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2018 (11) TMI 936 - HC - Companies LawFamily settlement - seeking a decree of permanent injunction to restrain the defendants, their associates, shareholders etc. from acting in contravention of the family settlement - Held that - Settled legal position is that a family settlement which settles disputes within the family should not be lightly interfered with especially if the settlement has already been acted upon by some members of the family. It is also settled that such settlements have to be treated differently from ordinary contracts and should not be lightly disturbed. In the present case the settlement has been partially implemented as noted above. If I were to vacate the interim order passed by the court on 7.2.2018 on the aforenoted grounds relating to the omissions of the plaintiff and also relating to failure to seek alternative efficacious remedy it would jeopardize the family settlement and complicate matters more. The family may further get embroiled in a complicated dispute which may get difficult to resolve. Presently, the suit is at the initial stage. Pleadings have just been completed. An opportunity should be granted to the plaintiffs to take steps to seek reliefs which will also have the effect of implementing the terms and conditions of the family settlement. Such a step would help resolve the conflict between the family and also help in implementing the terms and conditions of the family settlement. Order accordingly. Accordingly, in the interest of family amity and unity and to uphold the family settlement, thus confirm the interim order passed by this court.
Issues Involved:
1. Jurisdiction of the Court under Section 430 of the Companies Act, 2013. 2. Binding nature of the Family Settlement on non-signatory members. 3. Coherence and enforceability of the Family Settlement. 4. Relief sought being barred under the Specific Relief Act. Issue-wise Detailed Analysis: I. Jurisdiction of the Court under Section 430 of the Companies Act, 2013: The defendants argued that the court lacks jurisdiction to adjudicate the present suit due to Section 430 of the Companies Act, 2013, which bars civil courts from entertaining matters within the purview of the Tribunal or Appellate Tribunal. The court referred to the judgment in *Jai Kumar Arya & Ors. v. Chhaya Devi & Anr.*, which held that civil courts have jurisdiction in cases where the relief sought is not within the exclusive jurisdiction of the Tribunal. The court concluded that the present suit, which seeks to enforce a family settlement, does not fall under the jurisdiction of the Tribunal as per the Companies Act, 2013. II. Binding nature of the Family Settlement on non-signatory members: Defendants contended that only signatories to the Family Settlement are bound by it, and other family members or shareholders are not. The court referred to *Narendra Kante v. Anuradha Kante & Ors.* and *Satya Pal Gupta vs. Sudhir Kumar Gupta*, which established that family arrangements can bind non-signatories if they have acted in conformity with the settlement. The court found that the conduct of the non-signatory family members indicated their acceptance of the Family Settlement, making them bound by its terms. III. Coherence and enforceability of the Family Settlement: The defendants argued that the Family Settlement is incoherent and incapable of being implemented. The court referred to *Kale & Ors. v. Deputy Director of Consolidation & Ors.*, which emphasized the sanctity of family settlements and their enforcement if honestly made. The court found that the Family Settlement, despite some grey areas, is capable of being performed and has been partially implemented. The court noted that further details could be resolved during adjudication and upheld the settlement's enforceability. IV. Relief sought being barred under the Specific Relief Act: Defendants argued that the suit is barred under the Specific Relief Act as it seeks only declaratory and injunctive reliefs without seeking specific performance of the Family Settlement. The court referred to *Venkataraja & Ors. v. Vidyane Doureradjaperumal (Dead) Thr. Legal Representatives & Ors.*, which held that a suit for mere declaration without consequential relief is not maintainable. The court noted that the plaintiffs could seek specific performance to implement the Family Settlement. The court decided to grant the plaintiffs an opportunity to amend their pleadings to seek appropriate reliefs that would implement the Family Settlement. Conclusion: The court confirmed the interim order restraining the defendants from acting in contravention of the Family Settlement, provided the plaintiffs take specific steps within six weeks to implement the settlement, including payment of certain amounts and passing necessary board resolutions. The applications for interim relief were disposed of accordingly.
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