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TMI Blog2013 (2) TMI 366X X X X Extracts X X X X X X X X Extracts X X X X ..... pany Petition No. 17 of 2008 by the VKS Group against BKS Group under Sections 397 and 398 of the Act in the CLB. By an order dated 5th January 2009 in the said petition the CLB recorded the broad terms of the family settlement inter alia as under: "4. Bhupinder will take immediate steps to pass necessary resolution appointing Vijay and Anil as directors of Tinna Agro and Tinna Oil as the nominees of Tinna Group. 5. Till such time the remuneration for Vijay and Anil is fixed by Tinna Oil and Tinna Agro, Bhupinder will pay a sum of Rs. 5 lakhs per month jointly for both of them. 6. Tinna Overseas will immediately transfer two Mercedes, one BMW, one Honda Accord, one Honda CRV to Vijay and Anil and who will undertake to pay the balance instalments of car loans, if any. 7. It has also been agreed that transfer of management of companies, transfer of shares and loans if any between the companies, all have been taken into account in the settlement and the entire settlement is on a zero value basis. 8. The parties have also agreed that the terms agreed before me today is the last and final settlement superseding all other prior oral or written agreements between the pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Mr. Anil Kumar Sekhri, subject to the Group B1 and B2 continuing to hold their existing Co. A.(SB) Nos. 77 & 81 of 2011 Page 5 of 12 shareholdings in TAIL and TOCL. Hereon, Group A shall have no further interference in the management of the said Joint Venture." 6. Group A in the above clause meant the BKS Group, Group B1 the VKS Group and Group B2 the group represented by Mr. Anil Kumar Sekhri. On the basis of the MoFS and the SoA, the CLB passed a consent order on 9th June 2009 in which, inter alia, it was recorded as under: "4. Till such time as Tinna Oil and Chemicals Ltd. and Tinna Agro Industries Ltd. fixes the remuneration of Mr. Vijay Kumar Sekhri and Mr. Anil Kumar Sekhri, TOL shall continue to pay Rs. 2,50,000/- per month each to Mr. Vijay Kumar Sekhri and Mr. Anil Sekhri subject to the VKS group continuing to hold their existing shareholding in the aforesaid two companies. Mr. Vijay Kumar Sekhri and Mr. Anil Kumar Sekhri shall make endeavours to have their respective remuneration fixed by the aforesaid two companies as soon as possible." 7. It is stated by the VKS Group that while the BKS Group paid salaries to Mr. Vijay Kumar Sekhri and Mr. Anil Kumar Sekhri as pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Anil Kumar Sekhri were not entitled to salary satisfied the requirement of the terms of the MoFS and that once such a decision was taken, no further sum by way of salary was payable to either of the said persons. The CLB held that when the said persons were not even appointed as Directors then there was no question of fixing their salary as zero. In para 23 of the impugned order it was concluded by the CLB as under: "23. One cannot lose sight of the consent terms. Once a consent always a consent. Consent terms are binding on the parties and are legally enforceable. In this view of the matter and keeping the changed circumstances of this case the Bhupinder Sekhri group cannot be obligated to pay remuneration/salaries to the Petitioners indefinitely. To do substantial justice between the parties it is hereby directed that the Bhupinder Sekhri group shall pay a lump sum amount of Rs. 50 lakhs, after adjusting the amounts due, to the Petitioners towards remuneration/salaries for the intervening period within two months of receipt of this order." 10. The VKS Group is aggrieved by the impugned order inasmuch as it has not granted them the relief of payment of salary till 15th Ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll 15th July 2011, i.e., the date on which they ceased to be the shareholders in TAIL. 15. Both in the MoFS as well as in the order dated 9th June 2009 passed by the CLB, it was stated that Mr. Vijay Kumar Sekhri and Mr. Anil Kumar Sekhri would be paid Rs.2,50,000 each per month by TOCL subject to two conditions: one, as long as they continued holding shares in TAIL and TOCL and two, till such time their respective remuneration was fixed by TAIL and TOCL. There was no question, therefore, of their receiving remuneration in perpetuity. 16. In the impugned order the CLB has failed to address the issue whether as a result of the decision of the Board of Directors ('BoD') on 12th August 2009 not to pay any remuneration to the two directors, the liability of the BKS Group to pay them a total salary of Rs.5 lakhs per month came to an end. Instead the CLB has, "to do substantial justice between the parties" and without explaining the basis, directed that the BKS Group should pay Rs.50 lakhs to the VKS Group. To this extent both parties are justified in having a grievance against the said order dated 16th September 2011 passed by the CLB. 17. However, what is significant is that neither ..... X X X X Extracts X X X X X X X X Extracts X X X X
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