2016 (10) TMI 600 - Tri - Companies Law

Restraint orders against the EOGM scheduled to be held for removal of the Petitioner as director of the Company - Held that - The petitioner and Respondents 2 & 4 agreed for the Respondents to take exit from the Company on valuation of shares taking into consideration of the monies invested and taken from the company by either parties that is the petitioner and the Respondents as well.

Summary

Issues involved:
- Application under sections 241, 242, and 246 of the Companies Act, 2013 for interim restraint orders against an Extraordinary General Meeting (EOGM) for the removal of a director.
- Settlement agreement between the petitioner and respondents for one party to exit the company based on valuation of shares and investments.
- Appointment of a valuer to determine the shareholding value of each party.
- Audit of the company's financial transactions to ascertain investments and withdrawals by each group.
- Nomination of directors by the minority shareholder.
- Valuation and payment for joint rights over a road passing through company land.
- Transfer of company assets to the petitioner.
- Payment terms for the exiting party based on valuation.
- Discharge of personal guarantees and payment of bank installments.
- Procedure for share transfer and consideration payment.
- Restrictions on asset alienation until full payment is made.
- Disposal of the company petition and liberty to apply for both parties.

Analysis:
The judgment involves a company petition filed under sections 241, 242, and 246 of the Companies Act, 2013, seeking interim restraint orders against an EOGM for the removal of a director. The tribunal suggested a settlement where one party would exit the company based on the valuation of shares and investments. The parties agreed to appoint a valuer to determine the shareholding value within 15 days, with payment proportionate to their respective shareholding. An audit was ordered to track investments and withdrawals by each group, ensuring transparency in financial transactions. The minority shareholder was allowed to nominate two directors of their choice, in addition to themselves.

Furthermore, a valuation and payment arrangement was established for joint rights over a road passing through company land, with specific payment terms outlined. The exiting party was directed to transfer company assets to the petitioner, with payment based on the valuation report in six monthly installments. Personal guarantees were to be discharged, and bank installments were to be paid promptly. Procedures for share transfer and consideration payment were detailed, including restrictions on asset alienation until full payment was completed. The judgment concluded by disposing of the company petition, granting liberty to both parties to apply as needed.