LexPRANAB KUMAR PAL versus M/S. LIZ. INVESTMENT PVT. LTD. AND ORS.
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[2009] 6 S.C.R. 751 PRANAB KUMAR PAL A v. MIS. LIZ. INVESTMENT PVT. LTD. AND ORS. (Civil Appeal No. 2654 of 2009) APRIL 20, 2009 B [DR. ARIJIT PASAYAT, V.S. SIRPURKAR AND ASOK KUMAR_ GANGULY, JJ.] Compani(Js Act, 1956 - ss. 398, 402, 403, 235 and 237 - Contract - Award of - By Tui Nordic to Across India - c Petition alleging diversion of corporate opportunity by appellant-Al - Direction by Company Law Board to respondent no. 1 to nominate three Directors on Board of the company and restrain appellant from resigning as Director - ,..... Order of High Court that appellant has right to resign subject D ~ to several conditions - Direction to appellant to furnish security with CLB - Pursuant thereto, resignation of appellant - Clarification order that resignation of appellant to come into force on the date of acceptance of security by CLB - Appeal before Supreme Court - Appellant's case that said order E antithetical to freedom of employment of individual - Held: CLB to decide matters afresh - Directions to deposit security ~ " subject to decision of CLB. CIVIL APPELLATE JURISDICTION : Civil Appeal No. F 2654 of 2009. From the Judgment & Order dated 05.12.2005 of the High Court of Delhi at New Delhi, in Co. A (SB) No. 12 of 2005 and Co. A (SB) No. 13 of 2005 and Order dated 23.01.2006 in C.A. ~ ~ No. 109 of 2006 in Co. A. (SB) No. 12 of 2005. G C.A. Sundaram, Ritu Bhalla, Dhruv Dewan and Monark . Gelhot (for Suresh A Shroff & Co.) for the Appellant(s). 751 H 752 SUPREME COURT REPORTS [2009] 6 S.C.R. A Shyam Dewan, Arvind Kumar, E.C. Agrawala, Mahesh Agarwal, Rishi Agrawala, Gaurav Goel and Amit Kr. Sharma for the Respondent(s). The Judgment of the Court was delivered by B - DR. ARIJIT PASAYAT, J. 1. Lea·1e granted. c D E 2. Challenge in this appeal is to the order passed by a learned Single Judge of the Delhi High Court. By the impugned Judgment the High Court held as follows: ' "1. In respect of this contract awarded by Tui-Nordic to Across India, Across India shall file its statement of account every. month giving the income/receipts and expenditure on the said project. (2) It shall also give every three months, statement indicating the progress in the said project (3) Across-India and/or Mr. Pal shall jointly and severally furnish security of Rs.2.85 crores with the CLB to its satisfaction, so that in the event the petition succeeds and it is held that these appellants have made unlawful gains at the cost of the company, the company is able to recover the said loss without any further process. In such form such a security is to be given is to be decided by the CLB. F (4) CLB would be entitled to put the appellant to such other similar terms, as it thinks fit, in order to protect the rights of the respondents herein." 3. By order dated 23.1.2006 certain clarifications were G made. 4. Factual position as highlighted by the appellant is as follows: The Respondent No. I filed a Petition before the Company H Law .Board under Sections 398, 402, 403, 235 and 237 of the .... -.. PRANAB KUMAR PAL v. LIZ. INVESTMENT PVT. 753 LTD. AND ORS. [DR. ARIJIT PASAYAT, J.] Companies Act, 1956 (in short the 'Act') alleging inter alia, A diversion of corporate opportunity by the appellant herein. The Company Law Board vide its Order dated 09.06.2005 held that it prima facie finds that a possible corporate opportunity had be~n taken away from the Respondent No.I company and thereafter directed that the Respondent No.I should nominate B three Directors on the Board of Respondent No. 10 company and that status quo be maintained. The Company Law Board further directed that the Petitioner should be restrained from . . resigning as a Director of the Respondent No.2 company. The appellant being aggrieved by the said Order filed an Appeal c before the High Court being Co. A (SB) No. 12 of 2005 and Respondent No.10 company filed an Appeal being Co. A. No.(SB) 13 of 2005. After hearing, the High Court vide it composite Order dated 05.12.2005 in Co. A No. (SB) No. 12 of 2005 and Co. A No.(SB) 13 of 2005 set aside the Order D ~ dated 09.06.2005 passed by the Company Law Board. The • High Court has further held that the appellant has a right to resign as a Director of the Respondent No.2 company. However, several conditions have been imposed by the High Court. Pursuant to the said Order, the appellant resigned on E 12.1.2006. Thereafter the
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