Hc Denies Stay To Shaw Wallace On Clb Order

Shaw Wallace & Company (SWC) failed to obtained a stay from the Calcutta High Court on Thursday against the Company Law Board's order to nominate a representative from financial institutions on the board of the company within a stipulated period of 10 days of the order being passed.

The Principal Bench of the CLB had passed the order on January 21,1998.

Manu Chhabria-managed SWC filed the appeal yesterday before the Division Bench of Justice S K Sen and Justice N A Chaudury under section 10 F of the Companies Act 1956.

While moving the appeal in the division bench, Anil Dewan, P C Sen, Tarun Aich and Subhransu Ganguly, counsel for SWC stated that the CLB has no power to pass any interim order in the petition filed by the central government under section 408 of the Companies Act. The counsel argued the order should be stayed as the order is without jurisdiction.

 

Additional solicitor general Anindya Mitra appeared for the CLB and opposed the appeal and argued that before passing any order the court should hear out the case. The bench fixed appeal for hearing on February 26 and observed that the question of passing any order on the appeal will be consider on that day.

The bench further observed that the order was passed on January 21, and FIs already nominate its representative so SWC should have come earlier to challenged the order in the court.

The counsel for SWC further stated that section 408 of the Act does not contain any provision for passing any interim order or direction. It was also contended that the order of appointment of P K Pandit in the board of SWC by CLB was wholly unwarranted as the CLB had nominated two directors on the board of SWC and their views and requirements were invariably being carried out and given effect to by the SWC. The order of CLB was contrary to the provisions of the constitution of the SWC as embodied in its Articles of Association, the counsel added.

The central government by an application filed in the CLB sought for initiating proceeding against SWC for violating the CLB's order dated Sept 27,1996 by which CLB directed there should be always be a nominee of the financial institution on the board of SWC. In the application central government stated that P K Pandit who was a nominee director of the FI's was not re-elected in the AGM of SWC held on December 30, last due to the negative votes cast by SWC group. This action of SWC was a clear violation of the CLB's September 97 order.