion of the Board before whom the principal dispute is still pending consideration. The nature of lis would guide the Board for determining the relevancy of records/documents.

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(9). Consequently, the appeal is allowed in part and the order under appeal dated 20.11.2012 passed by the Board is modified to the extent that the respondents shall produce the above-mentioned original records before the Board on 16.04.2013. Before deciding the matter on merit, the Board would ensure that all the relevant documents/record to which the appellants are found entitled to inspect and authenticate are produced and the needful done. After providing the copies of relevant records to the appellants and giving reasonable opportunity to the parties to complete their pleadings, the Board shall decide the main dispute.

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(10). In case the respondents do not have any record(s) for production, they shall be at liberty to take such a plea before the Board. (11). Ordered accordingly. Dasti .

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M/S Aar Kay Chemicals Pvt. Ltd. & Ors. v. M/S a P Refinery Pvt. Ltd. & Ors.

Case brief

What is this about?

What did the court decide?

M/S Aar Kay Chemicals Pvt. Ltd. & Ors. v. M/S a P Refinery Pvt. Ltd. & Ors.

Case brief

What is this about?

What did the court decide?

What the court decided

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