2015 (10) TMI 492 - SC - Companies Law

Valuation of Shares as per the Valuation report made under Section 433, 434 and 439 of the Companies Act - Appellant raised objections to the report to which reply was filed by the respondent - Court ordered that shares of the company be valued by an approved auditor Order of the Court modified directing the Appellant to purchase the shares of the Respondent Respondent was allowed to make publications in case of default and time for payment of dues was fixed - Held That - Court found variation in the Value of shares in the stand of the company without any reason and hence it directed the company to purchase the shares as per Valuation Report - Court directed the appellant to bear 50% of the cost paid to the valuer - Contention raised by the appellant before the Division Bench has been reiterated - There is no infirmity factual or legal in the order of the Division Bench to warrant interference Decided in favour of the Respondent.

Summary

Issues:
1. Winding up petition based on just and equitable grounds.
2. Valuation of company shares and purchase agreement dispute.
3. Appeal against orders related to share valuation and purchase agreement.

Issue 1: Winding up petition based on just and equitable grounds
The case involves a company facing a winding up petition filed by the respondent under Sections 433, 434, and 439 of the Companies Act on just and equitable grounds. The High Court at Calcutta ordered the company to settle the dispute by purchasing the respondent's shares based on a Valuation Report submitted in January 2004. The appellant challenged the orders through an intra-court appeal before the Division Bench, which was ultimately dismissed.

Issue 2: Valuation of company shares and purchase agreement dispute
The dispute arose when the company offered to buy the respondent's shares at a lower rate than the valuation report, leading to a court direction for the company to purchase the shares as per the valuation. The Single Judge's order required the company to pay the due amount by a specified date, with a default clause in case of non-payment. The Division Bench upheld the Single Judge's decision, emphasizing that the parties had agreed earlier for the purchase of shares based on valuation, and the company was bound by the valuation report.

Issue 3: Appeal against orders related to share valuation and purchase agreement
The appellant contended that the company was not obligated to offer to purchase the shares at the valuation rate determined by the report. However, both the Division Bench and the Supreme Court found this argument untenable. The Supreme Court upheld the Division Bench's decision, stating that there was no factual or legal flaw in the order warranting interference. The appeal was dismissed with costs imposed on the appellant.