This the apex court has done by substituting the Company Law Board in place of the high court. Investment decisions of Shaw Wallace, therefore, will now be approved by the CLB.
A division bench comprising Justice N P Singh and Justice Faizan Uddin passed the ruling after an appeal by the company. The original petition in the high court was moved by the All-India Shaw Wallace Employees Federation. The other sections of the HC order have been left substantially unaltered. The HC, in its verdict on October 7, directed that the flagship or its subsidiaries shall not make any investment or disinvestment.
In addition, they shall not borrow, extend loans/advances exceeding Rs 50 lakh to its subsidiaries without the courts approval.
The Supreme Court made it clear that it was not expressing an opinion on the merits of the dispute between the company and its employees federation. The CLB has been urged to dispose the petition expeditiously. The order noted that the counsels on both sides agreed that in view of the high court order adjourning the hearing for four weeks and the long vacation in the court, there may be a delay in getting the approval. The apex court modified the HC order in view of this.
Senior counsel for the company, Anil Divan, told the court that a multi-crore investment scheme and a Rs 42-crore disinvestment programme were being delayed because of the litigation. The employees have only Rs 10-lakh worth of shares. It was difficult to approach the high court each time huge amounts are to be dealt with, he submitted.
Arun Jaitley, counsel for the employees federation, alleged large-scale financial mismanagement by the company. The central government, too, had moved a petition before the CLB alleging irregularities and seeking a change of directors.
During the hearing, the judges observed that the company was under a cloud. They added there were news reports that revealed four centres of the company being raided.