2022 (5) TMI 1606 - SCH - Companies Law

Valuation of shares of the company - HELD THAT - It is agreed upon by both the parties that the value of the Company may be jointly assessed by two Auditors. Both parties shall furnish separate list of three Auditors proposed by them for this Court to select one name from each list - As regards, the cutoff date for conducting the valuation, it is agreed by both parties that the date should be taken as 31.03.2021. In compliance to the orders passed by this Court from time to time, both the parties have placed the material on record relating to the contributions stated to have been made by them towards the growth of the company - it is directed that both parties to place copies of the said material before the Auditors to enable them to expedite the process of valuation. The Auditors are directed to provide an opportunity to both the parties to present their case and also take into consideration the material placed before them before assessing the value of the company and thereafter submit a joint report to this Court within a period of six weeks from this date. List these matters after six weeks.

Summary

Issues:
1. Appointment of Auditors for joint assessment of company value.
2. Selection of cutoff date for valuation.
3. Submission of material for valuation.
4. Instructions to Auditors for assessment process.
5. Allocation of expenses for Auditors.

Detailed Analysis:
1. The Supreme Court directed both parties to jointly assess the value of the company by appointing two Auditors. Each party was required to provide a list of three Auditors, but one party only submitted one name. Consequently, the Court appointed M/s Khimji Kunverji & Co. and M/s Ernst & Young Merchant Banking Services LLP for the valuation process.

2. Both parties unanimously agreed that the cutoff date for the valuation should be 31.03.2021. This agreement was crucial in determining the financial status of the company for the assessment.

3. To facilitate the valuation process, both parties were instructed to submit material related to their contributions towards the company's growth. This material was to be presented to the Auditors to aid them in expediting the valuation process effectively.

4. The Auditors were given specific directions to allow both parties to present their cases and consider the submitted material before assessing the company's value. They were required to submit a joint report to the Court within six weeks, outlining their assessment based on the provided information.

5. The Court ruled that the expenses incurred by the Auditors during the valuation process would be shared equally by both parties. This decision ensured a fair distribution of financial responsibility for the assessment.

This detailed analysis of the Supreme Court judgment highlights the key issues addressed in the case, including the appointment of Auditors, selection of the cutoff date for valuation, submission of material for assessment, instructions to Auditors for the valuation process, and the allocation of expenses between the parties.