Object of 397 398 and practical difficulties
Section 397/398 was enacted to protect minority against oppression and mismanagement. Object is good but practice is tough. In closely held companies disputes are personal and continuous. CLB has power to pass any order to put an end to matters complained of. But Board also has to protect going concern, creditors and business. Professionals find it confusing because law is not mechanical. Every petition brings new facts. Settled principles exist, but application is case to case. Technical approach will make remedy ineffective.
Amendment procedure becoming a trap
Majority often takes new actions during pendency of CP. Minority wants to challenge them. Normal practice is to seek amendment. But if majority does multiple acts, minority cannot keep amending. Each amendment means notice, reply, delay. Cost goes up and case drags. CLB also hesitates to interfere in daily management of public company. Majority exploits this gap. If Board insists on technical compliance, minority will be remediless. Going by CLB regulations, object of Act, and higher court principles, Board should take all subsequent acts on record if they relate to same dispute and decide them.
Role of professionals and clb
Professionals must help Board identify real issues. Board cannot go fishing. But once issues are before it through pleadings, documents, or affidavits, it should not shut eyes because amendment is not filed. Substance must prevail. This is especially true when company is going concern and any interim order affects operations. Board must balance by giving directions that regulate without paralyzing company. Technical dismissal helps no one.
Counter relief and wide powers
Section 397/398 does not say relief can be only to petitioner. If respondent majority raises grievance and seeks finding, CLB can grant relief. Limitation is only section 402. Wide language allows Board to call for information and decide all contentious points. This prevents multiplicity. If Board says "file separate petition", dispute continues and company suffers. Better to decide everything together.
Conclusion
Clb procedure 397 398 amendment technicalities must be handled pragmatically. In 2010, as corporate disputes rise, Board should avoid technical disposal. It must ascertain issues from record, hear parties, and pass order that ends dispute. Equity and logic must override procedure. This alone will make 397/398 meaningful for minority and for company.
