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TMI Blog2015 (12) TMI 421X X X X Extracts X X X X X X X X Extracts X X X X ..... r adjudicate upon such an oral allegation. On 2nd February, 2015 the allegation that pursuant to the BTA dated 30th December, 2010, SPCPL was in possession of Plant No. 2 was orally made on behalf of Vyas and Chaudhari. Significantly no such allegation was made by Rakesh who admittedly controls SPCPL, who was a party Respondent before the CLB and who was represented by the same Advocates. Again from the record of the proceedings it was clear that though by an Order dated 9th February, 2012, CLB had restrained the Respondents, which included Rakesh and the ex-Directors, Vyas and Chaudhari from disposing off, encumbering the assets of VMPL and the very same Order was continued by this Court whilst dismissing the Appeals filed by Rakesh in August, 2014, at no stage had Rakesh (who admittedly controlled SPCPL) and the ex-Directors Vyas and Chaudhari submitted before the CLB or before this Court or before the Hon'ble Supreme Court that the said Order dated 9th February, 2012 ought not to have been passed since allegedly all the assets including Plant No. 2 of VMPL are in possession and/or control of SPCPL from 30th December, 2010/18th March, 2011. Even after Rakesh failed to obtain a st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... noy, Senior Advocate, along with Mr. Mustafa Doctor, Senior Advocate, Mr. Rohaan Cama, Mr.Rohan Dakshini, Ms. Shweta Jaydev, Mr. Prakhar Parekh and Mr. Ashwin Bhadang, instructed by M/s. Federal Rashmikant, for the Respondent Nos. 1 and 2. Mr. Prashant Chawan with Mr. Navdeep Vora i/by M/s. Navdeep Vora and Associates, for MIDC. JUDGMENT 1. The present Appeal is filed by the Appellant- Super Max Personal Care Pvt. Ltd. ( SPCPL ) against the Order dated 2nd February, 2015, passed by the Company Law Board, Western Region Bench [ the impugned order ] on the ground that the Company Law Board ( CLB ) inter alia granted ingress to Respondent No. 2 Mr. Rajinder Kumar Malhotra ( RKM ) into Plant No. 2 of the Respondent No. 1 Vidyut Metallics Pvt. Ltd. ( VMPL ), which is in possession and control of SPCPL since the year 2010/11, without SPCPL being a party to the proceedings pending before the CLB, and which is the subject matter of an Arbitration Petition pending before this Court arising out of a Business Transfer Agreement ( BTA ) dated 30th December, 2010. Even in the written submissions tendered in Court by SPCPL, it is categorically mentioned that, The Appellants' ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gtap and Chaudhari were made on behalf of VMPL and not on behalf of SPCPL, and reflected VMPL's position, thereby suggesting that false statements are made on oath by Jagtap and Chaudhari as per their convenience and depending on the party/Company on whose behalf such statements were being made. SPCPL has also sought to explain that the said statements were made at the instance of the Directors/Promoters of VMPL, without realising that Chaudhari himself was a Director of VMPL at the relevant time and the said statements were obviously not made at the instance of RKM because before the said Affidavits were filed by Jagtap and Chaudhari, RKM had on 2nd/3rd February, 2012, already filed a Company Petition before the CLB under Sections 397-398 of the Companies Act, 1956 alleging acts of oppression and mismanagement by the then Directors of VMPL i.e. Shri Paresh Vyas (Vyas) and Chaudhari. This clearly demonstrates that these days, litigants show scant respect for Courts and the rule of law. They not only brazenly take a stand contradictory to that taken earlier on oath, but subsequently, and equally brazenly, also attempt to justify the same on a false and illegal premise. 3. One ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... immovable properties of VMPL, neither Rakesh nor the ex-Directors impugned the said orders or contended that the immovable assets/properties of VMPL are in possession of SPCPL, pursuant to the BTA, as is now alleged. Instead, as submitted by RKM, his son Rakesh left no stone unturned in trying to prevent him from removing Vyas and Chaudhari, the ex-Directors of VMPL, but failed to succeed despite taking the issue right upto the Hon'ble Supreme Court. As submitted by RKM, Rakesh thereafter realised that the hostile ex-Directors (Vyas and Chaudhari) through whom he was exercising control over VMPL's assets and properties shall no longer be able to wrongfully retain charge of VMPL's assets. Rakesh therefore arranged for SPCPL to make a false claim for the first time that it is in possession and control of Plant No.2 of VMPL pursuant to the BTA of December, 2010 and Supplemental BTA dated 18th March, 2011, which is nothing but a mala fide attempt to somehow exercise control over VMPL's assets, and properties. According to RKM, the above Appeal therefore clearly constitutes an abuse of the process of this Court. 4.1 SPCPL has denied and disputed that SPCPL has made a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ph 5 (o) at Appeal: Pg. 11 of the present Appeal clearly stated that the Appellant was not concerned with the family disputes between members of the RKM Family.... 4.4 In the Arbitration Petition filed by SPCPL in January, 2015 and annexed by SPCPL as Exhibit-K to the Appeal, SPCPL has stated as under: 16. The Petitioner has come to learn that the RKM Family is involved in a significant family dispute between RKM and his younger son Rajiv Malhotra on one side and Mr. Rakesh Malhotra on the other side. Whilst it is a purely family dispute and ordinarily the Petitioner should not be at all concerned about it, the Petitioner started getting very anxious and apprehensive about the same only when the disputes between the family reached the Petitioner's doorsteps and started interfering with the Business of the Petitioner. Over the last few months, the Respondent whether at the behest of RKM or otherwise has started to significantly interfere with and obstruct the Business of the Petitioner . It is pertinent to note from the purported instances set out by SPCPL in the said paragraph 16 of the Petition that the alleged obstruction commenced only from 31st December, 201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s fact in his SLP before the Hon'ble Supreme Court); that SPCPL is not concerned with the family disputes between Rakesh and RKM and had no alternative but to approach the Court only because, since December 2014 RKM/VMPL started interfering with the business of the Appellant; and that SPCPL is a professionally led and managed Company where Rakesh is not a member of the Board of Directors of the SPCPL and is also not concerned with the day to day affairs of SPCPL. 4.8 These facts once again expose the dishonest conduct of SPCPL in not being fair and honest with the Court but instead misrepresenting facts which are incorrect to its knowledge, only to seek favourable reliefs as sought by it in the proceedings. 5. Since the disputes between Rakesh on the one hand and his father RKM and his entire family on the other qua various Companies which are hereunder referred to as the RKM Indian Companies , has a chequered history, it is necessary to set out hereunder the relevant facts which have led to the filing of the present Appeal, which Appeal this Court has, with the consent of the Parties, decided to dispose of at the stage of admission itself. 5.1 The Super Max Group was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the BTA, all the equipment and employees of VMPL were transferred to SPCPL. Accordingly for carrying out the job work arrangement, the said equipment was to be leased back by SPCPL to VMPL and the said employees were to be seconded back by SPCPL to VMPL. 5.6 RKM in the aforestated manner handed over control of the 5 RKM Indian Companies to his elder son Rakesh and trusted him totally. A Supplementary BTA as well as the Job Work Agreement, the Staff Secondment Agreement and the Equipment Lease Agreements were all executed on 18th March, 2011. Vyas and Chaudhari, who were the two Directors of VMPL had now become employees/Consultants of SPCPL. However, since they had been the Directors of VMPL since 1993 and 2001 respectively, RKM believed that they would continue to protect the interest of VMPL and therefore allowed them to continue as Directors of VMPL. Similarly, the Directors of the other RKM Indian Companies remained unchanged. However according to RKM his son Rakesh misused the trust reposed in him by RKM and used his influence over the Directors of the RKM Indian Companies including VMPL (now employees/Consultants of SPCPL) to exclude RKM who held 99.99% of the shares of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o bank accounts, mutual fund holdings and immovable properties. It is pertinent to note that in Annexure 2 to the Petition, Plant No. 2 of VMPL was also included. 5.8 RKM along with the Petitioners who had filed the said four Company Petitions before the CLB, Mumbai, mentioned the matters including Company Petition No. 13 of 2012 with regard to VMPL, before the CLB on 9th February, 2012 when the following ad-interim order was passed: (i) The Respondents shall not utilize, invest or deal in any manner the funds, monies and securities of the Company (including bank account) except for the purpose of making statutory payments that may be required to be made to any government authorities and salaries of the employees in the ordinary course of business until further orders. (ii) The Respondents shall not dispose off, transfer, encumber or create any charge on the assets of the Company including the immovable properties until further orders . Interestingly, neither Vyas nor Chaudhari (employees/consultants of SPCPL) who continued to be the Directors of VMPL, nor Rakesh who admittedly was managing the affairs of SPCPL took a stand similar to the stand now taken through ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ur Companies including VMPL and the appointment of new Directors in their place could not be given effect to. 5.14 On 12th/20th August, 2014, this Court (Coram: G.S. Patel, J.) dismissed Rakesh's Company Appeals and also refused to extend the stay on the removal of Rakesh's suborned Directors/appointment of new Directors. In paras 134 to 138 of its judgment, the Court recorded that: (i) Rakesh had betrayed the confidence reposed in him by RKM, had engineered a coup d'etat, hijacked the RKM controlled Indian Cos., and deployed their funds to further the interests of entities controlled by him. (ii) That although RKM owned and controlled 99.9 % of the Shares of the said Indian Cos., the said Directors acting as puppets of Rakesh, had continued in control of the RKM Indian Cos. and had continued to be obdurate obfuscatory . That as a consequence the said RKM Cos. were exposed to considerable financial risk, severe financial distress and even possibly ruin. (iii) That considerable harm and profound prejudice was likely to occur if these state of affairs were allowed to continue. (iv) That it would be wholly inequitable to allow such a state of af ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o appeal but declined stay of the Order passed by this Court dated 12th/20th August, 2014. 5.17 At an Extraordinary General Meeting of VMPL held on 21st December, 2012, a Resolution had been passed removing Vyas and Chaudhari as Directors of VMPL and appointing in their place Mr. Punnilal Chhabria and Mr. Gordhandas Daulal Arora respectively ( the newly appointed Directors ). The newly appointed Directors of the Company had refrained from acting as Directors and Vyas and Chaudhari (employees/consultants of SPCPL) had continued to be the Directors of VMPL in view of the pending Appeals in this Court. However, after the Judgment and Order dated 12th/20th August, 2014 was passed, the newly appointed Directors immediately addressed a letter dated 25th August, 2014 to Vyas and Chaudhari calling upon them to forthwith seize and desist from acting as Directors of the Company and on and from 27th August, 2014 to hand over to them the entire charge of the Company along with all its records (statutory, financial and otherwise) including all original documents of all assets owned by VMPL. 5.18 In response to the said request made, the newly appointed Directors received a letter dated 26 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plete statutory compliance. 5.23 The newly appointed Directors of VMPL by a letter dated 7th October, 2014, requested Vyas and Chaudhari to make arrangements to hand over charge of VMPL's property viz. Peeco Plant (Wagle Estate), Panama Headquarter (Thane) and Plant 2, VMPL (Thane) and to remove their security guards from the said plants/properties. 5.24 On 11th October, 2014, certain persons deputed by the newly appointed Directors went to the Company's Panama Head Quarter and the Peeco Plant premises along with their security guards to take charge of the same. However, they were denied entry by the security guards employed by Vyas and Chaudhari. 5.25 By a letter dated 10th October 2014, Vyas, Choudhari and Rakesh through their Advocates replied to the RKM Advocate's letter dated 26th September, 2014. By the said letter, they purported to contend that the Petitioner was erroneously interpreting the orders passed by this Court and the statements made by them in the Special Leave Petition filed before the Hon'ble Supreme Court of India. They also refused to give the Petitioner the 'User ID' and 'Password with regard to the Company's on- line ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and Chaudhari from holding themselves out as Directors of VMPL and to direct them to hand over charge of the properties and records of VMPL to the newly appointed Directors. In the said Application, Rakesh and the ex-Directors of VMPL were represented by the same Advocate. 5.30 By Orders dated 20th November, 2014 and 5th January, 2015, made in Company Application No. 296 of 2014, the CLB restrained Vyas and Chaudhari from acting and holding themselves out as Directors of VMPL; and recorded a finding that Vyas and Chaudhari were wilfully disobeying the orders and not handing over charge. 5.31 According to RKM, realizing that the ex-Directors would no longer be able to retain control/change of the funds and assets of VMPL, on 12th January, 2015, Rakesh caused SPCPL to file Arbitration Petition (L) No. 55 of 2015 against VMPL. By the said Petition SPCPL falsely purported to contend that it was not concerned with the disputes between the Malhotra family. The reliefs sought in the Arbitration Petition related to restraining VMPL from interfering with the business of the SPCPL, from obstructing the water supply from the Peeco Plant to Plant Nos. 1 and 2. VMPL filed its Affidavit- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed both these plants and no further transfer of possession was required. Thus pursuant to the BTA and the Supplemental BTA, possession of both Plant 1 and Plant 2 along with other properties mentioned therein stood transferred to the Appellant . The other agreements referred to in para 6 of SPCPL's said Affidavit, were set out in paragraph 5 of the Rejoinder Affidavit i.e. (i) the Job Work Agreement, (ii) the Secondment Agreement (iii) the Equipment Lease Agreement all executed between VMPL and SPCPL and all dated 18th March, 2011. In fact, the same three agreements dated 18th March, 2011 had also been referred to in para 5 (g) of the Company Appeal as having been executed to take forward the job work arrangement between SPCPL and VMPL under the BTA and the said three Agreements had also been annexed as Exhibits-E, F and G thereto at pages 489, 514, 530. 6. As stated hereinabove, the case set up by SPCPL in the present Appeal is that pursuant to the BTA and Supplemental BTA, it is in possession and control of Plant No.2 since 10th December, 2010/18th March, 2011. In support of its case, SPCPL has, in its Appeal inter alia, stated/submitted as under: (i) That as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... siness Assets shall mean all assets relating to the Business including the following: (i) the right to use the immovable properties set out in Annexure-1 Part A ( VMPL Plant 1 ); (ii) All leased and licensed immovable properties set out in Annexure -1 Part B ( Rental Properties ); (iii) The right, interests and benefits in respect of all Contracts; (iv) All plant Machinery and other fixed assets currently operated within the Business as set out in the fixed asset register maintained by the Transferor, the summary of which is annexed as Annexure-1 Part D; (v) all Business IPR including but not limited to the (i) licenses with respect to (a) all computer software being used in connection with the Business, as set out in Annexure-1 Part E and (b) the payroll software being used in connection with the business, as set out in Annexure-1 Part F; (ii) trademarks owned and applied for by the Transferor, as set out in Annexure -1 Part G; (iii) goodwill of the said Business; and (iv) Business Information held by the Transferor which in any way relate to the Business, if any (v) all patents, designs (registered or unregistered). Copyrights, technical informati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or which relate to the Business, as set out in Annexure-1 Part M ( Insurance Policies ); (xi) the benefit of all rights and claims arising from, or coming into existence as a result of, the carrying on of the Business (including, without limitation, the benefit of all outstanding insurance claims in Schedule 7 of the Disclosure Letter ) by the Transferor; and (xii) the aggregate of cash (whether in hand or credited to any account with any banking financial, acceptance credit, lending or other similar institution or organization) and its cash equivalents, including all interest accrued thereon, as shown by the books of the Transferor in connection with the Business. 1.1.25 Licenses shall mean all licenses, permissions authorizations (public or private), consents, approvals, certificates, permits or other evidence of authority issued by a Regulatory Authority relating to or utilized in connection with the Business or any part thereof or the Business Assets, including any and all consents and approvals required to be obtained from any Regulatory Authority under any applicable Laws for the Transferor to sell, assign and transfer, or procure the sale, assignment or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rther submitted as follows: (a) That the Affidavits filed by the Officers of SPCPL and the bills and photographs produced by SPCPL show that SPCPL is in possession of Plant No.2. (b) That VMPL itself has in Petition No. 13 of 2012 filed before the CLB alleged that it is not carrying on any other business and all its assets have been transferred to SPCPL, which clearly establishes that it is SPCPL which is carrying on its business from Plant No.2 and is in possession and control of the same. (c) That a conjoint reading of Clauses 1.13, 1.1.4, 6.6, Annexure-8- Clause 5.3 and Clause 9.1 of the BTA, makes it apparent that all assets and properties used by VMPL as part of its business were agreed to be transferred by VMPL in favour of SPCPL which includes Plant No.2. (d) That post execution of BTA, all employees and assets of VMPL including Plant No.2, stood transferred in favour of the Appellant . As such post the BTA, SPCPL stood possessed of Plant No.2 and its employees started operating Plant No.2. (e) That it is clear from the terms relating to transfer of Licenses (Clauses 1.1.4 (vii) read with Annexure-1 Part L (Appeal Page 178) that licenses inter alia in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whether a person is in possession of a property is a mixed question of fact and law and involves determination of control over the property. (vii) That the above Appeal therefore deserves to be allowed. 9. Mr. Chinoy, Learned Senior Advocate appearing for VMPL/RKM has after referring to the sequence of facts/events set out in Paragraph 5 hereinabove, submitted as follows: 9.1 That the present Appeal is nothing but one more ploy of Rakesh who admittedly controls SPCPL to deprive VMPL and his father RKM who holds 99.99 per cent of the shareholding of VMPL, to inter alia take possession of the assets of VMPL including Plant No. 2 from the ex- Directors Vyas and Chaudhari, having been unsuccessful in stalling the same right upto the Hon ble Supreme Court. 9.2 The present Appeal is filed by SPCPL at the instance of Rakesh and is a part of Rakesh s mala fide (and judicially stigmatized attempt) to somehow wrongfully continue to exercise control over the assets and properties of VMPL and the same clearly constitutes an abuse of the process of the Court. 9.3 That under the BTA dated 30th December, 2010, while VMPL s Plant No. 1 is listed and included in the definition of Bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctors of VMPL in the course of the Company Appeal proceedings in this Court in 2013. The said Agreements are in accordance with the BTA which requires VMPL to carry out toll manufacturing at its Plant No. 2 and supply the manufactured products to SPCPL. However, the commercial/payment terms under the three agreements have been skewed in favour of SPCPL by the said hostile ex-Directors acting at the instance of Rakesh, with the result that VMPL has made substantial losses while carrying out such job work inasmuch as the lease rentals and the staff secondment charges required to be paid by VMPL to SPCPL are higher than the conversion charges received by VMPL from SPCPL. 9.9 That it was under the said Secondment Agreement that SPCPL employees were deputed/made available to VMPL for operating/manning its Plant No.2. However, clauses 2.1 to 2.5 of the Secondment Agreement make it clear that Plant No. 2 is in the possession and control of VMPL and that Plant No. 2 is being operated by VMPL and that the staff deputed/seconded from SPCPL to VMPL are operating Plant No. 2 under the supervision and control of VMPL. 9.10 That the job manufacturing activities at Plant No. 2 were and are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SPCPL's books of account (produced and handed over in Court during the hearing), has regular debits for payment of Equipment Lease Charges and Secondment Charges by VMPL to SPCPL and payment of conversion charges - as per the Agreement by SPCPL to VMPL. 9.12 That significantly the presence of its employees in VMPL's Plant No. 2 and the fact that they are operating the same, is the only basis on which SPCPL alleges that it is in possession of the said Plant No. 2 from March, 2011. As stated above, that baseless/false case is fully answered by the BTA and the staff Secondment Agreement. 9.13 That there can be no better evidence to belie the case of SPCPL being in possession of Plant No. 2 since 30th December, 2010/18th March, 2011, than the Affidavits of Jagtap and Chaudhari dated 14th March, 2013 and 28th February, 2012 respectively, filed on behalf of VMPL in C.A. No. 2023 of 2012 in Writ Petition No. 4358 of 2001, wherein they have categorically denied that SPCPL is in occupation or possession of the suit property (Plant No.2) and asserting that VMPL has not created any third party interest over Plant No.2 or parted with possession of Plant No.2, and also the Lis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Toll Manufacturing (job work) at its Plant No. 2 and supply the products to SPCPL. 11. As correctly pointed out by Mr. Chinoy, such specific provisions made in the BTA for Plant No. 2 necessarily exclude any contrary inference/submission on the basis of the General Clauses of the BTA. In any event, Clause 6.2.2 (f) and 6.7 of the BTA which are relied on by SPCPL are not applicable to VMPL's Plant No.2. The said two clauses only refer to VMPL's obligation to execute further documents, if required, to effectively transfer the Business Assets , which term is defined in Clause 1.1.4 and does not include VMPL s Plant No. 2. Instead, as stated earlier, it is specifically provided in Clause 1.1.13 (d) that VMPL is to carry on its job work at Plant No. 2 and supply the products to SPCPL. Also Clauses 2.1, 5, 9 and Annexure-8 of the BTA and the other provisions which are relied on by SPCPL are general provisions regarding transfer of the business and do not alter the above position or in any way detract from the specific provision made in Clause 1.1.13 (d) regarding Plant No.2. 12. Therefore, in my view, SPCPL has been unable to show a single provision from the BTA or the S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omissions of the deputed employees . 2.4 The deputed Employees shall follow the working hours specified by VMPL. 2.5 VMPL shall ensure that the deputed employees are adequately instructed with respect to the tasks to be performed by them and are provided adequate supervision and guidance so as to enable them to perform the tasks assigned to them (ii) Job Work Agreement dated 18th March, 2011 executed between VMPL and SPCPL: .. . .... .... ........ AND WHEREAS VMPL HAS AGREED TO CARRY OUT AFORESAID JOB HANDLING FOR SPCPL AS ENUMERATED BELOW: JOB HANDLING ACTIVITIES BY VMPL AT ITS PREMISES LOCATED AT PLOT NO. 153 TPS NO. 1 VILLAGE NAUPADA TAL. DIST. THANE . (iii) Equipment Lease Agreement dated 18th March, 2011 executed between VMPL and SPCPL: Now therefore, in consideration of the reciprocal promises and obligations a d mutual covenant between the parties recorded hereinafter, the parties hereto, are entering into this Deed which witnesses as follows: The lessor hereby grants lease and the lessee takes on lease (lease) with effective control and possession, the equipment for the fixed period with effect from the commencem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant No. 2 of VMPL. 15. Again, as stated earlier, SPCPL has in its Appeal relied on the Job Work Agreement, Secondment Agreement and the Equipment Lease Agreement, all dated 18th March, 2011 and has also annexed copies of the same as Exhibits 'E', 'F' and 'G' to the Appeal. In the said Appeal, SPCPL has nowhere stated that the said Agreements were not to be implemented or were not infact implemented. However, at the time of advancing arguments, SPCPL realised that the incorrect case advanced by it viz. that Plant No. 2 of VMPL is transferred to SPCPL and/or is in control and possession of SPCPL since December 2010/18th March, 2011, was completely negated/contradicted by the BTA and more particularly the said three Agreements. SPCPL therefore, for the first time in the list of dates tendered in Court and in its written submissions, falsely alleged that the said three Agreements were not acted upon. Again, the allegation that the Agreements were not acted upon is also belied by the fact that VMPL's ledger folio in SPCPL's books of account (produced and handed over in Court during the hearing), has regular debits for payment of Equipment Lease Charg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed by him, the Advocates for RKM repeatedly wrote letters to the Advocates for Rakesh, Vyas and Chaudhari, calling upon Vyas and Chaudhari to hand over the records and immovable properties of VMPL to the newly appointed Directors. Neither the said Ex-directors nor Rakesh at any time took a stand that all the immovable properties of VMPL are transferred to SPCPL or are in control and possession of SPCPL as is now alleged. 18. The most glaring facts which belie the allegation of SPCPL that it is in control and possession of Plant No. 2, are, at the cost of repetition, once again set out hereunder as follows: 18.1 Mr. Sanjay Jagtap, Head Legal and Secretariat of SPCPL who has filed his Affidavit-in-Support in the above Appeal claiming control and possession of Plant No. 2 by SPCPL since December, 2010/March, 2011 has filed an Affidavit dated 14th March, 2013, in Civil Application No. 2023 of 2012 in Writ Petition No. 4358 of 2001 in this Court wherein he has stated that, I deny that SPCPL has been put in possession of the suit property (i.e. Plant No. 2) or that they are now carrying on the business from the suit property (Para 20 of the Affidavit) and I deny that SPCPL a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... PL that they were in control/possession of Plant No.2 since 30th December 2010/18th March, 2011 being belied by the aforestated facts, as correctly submitted by Mr. Chinoy, the Learned Senior Advocate appearing for VMPL, it is obvious that what RKM meant was that VMPL was not carrying on its own business as on date but was carrying on the job work of SPCPL as agreed under the Job Work Agreement. Again it cannot be held that RKM meant that each and every asset along with the liabilities of VMPL was under the BTA transferred to SPCPL in view of the following averments/prayers contained in the Company Petition No. 13 of 2012 itself: (i) ...... The Company, in addition to the investments held as stated above, is the owner of several immovable properties, which are more particularly described in Annexure 2 hereto annexed (Para 15 page 175 of Compilation Volume 1). It is pertinent to note that Annexure 2 also includes Plant 2 of VMPL and therefore as on 2nd February 2012 it is the case of RKM in the Petition that the Company (VMPL) is inter alia the owner of Plant No.2. (ii) ....... The Petitioner states that by issuing the said corporate guarantee, Respondent Nos. 2 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and 402 of the Companies Act, inter alia, against Vyas, Chaudhari and Rakesh, seeking removal of Vyas and Chaudhari and appointment of new Directors in their place and protection of the assets of VMPL. CLB allowed RKM to replace Vyas and Chaudhari from acting as Directors of VMPL. Rakesh impugned the orders right upto the Hon ble Supreme Court of India but failed to prevent RKM from removing Vyas and Chaudhari as Directors of VMPL. Since Vyas and Chaudhari have during the interregnum throughout denied access to RKM qua the working and affairs of VMPL and have acted as per the directions of Rakesh who admittedly controlled SPCPL and allowed Rakesh to deal with the finances and assets of VMPL as per his wishes, Rakesh or SPCPL now cannot be allowed to take advantage of the same and contend that SPCPL was in possession and control of the assets of VMPL, since RKM is unable to show which Officer of VMPL supervised the working of Plant No. 2 or that VMPL never made a demand for conversion charges or that there were only book entries made qua the conversion charges or that some property tax bills were paid by SPCPL, etc. All these happenings were only because Rakesh, who controlled SPCP ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and hand over control of Supermax Group of Companies to his eldest son Rakesh. As part of that restructuring, SPCPL was registered as a new Company controlled by Rakesh. On 30th December, 2010, a BTA was executed between VMPL and SPCPL, the relevant terms of which are set out/discussed hereinabove. Since the persons who were appointed as Directors of VMPL were always the employees/consultants of VMPL and not the family members of RKM, pursuant to the BTA all the employees including the ex- Directors of VMPL (Vyas and Chaudhari) were transferred as employees/consultants of SPCPL. RKM at this stage could have removed Vyas and Chaudhari and appointed new Directors. However, since mortal beings are unable to foresee the future, and RKM being no exception, RKM not only trusted Rakesh, but Vyas and Chaudhari as well, and continued Vyas and Chaudhari as Directors of VMPL. Rakesh misused the trust placed on him by RKM and used his influence over Vyas and Chaudhari, the Directors of VMPL (who pursuant to the BTA were now employees/Consultants of SPCPL), to exclude RKM who held 99.99% of the shares of the five Companies. Through these pliant Directors, Rakesh also sought to utilise the funds ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unds, assets and properties to VMPL's new management on diverse and untenable grounds. This again was done obviously at the instance of Rakesh. 22.2 In the circumstances, VMPL filed Company Application No. 296 of 2014 in the CLB Petition to restrain the ex- Directors from holding themselves out as Directors of VMPL and to direct them to hand over charge of the properties and records of VMPL to the newly appointed Directors. In the said application, Rakesh and the ex-Directors of VMPL were represented by the same Advocates. By Orders dated 20th November, 2014 and 5th January, 2015, made in Company Application No. 296 of 2014, CLB had restrained the ex- Directors of VMPL i.e. Respondents Nos. 8 and 9 therein from acting and holding themselves out as Directors of VMPL and had recorded a finding that the ex-Directors were wilfully disobeying the orders and not handing over charge. Rakesh and the ex- Directors now realised that it would no longer be possible for the ex- Directors to hold on to the assets of VMPL. Rakesh therefore caused SPCPL to file an Arbitration Petition under Section 9 of the Arbitration and Conciliation Act, 1996 against VMPL restraining VMPL from communicat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h to pursue the litigation against his father, whether the Board of Directors of SPCPL had passed any Resolution approving the same. After seeking time from the Court on two occasions, the Court was informed by the Counsel appearing for SPCPL that the entire litigation initiated/defended by Rakesh i.e. since the year 2012 has been throughout financed by SPCPL and there is no Board Resolution on record qua the litigation expenses having been borne by SPCPL on behalf of Rakesh. Therefore the entire litigation expense of Company Petition No. 13 of 2012 incurred by Rakesh has been throughout borne by SPCPL and is shown as the litigation expense of SPCPL. So much for the assertion on oath by SPCPL that it is an independent entity which has nothing to do with the disputes between Rakesh and RKM. I have therefore no doubt that Rakesh after leaving no stone unturned in trying to prevent the removal of Vyas and Chaudhari as Directors of VMPL and having failed in his endeavour, realised that the assets of VMPL, viz. Plant No. 2, will have to be handed over to the new Directors. He has therefore put up SPCPL to file the above appeal making statements/submissions which are false and incorrect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion was made by Rakesh who admittedly controls SPCPL, who was a party Respondent before the CLB and who was represented by the same Advocates. Again from the record of the proceedings it was clear that though by an Order dated 9th February, 2012, CLB had restrained the Respondents, which included Rakesh and the ex-Directors, Vyas and Chaudhari from disposing off, encumbering the assets of VMPL and the very same Order was continued by this Court whilst dismissing the Appeals filed by Rakesh in August, 2014, at no stage had Rakesh (who admittedly controlled SPCPL) and the ex-Directors Vyas and Chaudhari submitted before the CLB or before this Court or before the Hon'ble Supreme Court that the said Order dated 9th February, 2012 ought not to have been passed since allegedly all the assets including Plant No. 2 of VMPL are in possession and/or control of SPCPL from 30th December, 2010/18th March, 2011. Even after Rakesh failed to obtain a stay from the Hon'ble Supreme Court on removal of Vyas and Chaudhari as Directors of SPCPL, Rakesh and the ex-Directors, as stated hereinabove, refused to accept that Vyas and Chaudhari had ceased to be the Directors of VMPL and that consequen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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