Object Of 397/398: Cure, Not Just Decide
Winding up is last resort. 397/398 tries to cure company. Sometimes settlement happens. Sometimes one group buys out. Sometimes CLB passes regulatory orders for board, accounts, meetings.
If CLB disappears after final order, all this will collapse. So responsibility continues. That is why Section 402 exists as a follow-up tool. Section 402: A Continuing Jurisdiction
Section 402 lists orders CLB can pass. It is not limited to time of petition. It can be used later also. Bombay HC in Mohinidevi Choraria made it clear. "Order under 402 cannot be made in independent proceeding. But it can be made subsequent to termination of 397/398 petition if seisin is retained". Seisin means control or hold over subject matter.
How To Know If Seisin Exists
Look at final order. If it appoints administrator, fixes valuation mechanism, directs future board composition, then naturally CLB must supervise. If order is completely silent and closes matter, then fresh 402 may not lie. But if implementation issue arises from same oppression, CLB should not refuse. Otherwise parties will file new 397/398 petition and waste time.
Practical Impact
For Minority: You can come back if majority violates final order.
For Majority: You can seek clarification if order is ambiguous. For CLB/NCLT: Pass speaking orders. Either say "matter closed" or "liberty granted". Avoid confusion. This prevents multiplicity and keeps company as going concern.
Conclusion
Section 402 clb supervision company affairs final order shows CLB has continuing responsibility under 397/398. As per Mohinidevi Choraria, it can entertain Section 402 applications after final disposal if seisin is retained. The aim is to regulate future affairs and put an end to oppression. Finality should not block effective implementation. NCLT must follow this and pass orders that either fully resolve or expressly keep supervision. This will ensure 397/398 remains a practical remedy and not just paper decree.
