2021 (1) TMI 190 - Tri - Companies Law

Permission for withdrawal of petition - the learned counsel for both parties brought to the notice of this Tribunal that the petitioners have filed a withdrawal/settlement memo on 15th December, 2020, stating that the petitioners and 2nd respondent who are the only shareholders of the 1st respondent company have now entered into a settlement to settle all disputes between them vide a Memorandum of Understanding dated 14th December, 2020. HELD THAT - In view of the settlement of the matter between the parties and filing of withdrawal memo by the learned counsel for the applicant, CP/24/KOB/2020 is allowed to be withdrawn recording the compromise between the parties and CP/29/KOB/2020 is allowed to be withdrawn . Both parties are directed to strictly follow the conditions stipulated in the settlement memo.

Issues Involved:
1. Withdrawal of Company Petitions CP/24/KOB/2020 and CP/29/KOB/2020.
2. Settlement and reorganization of shareholding and management.
3. Financial settlement and repayment of loans.
4. Release and transfer of collateral properties.
5. Execution of the Memorandum of Understanding (MoU) and compliance with its terms.

Detailed Analysis:

1. Withdrawal of Company Petitions CP/24/KOB/2020 and CP/29/KOB/2020:
The petitions CP/24/KOB/2020 and CP/29/KOB/2020 were filed by a shareholder and erstwhile director against M/s Malayalam Motors Pvt. Ltd. and M/s Malayalam Vehicles India Private Limited, respectively, under Sections 59, 241, and 242 of the Companies Act, 2013. Notices were issued, and both parties completed their pleadings. However, the petitioners filed a withdrawal/settlement memo, indicating that all disputes were resolved through a Memorandum of Understanding (MoU) dated 14th December 2020. Consequently, the tribunal allowed the withdrawal of both petitions, directing the parties to adhere to the conditions stipulated in the settlement memo.

2. Settlement and Reorganization of Shareholding and Management:
The MoU outlined the reorganization of shareholding and management. The First Party and his nominees were to acquire 100% of the paid-up share capital of MMPL and MMIPL, while the Second Party and his nominees were to acquire 100% of the paid-up share capital of MVIPL, MFBPL, and KPPL. This reorganization aimed to ensure that each party could manage their respective companies without interference from the other party.

3. Financial Settlement and Repayment of Loans:
The financial settlement involved the repayment of debts owed to MVIPL and MFBPL, totaling ?524.87 lakhs. The First Party agreed to repay this amount within 15 months, either personally or through affiliates. To secure this repayment, the First Party would transfer immovable properties to MVIPL. Additionally, the Second Party agreed to release properties provided as collateral for loans within 60 days of the MoU execution. The First Party also agreed to pay interest on the debt owed by the entities and persons to MVIPL and MFBPL.

4. Release and Transfer of Collateral Properties:
The MoU required the release and transfer of various collateral properties. The Second Party was to release properties provided as collateral for loans sanctioned by Canara Bank and Karur Vysya Bank. Similarly, the First Party was to release properties provided as collateral for loans sanctioned by ICICI Bank. The MoU also stipulated that the Second Party would return a Skoda Kodiaq car to the First Party on the date of signing the agreement.

5. Execution of the Memorandum of Understanding (MoU) and Compliance with its Terms:
The MoU constituted the full and final settlement of all disputes in C.P. No. 24/KOB/2020 and C.P No. 29/KOB/2020. Both parties agreed to cooperate in executing necessary documents and filings for the smooth reorganization and takeover of the companies. They also agreed not to publicize any matter related to the MoU or the consent order. The MoU was signed voluntarily by both parties, and they committed to not pursuing any further legal proceedings related to the disputes. Each party would bear their own costs and legal fees.

Conclusion:
The tribunal allowed the withdrawal of both company petitions, recording the compromise between the parties. The parties were directed to strictly follow the conditions stipulated in the settlement memo, ensuring the reorganization of shareholding, financial settlement, and release of collateral properties as agreed upon in the MoU.

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