Purpose behind special tribunal
Companies Act 1956 created CLB as special tribunal because civil courts were slow and not equipped for corporate disputes. CPC causes delay due to pleadings, amendments, evidence rules. Legislature intended CLB to have own procedure. Regulations are settled but not exhaustive. The goal is quick resolution to protect minority and regulate company. If CLB starts applying CPC strictly, same delays will return. That will defeat purpose of 397/398. Therefore tribunal must be pragmatic.
Continuing nature of oppression and mismanagement
Unlike civil suit about past event, 397/398 deals with ongoing affairs. Majority may keep oppressing, company may take new decisions, financial position may change during case. If CLB says "file amendment for every new act", minority will be running after amendments. If majority raises counter grievance, CLB should consider it to give finality. Refusing to look at subsequent events on technical ground denies justice. The proceeding must cover entire picture to put an end to matters complained of. This requires departure from CPC rigidity.
Andhra pradesh hc on procedure and natural justice
In Sri Ramdas Motor Transport 2002, AP HC said Board must follow CPC and also travel beyond it for justice. Natural justice is minimum. Parties must get hearing and chance to cross-examine. Board cannot pass orders on unattested xerox copies when originals are disputed. Discretion must be within defined limits. Acting arbitrarily is antithesis to rule of law. Court found CLB order perverse and unknown to law. This judgment is authority that CLB cannot ignore basic fairness in name of flexibility. Procedure must be in consonance with law of land.
Balancing flexibility with fairness
Flexibility does not mean no rules. CLB should frame issues, give opportunity, and record reasons. It can accept subsequent facts without formal amendment if it helps decide oppression. It can look at counter allegations to regulate affairs. But it must ensure both sides are heard and records are genuine. Technical objection should be overruled if it causes injustice. Strong reason must support every deviation. This way CLB fulfills object of 397/398 without becoming like civil court.
Conclusion
Clb procedure 397 398 technicalities natural justice must be balanced. CPC is not binding but principles behind it are. AP HC 2002 judgment is reminder that CLB must avoid technicalities but cannot ignore law. In 2010 context, with increasing shareholder disputes in closely held companies, CLB must act fast, fair and with logic. That alone will achieve purpose of putting an end to matters complained of.
