Noticeably in the face of the undertaking given by the appellants and the pendency of the demerger proceeding separately before the High Court, in our view, there did not exist any searing urgency to substitute the existing Board of Directors as done and to continue with it till the disposal of the suit and at the same time to keep the proceeding of the CLB pending till then. This is more so, as can be culled from the order dated 6.8.2014 of the CLB, the status of the respondent No.1 as Executive Director of the Company has been secured and further alienation of the assets of the company, otherwise has been restrained. Assuredly, these are based on undertakings before the CLB as given by the appellants, the contesting Directors and the CLB having taken note thereof, the same are as good as binding directions on the parties. The aspect of demerger as adverted to hereinabove, is the subject matter of adjudication in a separate proceeding on which, at this stage, no observation is called for. Suffice it to state however, that the aspect of demerger for the present cannot ipso facto be an impelling factor to conclude in favour of allegation of oppression and mis-management as made by the respondent No. 1. In the wake up of above, we feel persuaded to interfere with the impugned decision of the High Court, without observing any final opinion on the merit of the contrasting assertions. In our comprehension, having regard to the relief provided by the CLB by its order dated 6.8.2014 to the parties, it ought to be left to decide the petition on merits after affording them a reasonable opportunity of furnishing their pleadings. As in the course of hearing, some grievance was expressed on behalf of respondent No. 1 that her status as the Executive Director of the company, stands undermined due to uncalled for surveillance imposed at the instance of the existing Board of Directors, we make it clear, as has been assured before us, that she ought to be allowed to function in the aforesaid capacity being provided with all facilities and privileges attached to the office as permissible in law, so much so that she does not have any occasion to complain in this regard. This indeed ought to be in accord with the letter and spirit of the undertaking offered by the Board of Directors to the CLB. The respondent No. 1 too would cooperate in the day to day management of the affairs of the company in her said capacity. The existing Board of Directors would also abide by the undertaking as recorded in the order dated 6.8.2014 of the CLB qua the alienation of the assets of the company. The set-up of the Board of Directors and the arrangement vis-a-vis the administration of the affairs of the company, as was existing on the date on which the order dated 6.8.2014 was passed by the CLB, would continue until further orders by it. The CLB is, however, directed to dispose of the proceeding before it as expeditiously as possible. As the suit filed by the respondent No. 1, as noted hereinabove, is also pending, we hereby direct the Civil Court before which it is pending, to deal with the same with expedition as well, so as to provide a quietus to the lingering family discord in the overall well- being of the company and its constituents. Before parting, we need to take note of the submission of Mr. P.P. Rao, learned senior counsel appearing for Mr. G.V. Rao that the averments made in sub-paragraph 2 of the counter-affidavit filed by the respondent No. 1 at page 720 thereof besides being utterly incorrect and defamatory are liable to be effaced from the records. We are of the considered view that this assertion needs to be sustained. We thus, expunge these averments being wholly inessential for deciding the issues involved. The appeals are, thus, allowed in the above terms. The CLB and the Civil Court would decide the proceedings before them on their own merits, without being in any way influenced by any observation made herein. No costs.

                                                                (REPORTABLE)
                        IN THE SUPREME COURT OF INDIA
                        CIVIL APPELLATE JURISDICTION
                    CIVIL APPEAL  NO.  8275      OF 2015
                [ARISING OUT OF S.L.P. (C) NO. 12831 OF 2015]

PURNIMA MANTHENA AND ANOTHER     …..APPELLANTS
                 VERSUS
DR. RENUKA DATLA & OTHERS           …..RESPONDENTS
                            WITH
                     CIVIL APPEAL NO. 8276      OF 2015
                [ARISING OUT OF S.L.P. (C) NO. 12835 OF 2015

MAHIMA DATLA                               …..APPELLANT
                 VERSUS
DR. RENUKA DATLA & OTHERS           …..RESPONDENTS

                            WITH
                      CIVIL APPEAL NO. 8277     OF 2015
                [ARISING OUT OF S.L.P. (C) NO. 20338 OF 2015

G.V. RAO                                    …..APPELLANT
                 VERSUS
DR. RENUKA DATLA & OTHERS           …..RESPONDENTS



                       JUDGMENT
AMITAVA ROY,J.

            Leave granted.
2.           The  steeled  stand  off  encased  in  the  decision  impugned,
projects the  members  of  a  family,  daughters  against  their  mother  in
particular, in a combative formation in their bid to wrest the  reins  of  a
company, Biological E. Limited (for  short, hereinafter to be   referred  to
as “the company”) engaged in the business  of  pharmaceutical  products  and
vaccines.  The differences  that had surfaced soon after the demise  of  Dr.
Vijay Kumar Datla, the  predecessor-in-interest  of  the  contending  family
members, who at his death, was the Managing Director of  the  company,  have
grown in acrimonious content with time, stoked  by  the  intervening  events
accompanied by a host of litigation.  The  present  appeals  stem  from  the
judgment and order dated 15.4.2015 rendered by the High Court of  Judicature
at Hyderabad, for the State of Telangana and State  of  Andhra  Pradesh,  in
Company Appeal No. 17 of 2014 preferred by  the respondent Nos. 1, 2  and  3
herein,  under  Section  10F  of  the  Companies   Act,  1956   (for   short
hereinafter to be referred to as  “the  Act”)   assailing  the  order  dated
6.8.2014 passed  by  the  Company  Law  Board,  Chennai  Bench  (for  short,
hereinafter to be referred to as “CLB”) in Company Petition No. 36  of  2014
filed by them.
While  entertaining  the  instant  appeals,  this  Court  by   order   dated
12.5.2015, having regard to the considerations referred to  therein  and  as
accepted by the learned counsel for the parties, did make  an  endeavour  to
effect an amicable settlement through  mediation  which,  however,  did  not
fructify.  The learned counsel for the parties, as is recorded in the  order
dated 21.7.2015, on instructions, vouched that  the  day-to-day  functioning
of the company, however would be allowed to continue.  The appeals, in  this
backdrop have, thus, been analogously heard on merits  for disposal.
We have heard Mr. P.S. Raman, learned senior  counsel for the appellants  in
 Civil Appeal arising out of S.L.P. (C)  No. 12831 of 2015   (who  are  also
respondent Nos. 4 & 5 in SLP (C) No. 12835 of 2015  and 5 &  6  in  SLP  (C)
No. 20338 of 2015),   Mr.  Shyam  Divan,  learned  senior  counsel  for  the
appellant in Civil Appeal arising out of S.L.P. (C)  No. 12835 of 2015  (who
is also respondent No. 5  and 4 in SLP (C) No. 12831 of 2015   and  SLP  (C)
No. 20338 of 2015 respectively), Mr. P.P. Rao, learned  senior  counsel  for
the appellant in Civil Appeal arising out of S.L.P. (C)  No. 20338  of  2015
(who is also respondent No. 6 in  S.L.P. (C)  Nos. 12831 of 2015  and  12835
of 2015) and M/s.  Parag P. Tripathi and  Sajan  Poovaiah,   learned  senior
counsel  for  Dr.  Renuka  Datla  (  respondent  No.  1  in  all  the  three
Appeals).
5.          Since the judgment under challenge is same in all the   appeals,
 for the sake of convenience,  the facts  are being taken from Civil  Appeal
arising out of S.L.P. (C) No. 12835 of 2015.
6.          A skeletal  account  of  the  facts  in  the  bare  minimum,  as
available presently on  the  record,  would  outline  the  contours  of  the
respective assertions.
7.          The company, which was  initially  promoted  by  the  father  of
respondent No. 1, with time took in its  fold,  Mr.  Venkata  Krishnam  Raju
Datla, the father of Dr. Vijay Kumar Datla (since deceased  and  husband  of
respondent No.1).  After the demise of the father of  respondent No. 1,  Dr.
Vijay Kumar Datla, who was  inducted as  the Chairman and Managing  Director
of the company  on  1.5.1972  stewarded,  nurtured  and  nourished  it  from
strength to strength.  The respondent No. 1, his wife, joined him  initially
as a Medical Director, as she  is   a  qualified  medical  professional  and
w.e.f. 29.8.1991, was drafted in as the Executive Director of  the  company.
Dr. Vijay Kumar Datla, who continued as the  Chairman-cum-Managing  Director
of the company over the years, expired on 20.3.2013 and at  his  death,  he,
respondent No. 1  and  Mr.  G.V. Rao  (respondent No. 6) did constitute  the
Board of Directors of the company.  Noticeably Dr.  Vijay  Kumar  Datla,  in
his individual capacity, then did hold 81% of the shares thereof.
8           As the facts evince, Mr. G.V. Rao (respondent  No.  6)   offered
his resignation as a director vide his letter dated 6.4.2013 with  immediate
effect.  It has been pleaded, however, on behalf of the appellant  that  Mr.
G.V. Rao (respondent No. 6),  on  being  requested  by  the  family  not  to
abandon the company at its hour of crisis,   its  guardian  and  mentor  Dr.
Vijay  Kumar  Datla  having  departed,  did  reconsider  his  decision   and
addressed  another  letter  dated  9.4.2013   to  the  Board  of   Directors
expressing his inclination  to  continue  as  the  Director  of  the  Board,
intimating as well that thereby he was withdrawing  his  resignation  letter
dated 6.4.2013.
9.          On the same day  i.e.  9.4.2013,  a  meeting  of  the  Board  of
Directors was convened by Mr. G.V. Rao,  in the capacity of  a  Director  of
the company, which was attended amongst others, by  the three  daughters  of
the respondent No.1 i.e.  Ms.  Purnima  Manthena  (respondent  No.  4),  Ms.
Indira Pusapati (respondent no. 5) and Ms. Mahima Datla  (appellant).    The
respondent No. 1 did not attend the  meeting  and  as  the  minutes  of  the
proceedings would record, leave of absence was granted to her.  In the  same
meeting, Mrs. Indira  Pusapati  (respondent  No.  5)  was  inducted  as  the
Director of the company to fill up the casual vacancy  caused by  the  death
of  Dr. Vijay Kumar Datla.  Mr. G.V Rao (respondent No. 6), was  authorised,
inter alia, to verify all acts and  deeds  as would be necessary,  expedient
and desirable to give effect to the resolutions adopted.
10          Thereafter, on 10.4.2013 and  11.4.2013  as  well,  meetings  of
the Board of Directors of the company were held.  In  these  meetings  also,
respondent No. 1 did not attend and leave of absence was granted.    In  the
meeting dated 10.4.2013, along with  two  directors  namely;  Mr.  G.V.  Rao
(respondent  No. 6)  and  Ms.  Indira  Pusapati  (respondent  No.  5),  Mrs.
Purnima Manthena (respondent No.  4)  and   Ms.  Mahima  Datla  (appellant),
amongst others, were present.   The  meeting  took  note  of  a  will  dated
14.2.2005, said to be executed by Dr. Vijay Kumar Datla  in  favour  of  Ms.
Mahima Datla (appellant) and resolved to transmit the equity shares held  by
him and as referred to in the aforesaid will, in favour of Ms. Mahima  Datla
(appellant).    In the same meeting, it was further resolved to appoint  Ms.
Mahima Datla (appellant) and Ms. Purnima Manthena (respondent No. 4) as  the
Additional Directors  of the company, to hold the said  office   up  to  the
conclusion  of next annual general meeting.  Mr. G.V.  Rao  (respondent  No.
6), Director of the company was authorised to  verify all  acts,  deeds   as
would  be  necessary,  expedient  and  desirable  to  give  effect  to   the
resolutions adopted.
11          In its next meeting held on 11.4.2013, in which  respondent  No.
1 was absent and leave of absence was  granted  to  her,  Ms.  Mahima  Datla
(appellant) was appointed as the Managing Director of  the  company  for   a
period of three years w.e.f. 11.4.2013.  It was resolved as well to  request
the Chairman to advise  respondent  No.  1  to  officially  communicate  the
appointment of Ms. Mahima Datla (appellant) as   Managing  Director  of  the
company.
Though the pleaded assertion of respondent No. 1 is  that  she  was  neither
noticed nor informed of  the   meetings  held  on  9.4.2013,  10.4.2013  and
11.4.2013 and that the proceedings thereof were a nullity,  as  the  meeting
dated 9.4.2013 could  not  have  been  validly  convened  by  Mr.  G.V.  Rao
(respondent No. 6), who had, prior thereto, resigned from  the  company  and
further that the meeting  dated 9.4.2013 was  sans  the  prescribed  quorum,
the progression of events attest  that  on  15.4.2013,  a  letter  had  been
addressed by her (respondent No. 1)  to the constituent  fraternity  of  the
company, conveying the news  of  appointment  of  her  daughters  i.e.  Mrs.
Purnima Manthena (respondent No. 4), Mrs. Indira  Pusapati  (respondent  No.
5) and Ms. Mahima Datla (appellant) as the  Directors of the Board  thereof,
with  particular  reference  to  the  appointment  of   Ms.   Mahima   Datla
(appellant) as the Managing Director, thereby  seeking  the  “blessings  and
guidance”  of  all  concerned  for  enabling  her   to  discharge  her   new
responsibility.  Respondent No. 1, however, at a later point  of  time,  did
allege exertion of pressure and undue influence by the  other  Directors  to
which she wilted, being in an anguished and forsaken  state of  mind,  still
mourning the sudden demise of her husband, Dr. Vijay Kumar Datla.
While the matter rested  at  that,  the  respondent  No.  1,   Mrs.  Purnima
Manthena (respondent No. 4), Mrs. Indira Pusapati  (respondent  No.  5)  and
Ms. Mahima Datla (appellant)  addressed a letter   dated  24.5.2013  to  the
Board of Directors conveying the decision of  the  members  of  the  HUF  on
consensus to divide 4594 shares  thereof  (HUF)  held  by  Dr.  Vijay  Kumar
Datla, in equal shares.  They also appended to the letter, a  Memorandum  Of
Undertaking   to  this  effect  and  requested  the   company    to   effect
transmission of shares in their favour, on the said basis.
Incidentally on the same day i.e. 24.5.2013,  a  meeting  of  the  Board  of
Directors was convened  in which, as respondent No. 1 was absent,  leave  of
absence was granted to her. In the said meeting, amongst other, taking  note
of the Memorandum Of Understanding referred to in the aforementioned  letter
dated 24.5.2013 signed by the respondent No. 1 and   Mrs.  Purnima  Manthena
(respondent No. 4), Mrs. Indira Pusapati (respondent No. 5)  and Ms.  Mahima
Datla (appellant), 4594 equity shares  held by Dr. Vijay Kumar  Datla  (HUF)
were transmitted in their favour in equal shares.
A meeting of the Board of Directors  was thereafter  convened  on  22.8.2013
 of which a notice was served on the respondent No. 1.  She did  attend  the
meeting albeit with reservations, whereafter  through  a  host  of  letters,
addressed to  the Board of Directors, she highlighted her objections,  inter
alia, to the validity of  the  meetings  held  on  9.4.2013,  10.4.2013  and
11.4.2013 in particular and the resolutions adopted therein.
16.           On the receipt of notice of the Annual General Meeting of  the
company, which was scheduled to be held  on  28.11.2013,  respondent  No.  1
filed an application under Section 409 of the Act  before  the  CLB,   which
was registered as Company Petition No. 1  of  2013,  seeking  principally  a
declaration that  the  appointments  of  her  three  daughters  namely;  Ms.
Purnima Manthena (respondent No. 4), Mrs. Indira  Pusapati  (respondent  No.
5) and Ms. Mahima Datla (appellant) as Directors of the  company  by  virtue
of the meetings held on 9.4.2013, 10.4.2013 and 11.4.2013 to be a   nullity.
 While seeking a further declaration that Mr. G.V. Rao  (respondent  No.  6)
having resigned from the Board of Directors of the company on 6.4.2013  with
immediate effect, he was neither entitled to continue as  the  Director  nor
did he have any authority to convene the  aforesaid  meetings  and  transact
the business therein, she also prayed that all  acts,  deeds  and  decisions
taken in and pursuant to the resolutions in the said  meetings  be  adjudged
to be void and not binding on the company.   Apart from seeking a  permanent
injunction restraining  her three daughters  namely;  Ms.  Purnima  Manthena
(respondent No. 4), Ms. Indira  Pusapati  (respondent  No.  5),  Ms.  Mahima
Datla (appellant) and Mr. G.V. Rao (respondent No. 6)  from  functioning  as
Directors of the company, by  way  of  interim  relief,  she  prayed  for  a
restraint  on the ensuing Annual General Meeting fixed on 28.11.2013 and  to
appoint two ad hoc Directors  for administering  the day-to-day  affairs  of
the company along with her.
17.         By its ruling dated 17.12.2013, the CLB, after  considering  the
rival pleadings and the documents laid before it, observed on a prima  facie
evaluation  of  the  facts  portrayed,   that  the  respondent  No.  1   had
recognised her three daughters  Ms. Purnima  Manthena  (respondent  No.  4),
Mrs. Indira Pusapati (respondent No. 5) as  the  Directors  and  Ms.  Mahima
Datla (appellant)  to be the Managing Director of the company.   It  was  of
the view that, though she received the letter of withdrawal  of  resignation
of Mr G.V. Rao-respondent No.  6,  she  had  not  responded  thereto  either
accepting or rejecting the same.  On an  appraisal of the pleaded facts  and
the documents on record, the CLB returned a finding that there  was  neither
any change in the Board of Directors nor in the management  of  the  company
nor there was any likelihood of change in the ownership of the  company  nor
any likelihood of the new management taking over the company nor any  change
in the shareholding pattern of the company and concluded in the  context  of
Section 409 of the Act that respondent No. 1 had not  made  out  any  ground
for grant of any interim relief, as prayed.   Noting the  assertion  of  the
respondents therein that the company had the  necessary  reserves  to  meets
its debts and that Mahima Datla (appellant herein) had stood as a  guarantor
for the loans obtained from the banks, the CLB was, thus, of the  view  that
the  apprehension  of  the  respondent  No.  1,  as   expressed,   was   not
substantiated by  any  documentary  evidence.  Having   recorded   that  the
respondent No. 1 was continuing  as the Executive Director  of  the  company
and that Mahima Datla (appellant herein) being associated with  its  affairs
was well acquainted therewith and  that   in  the  proposed  Annual  General
Meeting to be held on 18.12.2013 (which  got  deferred  to  this  date  from
28.11.2013), the company was going to transact the  business,  as  notified,
which did not  disclose  any  proposed  change  in  the  management  or  the
ownership or taking over by external agency, the CLB declined to grant  stay
of the said meeting.   This was more so, in view of  the  statutory  mandate
qua  Annual General Meeting of a company under  the  Act.   The   respondent
No. 1  was left at  liberty  to  participate  in  the  said  Annual  General
Meeting and  the  company  was  permitted  to  conduct  the  same  and  take
resolutions as per the notice.  The resolutions to be passed in the   Annual
General Meeting were, however, made subject to the outcome  of  the  Company
Petition No.1  of  2013.
18.          Though the respondent No.1, being aggrieved by this order,  did
prefer an appeal under Section 10F of the Act being Company Appeal No. 1  of
2014, she participated in the Annual General Meeting held on  18.12.2013  in
which,   resolutions   on   the   appointment   of   the    appellants    as
Directors/Managing Director  and amongst others, the  enhanced  remuneration
of respondent No. 1 were  adopted.   Eventually  on  24.2.2014,  the  appeal
stood disposed of as infructuous on the concurrence of the parties  to  join
for the necessary endeavours for early disposal of the Company Petition  No.
1 of 2013.
19          Close on the heels of the disposal of aforesaid  Company  Appeal
No. 1 of 2014, the respondent No. 1  instituted a suit being  O.S.  No.  184
of  2014  in  the  Court  of  Chief  Judge,  City  Civil  Court,   Hyderabad
substantially  traversing  the above  facts  and  seeking  a  decree  for  a
declaration to be the absolute  owner  of  the  shares  of  the  company  as
enumerated in Schedule A to the plaint, on the strength of  a  will  claimed
to have been  executed in  her  favour  by  Dr.  Vijay  Kumar  Datla  (since
deceased) and  a direction to the defendants therein to  transfer  the  same
by recording her name in relation thereto and to hand over   the  possession
of  the  share  certificates  to  her.   Her  alternative  prayer,   without
prejudice to this relief, was for delineating her extent of  claim   to  the
shares in the capacity of a working spouse/widow of  late  Dr.  Vijay  Kumar
Datla.
20           As the flow of the developments thereafter  would  demonstrate,
the respondent No. 1 withdrew the Company Petition No. 1 of  2013  in  July,
2014 with a liberty  to  approach  the  appropriate  forum  for  appropriate
reliefs in a manner known to law. The Company Petition No.1  of  2013,  was,
accordingly closed.
21          The respondent No. 1, in her renewed pursuit  for  redressal  of
her grievances as perceived by her, next instituted another petition  before
the CLB,  which was registered as Company Petition  No.  36  of  2014  under
Sections 111A, 237, 397,398,402,403,404,406 of the Act, 1956   and  Sections
58 and 59 of the Companies  Act,  2013.   As  the  pleaded  assertions  made
therein would attest, those were in substantial reiteration  of  the   facts
 narrated  hereinabove, with  the  added  imputation  that  the  respondents
therein were contemplating   to  transfer  and  consign   the   undertakings
of   the  company  to  other  companies  incorporated  and  managed  by  the
appellant herein and other Directors so as to enable  them,  to  dispose  of
the said assets through their companies  and  appropriate  the  proceeds  to
their benefits to the irreparable loss and detriment  to  the  company  i.e.
Biological E. Limited and its genuine shareholders.  She, however  admitted,
that the concerned Directors  in  the  meanwhile,  had  filed  a  scheme  of
arrangement under Sections 391 to 394  of the Act  before the High Court  of
Andhra Pradesh for demerger of the undertakings of  the  company  as  listed
out in the said petition.  A copy of the  scheme  of  arrangement  was  also
appended to the petition alleging over  all  mis-management  and  oppression
by the Directors therein in particular, consciously driving the company  and
its shareholders to a state of ruination  chiefly  through  the  process  of
demerger.   The respondent No.1 prayed for a declaration of the acts of  the
said Directors  to be oppressive and prejudicial  to  the  interest  of  the
company and to appoint an administrator and/or  Special  Officer  to  manage
the affairs thereof by superseding the existing Board of Directors.  In  the
alternative, she also prayed for constitution of a committee  comprising  of
her representative to function as the administrator and/or  Special  Officer
for the management and control of its affairs.  She  reiterated  her  prayer
for (i) declaring  the  Board  meetings  held  on  9.4.2013,  10.4.2013  and
11.4.2013 as void ab-initio, (ii) removal of the  appellant herein  and  the
other Directors from the office of the Directors of the  company  and  (iii)
adjudging  the transmission of 400951 equity shares held by Dr. Vijay  Kumar
Datla (since deceased)  to the appellant  (Ms.  Mahima  Datla)  as  illegal,
null and void. A  declaration to  adjudge  the  resolutions  passed  in  the
Board meetings held on or after  20.03.2013  and  also  the  Annual  General
Meeting held on 18.12.2013 as non est  was  also  sought  for.   By  way  of
interim relief, she prayed for supersession  of the Board of  Directors  and
appointment of interim administrator  and/or Special Officer to  assume  the
charge of the affairs of the company and  in  the  alternative,  prayed  for
constitution of a committee comprising of her  representative  to  discharge
the said role.
22          The petition was taken up on 6.8.2014, on being  mentioned.   In
course of the arguments, though the contesting respondents  could  not  file
their pleadings, understandably it being the  date  of  first  hearing,  the
primary  facts,  as  adverted  to  hereinabove,  having  a  bearing  on  the
dissensions  were addressed and  the CLB, after  taking  note  of  the  fact
that the meeting of the company for considering the scheme of  demerger  was
scheduled to be held on 7.8.2014, as directed by the High  Court,  construed
it to be inexpedient to intervene in that regard.    It  observed  as  well,
that  meanwhile  a suit had been filed by the respondent No.1  on the  basis
of a will said to have been executed in her favour and  that  the  same  was
pending adjudication and concluded that  it  would  not  be  appropriate  to
restrain the appellant (Ms. Mahima Datla)  from exercising her voting  right
in  respect  of  400961  equity  shares.   Noticeably,  in  course  of   the
submissions, it was pleaded on behalf of the  respondent  No.  1   that  the
suit would be withdrawn.  Qua the alienation of immovable properties of  the
company, the CLB recorded the submission   on  behalf  of   the  respondents
therein that there was no intention to do  so  vis-a-vis  the   movable  and
immovable properties of the company except that may arise under  the  scheme
of demerger.   In  response  to  the  submissions  made  on  behalf  of  the
respondent No. 1 that  she  ought  not  to  be  removed  from  the  post  of
Executive Director, it was submitted on behalf of  the  respondents  therein
that no step would  be taken to dislodge her without the leave of  the  CLB.
Taking note of  these  submissions/undertakings,  the  CLB  ruled  that  the
respondent No. 1 had not been able  to  make  out  any  case  for  grant  of
interim relief “at the  time of mentioning  of  the  Company  Petition”  and
permitted the respondents therein  to file their counter within a period  of
six weeks and fixed  9.10.2014 to be the next date.
23.           The respondent No. 1 herein,  being  aggrieved,  preferred  an
appeal being Company Appeal No. 17 of 2014 which has since been  allowed  by
the judgment and order dated 15.4.2015 impugned  in  the  instant  batch  of
appeals.
24           The  High  Court,  as  the   decision  assailed  would  reveal,
traversed the entire gamut of the  facts  involved  as  available  from  the
company petition  and  the  documents  appended  thereto  and  recorded  its
findings on all the  aspects of the   discord  and  eventually  granted  the
following reliefs.

“1.   An ad hoc Board of Directors constituted with appellant No. 1  as  the
Executive Director  and   respondent  Nos.  2  to  4  as  the  Directors  of
respondent No. 1-company.  Appellant No. 1 shall discharge the functions  of
the Managing Director of the company.

The ad hoc Board is  responsible  for  the  day-to-day  functioning  of  the
company and shall carry out the statutory obligations under the Act.

All the decisions shall be  taken  by  the  Board  based  on  unanimity  and
consensus.  If consensus on any aspect relating to  the  day-to-day  affairs
of the company is eluded among the Board members, appellant No.  1,  as  the
Managing Director, shall approach the  Company  Law  Board  for  appropriate
directions.

The Board shall not transfer  or deal with  81%  shares  held  by  late  Dr.
Vijay Kumar Datla in any manner till the dispute on the issue of  succession
is adjudicated in O.S. No. 184 of 2014.

The Board shall  not  take  any  major  policy  decisions  unless  there  is
unanimity among all its members  and  without  the  prior  approval  of  the
Company Law Board.

The ad hoc Board shall continue  to function till O.S. No. 184 of  2014   is
disposed of and appropriate orders  in  C.P.  No.  36  of  2014  are  passed
thereafter.

The Company Law Board  shall keep C.P. No. 36 of 2014 pending till O.S.  No.
184 of 2014 is finally disposed of.”

25          The appeal was allowed  and the accompanying  applications  were
disposed of as infructuous.  In arriving  at  its  penultimate  conclusions,
leading to the  arrangement  configured  by  the  operative  directions,  as
extracted hereinabove, the High Court elaborately delved  into  the  factual
details bearing on all facets of the surging disputes between  the  parties,
tracing from the issue of validity or otherwise of the  continuance  of  Mr.
G.V. Rao  as the Director  of  the  company,  to  the  imputation  of   mis-
management and oppression, allegedly  indulged  in  by  the  appellants  and
other Directors  including the perceived  imminent  possibility  of  slicing
off the assets of the establishment through a process of demerger.
26          En route to the final deductions, the High Court did dwell  upon
the  validity  of  the  Board  meetings  held  on  9.4.2013,  10.4.2013  and
11.4.2013 in particular and also   of the Annual General  Meeting  conducted
on 18.12.2013, the claim made by the respondent No. 1 in her suit  based  on
a  will claimed to be executed in  her  favour  by  Dr.  Vijay  Kumar  Datla
(since deceased), the letter dated 15.4.2013 written by the  respondent  No.
1 as well as  the  accusation  of   manipulation  of  the  transfer  of  the
majority of the shares  of  the  company  in  favour  of  Ms.  Mahima  Datla
(appellant).  It held  in no uncertain terms, that  in  fact  there  was  no
Board of Directors legally  in  existence,  thus  necessitating  a  workable
arrangement for regulating the  conduct  of  the  affairs  of  the  company.
Having regard to the contesting claims to the shares on  the  basis  of  two
wills and the pendency of the suit instituted by the respondent No.  1,  the
High Court construed it to be appropriate to proceed  on  the  premise  that
the appellant, her sisters and the  respondent No. 1 had more or less  equal
shares.   In the backdrop of this determination, the High  Court,  being  of
the view, that it would be preferable to  make  an  interim  arrangement  to
conduct the administration of the  company,  without  the  induction  of  an
outsider  as  an   administrator/receiver,   issued    the   above-mentioned
directions to ensure the same.
27          As would be evident from the steps enumerated  in  the  impugned
judgment and order in  this  regard,  an  ad  hoc  Board  of  Directors  was
directed  to  be  constituted  with  respondent  No.  1  as  the   Executive
Director and her three daughters as the Directors with the  rider  that  the
respondent No. 1 would  discharge  the functions of the   Managing  Director
of the company.  Thereby, the ad  hoc  Board  was  allowed  to  continue  to
function till the suit i.e. O.S. No.  284  of  2014  was  disposed  of   and
appropriate orders in the pending Company  Petition  No.  36  of  2014  were
passed.  It was ordered that the CLB would  keep the  Company  Petition  No.
36 of 2014 pending till the suit was finally disposed of.
28          To put it differently, by the  impugned  verdict,  the  existing
Board of  Directors   was  substituted  by  an  ad  hoc  body   adverted  to
hereinabove and the respondent No.  1  was  entrusted  with  the  charge  of
office of the Managing Director of the company.   Further  the  arrangement,
as directed, was to continue  till the disposal of the suit.  The  restraint
on the CLB from proceeding with  Company Petition No. 36 of  2014  till  the
suit  was  decided,  understandably    was  to  postpone   the  adjudication
therein, till after the final determination  of  the  issues  in  the  suit.
For  all  essential  purposes,  therefore,   the  adjudication  of   Company
Petition No. 36 of 2014 was made conditional on the disposal of the suit.
29.          Sustainability of the extent, propriety  and  correctness    of
the scrutiny undertaken by the High Court on the aspects of the lis  between
the parties pending  the examination thereof by the  statutorily  prescribed
forum of original jurisdiction i.e. the CLB in an appeal under  Section  10F
of the Act and  the  decisive  bearing  thereof,   is  the  focal  point  of
impeachment in the instant proceedings.
30.         Learned senior counsel for the appellants  in  all  the  appeals
have, at the threshold, urged that as the order dated 6.8.2014  of  the  CLB
did not generate any question of law, as enjoined  by  Section  10F  of  the
Act,  the  High  Court  ought  to  have  summarily   dismissed  the  appeal.
According to the learned senior counsel, none of  the  issues  involved  had
been considered and decided by  the CLB  and  rightly,  in  absence  of  the
pleadings of the appellants and, thus, no appeal under   Section 10F of  the
Act was contemplated.   The  CLB  vide  its  order  dated  6.8.2014,  having
plainly deferred the scrutiny of the issues, taking note of the  undertaking
offered on  behalf  of  the  appellants  regarding  the  alienation  of  the
properties of the company and the assurance  of the office of the  Executive
Director  of the respondent No.  1,  there  was  no  finding  based  on  any
adjudication and thus no question of law did emanate   to permit  an  appeal
therefrom under Section 10F of the Act.
31.         Without prejudice to these demur,  the  learned  senior  counsel
for the appellants  emphatically argued  that  not  only  in  the  attendant
facts and  circumstances,  Mr.  G.V.  Rao   did  lawfully  continue  as  the
Director of the company, he having withdrawn his resignation  prior  to  the
date of the meeting on 9.4.2013, they urged as well  that all the   meetings
of the Board held on or from 9.4.2013 including the Annual  General  Meeting
were to the full knowledge of respondent No. 1 and the  contentions  to  the
contrary, are factually untenable. Referring to the letter  dated  15.4.2013
of the respondent No. 1, whereby she  acknowledged   the  induction  of  the
Mahima Datla (appellant) as the Managing Director of  the  company  and  her
two other daughters as the Directors of the company,  wishing  them  success
on the new venture, they maintained that  her  complaint  qua  this  letter,
after a lapse of one year, being an after thought, was thus of no  relevance
or significance.  According to the learned  senior  counsel,  even  assuming
without admitting that the meetings  of  the  Board  of  Directors  held  on
9.4.2013, 10.4.2013 and 11.4.2013 and thereafter were invalid as imputed  by
respondent No. 1, the same got sanctified  in  the  Annual  General  Meeting
held on 18.12.2013, in which she   participated  without  any  cavil.    The
learned  senior  counsel  urged,  that  having  regard  to   the   situation
eventuated by the sudden demise of Dr. Vijay  Kumar  Datla  and  the  urgent
need  to  attend  to  the  day-to-day   affairs  of  the  company,  a   duly
constituted Board of Directors, was an imperative necessity,  and  thus  the
steps  taken  by    Mr.   G.V.   Rao   to   convene   the   meetings   dated
9.4.2013,10.4.2013 and 11.4.2013, to that effect is even otherwise saved  by
the doctrine of necessity. Further the  issues  raised  by  her  in  Company
Petition No. 36 of 2014 being substantially the  same  in  Company  Petition
No. 1   of 2014, in which the  CLB  declined  to  grant  injunction  to  the
conduct of the annual General Meeting which was to be  held  on  18.12.2013,
the High Court ought not to have on an  extensive  evaluation  of  the  same
facts afresh,   overhauled the set-up of the company in the manner  done  at
the preliminary stage and that too in absence of any  tangible  and  legally
cognizable evidence of  oppression  and/or  mis-management  of  the  affairs
thereof.  They argued as well, that  as the suit  filed  by  the  respondent
No. 1 was pending adjudication and the scheme  of  demerger   involving  the
company  was also subjudice before the High Court in a  separate  proceeding
being  Petition Nos. 721-722 of 2014, the apprehension expressed  on  behalf
of the respondent No. 1 of imminent alienation  of  the  properties  of  the
company at their whims to  irreparably  wreck  the  existence  thereof,  was
grossly  belied,   and  thus,  could  not  have  been  a  consideration  for
superseding  the existing Board of Directors and replacing it by an  ad  hoc
body with the respondent No. 1 as the Managing Director.  They   urged  that
the interim arrangement modelled by the High  Court  making  it  co-terminus
with the suit tantamounts  to  grant  of  reliefs  claimed  in  the  Company
Petition No. 36 of 2014 finally, pending disposal of the  proceeding  before
the Board and on this count alone, the impugned decision  is  liable  to  be
interfered with.
32.         To endorse the  above  pleas,   the  following  decisions   were
pressed into service:
V. S. Krishnan and Others  etc.  vs.  Westfort  Hi-tech  Hospital  Ltd.  and
Others etc.  (2008)3 SCC 363
Wander Ltd. and Another vs. Antox India P. Ltd. 1990 (suppl.) SCC 727,
Election Commission of India and  Another  vs.  Dr.  Subramaniam  Swamy  and
Another (1996) 4 SCC 104
The Commissioner of Income Tax, Bombay vs. The Scindia Steam Navigation  Co.
Ltd. 1962(1) SCR 788
Lalit Kumr Modi vs. Board  of  Control  For  Cricket  in  India  and  others
(2011)10 SCC 106
Banku Chandra Bose and another vs. Marium Begam and  another  AIR  1917  Cal
546
Gokaraju Rangaraju Vs. State of A.P. (1981)3SCC 132
State of Punjab and others vs. Krishan Niwas (1997) 9 SCC 31.
A.R. Antulay vs. R.S. Nayak  & Another (1988) Suppl. 1 SCR1

33.         In emphatic repudiation, the learned  senior  counsel  for  Mrs.
Renuka Datla (respondent No. 1)   assiduously  insisted  in  favour  of  the
maintainability  of the appeal before the High Court under  Section  10F  of
the Act.  They urged, that the denial of interim relief by the  CLB  in  the
attendant factual conspectus,  was not only in  disregard  to  the  relevant
provisions of the Act and  the Articles of Association of  the  Company  but
also did adversely  impact upon the legal right  of  the  respondent  No.  1
justifying the intervention of the  High Court under   Section  10F  of  the
Act.   While questioning the locus and  competence of  Mr. G.V. Rao  as  the
Director of the  company, consequent upon his  resignation  and  reiterating
the invalidity of the meetings of 9.4.2013, 10.4.2013  and  11.4.2013,  they
urged that not only the respondent No.  1  was  unaware  thereof,  but  also
there was no such pressing urgency  to  rush  through  such  steps  for  her
exclusion and that too while she was in the state of mourning,  having  lost
her husband.  They repudiated as well,  the validity of  the  said  meetings
for want of quorum and due notice and   assailed  also  the  Annual  General
Meeting to be a nullity as the same could not have been convened  by  or  on
behalf of the Board of Directors which was non est in law  for  all  intents
and purposes.  According to the learned senior counsel, in any view  of  the
matter, if such  meetings  were  in  fact  necessitated  by  the  prevailing
exigencies, resort ought to have been taken  of the relevant provisions   of
the  Act as well  as   Articles  of  Association.   In  this  context,  they
assertively  dismissed the plea  based on the doctrine of necessity.    They
maintained that these meetings, having regard to the  manner  in  which  the
same were   convened and conducted, smacked of the intention to deprive  the
respondent No. 1 of her legitimate dues.  They assertively pleaded that  the
letter dated 15.4.2013 of the respondent No. 1, purportedly   accepting  the
induction of her daughters in the Board of Directors, was not issued on  her
volition, and thus  was  wholly  inconsequential.   As  the  progression  of
events from 9.4.2013 did irrefutably  demonstrate,  the  endeavours  of  the
appellant  and  the  other  Directors  of  the  Board  to  cast  aside   the
respondent No. 1 and assume  the absolute  charge  of  the  company  to  its
detriment and  prejudice of its constituents, resulting  in  oppression  and
mis-management of its affairs, the High Court was  eminently  justified  for
its remedial intervention in the overall well-being  of  the  company,  they
pleaded.  The learned senior counsel argued   that the rejection by the  CLB
of the interim reliefs sought for by the respondent No. 1   did   give  rise
to a  question of law, and thus the appeal under Section 10F of the Act  was
unquestionably maintainable.  According to the learned senior  counsel,  the
contemplation of the demerger of the company did  signal  imminent  cleavage
of its  vital assets to reduce it to a carcass for the unlawful  gain  of  a
selected few though unauthorisedly at the helm of  affairs,  warranting  the
substitution of Board of Directors by the ad hoc body  as  effected  by  the
impugned order.  The following decisions were cited in buttressal:
Raj Kumar Shivhare vs. Assistant Director, Directorate  of  Enforcement  and
Another (2010)4SCC 772,
Waman Shriniwas Kini vs. Ratilal Bhagwandas & Co. (1959) Suppl. 2 SCR 217.
V. S. Krishnan and Others  etc.  vs.  Westfort  Hi-tech  Hospital  Ltd.  and
Others etc.  (2008)3 SCC 363
Dale & Carrington Invt. (P) Ltd. and Another vs. P.K. Prathapan  and  Others
(2005) 1 SCC 212.
Pankaj Bhargava and Another Vs. Mohinder Nath and Another (1991) 1 SCC 556.
34.         In their  short  reply,  the  learned  senior  counsel  for  the
appellants maintained that not only the issue of demerger is subjudice in  a
different proceeding before the High Court under the  Act,  and  thus  could
not have been taken note of  qua  the  allegation  of  oppression  and  mis-
management,  there  being   neither  any  prayer  for  cancellation  of  the
appointment of  Mr. G.V. Rao nor any necessity for the  replacement  of  the
Board of Directors, the impugned  judgment  warrants  interference,  pending
disposal of the proceeding before the CLB on  merits.   The  learned  senior
counsel for the respondent No. 1 has not controverted  the  pendeny  of  the
demerger proceeding independently before the High Court.
35.          We have extended our anxious consideration to the  weighty  and
dialectical  assertions  exhaustively  touching  upon  the  aspects  of  the
debate, both legal and factual.  Understandably, as  the  impugned  judgment
stems from an appeal under Section 10F of the Act,  great emphasis has  been
laid, both in favour and against the maintainability  thereof   as  well  as
the manner and extent of scrutiny of  the  materials  available  on  record,
judged from the point of view  of  the  nascent  stage  of  the  proceedings
before the CLB, at which  the appeal had been carried  to  the  High  Court.
Admittedly, the appeal preferred by the respondent No. 1 under  Section  10F
of the Act has been against an order dated 6.8.2014 of  the  CLB,  declining
to grant the interim relief in entirety while securing  the  office  of  the
respondent No. 1 as the Executive Director of the company  and  noting   the
pendency of the demerger proceeding as well as the undertaking on behalf  of
the contesting Board of Directors that the properties of the company  except
as would be required  by way  of   demerger,  would  not  be  alienated.  To
reiterate, by order dated 6.8.2014, the CLB deferred  the  consideration  of
the prayer for further interim relief and granted  time  to  the  contesting
respondents therein to file their pleadings. It is a matter of  record  that
till the stage of filing of the appeal under Section 10F of the  Act  before
the High Court, the contesting Board of Directors in the  proceeding  before
the CLB had not filed their pleadings.
36.         In the  above  prefatory,  yet  presiding  backdrop  and  having
regard to the decisive bearing of  a  finding  on   the  maintainability  or
otherwise of the appeal before the High Court or the permissibility  of  the
ambit of scrutiny undertaken by it, expedient it would be to  assay  at  the
threshold, these cardinal aspects  in the proper legal perspective.
37.         Section 10F of the Act, which provides for  appeal  against  the
order of the Company Law Board, for ready reference is extracted hereunder:
“10F:  Appeals against the order  of  the  Company  Law  Board.  Any  person
aggrieved by any decision or order of the Company  Law  Board  [made  before
the commencement of the companies (Second Amendment) Act, 2002] may file  an
appeal to the High Court within sixty days from the  date  of  communication
of the decision or order of the Company Law Board to him on any question  of
law arising out of such order:

Provided that the High Court may, if it is satisfied that the appellant  was
prevented by sufficient  cause  from  filing  the  appeal  within  the  said
period, allow it to be filed within a further  period  not  exceeding  sixty
days.”


38.         As the quoted provision would reveal, a person  aggrieved  by  a
decision or order of the  CLB, may file an  appeal  before  the  High  Court
within 60 days from the date of communication of the decision or  order   to
him on any question of law  arising  out  of  such  order.   The  period  of
limitation prescribed, however, is extendable by the High Court  by  another
60 days on its  satisfaction  that  the  appellant  had  been  prevented  by
sufficient cause in doing so.
39.          The expression “decision or order” and  “any  question  of  law
arising out  of  such  order”  persuasively  command   for  an  inquest,  to
appropriately address the  issue  in  hand.   The   right  to  appeal  under
Section 10F of the Act  unambiguously being one conferred by a statute,  the
aspect of circumscription, if any, of  the contours of the  enquiry  by  the
appellate forum, would    be    of    formidable    significance.        The
precedential guidelines available offer the direction.
40.           In  Scindia Steam Navigation Co. Ltd. (supra), a  Constitution
Bench of this Court while dilating on the contingencies on which a  question
of law would arise out of an order of the Appellate Tribunal,  as  envisaged
in Section 66(1) of the  Income  Tax  Act,  1922  had  ruled   that  when  a
question of law is neither raised nor considered by it, it would  not  be  a
question arising out of its order notwithstanding that it may arise  on  the
findings given by it.  It was propounded that it was only  a  question  that
had been raised before or decided by the Tribunal  that  could  be  held  to
arise out of its order.
41.         In Dale & Carrington Invt. (P) Ltd. (supra), this Court  had  an
occasion to dwell upon the scope of Section 10F of the  Act  qua  an  appeal
preferred against the decision of the  Company  Law  Board   after  a  full-
fledged  adjudication before the High Court.  While negating  the  argument,
that the High Court could not have disturbed the findings arrived at by  the
Company Law Board and record its own findings on  certain  issues  which  it
could not go into, this Court held that if a finding  of  fact  is  perverse
and is based on no evidence, it can be set-aside in an  appeal  even  though
the appeal is permissible only on the question of  law.   It  was  clarified
that, perversity of a finding itself, becomes a question of law.   Reverting
to the facts of that case, this Court  observed that the  CLB  had  rendered
its decision in a very cursory and cavalier manner without  going  into  the
real issues which were germane for  the  determination  of  the  controversy
involved,  and thus approved the exercise of the High Court  in  elaborately
dealing with the matter.
42.         While reiterating in V.S. Krishnan and others (supra), that  the
CLB is the final authority on facts  and that  no  question  of  law  arises
unless its findings are perverse, based on  no  evidence  or  are  otherwise
arbitrary, this Court reiterated that in an appeal under Section 10F  “on  a
question of law”, the jurisdiction of the appellate court is  restricted  to
the question as to whether on the facts as noticed by the Company Law  Board
and as placed before it, its conclusion was against law  or was  founded  on
a consideration of irrelevant material or was as a  result  of  omission  to
consider  the relevant material.
43.         Adverting to the right of appeal, as a creature of  statute,  as
provided by Section 35 of the Foreign Exchange Management  Act,  1999,  this
Court in Raj Kumar Shivhare (supra) held that the expression  “any  decision
or  order”  did  mean  “all  decision  or  order”.   While  extending   this
interpretation to the expression “any decision or order” applied in  Section
35 as above, to dismiss the plea that such an appeal  is  contemplated  only
from a final order,  this  Court  distinguished  a  right  of  appeal  as  a
creature of statute from an inherent right of filing a suit,  unless  barred
by law.  It was   underlined that while conferring such a right  of  appeal,
a statute may impose  restriction or condition in law, limiting the area  of
appeal, to question of law or sometime to a substantial question of law  and
 ruled that  whenever  such   limitations  are  imposed,  those  are  to  be
strictly adhered to.
44.         This Court in Wander Ltd. (supra), while  dealing  with  appeals
against  orders granting or refusing a prayer for interlocutory  injunction,
did reiterate that the same, being in exercise of judicial  discretion,  the
appellate court ought  not  interfere  therewith  and  substitute   its  own
discretion except where such discretion is  shown  to  have  been  exercised
arbitrarily or capriciously or perversely or where  the  Court  whose  order
has  been  appealed  from,  had  ignored  the  settled  principles  of  law,
regulating  grant  or  refusal  of  interlocutory  injunctions.     It   was
enunciated, that appeal against exercise  of  discretion  is  an  appeal  on
principle and the appellate court would not reassess the materials and  seek
to reach a conclusion different from the one reached by the court below,  if
it was reasonably possible on the  materials  available.   It  was  held  as
well, that the appellate Court in such a situation  would  normally  not  be
justified in interfering with the  exercise  of  discretion   of  the  Court
below, if made reasonably and in a judicial manner,  solely  on  the  ground
that if it had considered the matter at the trial stage, it would have  come
to a contrary conclusion.  It was proclaimed that  an  interlocutory  remedy
is intended to preserve  in status quo, the rights  of  the   parties  which
may appear on a prima facie examination of a case.  It  was  held  that  the
prayer for grant of interlocutory injunction, being at  a   stage  when  the
existence of the legal right asserted  by  the  plaintiff  and  its  alleged
violation are both contested and uncertain and remain  uncertain  till  they
are  established at the trial  on  evidence,   it  is  required  to  act  on
certain well-settled principles  of  administration  of  such  interlocutory
remedy which  is  both  temporary  and  discretionary.    Referring  to  the
fundamental  object of  interlocutory  injunction,  this  Court  noted  with
approval that the need for such protection of the plaintiff  against  injury
by violation of his rights  must be weighed against the  corresponding  need
of the defendant to be protected  against  any  injury  resulting  from  the
restraint on the exercise of his rights, as sought   for,  which   he  could
not be adequately compensated. The need of one, thus   was  required  to  be
compared against the other, to  determine  the  balance  of  convenience  to
ensure an appropriate exercise  of  discretion  for  an  interim  remedy  as
suited to a particular fact situation.

45.         The unequivocal legal propositions as  judicially  ordained,  to
ascertain the emergence and existence of a question of  law,  the  scope  of
examination  thereof by a court of appellate jurisdiction and the  balancing
of the competing  factors in the grant of interlocutory remedy, hallowed  by
time, indeed are well settled.  A question  of law, as  is  comprehended  in
Section 10F of the Act, would arise indubitably, if a decision which is  the
foundation thereof, suffers from perversity, following a patent error  on  a
fundamental   principle  of  law  or  disregard  to  relevant  materials  or
cognizance of irrelevant or non-germane determinants.  A  decision  however,
on the issues raised, is a sine qua non for a question of law to  exist.   A
decision logically  per-supposes  an  adjudication  on  the  facets  of  the
controversy involved and mere deferment thereof to a future  point  of  time
till the completion of the essential legal formalities would not ipso  facto
fructify into a verdict to generate a question of law to be  appealed  from.
However, an omission to record a finding even on  a  conscious  scrutiny  of
the materials  bearing on the issues involved  in a  given  case,   may   be
termed to be one.  Be that as it  may,  in  any  view  of  the  matter,  the
appellate forum though exercising a jurisdiction which otherwise may be  co-
ordinate with that of the lower forum, ought to confine its  judicial  audit
within the layout of the adjudgment  undertaken by the forum of lower  tier.
 This is imperative, more particularly in  the  exercise  of  the  appellate
jurisdiction qua a decision  on  discretion   rendered  at  an  introductory
stage  of any proceeding, otherwise awaiting final  adjudication  on  merits
following a full contest.  It is    settled  that  no  adjudication  at  the
preliminary stage  of a proceeding in a court  of  law  ought  to  have  the
attributes of a final verdict so as to prejudge the issues  at  that  stage,
thereby rendering the principal determination otiose or redundant.  This  is
more so, if the pleadings of the parties are  incomplete  at  the  threshold
stage and the  lower  forum  concerned  seeks  only  to  ensure   a  working
arrangement vis-a-vis the dissension  and  postpone  fuller  and  consummate
appreciation of  the  rival  assertions  and  the  recorded  facts  and  the
documents at a later stage.

46.          Section  10F  of  the  Act  engrafts  the  requirement  of  the
existence of a question of law arising from the decision of the  CLB  as  an
essential pre-condition for the maintainability  of  an  appeal  thereunder.
While the language applied therein evinces that all  orders,  whether  final
or interlocutory, can be the subject-matter of appeal, if  it   occasions  a
question of law, in our comprehension,  the  Section  per  se  defines   the
perimeters  of inquisition by the appellate forum conditioned  by  the  type
of the order under scrutiny.  The nature and purport   of  the  order  i.e.,
interlocutory or final, would thus logically  present  varying  canvases  to
traverse and analyse.  These too would define  the  limits  of  adjudication
qua the appellate forum.  Whereas in an appeal under  Section  10F  from  an
order  granting or  refusing  interim  relief,   being  essentially  in  the
exercise of judicial discretion  and  based  on  equity  is   an  appeal  on
principle and no interference is merited unless the same  suffers  from  the
vice  of  perversity  and  arbitrariness,  such  constrictions    may    not
necessarily regulate  and/or  restrict  the  domain  of   examination  in  a
regular  appeal  on  facts  and  law.   Section  10F,   thus,    statutorily
demarcates the contours of  the  jurisdictional  exercise  by  an  appellate
forum depending on the nature of the order impugned i.e.   interlocutory  or
final and both cannot be equated, lest the  pending  proceeding  before  the
lower forum, if the order impugned is purely of  interlocutory  nature,  and
does not decide any issue on a consideration  of  the  rival  assertions  on
merits, stands aborted and is  rendered  superfluous  for  all  intents  and
purposes.

47.         Reverting to the  present  facts,  noticeably  the  parties  are
contentiously locked on several issues, legal and  factual, a brief  outline
whereof has been set-out hereinabove.  While  seeking  the  intervention  of
the  CLB  on  the  key  accusation  of  oppression  and  mis-management   as
conceptualised in Sections 397 and  399 of the Act,  the  respondent  No.  1
had retraced  the  march  of  events  from  9.4.2013,  the  date  on  which,
according to her, when the meeting of the Board  of  Directors,  invalid  in
law, was convened and conducted by  Mr. G.V. Rao ,  who  allegedly   had  no
authority to do so, he having resigned from the company.  She  had  asserted
her express and implicit reservation in this regard and her disapproval  not
only of the constitution of the Board of Directors since then  but  also  of
the decisions taken from time to time.   Without recapitulating  the  stream
of developments that had occurred, suffice  it  to  mention,  that  after  a
series of intervening legal proceedings, she finally did submit  a  petition
before the CLB amongst other under Sections 397, 398,402/403/404 and 406  of
the Act alleging oppression and  mis-management  and  highlighting  in  that
regard, the  imminent possibility of alienation of the vital assets  of  the
company through a purported scheme of  demerger  to  the  undue  benefit  of
other Directors of  the  Board   of  the  company.   In  contradiction,  the
appellants  and  the  contesting  Directors   have  not  only  endorsed  the
validity of the meetings on or from 9.4.2013 contending that respondent  No.
1 though intimated thereof, had opted out therefrom and   on  the  basis  of
the record,  have  sought to demonstrate her participation in the  meetings,
amongst others  on 24.5.2013, 22.8.2013 and the Annual General Meeting  held
on 18.12.2013 as  permitted  by  the  CLB,   they  have  also   emphatically
adverted to the letter dated 15.4.2013 addressed by  the  respondent  No.  1
seemingly  acknowledging the  lawful induction of the appellant (Ms.  Mahima
Datla) as the Managing Director and her two sisters as the Directors in  the
Board.   The  appellants  and  other  contesting   respondents   have   also
endeavoured to  underline  that  the  respondent  No.  1  has  accepted  the
distribution of the shares held by Dr. Vijay  Kumar  Datla  in  the  HUF  as
decided in the meeting dated 24.5.2013  and  also  the  enhancement  in  her
remuneration as  the Executive Director as minuted  in  the  Annual  General
Meeting  dated 18.12.2013. There is no denial by  her  as  well  as  of  the
pendency of the demerger proceeding before the High Court.

48.         In the above overwhelming factual premise, the  High  Court,  as
the impugned decision would demonstrate,  being  fully  conscious  that  the
proceeding before the CLB was pending  for  final   adjudication,  proceeded
to  undertake an in-depth exercise to fathom and analyse  the facts and  the
law involved and has recorded its decision on merits in  total  substitution
of the order of the CLB.  This to reiterate, is in absence of any  pleadings
by the appellants, the  contesting Directors before the CLB.   This  assumes
importance as the High Court did resort to  a full-fledged scrutiny  of  the
factual and legal aspects, to test  the  legality  and/or  validity  of  the
order dated 6.8.2014 of the CLB at the stage of mentioning.   Having  regard
to the fact that the appeal before the High Court under Section 10F  of  the
Act was one from an interim order passed in exercise of judicial  discretion
at the stage of mentioning, in our view, bearing  in  mind  the  permissible
parameters of  exercise of  appellate  jurisdiction  in  such  matters,  the
elaborate  pursuit  so  undertaken  by  it,  is  neither  contemplated   nor
permissible. The High Court, in any view of  the  matter,  was  not  dealing
with a regular appeal under Section 10F  of the Act on  a  question  of  law
from  a  decision  rendered  by  the  CLB  on  merits,  after   a   complete
adjudication.  The appeal before it, being one  on  principle  and  from  an
order rendered by  the  CLB  in  the  exercise  of  its  discretion  at  the
preliminary stage awaiting the pleadings of the respondents therein, we  are
of unhesitant opinion that the scrutiny in the appeal  ought  to  have  been
essentially  confined  to   the  aspects  of  which   the  CLB   had   taken
cognizance, to pass its order at that stage, and not beyond.

49.         As it is, though a  colossus  of  facts  with  the  accompanying
contentious issues  are involved, having regard to the stage  at  which  the
order of the CLB had been passed, no exhaustive examination of  the  factual
and legal aspects ought to have been undertaken by the High Court to  record
its conclusive deductions on the basis thereof.  Keeping in view  the  stage
wise  delineation  of the jurisdictional frontiers  of  the  forums  in  the
institutional  hierarchy as codified by law,  the  High  Court's  quest   to
unravel  the entire gamut  of law and  facts  involved  at  the  preliminary
stage of the proceeding before the CLB and to record  its  findings  on  all
issues involved on merits did amount to prejudging those, thereby  rendering
the petition before the CLB redundant for all intents and purposes.

50.         In the   instant case, though the CLB, as a matter of fact,  did
not record  any  view  on  the  merits  of  the  case  while  deferring  the
consideration  of  the  interim  relief  ,  being   satisfied    with    the
undertakings offered on  behalf  of  the  appellants  and  other  contesting
Directors, the  High  Court   has,  by  the  impugned  decision,  decisively
furnished its views and conclusions  on all vital issues, as a  consequence,
leaving little or none for the CLB to decide.   This is not the role of  the
appellate forum as is contemplated under Section 10F of the  Act   qua   the
stage from which  the appeal had been preferred from the order of the CLB.

51.          Noticeably  in  the  face  of  the  undertaking  given  by  the
appellants and the pendency of the  demerger  proceeding  separately  before
the High Court, in our view, there did not exist  any  searing  urgency   to
substitute the  existing Board of Directors as done and to continue with  it
till the disposal of the suit and at the same time to  keep  the  proceeding
of the CLB pending till then. This is more so, as can  be  culled  from  the
order dated 6.8.2014 of the CLB,  the status  of  the  respondent  No.1   as
Executive Director of the Company  has been secured and  further  alienation
of the assets of the company, otherwise  has  been  restrained.   Assuredly,
these are based on undertakings before the CLB  as given by the  appellants,
the contesting Directors and  the CLB having taken note  thereof,  the  same
are as good as binding directions on the parties.  The  aspect  of  demerger
as adverted to hereinabove, is the  subject  matter  of  adjudication  in  a
separate proceeding on which, at this stage, no observation is  called  for.
Suffice it to state however, that the aspect of demerger   for  the  present
cannot ipso facto  be   an  impelling  factor   to  conclude  in  favour  of
allegation of oppression and mis-management as made by  the  respondent  No.
1.

52.         In the wake up of above, we feel  persuaded  to  interfere  with
the impugned decision of  the  High  Court,  without   observing  any  final
opinion on the merit of the contrasting assertions.  In our   comprehension,
having regard to the relief provided by the CLB by its order dated  6.8.2014
 to the parties, it ought to be left  to  decide   the  petition  on  merits
after  affording  them  a  reasonable  opportunity   of   furnishing   their
pleadings.  As in the course of hearing, some  grievance  was  expressed  on
behalf of respondent No. 1 that her status as the Executive Director of  the
company, stands  undermined due to uncalled for surveillance imposed at  the
instance of the existing Board of Directors, we make it clear, as  has  been
assured before us, that  she   ought  to  be  allowed  to  function  in  the
aforesaid  capacity  being  provided  with  all  facilities  and  privileges
attached  to the office as permissible in law,  so much  so  that  she  does
not have any occasion to complain in this regard.  This indeed  ought     to
be in accord with the letter and spirit of the undertaking  offered  by  the
Board of Directors  to the CLB.    The respondent No. 1 too would  cooperate
in the day to day management of the affairs  of  the  company  in  her  said
capacity.   The  existing  Board  of  Directors  would  also  abide  by  the
undertaking as recorded in the order dated  6.8.2014  of  the  CLB  qua  the
alienation of the assets  of  the  company.  The  set-up  of  the  Board  of
Directors and the arrangement vis-a-vis the administration  of  the  affairs
of the company, as was existing  on  the  date  on  which  the  order  dated
6.8.2014 was passed by the CLB, would continue  until further orders by  it.
 The CLB is, however, directed to dispose of the  proceeding  before  it  as
expeditiously as possible.  As the  suit filed by the respondent No.  1,  as
noted hereinabove, is also pending, we hereby direct the Civil Court  before
which it is pending,  to deal with the same  with expedition   as  well,  so
as to provide a quietus to the lingering family discord in the overall well-
being of the company and its constituents.

53.         Before parting, we need to take note of the submission  of   Mr.
P.P. Rao, learned senior counsel  appearing  for  Mr.  G.V.  Rao   that  the
averments made in sub-paragraph 2 of  the  counter-affidavit  filed  by  the
respondent No. 1 at page 720  thereof  besides being utterly  incorrect  and
defamatory are liable to be  effaced  from  the  records.   We  are  of  the
considered view that  this  assertion  needs  to  be  sustained.   We  thus,
expunge these averments being wholly inessential  for  deciding  the  issues
involved.

54.         The appeals are, thus, allowed in the above terms.      The  CLB
and the Civil Court would decide the proceedings before them  on  their  own
merits, without being in any way influenced by any observation made  herein.
No costs.

                            ….....…....................................J.
                                  (V. GOPALA GOWDA)



                            …............................................J.
                                  (AMITAVA ROY)
NEW DELHI;
OCTOBER 6,  2015.

whether the matter can be remitted back to the High Court for re-appraisal of the evidence.The first Appellate Court is required in law to examine the case of the appellant with reference to the ground urged in the appeal. The High Court in law is required to re-appraise the evidence adduced by the prosecution witnesses particularly in the light of the ground urged on behalf of the appellant that PW-1 to PW-4 and PW-8 are interested witnesses and therefore, their depositions should not have been accepted to record findings of fact on the charges framed against him. As could be seen from the reasoning portion of the impugned judgment and order no such effort is made by the High Court, except recording the findings of fact on the charges levelled against the appellant holding that the same are proved. In view of the foregoing reasons, the impugned judgment and order is liable to be set aside and we accordingly set aside the same and remand the case to the High Court for its fresh disposal of the same in accordance with law on merits after affording an opportunity to the parties. Needless to mention in this Order that as the appellant is undergoing sentence imposed upon him in the District Jail, Deharadun, Uttarakhand, and the matter is pending from 2009, therefore, the High Court is requested to dispose of the appeal expeditiously, but not later than 6 months from the date of receipt of this order. With the above observations this appeal is disposed of.

 NON-REPORTABLE


                        IN THE SUPREME COURT OF INDIA
                       CRIMINAL APPELLATE JURISDICTION

                      CRIMINAL APPEAL NO. 1314  OF 2015
                (ARISING OUT OF SLP (Crl.) NO. 10250 OF 2014)



DINESH LAL                      ………APPELLANT
                                     Vs.
STATE OF UTTARAKHAND              ……RESPONDENT

                               J U D G M E N T

V.GOPALA GOWDA, J.
           Leave granted.
    This criminal appeal by special leave is directed against  the  impugned
judgment and order dated 3.7.2013 passed in Crl. A. No. 153 of 2010  by  the
High Court of Uttarakhand at Nainital whereby it affirmed the  judgment  and
order dated 10.6.2010  passed  by  the  District  &  Sessions  Court,  Tehri
Garhwal, New Tehri (for short the “the Trial Court”) in  Sessions  Case  No.
16 of 2009, convicting the  appellant  herein  for  the  offence  punishable
under Section 302 of Indian Penal Code, 1860 (for short “IPC”)  and  Section
4/25 of the Arms Act, 1959 and sentenced him to  life  imprisonment  with  a
fine of Rs.20,000/- for the offence punishable under Section 302 of IPC  and
two years rigorous imprisonment with a fine of Rs.10,000/- for  the  offence
punishable under Section 4/25 of the Arms  Act,  1959.  Both  the  sentences
imposed upon him for the abovesaid offences were to run concurrently.
   Brief  facts  are  stated  hereunder  to  appreciate  the   rival   legal
contentions urged on behalf of the parties:
        On 11.03.2009 complainant Jotar Das submitted  a  written  complaint
to  Naib  Tehsildar,  Jakhnidhar,  District   Tehri   Garhwal,   Uttarakhand
regarding the murder of his daughter, Kumari Kusum (hereinafter referred  to
as “deceased”).
   In the said complaint it was stated  by  him  that  a  proposal  for  the
marriage of the deceased was made by the appellant about 4 months back  from
the date of the said written complaint. The  appellant  used  to  visit  the
house of the complainant but he refused to give his daughter in marriage  to
the appellant after hearing complaints about his activities.
   On 11.03.2009, it is  alleged  that  at  about  11.30  AM  the  appellant
reached Vartyakhund, through jungle where the  deceased  was  cutting  grass
along with her grandmother Smt. Madi Devi (PW-1) and her aunt Smt. Ram  Maya
Devi (PW-2). After reaching there the appellant attacked the  deceased  with
a ‘khukri’ (a sharp edged weapon), at the left side below her  heart,  as  a
result of which she died on the spot. Thereafter, he hit  himself  with  the
same ‘khukri’ below his naval and  fell  unconscious.  This  information  of
murder was given to the complainant by his mother  Smt.  Madi  Devi  (PW-1),
who witnessed the murder of the deceased along with PW-2.
   On the basis of the written complaint, FIR in Crime Case No. 02/2009  was
registered against  the  appellant.  The  matter  was  investigated  by  the
investigation officer and the charge sheet was filed against  the  appellant
for the offences punishable under Sections 302 and  309  of  IPC  and  under
Section 4/25 of the Arms Act, 1959.
   The Trial Court convicted  the  appellant  for  the  offences  punishable
under Section 302 of IPC and Section 4/25 of the Arms Act, 1959 and  he  was
awarded the sentence of life imprisonment with a  fine  of  Rs.20,000/-  for
the offence punishable under Section 302  IPC  and  sentence  of  two  years
rigorous imprisonment with fine of Rs.10,000/- for  the  offence  punishable
under Section 4/25 of the Arms Act, 1959. The  above  sentence  was  imposed
upon  the  appellant  for  the  offences  referred  to  supra  were  to  run
concurrently.
   Aggrieved by the decision of the Trial  Court,  the  appellant  filed  an
appeal before the High Court urging various grounds and prayed  for  setting
aside the judgment and order passed by the Trial Court  and  acquit  him  of
the charges framed against him. The High Court upheld the  decision  of  the
Trial Court holding that no attempt was made by the appellant  to  establish
his plea. Hence, this appeal.
  Mr. A.S. Pundir, learned Amicus Curiae for the  appellant  contended  that
the High Court has gravely erred in placing reliance on the  depositions  of
Smt. Madi Devi (PW-1), Smt. Ram Maya Devi (PW-2), Smt. Shanti  Devi  (PW-3),
Jotar Das (PW-4) and Ramesh (PW-8) as all were the members  of  same  family
and it was  natural  for  these  interested  witnesses  who  have  stated  a
concocted version against the appellant in order to save the main  assailant
Ramesh (PW-8), who actually attacked the two victims i.e., the deceased  and
the appellant,  in  his  outrage  against  the  deceased.  The  said  attack
resulted into the death of the deceased and serious injuries caused  to  the
appellant. He further  urged  that  the  courts  below  have  erred  in  not
noticing the concocted case set up by the prosecution against the  appellant
which is  most  unnatural.  He  further  submitted  that  there  is  lot  of
inconsistency in respect of the time of  occurrence  of  incident  that  was
stated by  Smt.  Madi  Devi  (PW-1)  and  Ram  Maya  Devi  (PW-2)  in  their
statements of evidence, which is  sufficient  to  show  that  none  of  said
witnesses could have  been  available  on  the  spot  at  the  time  of  the
incident.
He further contended that the High Court has failed to appreciate  that  the
Trial Court erred in using the part  of  statement  of  the  appellant  made
under Section 313 of the Code of Criminal Procedure, 1973 about  the  injury
caused to  him  by  ‘khukri’  while  ignoring  the  rest  of  the  statement
regarding the assault being made by Ramesh,  the  brother  of  the  deceased
upon   him. Therefore, the concurrent findings of fact recorded by the  High
Court on the charge framed against appellant in exercise  of  its  appellate
jurisdiction and upheld the Trial Court’s decision, which  is  erroneous  in
law as the same is without proper re-appraisal  of  the  evidence.  On  this
ground itself the impugned judgment and order of the High Court is  required
to be set aside by this Court in exercise of its appellate jurisdiction.
On the other hand,  Mr.  Ashutosh  Kumar  Sharma  learned  counsel  for  the
respondent-State sought to justify the concurrent findings of fact  recorded
in the impugned judgment and order by the High Court  contending  that  Smt.
Madi Devi (PW-1), who is an eye witness to the entire  incident  of  murder,
has clearly  narrated  the  whole  incident  in  her  examination  in  chief
evidence before  the  Trial  Court  and  also  successfully  identified  the
accused in the Court. Smt. Ram Maya Devi (PW-2) supported the version of PW-
1. The deposition of the said  witnesses  and  other  prosecution  witnesses
were found to be reliable and trustworthy by the  Trial  Court,  upon  which
the High Court also gave a concurrent finding. Therefore, the same does  not
need interference by this Court in exercise of its appellate jurisdiction.
It was further contended by him that the plea of  the  appellant  that  PW-8
used ‘khukri’ against him but the deceased came in between as  a  result  of
which, she received  fatal  injuries  which  caused  her  death  is  totally
untenable as the appellant has not made  any  effort  at  all  to  give  any
evidence before the Trial Court in support of the said  plea  and  not  even
bothered to offer himself for examination to adduce evidence in  support  of
his defence before the Trial Court. Therefore, the High Court was  right  in
concurring with the judgment of the Trial Court.
This Court at the admission stage  vide  its  order  dated  2.2.2015  issued
notice only for limited purpose to find out as to whether the matter can  be
remitted back to the High Court for re-appraisal of the evidence.
We have heard the learned counsel for the  parties  and  carefully  examined
the concurrent findings recorded by the High Court on the  charges.  From  a
bare perusal of the impugned judgment and order it is abundantly clear  that
the High Court has passed a cryptic order without  appraising  the  evidence
properly and scrutinising the depositions of  PW-1 to  PW-4  and  PW-8,  who
are all members of the same family and they are  interested  witnesses.  The
Trial Court appears to have ignored the appellant’s version that it was  PW-
8, who actually used ‘khukri’ to attack the appellant but unfortunately  the
deceased came in between as  a  consequence  of  which  she  received  fatal
injuries which resulted in her death. The Trial Court has paid  little  heed
to this aspect of the  matter  while  passing  its  judgment  and  order  of
conviction and awarding sentence upon the appellant. It has relied upon  the
depositions  of  the  interested  witnesses   of   the   prosecution   after
disbelieving the case of the  appellant  holding  that  he  did  not  tender
himself for examination before the Trial Court in support of his defence.
The impugned judgment and order passed by the High Court is neither  a  well
reasoned order nor based on  a  careful  re-appraisal  of  the  evidence  on
record. The conclusion arrived at by the High  Court   in  concurring   with
the findings of  the  Trial  Court  on  the  charges  levelled  against  the
appellant are based on proper appreciation of evidence  is  not  sustainable
in law for the reason that the High Court has not re-appraised the  evidence
on record while arriving  at such conclusion.
The first Appellate Court is required in law to  examine  the  case  of  the
appellant with reference to the ground urged in the appeal. The  High  Court
in law is required to re-appraise the evidence adduced  by  the  prosecution
witnesses particularly in the light of the ground urged  on  behalf  of  the
appellant  that  PW-1  to  PW-4  and  PW-8  are  interested  witnesses   and
therefore, their  depositions  should  not  have  been  accepted  to  record
findings of fact on the charges framed against him. As could  be  seen  from
the reasoning portion of the impugned judgment and order no such  effort  is
made by the High Court,  except  recording  the  findings  of  fact  on  the
charges levelled against the appellant holding that the same are proved.
In view of the foregoing reasons, the impugned judgment and order is  liable
to be set aside and we accordingly set aside the same and  remand  the  case
to the High Court for its fresh disposal of the same in accordance with  law
on merits after  affording  an  opportunity  to  the  parties.  Needless  to
mention in this Order that as the appellant is undergoing  sentence  imposed
upon him in the District Jail, Deharadun, Uttarakhand,  and  the  matter  is
pending from 2009, therefore, the High Court is requested to dispose of  the
appeal expeditiously, but not later than 6 months from the date  of  receipt
of this order. With the above observations this appeal is disposed of.

                                     …………………………………………………………J.
                       [T.S. THAKUR]


                       …………………………………………………………J.
 [V. GOPALA GOWDA]

New Delhi,
October 6, 2015

“whether the appellant herein, being the father of the deceased, has statutory right to prefer an appeal to the High Court against the order of acquittal under proviso to Section 372 of Cr.P.C. without obtaining the leave of the High Court as required under sub-Section (3) to Section 378 of Cr.P.C.”, this Court is of the view that the right of questioning the correctness of the judgment and order of acquittal by preferring an appeal to the High Court is conferred upon the victim including the legal heir and others, as defined under Section 2(wa) of Cr.P.C., under proviso to Section 372, but only after obtaining the leave of the High Court as required under sub-Section (3) to Section 378 of Cr.P.C. The High Court of M Adverting to another contention of the learned counsel on behalf of th.P. has failed to deal with this important legal aspect of the matter while passing the impugned judgment and order.e appellant regarding the failure on the part of the High Court to re- appreciate the evidence it is clear from a perusal of the impugned judgment and order passed by the High Court that it has dealt with the appeal in a very cursory and casual manner, without adverting to the legal contentions and evidence on record. The High Court in a very mechanical way has stated that after a perusal of the evidence on record it found no reason to interfere with the decision of the trial court as the prosecution has failed to establish the charges levelled against the accused beyond reasonable doubt and it has dismissed the appeal by passing a cryptic order. This Court is of the view that the High Court, being the Appellate Court, has to exercise its appellate jurisdiction keeping in view the serious nature of the charges levelled against the accused. The High Court has failed to exercise its appellate jurisdiction properly in the appeal filed by the appellant against the judgment and order of acquittal passed by the trial court. Hence, the impugned judgment and order of the High Court is not sustainable in law and the same is liable to be set aside by this Court and the case is required to be remanded to the High Court to consider for grant of leave to file an appeal by the appellant as required under sub-Section (3) to Section 378 of Cr.P.C. and thereafter proceed in the matter For the reasons stated supra, this appeal is allowed by setting aside the impugned judgment and order of the High Court.

                         IN THE SUPREME COURT OF INDIA
                        CRIMINAL APPELLATE JURISDICTION

                      CRIMINAL APPEAL NO. 1315  OF 2015
     (Arising out of S.L.P. (Crl) NO. 7954 of 2014)


SATYA PAL SINGH                     …… APPELLANT

                                   VERSUS

STATE OF M.P. AND ORS.             …… RESPONDENTS

                               J U D G M E N T

V. GOPALA GOWDA, J.

    Leave granted.

This criminal appeal by special  leave  is  directed  against  the  impugned
judgment and order dated 04.03.2014 passed  in  Criminal  Appeal  No.547  of
2013 by the High Court of M.P. at Gwalior whereby the High Court has  upheld
the decision of the  Sessions  Court,  Bhind,  M.P.  (the  trial  court)  in
Sessions Case No. 293/2010 by acquitting all  the  accused  i.e.  respondent
nos. 2 to 6 herein.

The appellant herein made a written  complaint  dated  19.07.2010  regarding
the death  of  his  daughter,  Ranjana  (hereinafter  referred  to  as  “the
deceased”) to the Addl. Superintendent of Police, Bhind, M.P.  The  FIR  was
registered on 27.07.2010. The trial court after the examination of  evidence
on record passed the judgment and order dated 13.06.2013 acquitting all  the
accused of the charges levelled against them  for  the  offences  punishable
under Sections 498A and 304B of Indian Penal Code, 1860  (for  short  “IPC”)
and Section 4 of the Dowry Prohibition Act, 1961 and alternatively  for  the
offence punishable  under  Section  302  of  IPC.  Being  aggrieved  of  the
decision of the  trial  court,  the  appellant  approached  the  High  Court
against the order of acquittal of respondent nos. 2 to  6.  The  High  Court
vide its judgment and order dated 04.03.2014 has upheld  the  trial  court’s
decision of acquittal of all the accused  persons.   The  impugned  judgment
and order of the High Court is challenged in this appeal before  this  Court
questioning its correctness.

Being aggrieved of the impugned judgment and order the appellant  being  the
legal heir of the deceased filed an  appeal  before  the  High  Court  under
proviso to Section 372 of the Code of Criminal Procedure,  1973  (for  short
“the Cr.P.C.”). The High Court, however, has mechanically  disposed  of  the
appeal by passing a cryptic order without examining as to whether the  leave
to file an appeal filed by the appellant as provided under  sub-Section  (3)
to Section 378 of Cr.P.C. can be granted or  not.  The  correctness  of  the
same is questioned by  the  appellant  in  this  appeal  inter  alia  urging
various grounds.

Mr. Prashant Shukla, the learned counsel on behalf of the  appellant  placed
strong reliance upon the judgment rendered by Delhi High Court in  Ram  Phal
v. State & Ors.[1] wherein the Full Bench, after  interpreting  the  proviso
to Section 372 read with Section 2(wa) of the Cr.P.C.,  has  held  that  the
father of the victim has locus standi to prefer an appeal, being  a  private
party coming under the definition of  victim  under  Section  2(wa)  of  the
Cr.P.C. It was contended by him that in the  instant  case,  the  appellant,
being father of the deceased, has locus standi to file an appeal before  the
High Court against the order of  acquittal  under  proviso  to  Section  372
without seeking the leave of the High Court as  required  under  sub-Section
(3) of Section 378 of Cr.P.C. Thus, the appeal filed by  the  appellant  was
maintainable before the High Court of M.P. under  the  abovesaid  provisions
of Cr.P.C. He further urged that undoubtedly, the said legal aspect  of  the
matter has not been dealt with by the High Court and the appeal was  decided
on merits but without examining as to whether the leave to  file  an  appeal
by the  appellant  is  required  to  be  granted  or  not  under  the  above
provisions of Cr.P.C.

The learned counsel for the appellant  drew  the  attention  of  this  Court
towards the decision rendered by Delhi High Court in the  case  referred  to
supra, wherein it has elaborately adverted to the definition  of  victim  as
defined under Section 2(wa)  of  Cr.P.C.  and  proviso  to  Section  372  of
Cr.P.C. and has examined them in the light of their legislative history.  It
has also adverted to 154th Law Commission Report of 1996 in connection  with
the said legal provision of Cr.P.C. and has succinctly held that  where  the
victim is unable to prefer an appeal then the appeal  can  be  preferred  by
persons - such as relatives, foster children, guardians, fiancé  or  live-in
partners, etc. of the victim, who are in a position  to  do  so  in  his/her
behalf. He urged that in  the  instant  case,  there  is  no  need  for  the
appellant, being the father of the deceased,  to  seek  leave  of  the  High
Court as provided under  sub-Section  (3)  to  Section  378  of  Cr.P.C.  to
maintain the appeal before it as it is his  statutory  right  to  prefer  an
appeal against the order of acquittal of all  accused  persons  in  view  of
proviso to Section 372 of Cr.P.C.

It was further urged by him that the High Court ought to  have  granted  the
leave to the appellant to file an appeal by the appellant as required  under
sub-Section (3) of Section 378 of Cr.P.C. and thereafter it  ought  to  have
examined and disposed of the appeal on merits.

He further vehemently contended that the appeal before the  High  Court  was
filed by the appellant challenging the acquittal order passed by  the  trial
court but the High Court has concurred with the decision of the trial  court
mechanically without re-appreciating the  evidence  on  record.  He  further
submitted that the decision of the High Court suffers from error in  law  as
the High Court, being the Appellate Court,  was  required  to  re-appreciate
the evidence on record to exercise its appellate jurisdiction in the  appeal
filed by the appellant with reference to the legal contentions urged in  the
memorandum of appeal but it has failed to do so. The High Court  in  a  very
cursory and casual manner has held that  after  a  perusal  of  evidence  on
record it found no reason to interfere with the decision of the trial  court
as the prosecution has failed to establish beyond reasonable doubt that  the
charges levelled against all the accused are proved  and  it  has  dismissed
the appeal by passing a cryptic order,  which  amounts  to  non-exercise  of
appellate jurisdiction properly  by  the  High  Court.  Thus,  the  impugned
judgment and order of the High Court is vitiated in law and  therefore,  the
same is required to be set aside by this Court. He  further  requested  this
Court to remand the matter to the High  Court  for  re-appreciation  of  the
evidence on record and pass appropriate order on merits of  the  case  after
hearing both the parties.

We have carefully examined the above mentioned  provisions  of  Cr.P.C.  and
the Full Bench decision of Delhi High Court referred  to  supra  upon  which
strong reliance is placed by the learned counsel for  the  appellant.  There
is no doubt that the appellant, being the father of the deceased, has  locus
standi to prefer an appeal before the High Court under  proviso  to  Section
372 of Cr.P.C. as he falls within the definition of victim as defined  under
Section 2(wa) of Cr.P.C. to question the correctness  of  the  judgment  and
order of acquittal passed by the trial court in favour of respondent nos.  2
to 6 in Sessions Case No. 293/2010.
The proviso to Section 372 of Cr.P.C. was amended by Act No.5 of  2009.  The
said proviso confers a statutory right upon the  victim,  as  defined  under
Section 2(wa) of Cr.P.C. to prefer an appeal against an order passed by  the
trial court either acquitting  the  accused  or  convicting  him/her  for  a
lesser offence or imposing inadequate  compensation.  In  this  regard,  the
Full  Bench  of  Delhi  High  Court  in  the  case  referred  to  supra  has
elaborately dealt with the legislative history of insertion of  the  proviso
to Section 372 of Cr.P.C. by Act No. 5 of 2009 with effect from  31.12.2009.
The relevant provision of Section 372 of Cr.P.C. reads thus:

“372. No appeal shall lie from any judgment or order  of  a  Criminal  Court
except as provided for by this Code or by any other law for the  time  being
in force:

Provided that the victim shall have a right to prefer an appeal against  any
order passed by the Court acquitting the accused or convicting for a  lesser
offence or imposing inadequate compensation, and such appeal  shall  lie  to
the  Court  to  which  an  appeal  ordinarily  lies  against  the  order  of
conviction of such Court.”

The said amendment to the provision of Section 372 of Cr.P.C.  was  prompted
by  154th  Law  Commission  Report.  The  said  Law  Commission  Report  has
undertaken a comprehensive review of Cr.P.C. and  its  recommendations  were
found to be  very  appropriate  in  amending  the  Cr.P.C.  particularly  in
relation to provisions concerning arrest, custody and remand,  procedure  to
be followed in  summons  and  warrant-cases,  compounding  of  offences  and
special protection in respect of women and inquiry and trial of  persons  of
unsound mind. Further, the Law  Commission  in  its  report  has  noted  the
relevant aspect of  the  matter  namely  that  the  victims  are  the  worst
sufferers in  a  crime  and  they  do  not  have  much  role  in  the  Court
proceedings. They need to be given certain rights and compensation  so  that
there is no distortion of the criminal justice system. The  said  report  of
the Law Commission has also taken note of the views  of  the  criminologist,
penologist and reformers of  criminal  justice  system  at  length  and  has
focused on victimology, control  of  victimization  and  protection  of  the
victims of crimes and the issues of compensation to be awarded in favour  of
them. Therefore, the Parliament on the basis of the aforesaid Report of  the
Law Commission, which is victim oriented in approach,  has  amended  certain
provisions of the Cr.P.C. and in that amendment the proviso to  Section  372
of Cr.P.C. was added to confer  the  statutory  right  upon  the  victim  to
prefer an appeal before the High Court against acquittal order, or an  order
convicting the accused for the lesser offence or against the order  imposing
inadequate compensation.

The Full Bench of the High Court  of  Delhi  after  examining  the  relevant
provisions under Section 2(wa) and proviso to Section  372  of  Cr.P.C.,  in
the light of their legislative history has held that the right to prefer  an
appeal conferred upon the victim or relatives of the  victim  by  virtue  of
proviso to Section 372 is an independent statutory right. Therefore, it  has
held that there is no need for the  victim  in  terms  of  definition  under
Section 2(wa) of Cr.P.C. to seek the leave of the  High  Court  as  required
under sub-Section (3) of Section 378 of Cr.P.C. to prefer  an  appeal  under
proviso to Section 372 of Cr.P.C. The said view of the  High  Court  is  not
legally correct for the reason that the  substantive  provision  of  Section
372 of Cr.P.C. clearly provides that no appeal shall lie from  any  judgment
and order of a Criminal Court except as provided  for  by  Cr.P.C.  Further,
sub-Section (3) to Section 378 of Cr.P.C. provides that  for  preferring  an
appeal to the High Court against an order of acquittal it  is  necessary  to
obtain its leave. We have  to  refer  to  the  rules  of  interpretation  of
statutes to find out what is the effect of the proviso  to  Section  372  of
Cr.P.C., it is well established that the proviso of a statute must be  given
an interpretation limited to the subject-matter of the  enacting  provision.
Reliance is placed on the decision of this  Court  rendered  by  four  Judge
Bench in Dwarka Prasad v. Dwarka Das  Saraf[2],  the  relevant  para  18  of
which reads thus:
“18. … A proviso must be limited  to  the  subject-matter  of  the  enacting
clause. It is a settled rule of  construction  that  a  proviso  must  prima
facie be read and considered in relation to the principal  matter  to  which
it is a proviso. It is not a separate or independent enactment.  “Words  are
dependent on the principal enacting words to which  they  are  tacked  as  a
proviso. They cannot be read as divorced from their  context”  (Thompson  v.
Dibdin, 1912 AC 533). If the rule of construction  is  that  prima  facie  a
proviso should be limited in its operation  to  the  subject-matter  of  the
enacting clause, the stand we have taken is sound. To  expand  the  enacting
clause, inflated by the  proviso,  sins  against  the  fundamental  rule  of
construction that a proviso must be considered in relation to the  principal
matter to which it stands as a  proviso.  A  proviso  ordinarily  is  but  a
proviso, although the golden rule is to read the  whole  section,  inclusive
of the proviso, in such manner that they mutually throw light on each  other
and result in a harmonious construction.”
          (emphasis laid by this Court)
 Further, a three Judge Bench of this Court by majority of 2:1 in  the  case
of S. Sundaram Pillai v. V.R. Pattabiraman[3] has elaborately  examined  the
scope of proviso to the substantive provision of the Section  and  rules  of
its interpretation. The relevant paras are reproduced hereunder:
“30. Sarathi in Interpretation of Statutes at pages  294-295  has  collected
the following principles in regard to a proviso:
(a)When one finds a proviso to a section the natural  presumption  is  that,
but for the proviso, the enacting part of the section  would  have  included
the subject-matter of the proviso.

(b)A proviso must be construed with reference to the preceding parts of  the
clause to which it is appended.

(c)Where the proviso is directly repugnant to a section, the  proviso  shall
stand and be held a repeal of the section as the proviso speaks  the  latter
intention of the makers.

(d)Where the section is doubtful, a proviso may be used as a  guide  to  its
interpretation: but when it is clear, a proviso cannot imply  the  existence
of words of which there is no trace in the section.

(e)The proviso is subordinate to the main section.

(f)A proviso does not enlarge an enactment except for compelling reasons.

(g)Sometimes an unnecessary proviso is inserted by way of abundant caution.

(h)A construction placed  upon  a  proviso  which  brings  it  into  general
harmony with the terms of section should prevail.

(i)When a proviso is repugnant to the enacting part, the  proviso  will  not
prevail over the absolute terms of a  later  Act  directed  to  be  read  as
supplemental to the earlier one.

(j)A proviso may sometimes contain a substantive provision.

 XXX            XXX                 XXX

32. In Ishverlal Thakorelal Almaula v. Motibhai Nagjibhai it was  held  that
the main object of a proviso is merely to qualify  the  main  enactment.  In
Madras and Southern Mahrata Railway Co. Ltd. v.  Bezwada  Municipality  Lord
Macmillan observed thus:

“The proper function of a proviso is to except and deal with  a  case  which
would otherwise fall within the general language of the main enactment,  and
its effect is confined to that case.”

33. The above case was approved by this Court  in  CIT  v.  Indo  Mercantile
Bank Ltd. where Kapur, J. held that the proper function  of  a  proviso  was
merely to qualify the generality of  the  main  enactment  by  providing  an
exception and taking out, as it were, from  the  main  enactment  a  portion
which, but for the proviso, would fall within the main  enactment.  In  Shah
Bhojraj Kuverji Oil Mills and Ginning  Factory  v.  Subbash  Chandra  Yograj
Sinha Hidayatullah, J., as he then was, very aptly and succinctly  indicated
the parameters of a proviso thus:

“As a general rule, a proviso is added to an enactment to qualify or  create
an exception to what is in the enactment, and ordinarily, a proviso  is  not
interpreted as stating a general rule.”

XXX               XXX                XXX

36. While interpreting a proviso care must be  taken  that  it  is  used  to
remove special cases  from  the  general  enactment  and  provide  for  them
separately.

37. In short, generally  speaking,  a  proviso  is  intended  to  limit  the
enacted provision so as to except something which would have otherwise  been
within it or in some measure to modify  the  enacting  clause.  Sometimes  a
proviso may be embedded in the main provision and becomes an  integral  part
of it so as to amount to a substantive provision itself.”
                      (emphasis supplied)

Thus, from a reading of the above said legal  position   laid  down  by  this
Court in the cases referred to  supra,  it  is  abundantly  clear  that  the
proviso to Section  372  of  Cr.P.C.  must  be  read  along  with  its  main
enactment i.e., Section 372 itself and  together  with  sub-Section  (3)  to
Section 378 of Cr.P.C. otherwise the substantive provision  of  Section  372
of Cr.P.C. will be rendered nugatory, as it clearly states  that  no  appeal
shall lie from any judgment or order of a Criminal Court except as  provided
by Cr.P.C.

Thus, to conclude on the legal issue:
“whether the appellant  herein,  being  the  father  of  the  deceased,  has
statutory right to prefer an appeal to the High Court against the  order  of
acquittal under proviso to Section 372  of  Cr.P.C.  without  obtaining  the
leave of the High Court as required under sub-Section (3) to Section 378  of
Cr.P.C.”, this Court is of the  view  that  the  right  of  questioning  the
correctness of the judgment and order of acquittal by preferring  an  appeal
to the High Court is conferred upon the victim including the legal heir  and
others, as defined under Section 2(wa) of Cr.P.C., under proviso to  Section
372, but only after obtaining the leave of the High Court as required  under
sub-Section (3) to Section 378 of  Cr.P.C.   The  High  Court  of  M

Adverting to another contention of the learned  counsel  on  behalf  of  th.P.  has
failed to deal with this important legal aspect of the matter while  passing
the impugned judgment and order.e
appellant regarding the failure on  the  part  of  the  High  Court  to  re-
appreciate the evidence it is clear from a perusal of the impugned  judgment
and order passed by the High Court that it has dealt with the  appeal  in  a
very cursory and casual manner, without adverting to the  legal  contentions
and evidence on record. The High Court in a very mechanical way  has  stated
that after a perusal of the  evidence  on  record  it  found  no  reason  to
interfere with the decision of  the  trial  court  as  the  prosecution  has
failed  to  establish  the  charges  levelled  against  the  accused  beyond
reasonable doubt and it has  dismissed  the  appeal  by  passing  a  cryptic
order. This Court is of the view that the High Court,  being  the  Appellate
Court, has to exercise  its  appellate  jurisdiction  keeping  in  view  the
serious nature of the charges levelled against the accused. The  High  Court
has failed to exercise its appellate jurisdiction  properly  in  the  appeal
filed by the appellant against the judgment and order  of  acquittal  passed
by the trial court.

  Hence,  the  impugned  judgment  and  order  of  the  High  Court  is  not
sustainable in law and the same is liable to be set aside by this Court  and
the case is required to be remanded to the High Court to consider for  grant
of leave to file an appeal by the appellant as  required  under  sub-Section
(3) to Section 378 of Cr.P.C. and thereafter proceed in the matter

 For the reasons stated supra, this appeal is allowed by setting  aside  the
impugned judgment and order of the High Court. The case is remanded  to  the
High Court to hear the appellant with regard to grant of leave  to  file  an
appeal as the appellant is  legal  heir  of  the  victim  as  defined  under
Section 2(wa) of Cr.P.C. and dispose of the appeal in  accordance  with  law
in the light  of  observations  made  in  this  order  as  expeditiously  as
possible.
                                         …………………………………………………………J.
                             [T.S. THAKUR]


                             …………………………………………………………J.
          [V. GOPALA GOWDA]
New Delhi,
October 6, 2015




-----------------------
[1]
      [2]  221 (2015) DLT 1
[3]
      [4]  (1976) 1 SCC 128
[5]
      [6]  (1985) 1 SCC 591

-----------------------
|REPORTABLE        |

whether the termination of the services of the appellant Gambhir was in any manner vitiated. = At this stage, it may be mentioned that in Chairman, Canara Bank, Bangalore v. M.S. Jasra[4] an employee of the Lakshmi Commercial Bank (which had amalgamated with Canara Bank at the same time when Hindustan Commercial Bank amalgamated with the PNB) the contention of the employee was that the age of retirement (60 years) in Lakshmi Commercial Bank could not be varied to his disadvantage (58 years) on the amalgamation of that Bank with the Canara Bank. This contention was rejected by holding that the employee became an employee of the Canara Bank and was, therefore, entitled to the rights given to employees of the Canara Bank. Applying this principle to the facts of this case, it is clear that Gambhir became an employee of the PNB and was subject to the discipline of all its rules and regulations, including those pertaining to misconduct. 28. It is also contended that the allegations against Gambhir had already been inquired into by the Hindustan Commercial Bank and therefore the PNB could not reopen issues relating to the alleged misconduct and hold an inquiry into them. We do not find any merit in this submission also. There were a large number of transactions which were alleged to be irregular and in which Gambhir was said to be involved. It is possible that there may have been an overlap in respect of some of them (although no such overlap has been shown to us) but that is not an indication that the alleged irregularities committed by Gambhir in respect of other transactions were condoned. In fact, Gambhir has not pointed out which were the transactions which were the subject matter of concern in the Hindustan Commercial Bank and which were the transactions which were the subject matter of inquiry by the PNB. This would have certainly given us a far clearer picture. However, on a random consideration of the allegations made, it does appear that there were certain transactions particularly the transactions pertaining to R.K. Tandon & Co. which were not inquired into by the Hindustan Commercial Bank. It may be recalled that it is the admitted position that in respect of one alleged irregular transaction, the Hindustan Commercial Bank could not take any decision one way or the other due to the amalgamation of that Bank with the PNB. We have not found any duplication in the allegations and are not inclined to carry out any investigation in this regard at this stage. 29. In view of the above, we find no reason to interfere with both the judgments delivered by the Calcutta High Court. The appeal is dismissed.

                                                                  REPORTABLE

                        IN THE SUPREME COURT OF INDIA

                        CIVIL APPELLATE JURISDICTION

                        CIVIL APPEAL NO. 6975 OF 2009

Jagdish Lal Gambhir                          ....Appellant


                                   Versus

Punjab National Bank & Ors.                         …Respondents


                               J U D G M E N T


Madan B. Lokur, J.

1.    This appeal is directed against the  judgment  and  order  dated  24th
July, 2006 passed by the Division Bench of the High  Court  at  Calcutta  in
FMA No.388 of 2001.
2.    The  issue  for  consideration  is  whether  the  termination  of  the
services of the appellant Gambhir  was  in  any  manner  vitiated.   In  our
opinion, the question requires to be answered in the negative and we  uphold
the judgment and order of the Division Bench  confirming  the  dismissal  of
the writ petition filed by Gambhir.
3.    Gambhir was working as an Assistant General Manager in  the  Hindustan
Commercial  Bank  Limited.   This  bank  was  amalgamated  with  the  Punjab
National Bank on 19th December, 1986.  On amalgamation, the services  of  28
or 29 officials of the Hindustan Commercial Bank including Gambhir were  not
taken over by the Punjab National Bank (for short the  ‘PNB’).   It  may  be
stated that two other banks were similarly amalgamated with the Canara  Bank
and the State Bank of India, but we are not concerned with them.
4.    Several officers whose services were not taken over  by  the  PNB  and
other banks filed a writ petition in this Court  under  Article  32  of  the
Constitution challenging the failure of the transferee banks in  not  taking
over their services.  This Court decided the writ petition and the  decision
is reported as K.I. Shephard v. Union of India[1].   It  was  held  by  this
Court that the transferee banks could not refuse to take over  the  services
of the officials  of  the  transferor  banks.   Consequently,  the  PNB  was
obliged to  take  over  the  officials  of  the  Hindustan  Commercial  Bank
including Gambhir.  It was also directed  if  there  was  any  necessity  of
initiating  disciplinary  proceedings  against  any   of   the   transferred
employees, the transferee banks including PNB were at liberty to do so.
5.    As far as  Gambhir  is  concerned,  while  he  was  working  with  the
Hindustan Commercial Bank, he was issued a  charge-sheet  on  3rd  February,
1983 alleging irregularities in sanctioning of loans  to  the  customers  of
the bank and a failure to take follow  up  steps.  Gambhir  replied  to  the
charge-sheet and was thereafter administered a ‘caution’ and  was  asked  to
be more discreet in respect of granting advances and  management  of  credit
portfolio.  Thereafter in 1986 another set of allegations were made  against
Gambhir but no final decision was taken by  the  Hindustan  Commercial  Bank
until its amalgamation with the PNB.
6.    In view of the above, the PNB issued  a  charge-sheet  to  Gambhir  on
28th November, 1987 in  which  it  was  alleged  that  he  had  deliberately
flouted the bank lending norms and accommodated some parties  unauthorisedly
thereby putting huge funds of the bank at stake.
7.    Feeling  aggrieved  by  the  initiation  of  departmental  proceedings
against him, Gambhir preferred W.P. (C) No. 121 of 1988 in this Court  under
Article 32 of the Constitution.  By an order dated  22nd  April,  1988  this
Court declined to entertain the writ petition but expressed  the  view  that
the inquiry against Gambhir should be completed quickly.    Thereafter,  the
inquiry was conducted and  by  a  report  dated  22nd  September,  1988  the
Inquiry Officer held that the charges against Gambhir were proved  and  that
he had  failed  to  discharge  his  duties  with  utmost  integrity,  honest
devotion and diligence thereby putting huge funds of the bank at stake.
8.    In the meanwhile, Gambhir preferred a writ petition  in  the  Calcutta
High Court being C.M.No.11992  (W)  of  1988  challenging  the  charge-sheet
issued to him and the inquiry proceedings.
9.    It appears that during the pendency of the writ petition  Gambhir  was
dismissed from service with effect from 2nd August, 1989.
10.   Be that as it may the writ  petition  was  dismissed  by  the  learned
Single Judge by judgment and order dated 7th December, 2000.
11.   Before the learned Single Judge,  Gambhir  raised  three  contentions.
It was firstly contended that the charge-sheet  was  issued  to  him  by  an
officer of the same rank, that is, an Assistant  General  Manager  and  this
was not permissible in law.  Therefore, since the issuance  of  the  charge-
sheet was itself vitiated the entire departmental  proceedings  against  him
were null and void.  The learned Single Judge rejected  this  contention  by
referring to Clause 12 of the scheme of amalgamation  whereby  the  PNB  was
entitled  to  classify  and  categorize  the  employees  of  the   Hindustan
Commercial Bank whose services were being taken over.  As far as Gambhir  is
concerned, even though he may have been an Assistant General Manager in  the
Hindustan Commercial Bank, he was placed as a Scale-III officer in the  PNB.
 This is an admitted position and Gambhir did not make any  grievance  about
this at any stage.  The charge-sheet was no doubt  issued  by  an  Assistant
General Manager of the PNB  but  he  was  placed  higher  than  a  Scale-III
officer in  the  hierarchy  and  under  the  Punjab  National  Bank  Officer
Employees (Discipline and Appeal Regulations), 1977  the  Assistant  General
Manager was the disciplinary authority for officers placed in  Scale-III.
12.   The second contention  urged  by  Gambhir  was  that  the  allegations
against him were already the subject matter of an inquiry by  the  Hindustan
Commercial Bank and thus could not be reopened by the PNB merely because  of
a change of employer.  This contention was  also  rejected  by  the  learned
Single Judge holding that what was sought  from  Gambhir  by  the  Hindustan
Commercial Bank was an  explanation  with  regard  to  certain  transactions
which indicated an irregular  conduct  on  his  part.   However,  no  formal
disciplinary proceedings had been initiated against  Gambhir  and  that  did
not preclude the PNB from looking  into  those  alleged  irregularities  and
holding a formal inquiry into them.
13.   The third contention urged by Gambhir before the learned Single  Judge
was that Inquiry Report was not supplied to him before  his  dismissal  with
effect from 2nd August, 1989.  This contention was rejected by  the  learned
Single Judge by holding  that  the  requirement  of  supplying  the  Inquiry
Report arose out of a decision of this Court in  Union  of  India  v.  Mohd.
Ramzan Khan[2]. However that decision was rendered by this  Court  (on  20th
November,  1990)  after  Gambhir  was  dismissed  from  his  service.   That
decision had only prospective effect.  Subsequently, the Constitution  Bench
in Managing Director, ECIL v. B. Karunakar[3]  made it clear that orders  of
punishment passed prior  to  the  decision  in  Mohd.  Ramzan  Khan  without
furnishing the report of  the  Inquiry  Officer  should  not  be  disturbed.
Therefore, Gambhir had no right to a copy of the  Inquiry  Report  prior  to
his dismissal.
14.   At this stage it may be mentioned that Gambhir has not challenged  the
merits of the inquiry at any stage or the punishment  awarded  to  him.   In
that sense Gambhir was not prejudiced by the failure to supply  him  with  a
copy of the Inquiry Report.
15.   Feeling aggrieved by the  decision  rendered  by  the  learned  Single
Judge, Gambhir preferred an appeal before the Division Bench  but  that  was
dismissed by the impugned judgment and order dated 24th July, 2006.
16.   Before the Division Bench  Gambhir  raised  five  contentions.   These
were noted by the Division Bench as follows:-
“(i)  Gambhir was entitled to be appointed in terms  of  the  order  of  the
Apex  Court  in  K.I.  Shephard  (supra).   He  was  to  be  fitted  in  the
appropriate post which he was holding earlier which was not done.
(ii)The disciplinary authority who issued the charge-sheet was nor  properly
authorized to act as such under the service rules.
(iii) No copy of the inquiry report was given to him.  As a result he  could
not defend himself in the proceeding by  offering  his  explanation  to  the
disciplinary authority pointing out the illegality  and  irregularity  crept
in the enquiry report.
(iv)  No second show cause notice was issued to him.
(v)   The charges were stale and could not be proceeded with.”

17.    As far as the first contention  is  concerned  it  has  already  been
mentioned that Gambhir was posted as a Scale–III officer  in  the  PNB  upon
the amalgamation  of  the  Hindustan  Commercial  Bank  with  the  PNB.   No
grievance was made by Gambhir at any point of time regarding his  placement.
 The Division Bench therefore rejected his contention and held that  he  was
appropriately placed in the PNB as a Scale-III officer.  The Division  Bench
held that that apart since the Hindustan Commercial Bank was a much  smaller
bank than the PNB, Gambhir’s designation as an Assistant General Manager  in
the Hindustan Commercial Bank could not be equated  with  the  corresponding
designation in the PNB.  In any event, there was no loss of pay  as  far  as
Gambhir was concerned.
18.     The second contention urged by Gambhir  was  also  rejected  by  the
Division Bench relying principally upon the decision of the  learned  Single
Judge.  Additionally, it was held that when Gambhir  preferred  W.P.(C)  No.
121 of 1988 in this Court, it was observed that the inquiry against  Gambhir
should be expedited.  The Division Bench was of the view that  this  was  an
indication that this Court did not find any procedural irregularity  in  the
issuance of the charge-sheet against Gambhir.
19.     The third contention urged by Gambhir was rejected in   view of  the
decisions rendered in Mohd. Ramzan Khan and Karunakar. Additionally, it  was
noted that Gambhir had been supplied with a copy of the Inquiry  Report  but
had not raised any issue on the merits of the allegations made  against  him
and the findings arrived at by the Inquiry Officer.
20.     The fourth contention was also rejected by  the  Division  Bench  on
the ground that there was no requirement of  issuing  a  second  show  cause
notice to Gambhir.
21.     The last contention urged by Gambhir was  also  rejected  since  the
PNB was entitled to look  into  any  final  irregularity  committed  by  the
employees of the Hindustan Commercial Bank whose services  were  taken  over
by the PNB.  On this basis, the Division Bench  dismissed  Gambhir’s  appeal
by the impugned judgment and order dated  24th  July,  2006.   It  is  under
these circumstances that Gambhir is now before us.
22.     The contentions urged by learned  counsel  for  Gambhir  are  merely
repetitions of the contentions urged either before the learned Single  Judge
or before the Division Bench of the High Court.
23.     As far as the principal ground urged by  learned  counsel  that  the
charge-sheet could not have been issued to Gambhir by the Assistant  General
Manager in the PNB is concerned, we find no merit in  the  contention.   The
admitted position is that Gambhir was a Scale-III officer in the  PNB  while
the rank of the Assistant General Manager in the PNB  is  Scale-V.   Gambhir
could only have been placed in Scale–III in terms  of  his  responsibilities
and keeping in mind the corresponding scale upon  the  amalgamation  of  the
Hindustan Commercial  Bank  with  the  PNB.  Clause  12  of  the  scheme  of
amalgamation as sanctioned by the Government  of  India  clearly  states  as
follows:-
“The transferee bank shall, on the expiry of a period not longer than  three
years from the date on which this scheme is sanctioned, pay or grant to  the
employees of the transferor bank the same remuneration and  the  same  terms
and  conditions  of  service  as  are  applicable  to   the   employees   of
corresponding  rank  or  status  of  the  transferee  bank  subject  to  the
qualifications and experience of the said employees of the  transferor  bank
being the same as or equivalent to those of  such  other  employees  of  the
transferee bank.”


24.     There is no allegation by Gambhir at any point of time that  he  was
either reduced in rank or that his placement was incorrect  or  any  similar
grievance.  That being the position, it is now  too  late  in  the  day  for
Gambhir to  contend  that  his  placement  in  the  PNB  was  erroneous  and
therefore the issuance of the charge-sheet by the Assistant General  Manager
in the PNB was vitiated in any manner.
25.     We are in agreement with the view of the High Court that  the  rules
applicable to Gambhir  were  the  Punjab  National  Bank  Officer  Employees
(Discipline and Appeal) Regulations, 1977. In terms  of  these  Regulations,
as discussed by the High Court, the disciplinary authority  of  Gambhir  was
the Assistant General Manager (P).  That being the position, merely  because
Gambhir was an Assistant General Manager in the  Hindustan  Commercial  Bank
does not mean that the Regulations of 1977 would not be  applicable  to  him
or that the Assistant General Manager (P) in the PNB could not  have  issued
a charge-sheet to Gambhir.
26.     At this stage, it may be mentioned that in  Chairman,  Canara  Bank,
Bangalore v. M.S. Jasra[4]  an  employee  of  the  Lakshmi  Commercial  Bank
(which had amalgamated with Canara Bank at  the  same  time  when  Hindustan
Commercial Bank amalgamated with the PNB) the  contention  of  the  employee
was that the age of retirement (60 years) in Lakshmi Commercial  Bank  could
not be varied to his disadvantage (58 years) on  the  amalgamation  of  that
Bank with the Canara Bank.  This contention was  rejected  by  holding  that
the employee became an employee of  the  Canara  Bank  and  was,  therefore,
entitled to the rights given to employees of the Canara Bank.
27.     Applying this principle to the facts of this case, it is clear  that
Gambhir became an employee of the PNB and was subject to the  discipline  of
all its rules and regulations, including those pertaining to misconduct.
28.     It is also  contended  that  the  allegations  against  Gambhir  had
already been inquired into by the Hindustan Commercial  Bank  and  therefore
the PNB could not reopen issues relating to the alleged misconduct and  hold
an inquiry into them.  We do not find any merit  in  this  submission  also.
There were  a  large  number  of  transactions  which  were  alleged  to  be
irregular and in which Gambhir was said to  be  involved.   It  is  possible
that there may have been an overlap in respect of some of them (although  no
such overlap has been shown to us) but that is not an  indication  that  the
alleged  irregularities  committed  by   Gambhir   in   respect   of   other
transactions were condoned.  In fact, Gambhir  has  not  pointed  out  which
were the transactions which were  the  subject  matter  of  concern  in  the
Hindustan Commercial Bank and which were the  transactions  which  were  the
subject matter of inquiry by the PNB.  This would have certainly given us  a
far clearer picture.
However, on a random consideration of the allegations made, it  does  appear
that  there  were  certain  transactions   particularly   the   transactions
pertaining to R.K. Tandon  &  Co.  which  were  not  inquired  into  by  the
Hindustan Commercial Bank. It may  be  recalled  that  it  is  the  admitted
position  that  in  respect  of  one  alleged  irregular  transaction,   the
Hindustan Commercial Bank could not take any decision one way or  the  other
due to the amalgamation of that Bank with the PNB.  We have  not  found  any
duplication in the allegations  and  are  not  inclined  to  carry  out  any
investigation in this regard at this stage.
29.     In view of the above, we find no reason to interfere with  both  the
judgments delivered by the Calcutta High Court.  The  appeal  is  dismissed.


                                                                ……………………………J
                                                      (Madan B. Lokur)


                                                               …………………………..J
New Delhi;                                        (R.K. Agrawal)
October 6, 2015
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[1]    (1987) 4 SCC 431
[2]    (1991) 1 SCC 588
[3]    (1993) 4 SCC 727
[4]    (1992) 2 SCC 484