Hyderabad: The petition seeking change of management as well as appointment of a special officer to run the affairs at Deccan Chronicle Holdings Limited (DCHL) is likely to come up for hearing before the principal bench of the Central Law Board, New Delhi, on today (Tuesday) even as company’s senior counsel tried to convince the High Court in Hyderabad to stop the CLB from going ahead with the case, albeit with little success on Monday.
Arguing in a writ petition filed against the Serious Fraud Investigation Office (SFIO)’s application as well as its listing for hearing by the CLB, New Delhi, DCHL counsel DV Sitarama Murthy said there was no basis for seeking such a drastic action based on a mere inspection report filed by the Registrar of Companies (RoC), and neither the government had formulated an opinion on the matter nor any investigation was conducted to substantiate the move.
The company requested the court to prohibit the CLB principal bench from proceeding with this case. SFIO has filed a case under Section 388-B of the Companies Act, 1956, under which the central government may state a case against the person and refer the same to the Company Law Board with a request that it may inquire into the case as to whether or not such person is fit and proper to hold the office of director or any other office connected with the conduct and management of any company.
The Centre had followed a similar process when it swung into action to salvage scam-hit Satyam in the past.
Meanwhile, Justice P Naveen Rao, however, asked the counsel, if this court had the jurisdiction over a matter that was being heard by the CLB, a statutory body constituted to decide on such and other company matters under the Companies Act. The counsel argued that the High Court had the jurisdiction over the matter as the cause of action arises from the city of Hyderabad.
When the judge advised the counsel to raise these issues before the CLB instead of seeking a relief from the High Court, Rao said the principal bench had taken up the main case for hearing on Tuesday keeping aside the objections raised by the company over the SFIO application as soon as the case was listed for the hearing.
The counsel had to dedicate most of the latter part of his arguments on whether the High Court had the jurisdiction over this matter, which was already being heard by the CLB, since the Judge said he was not convinced of the position taken by the lawyer. Subsequently, the judge agreed to hear more arguments on this particular aspect during the post lunch session as the senior counsel has insisted for the same stating that the matter was coming up for hearing before the CLB on Tuesday.
But, when the court reassembled after the lunch break, the DCHL counsel requested the Judge that he would present his arguments on the matter of jurisdiction on Tuesday.
