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Issues Involved:
1. Validity of the consent order. 2. Allegations of oppression and mismanagement. 3. Valuation of shares and assets. 4. Procedural fairness in settlement. 5. Legal implications of the consent order. Issue-wise Detailed Analysis: 1. Validity of the Consent Order: The appeal was filed by Smt. Neelu Kohli under section 10F of the Companies Act, 1956, challenging the orders of the Company Law Board (CLB) dated June 2, 2006, and November 15, 2006. The CLB recorded a memorandum of an alleged agreement to settle the matter, but Neelu Kohli later sought to recall her consent, claiming she was under depression and did not comprehend the implications of the settlement. The CLB dismissed her application, stating that the consent was given voluntarily and in the presence of her counsel and a well-wisher. 2. Allegations of Oppression and Mismanagement: Neelu Kohli and her son Nimit Kohli filed a petition alleging acts of oppression and mismanagement by Shri Naveen Kohli. The CLB initially directed that both parties be declared 50% shareholders each and ordered Neelu Kohli to sell her 50% interest in the company to the respondents at a value determined by an independent valuer. The valuation process faced numerous delays and objections, particularly from Naveen Kohli. 3. Valuation of Shares and Assets: The valuation report by M/s. INMACS Management Services valued Neelu Kohli's 50% share at Rs. 153.22 lakhs. The report considered various assets, including land, building, plant, machinery, and bank balances. The settlement terms recorded by the CLB on June 2, 2006, proposed dividing the land and machinery equally and paying Neelu Kohli Rs. 7.5 lakhs, which she later contested as grossly unfair. 4. Procedural Fairness in Settlement: The CLB Chairman invited both parties to his chambers for a proposed settlement without their counsel. The terms were recorded in the Chairman's handwriting, which was mostly unreadable. Neelu Kohli immediately sought to recall the settlement, claiming she was under depression and did not fully understand the implications. The court found that the settlement process was not fair and reasonable, as it was conducted in closed chambers and heavily favored Naveen Kohli. 5. Legal Implications of the Consent Order: The court held that the consent order was not a result of Neelu Kohli's free will and consent. The settlement terms were highly unfair, offering her only Rs. 7.5 lakhs against a valuation of Rs. 153.22 lakhs. The court emphasized that a consent decree cannot be altered unless both parties agree, but in this case, the circumstances indicated that Neelu Kohli never intended to sign the settlement. The court set aside the CLB's orders and directed it to decide the Company Petition No. 27 of 1997 in accordance with the law. Conclusion: The court allowed the appeal, set aside the CLB's orders dated June 2, 2006, and November 15, 2006, and directed the CLB to decide the Company Petition No. 27 of 1997 in accordance with the law. Neelu Kohli was awarded Rs. 10,000 as the cost of prosecuting the appeal.
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