The bench has directed LML, Singhania and others to file their replies to the Paiggio petition by July 10. The petitions will be finally heard on September 8. Earlier at a hearing on June 1, the counsel for LML had sought at least 4-weeks time to reply to petition filed by the Italian company.Piaggio had moved a petition before the CLB under sections 397, 398 and 402 of the Companies Act, alleging oppression and mismanagement. The foreign company had sought CLB intervention to regulate the affairs of scooter manufacturer.

On the Piaggio contention that the LML Ltd managing directorhas been entering into capital contracts in violation of the provisions of Article 134, the principal bench said they would like to examine the matter in detail and, therefore, had decided to defer directions till replies were filed by LML and other respondents. Piaggio wanted CLB to restrain Singhania from entering into any capital contract valued over Rs 1 crore without theapproval of the board.

The bench has also decided not to comment on the Piaggio contention that the company's money was being used by the Indian promoters to fund the litigation between the joint venture partners as the LML counsel had stated the details of such expenses would be submitted to the foreign partner.On the implication of the Piaggio plea for statutory right to inspect the books of accounts of LML, the bench stated that the Indian partner was yet to represent its apprehension is this matter "in black and white".

Accordingly, the bench has decided to reserve its direction on this matter till a reply was filed by the Indianpartner. LML and the Indian promoters apprehend that if the nominees of the Italian partner would misuse information obtained from such inspection for his personal benefits and thus harm the interest of the company.

The bench further felt that the right of inspection was not absolute and unrestricted, and depending on the merits of the case, such rights could be denied or restricted. As for videotaping the proceedings of the board meetings, the bench felt that replies of the four independent directors on the board, including the financial institutions nominee, should be considered before any direction was given. Besides the four independent directors, Piaggio has three nominees on the board of the company, while the Indian promoters have four.