2011 (9) TMI 1163 - Board - Companies Law

Summary

Issues Involved:
1. Execution of Consent Order
2. Appointment and Remuneration of Directors
3. Compliance with Family Settlement
4. Allegations of Contempt

Detailed Analysis:

1. Execution of Consent Order:
The petitioners filed C.A. No. 471 of 2009 for execution of the consent order dated June 9, 2009, under section 634A of the Companies Act, 1956. The consent order arose from disputes within the Sekhri family, leading to a broader family settlement. The Company Law Board (CLB) consent order required the respondent group to pay a monthly remuneration of Rs. 2,50,000 each to Vijay Kumar Sekhri and Anil Kumar Sekhri until their remuneration was fixed by Tinna Oil and Tinna Agro. However, the respondent group ceased payments from September 2009, leading to an accumulated amount of Rs. 95,00,000 by March 31, 2011. The petitioners contended that the respondents failed to adhere to the consent order, while the respondents argued that the remuneration was fixed as "0" by the companies on August 12, 2009, thus nullifying further payments.

2. Appointment and Remuneration of Directors:
The consent order mandated the appointment of Vijay and Anil as whole-time directors with remuneration. The respondents argued that the petitioners did not make efforts to get their remuneration fixed, leading to the cessation of payments. The CLB had directed the companies to decide on the remuneration by August 31, 2009, which was fixed at "0". The petitioners argued that the companies did not appoint them as whole-time directors, and the decision to fix the remuneration at "0" was not in line with the consent terms. The CLB noted that the stop-gap arrangement for remuneration was not meant to be indefinite and directed the respondent group to pay a lump sum of Rs. 50 lakhs towards remuneration for the intervening period.

3. Compliance with Family Settlement:
The family settlement involved the transfer of shares and assets among family members. C.A. No. 474 of 2010 addressed the release of shares of Pratham Road Technologies Pvt. Ltd. from the custody of the Bench Officer, contingent on the petitioners receiving 25% shares of Gautam Overseas Ltd. The petitioners alleged that the respondents failed to fulfill their obligations under the family settlement, including the transfer of shares and handling contingent liabilities. The CLB directed the release of shares of Pratham Road Technologies Pvt. Ltd. and required compliance with due procedures for reissuing shares held by Shri R. K. Dhawan.

4. Allegations of Contempt:
C.A. Nos. 500 of 2010, 131 of 2011, and 166 of 2011 involved allegations of contempt by the petitioners for violating the consent order. The respondents accused the petitioners of filing false complaints to the Bombay Stock Exchange, Economic Offences Wing, and Securities Exchange Board of India, causing harm to the respondents. The petitioners countered that the respondents failed to comply with the family settlement, including the appointment of directors and payment of remuneration. The CLB dismissed the contempt applications, emphasizing the importance of implementing the consent decree and resolving disputes in the interest of the companies and the family settlement.

Conclusion:
The CLB directed the respondent group to pay a lump sum of Rs. 50 lakhs to the petitioners towards remuneration and ordered the release of shares of Pratham Road Technologies Pvt. Ltd. The CLB dismissed the contempt applications, urging the parties to comply with the family settlement and consent decree to resolve their disputes amicably.