Tuesday, November 4, 2014

Takeover option wasn't available to petitioner as he failed to exercise it within 15 days of order of CLB

Where pursuant to CLB's order petitioner exercised takeover option of respondent-company, as a relief to bring an end to acts of oppression and mismanagement, beyond 15 days from date of relevant orders of CLB and High Court, such option was no more available


a)While disposing of oppression and mismanagement petition the Company Law Board directed petitioners to takeover the respondent-company and to communicate their decision to the respondents within 15 days from the date of the CLB’s order.

b)However, the petitioners did not exercise the option within 15 days, instead filed an appeal before the High Court. Consequently, the appeal was dismissed and a certified copy was delivered to the petitioner.

c)Thereafter, the petitioner within two days of the receipt of a copy of the High Court's order (but beyond 15 days of final order of High Court), sent a letter to the respondents exercising its option to take over the respondent-company.

d)The petitioner contended that there was no delay on his part in complying with the directions to exercise his option within 15 days as he had exercised the option with two days of receipt of copy from the High Court and was, therefore, entitled to enforcement of CLB’s order to takeover the respondent-company.

The Company Law Board held as under:

1)In view of the fact that Counsel of the petitioner was present before the CLB and before the High Court on the date of the order dismissing the appeal, the knowledge thereof on such dates to the petitioner could safely be inferred.

2)Since no appeal was preferred by the Petitioner against the order High Court, the date of receipt of certified copy of the said order would lose significance and, therefore, the petitioner should have exercised the option within 15 of final order of High Court.

3)Even though the petitioner was in knowledge of respective orders on same date, yet he failed to exercise option within 15 days from date of CLB order as well as final order of High Court, thus, takeover option would no more be available to petitioner. – DR. RAJ KACHROO V. D.S.M. HEALTHCARE (P.) LTD. [2014] 50 TAXMANN.COM 233 (CLB - NEW DELHI)