In a petition filed under section 397 & s. 398 the Company Law Board by an interim order appointed an auditor to look into the misappropriation of funds of the company and to see whether the person in charge of the management of the company had acted to the detriment of the other shareholder of the company. The petitioner on whose application such an interim order was passed, alleging professional misconduct, sought a direction for withdrawing of the auditor and appointment of an independent auditor. The Company Law Board rejected this prayer on the ground that is not practical. The professional misconduct was not a matter would normally examined by the Company Law Board nor could the court examine any such sundry matters. The matter of professional misconduct was to be examined by the disciplinary body. No interference with the order of the Company Law Board was warranted.

Smt. S. Kunjithamala & Ors. vs HVAC System P. Ltd. & Ors. [ (2010) 154 Comp Cas 405 (Kar)]

The respondent was neither a subscriber to the memorandum of the company who had agreed to become a member nor a person who had agreed in writing to become a member of a company as envisaged under s. 41 of the Companies Act, 1956. The Petitioner–company was registered under section 25 of the Act and had no equity share capital holding would have constituted the respondent a shareholder. The complaint was not maintainable under section 621 of the Act and was to be quashed.

Madras Cricket Club and Ors. vs M. Subbiah [ (2010) 154 Comp Cas 353 (Mad)]

The petitioner was not a director of the company on the date the 1999 Regulations were framed, he could not be held vicariously liable for the violation of those Regulations and the directions, issued by the Securities and Exchange Board of India to the company. He could not be made liable for the offence under the Securities and Exchange Board of India Act, 1992 was committed by the company. Therefore, he could not have been a person in charge of the business of the company on the date the offence was committed. There was no allegation that the 1999 Regulations were violated or the directions issued by the Securities and Exchange Board of India were ignored by the company with the consent or connivance of the petitioner or it was attributable to any act on the part of the petitioner. Therefore, he was not covered even by section 27(2) of the 1992 Act. That since there was a reasonable certainty that the trial would not result in conviction of the petitioner it would be neither fair or nor reasonable to allow it to be proceeded with against the petitioner and so the criminal complaint against the petitioner was to be quashed.

Raj Chawla vs Securities and Exchange Board of India & Anr. [ (2010) 154 Comp Cas 16 (Del)]

The applicant is a party to the proceedings of the board meeting and signed on the minutes. In pursuance of the resolution of the board the company held its extraordinary general meeting and resolved to delete the Article 15 of the Article of Association and also substituted Article 16. The applicant is also a party to this extraordinary general meeting. The applicant being party to the board and general meetings cannot plead ignorance of the same. The applicant being a director and party to the board and general meeting wherein the decisions have been taken to delete Article 15 and substitute article 16 now cannot state in the affidavit that no such special resolution was ever passed by the shareholder for amending the articles of the company. So, convening the annual general meeting of the company is statutory compliance and the Company Law Board cannot interfere in the affairs of the company. Therefore the application is misconceived and devoid of any merit and liable to be dismissed.

A. Mylsamy vs Sri Gajendira Paper and Boards (P) Ltd. [ (2010) 1 Comp LJ 622 (CLB)]