Company App. Under Stamp No.149 of 2006

4th October, 2006

Petitioner Counsel: Mrs. CARMITA D'COSTA
Respondent Counsel: Mr. J. ABREU LOBO,Mr. IFTIKHAR AGHA,Mr. ABEEZAR FAIZULLABHOY

Cases Cited:
Bais Surgical & Medical Institute Pvt. Ltd. Vs. Dhananjay Pande, 2005(5) Bom.C.R. 434 [Para 3,4]
Stridewell Leathers (P) Ltd. Vs. Bhankerpur Simbhaoli Beverages (P) Ltd., (1994)1 SCC 34 [Para 3,4,5,6,7]

JUDGMENT

N. A. BRITTO, J. :- An appeal against any decision or order of the Company Law Board, in terms of Section 10-F of the Companies Act, 1956 lies before this Court. The short question for our consideration is whether such an appeal is to be entertained by a Single Judge or a Division Bench of this Court?

2. Some bare facts are required to be taken note of to answer the said question.

3. The appellants herein had preferred this appeal against the Order dated 26-9-2005 of the Company Law Board before the learned Single Judge of this Court dealing with the Company matters. By Order dated 7-7-2006, the learned Single Judge, in the light of the Judgment of the Division Bench of this Court in Bais Surgical & Medical Institute Pvt. Ltd. and others Vs. Dhananjay Pande and others (2005(5) Bom.C.R. 434) was pleased to place this appeal before the Division Bench. When the matter came up for hearing before the Division Bench, the learned Counsel on behalf of both the parties were in complete agreement that the jurisdiction to entertain such an appeal was that of the Single Judge. The learned Counsel were also unanimous in their view that the learned Division Bench had failed to notice the context in which the observations in para 13 of the Judgment in Stridewell Leathers (P) Ltd. and others Vs. Bhankerpur Simbhaoli Beverages (P) Ltd., ((1994)1 SCC 34) came to be made in arriving at the conclusion that such an appeal was to be decided by the Division Bench. Likewise, the learned Counsel were also unanimous in their view that the learned Division Bench had overlooked the provisions of Chapter I, Rule 2(1)(a)(v) of the Bombay High Court Appellate Side Rules, 1960 which provide that the hearing of appeals from an order of a judicial or quasi judicial forum under local or special Act lie within the jurisdiction of the learned Single Judge. The Division Bench before whom this appeal came to be placed and to which one of us (Britto, J.) was a party came to the conclusion that the view taken by the learned Division Bench in the case of Bais Surgical & Medical Institute Pvt. Ltd. and others Vs. Dhananjay Pande and others (supra) needed reconsideration and as a result the matter was directed to be placed before the learned Chief Justice to enable him to refer the matter to a Full Bench and that is how the matter has been listed before us.

4. The learned Division Bench in Bais Surgical & Medical Institute Pvt. Ltd. and others Vs. Dhananjay Pande and others (supra) had referred to Stridewell Leather (P) Ltd. And others Vs. Bhankerpur Simbhaoli Beverages (P) Ltd. (supra) and observed that the main question that had arisen in that case was not about the strength of the Bench but was about the territory (sic. territorial) jurisdiction and that the Hon'ble Apex Court had held that the High Court within whose territorial jurisdiction the registered Office of the Company was situated was the Court which had jurisdiction and not the place within whose jurisdiction the Company Law Board (CLB) or its Bench was located. At the same time, the learned Division Bench observed that the question as to the Bench strength was also addressed, discussed and the Lordships of the Apex Court had pointed out even on this point, and, these observations were contained in para 13 and the dictum was that the jurisdiction to hear and decide the appeal under Section 10-F of the Companies Act shall lie before the Division Bench.

5. Since the decision of the learned Division Bench proceeds on the observations of the Apex Court in the case of Stridewell Leathers (P) Ltd. Vs. Bhankerpur Simbhaoli Beverages (P) Ltd. (supra) it would be advantageous to reproduce the said observations.

"13. It may be mentioned that the original jurisdiction to try a petition for winding up a Company continues to remain in the High Court concerned even though the original jurisdiction in respect of the petition under Sections 397 and 398 is transferred to the Company Law Board. It is obvious that the appeal against an order made by the Company Judge of the High Court in a winding up petition continues to lie before a Division Bench in the same High Court. If the construction suggested on behalf of the respondents be correct then that High Court would have no jurisdiction to entertain an appeal against the Company Law Board's order while appeal from the Company Judge's order in a winding up petition in respect of the same Company would lie there. This appears to be incongruous. A possible anomaly of this kind would be prevented by taking the view which we have indicated".

6. In Stridewell Leathers (P) Ltd. Vs. Bhakerpur Simbhaoli Beverages (P) Ltd. (supra) the Apex Court was dealing with the question as to the meaning to be given to the expression "the High Court" in Section 10-F of the Act and the controversy was whether the High Court to which the appeal lies under Section 10-F from an order of the Company Law Board is the High Court having jurisdiction in relation to the place in which the registered Office of the Company is situated or it is the High Court having jurisdiction in relation to the place in which the Company Law Board makes the order under appeal. After observing, inter alia, that the forum of appeal indicated in Section 10-F is a definite forum determined by the provisions of the Act and not by the regulations framed by the Company Law Board under Section 10-F(6) or the place of its sitting under the regulations, the Apex Court held that the expression "the High Court" in Section 10-F of the Act meant the High Court having jurisdiction in relation to the place at which the registered Office of the Company concerned is situated as indicated by Section 2(II) r/w Section 10(1)(a) of the Act. The Apex Court then proceeded to hold that in that case the appeal under the order of the Company Law Board would lie in the Madras High Court which had jurisdiction in relation to the place at which the registered Office of the Company concerned was situated and not the Delhi High Court merely because the order was made by the Company Law Board at Delhi.

7. In our view, the observations made by the Apex Court in para 13 of Stridewell Leathers (P) Ltd. Vs. Bhakerpur Simbhaoli Beverages (P) Ltd. (supra) were made in an entirely different context. They were in the context of appeals being filed from the decision of the Single Judge to the Division Bench and not from the Company Law Board to the Division Bench. In our view no dictum can be culled out from the observations of the Apex Court in para 13 of the learned Judgment in the case of Stridewell Leathers (P) Ltd. Vs. Bhakerpur Simbhaoli Beverages (P) Ltd. (supra) to support a view that an appeal from a decision of Company Law Board will lie to the Division Bench of this Court. It is well settled that a case is an authority for what it actually decides and not for what logically follows from it. The learned Division Bench also overlooked the provisions of Chapter I, Rule 2(1)(a)(v) of the Bombay High Court Appellate Side Rules, 1960 which provide that it is a Single Judge which is required to entertain and dispose of an appeal from order under local or special Acts not having the force of a decree. That being the legal position, we are of the considered view that an appeal from a decision or order of the Company Law Board, filed under Section 10-F of the Act, is required to be entertained and disposed of by a Single Judge and not by the Division Bench. The question raised is answered accordingly.

8. In the light of that, the appeal is now required to be returned to the learned Single Judge dealing with Company matters to dispose of the same in accordance with law.

Questions answered accordingly.