2017 (10) TMI 1508 - Tri - Companies Law

Oppression and Mismanagement - valuation of shares - appointment of valuer for valuation of shares - HELD THAT - Deloitte Touche Tohmatsu Limited, Ahmedabad is appointed as Independent Valuer to carry out valuation of the business of the 1st Respondent Company, Madhu Silica Private Limited as on 31st March, 2017 - The Valuer shall complete the entire exercise of valuation of the business of the company within 10 weeks from the date of this order. Both the parties shall provide necessary documents, data and information to the Valuer within 10 days of service of notice on them by the Independent Valuer - The Independent Valuer shall submit the valuation reports in three originals to the Registrar of this Tribunal in a sealed cover and the cover shall be opened on 22nd December, 2017 in the open Court. Thereafter, this Tribunal will pass appropriate orders for the exchange of shares/consideration by fixing a time line. List the matter on 22nd December, 2017.

Summary

Issues:
Petition under Sections 241 and 244 of the Companies Act, 2013 for relief from oppressive acts by majority shareholders, appointment of an administrator or independent committee, declaration of invalidity of certain meetings and resolutions, fair exit at fair value of shares, and appointment of an independent valuer for share valuation.

Analysis:
1. The petition sought relief under Sections 241, 242, and 243 of the Companies Act, 2013 to address oppressive acts by majority shareholders, including the appointment of an administrator or independent committee to manage the company's affairs. Additionally, the petition requested the appointment of independent directors to assume management control, fair exit at fair share value, and the declaration of certain meetings and resolutions as invalid.

2. Respondents No. 1 to 9 filed replies, and the petitioners submitted rejoinders. Respondent No. 10 did not appear before the Tribunal, with both parties confirming that Respondent No. 10 was not a shareholder of the 1st Respondent Company.

3. During the hearing, draft consent terms were filed, and on 10th October 2017, the final consent terms were signed by the petitioners and respondents, agreeing to resolve the matters raised in the petition through the purchase of petitioners' shares by the respondents at a value determined by an Independent Valuer.

4. The consent terms outlined the appointment of an Independent Valuer from specified firms to conduct a valuation of the company's business. The valuation process was to be completed within ten weeks, with costs shared equally between the company and Petitioner No. 1. The valuation date was set as 31st March, 2017, and the Valuer's report was to be submitted to the Tribunal for binding resolution.

5. The consent terms became part of the Tribunal's order, appointing Deloitte Touche Tohmatsu Limited as the Independent Valuer for the valuation exercise. The Valuer was directed to complete the valuation within ten weeks, with both parties required to provide necessary information promptly.

6. The Independent Valuer was instructed to submit the valuation reports to the Tribunal by a specified date for further action regarding the exchange of shares/consideration. The Tribunal scheduled a follow-up hearing for 22nd December, 2017, to address the valuation report and subsequent orders.

This detailed analysis covers the issues raised in the petition, the parties' responses, the consent terms agreed upon, the appointment of an Independent Valuer, and the Tribunal's directives for the valuation process and future proceedings.