Scope of Sections 397 and 398 read with Sections 402 and 403 of the Companies Act, 1956

Section 397 of the Act empowers the Company Law Board to make such orders as it thinks fit with a view to bring an end to the matters complained of.

Sections 397 and 398 of the Act give very wide powers to the Company Law Board with regard to the affairs of the company. Section 397 of the Act empowers the Company Law Board to make such orders as it thinks fit with a view to bring an end to the matters complained of. As per Section 398 of the Act, the Company Law Board is also empowered to pass such orders as it thinks fit to prevent matters which are apprehended. Section 402 and 403 of the Act cannot be read to limit the scope of the powers of the Company law Board to regulate the affairs of a company. Section 403 does not restrict the Company Law Board from vacating interim orders without an appropriate application. The provision impliedly empowers the Company law Board to make any interim order which it thinks fit. The Company Law Board exercises summary jurisdiction and its decisions are based on preponderance of probabilities. [Satish Sharma vs. Vrinda Realtors Ltd. and Ors.] (Delhi HC, 17.02.2014)