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TMI Blog2015 (5) TMI 556X X X X Extracts X X X X X X X X Extracts X X X X ..... ma facie material is available on record which clearly establishes that the amounts received in the name of the Company have been siphoned off by the Dalmia Group for their own personal benefits/group entities. Suffice it to say, at this stage, the actions and deeds of M/s Dalmia Group speak a lots of falsehood and unethical means for achieving their goals, which can hardly be approved. A prima facie case, therefore, is established in favour of the Petitioners. However, it is a settled proposition of law that while granting an ad- interim injunction order, the Court is required to examine, not only the "prima facie case" but also the other factors, like balance of convenience and "question of irreparable loss". In a catena of decisions, it is laid down that the satisfaction of the court that there is a prima facie case by itself is not a sufficient ground to grant an ad-interim injunction. The court further has to satisfy itself that non-interference by the court would result in irreparable injury to the party seeking relief(s) and there is no other remedy available to the party except one to grant ad-interim injunction. The court while granting or refusing to grant ad-interim i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n for ad-interim orders rejected. - CO. PETITION NO. 3 OF 2015 - - - Dated:- 28-1-2015 - ASHOK KUMAR TRIPATHI, J. For The Petitioner : Mr. Gaurav Joshi, Sr. Counsel, a/w Mr. Raj Panchmatia, Advocate, Mr. Peshwan Jehangir, Advocate, Mr. Ayush Agarwal, Advocate and Ms. Shreya Dua, Advocate. For The Respondent : Mr. Ravi Kadam, Sr. Counsel, a/w Mr. Ashish Kamat, Advocate, Mr. Zal Andhyarujina, Advocate, Ms. Shruti Sardesai, Advocate, Mr. Amit Jajoo, Advocate, Ms. Sushmita Gandhi, Advocate, Mr. Aly Basith, Advocate, Mr. Victor Basu, Advocate, Mr. B.B. Merchant and Mr. M.A. Venkata Subramanian, Advocate. ORDER 1. This is a Company Petition filed by the Petitioners under Section 397/398 read with Sections 399, 402, 403 406 of the Companies Act, 1956 (hereinafter referred to as the Act ) seeking various reliefs and ad-interim reliefs as contained in the petition. The Petitioners have alleged certain acts of oppression and mismanagement, more particularly set out in the petition, purportedly committed by the Respondents in the conduct of the affairs of the Respondent No. 1 Company (hereinafter referred to as the Company for short). 2. Pursuant to advance noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5. In the backdrop of the above position, the arguments were advanced at length by the Ld. Counsels appearing for the respective parties. 6. Before, I proceed to deal with the rival submissions, it seems useful to refer to few facts relevant for the purpose of adjudication of the ad-interim reliefs. 6.1 The Company was incorporated on 28/06/1955 as a Public Ltd. Company under the provisions of the Companies Act, 1956. Its shares are listed on the National Stock Exchange of India and Bombay Stock Exchange, Mumbai ( NSE and BSE in short). The Company owns and possesses immovable assets at Vile Parle and Marol (Andheri) at Mumbait Guntur and Hyderabad (A.P). The property situated at Vile Parle Village, S. V. Road, Vile Parle, Mumbai, Maharashtra, which Is the subject matter of this petition, shall hereinafter be referred to as Vile Parle Property in short. According to the Petitioners, Mr. Sanjay Dalmia and Mr, Anurag Dalmia, the Respondent Nos.2 and 3 (hereinafter referred to as Dalmia Group in short) having acquired a substantial shareholding in the Company by themselves and through the Respondent Nos.8 to 37 are In the control and management of the affairs of the Compa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mbai by which a proposal was made to launch real estate projects of the Company as per resolution passed by its Board of Directors on 21/12/2009. In continuation thereof, the Company issued a notice for convening an EOGM on 18/1/2010 at 11.00 a.m. to pass a resolution constituting an empowered committee and to undertake necessary steps for development of the companies' assets Including that of the subject asset at Vile Parle Property. 6.6 It is further case of the Petitioners' that before any resolution could be passed by the general body of the company, the Dalmia Group entered into a Memorandum of Understanding dated 26/12/2009 for the development of the Vile Parle Property with one M/s Seth Developers Pvt. Ld. and one M/s Suraksha Realty Ltd. In blatant breach and wilful disregard of the relevant SEBI Takeover Regulations. Being aggrieved by the said act, some minority shareholders, including the Petitioner Nos. 1 and 3 filed a Company Petition with the CLB seeking various reliefs under Section 397/398 read with 402, 403 and 406 of the Act and for setting aside the resolution dated 18/1/2010 passed at the EOGM. However, the said Company Petition was finally disposed o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le Property for a consideration of approx. ₹ 2000 crores. Vide the said 2011 MOU, the said Arrow was to advance a sum of ₹ 300 crores to the Company. 6.10 It is further stated that some of the shareholders of the Company, therefore, filed further application, being Notice of Motion, under Order 39 Rule 2A of the C.P.C.1908 before the Hon'ble Bombay City Civil Court at Dindoshi seeking an order to punish the Respondents for contempt of court for wilful and deliberate violation of the order dated 26/04/2011. The said Notice of Motion is pending disposal. 6.11 The Petitioners have then made allegations relating to alleged misappropriation of funds of the Company interalia stating that as a result of siphoning of the assets and funds of the Company, the net worth of the Company reduced from ₹ 42.44 crores as on 31/03/2009 to a negative ₹ 146.37 crores as on 31/03/2014. According to the Petitioners' case, the book value per share of the Company reduced from ₹ 24.13 as on 31/03/2009 to a negative book value of ₹ 83.2 as on 31/03/2014; the borrowings of the Company increased from ₹ 107.69 crores as on 31/03/2009 to ₹ 280.73 cro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ese appeals are admitted by the Hon'ble Supreme Court and the same are also pending for disposal. 6.14 The Petitioners have alleged that inspite of the stay orders being in force, on 12/09/2014 they received a Notice of Postal Ballot Issued by the Company interalia seeking the approval of the shareholders to authorise the Board of Directors to sell, transfer or otherwise dispose of the subject property to the Respondent No.34 However, no resolution could be passed with respect to the said Notice in view of the fact, the Company failed to achieve requisite majority as 31.75% of the shareholders of the Company voted against the resolution for sale of the subject property and this information was forwarded on to the BSE and NSE by the Company, Despite this, the promoters and management of the Company in their devious attempt to dispose of the subject property in complete disregard of the shareholders mandate, for their own fraudulent purpose and for their personal benefits and once again during the meeting of Board of Directors on 21/11/2014, passed a resolution thereby approving a draft Agreement to be entered into with the Respondent No.34 for sale of the subject Vile Parle p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utical Products of India Ltd. (2008) 7 Supreme Court Cases 619, and (ii) Raheja Universal Ltd. v. NRC Limited Ors. (2012) 4 Supreme Court Cases 148, has vehemently argued that a petition under section 397/398 of the Act would not be maintainable for filing a reference in the BIFR under the SICA in respect of the Company for the reasons that SICA being a Special Act shall prevail over the provisions of the Companies Act. To support his contention, he took me through various paragraphs of the said judgments. I would like to reproduce the relevant extract from the decision in the case of Tata Motors Ltd. vs. Pharmaceutical Products of India Ltd. (supra) here as under:- 21. It was conceded by Mr. Sundaram SICA being a special law vis-a-vis the 1956 Act, it shall prevail over the latter. The learned counsel, however, qualifies his submission by contending that SICA only excludes the provisions of the Companies Act when they are inconsistent with each other. 22. The provisions of a special Act will override the provisions of a general Act. The latter of Act will override an earlier Act. The 1956 Act is a general Act. It consolidates and restates the law relating to companies and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , in the absence of any provision empowering it to delegate its power in favour of any other authority had no jurisdiction to do so. 'Delegatus non potest delegare' is a well-known maxim which means unless expressly authorised a delegatee cannot sub-delegate its power. Moreover, the said observations of BIFR would only mean that the Company Court could exercise its power in accordance with law and not dehors it. If the Company Court had no jurisdiction to pass the impugned order. It could not derive any jurisdiction only because BIFR said so. 30. . 31. SICA furthermore was enacted to secure the principles specified in Article 39 of the Constitution of India. It seeks to give effect to the larger public interest. It should be given primacy because of its higher public purpose. Section 26 of SICA bars the jurisdiction of the civil courts. 32. What scheme should be prepared by the operating agency for revival and rehabilitation of the sick industrial company is within the domain of BIFR. Section 26 not only covers orders passed under SICA but also any matter which BIFR is empowered to determine. 33. The jurisdiction of the civil court is, thus, barred in resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of law. The Respondent Nos.2 and 3 extracted huge amounts from the said Companies under the MOU for sale/development of the Vile Parle Property and then the Company entered into an MOU with M/s Arrow Engineering Pvt. Ltd. and further extracted the monies. Now, the Respondents are trying to enter into a new transaction with M/s. Parmida Developers Ltd. in contravention of the provisions contained in Section 173 (1) of the Act. Furthermore, there is ample prima facie material is available on record which clearly establishes that the amounts received in the name of the Company have been siphoned off by the Dalmia Group for their own personal benefits/group entities. Suffice it to say, at this stage, the actions and deeds of M/s Dalmia Group speak a lots of falsehood and unethical means for achieving their goals, which can hardly be approved. A prima facie case, therefore, is established in favour of the Petitioners. 13. However, it is a settled proposition of law that while granting an ad- interim injunction order, the Court is required to examine, not only the prima facie case but also the other factors, like balance of convenience and question of irreparable loss . In a cat ..... 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