High Court Allows Government Nominees To Work On Swc Board

The Calcutta High Court Thursday allowed the four central government nominees to function on the board of directors of Shaw Wallace and Company (SWC).

Justice S B Sinha and Justice M H S Ansari dismissed four appeals filed by the liquor major and its Dubai-based chairman M R Chhabria, challenging the order of the Company Law Board (CLB) passed on July 27, 1998.

In that order, CLB had appointed two central government nominees and two its own nominees in the board of the SWC.

The bench, while dismissing the appeals and vacating the ad-interim order passed in the case, imposed cost upon the SWC for the case.

 

However, on the prayer of SWC counsel S B Mookherjee, the bench agreed to stay the operation of the order for 30 days enabling the company to move in the higher forum.

SWC and its Chairman moved four appeals in the division bench of the Calcutta High Court challenging the CLB order.

On December 22, 1998, a division bench had granted an ad-interim stay of CLB order and directed the concern parties to file their respective affidavits.

In July 1999, the central government had filed an application for review of the order of the adinterim stay before the division bench.

The bench had observed that the court would heard out entire apples. After the full hearing of the appeals, the bench delivered its judgement.

SWC submitted that CLB have no jurisdiction to pass such order as there was already government nominees in the board of the company.

Central government and All India SWC Employees Fedaration (AISEF) opposed the appeals.

It was contended by the Central government that CLB had passed the order on July 27, 1998 and in terms of the order nominees were already assumed their office. The Company moved court long after the order was passed and in December 1998, the Court had granted the ad-interim stay. The order of stay should be vacated for the interest of the company, its shareholders. AISEF also opposed the appeals.

The court also dismissed an appeal filed by the AISEF.In this appeal, AISEF sought court's order to appointment of a Receiver for the purpose of lookafter the affairs of the company.The Empolyees also sought court's order to supercede the board of the SWC.

CLB passed its order on July 27, 1998, following an application filed by the AISEF alleging mismanagement in the company.