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TMI Blog2016 (1) TMI 506X X X X Extracts X X X X X X X X Extracts X X X X ..... Kanga & Co. for the Appellants in Company Appeal No.22 of 2015; for Resp. No.7 in Company Appeal No.21 of 2015 and Company Appeal No.24 of 2015 and for Resp. No.3 in Company Appeal No.23 of 2015. Mr. Janak Dwarkadas, Senior Advocate with Mr. N.H. Seervai, Senior Advocate, Mr. Sharan Jagtiani, Mr. Chirag Kamdar, Mr. Gerald Misquitta, Mr. Alok Patel i/by Mahendra Patel & Associates, for Resp. Nos.2, 3, 4 and 6 in Company Appeal No.21 of 2015 and for Company Application No.11 of 2015; for Resp. Nos.3, 4, 5 and 6 in Company Appeal No.22 of 2015 and for appellants in Company Appeal No.23 of 2015 and for applicants in Company Application No.12 of 2015 in Company Appeal No.23 of 2015 and for respondent Nos.2, 3, 4 and 6 in Company Appeal No.24 of 2015. Mr. Darius Khambata, Senior Advocate with Ms. Namrata M. Shah, Mr. Prashant Bari i/by Beri & Co. for Respondent No.8 in Company Appeal No.21 of 2015 and Company Application No.11 of 2015; and for Respondent No.7 in Company Appeal No.22 of 2015 and for Respondent No.2 in Company Appeal No.23 of 2015 and Company Application No.12 of 2015; and for the appellant in Company Appeal No.24 of 2015. Mr. C.J. Joy with Mr. G.Hariharan i/by H.P. Cha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... F Yeast was Rs. 3 crores (Rupees three crores only) divided by 300000 equity shares of Rs. 100/(each). The approximate value and paid up capital of SAF Yeast at the relevant time was Rs. 1,58,37,500/comprising of equity shares of Rs. 100/each. 4. The shareholding of SAF Yeast is as follows: Nafan B.V. owns 80,772 equity shares, approximately constituting 51% of the total shareholding. Mr.Arunachalam Muthu holds 16,800 equity shares constituting approximately 10.607% of the total shareholding. Mr.A.M. Arunachalam holds 10396 equity shares constituting approximately 6.56% of the total shareholding. Mr.A.M. Muthiah holds 10397 equity shares, constituting approximately 6.57% of total shareholding. Mr.TNM Arunachalam, who passed away during the proceedings, held 1,800 equity shares constituting 1.13% of total shareholding. Helios Food Additives Pvt. Ltd. holds 38010 equity shares constituting approximately 24% of total equity share capital. Mr.B.B. Pay Master, who is no more, held nominal 200 equity shares of SAF Yeast. 5. Nafan B.V. (referred to as Nafan) is a Company incorporated under the laws of Netherlands, having its registered office at Loatellikade I-Parnassustoren - 1076 AZ A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he event the laws of India are amended and it is made legally permissible to hold the majority interest, Muthu would transfer the necessary shares to Lesaffre or its subsidiary, and that they would then hold majority of equity capital. When SAF Yeast was incorporated, the word 'SAF' was derived from the name Lesaffre and the interim license agreement was entered into between Lesaffre and SAF Yeast on 11 December 1982, after obtaining requisite approvals. Lesaffre was issued 6000 equity shares comprising of 40% of equity capital. On 22 March 1991, Lesaffre and Muthu entered into a participation agreement to update the agreement of 6 June 1981. Article 6 of participation agreement required that Memorandum of Articles of Association of SAF Yeast would reflect the terms of participation agreement. In accordance with Article 7 of the Participation Agreement, Lesaffre was entitled to have majority in the Board of Directors of SAF Yeast. Article 7.4 provided for scheme of appointing an alternate Director. Article 7.6 lay down the day-to-day management of SAF Yeast to be in the Board of Directors, except as delegated to the Managing Director by the Board. Lesaffre was entitled to n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that reasonable settlement with Calyon Bank as the bankers would be in the interest of SAF Yeast; however, the terms put-forth by Muthu were not reasonable. (iv) Meeting of Board of Directors was held on 14 April 2005 in France. The pending cases with the Calyon Bank were discussed. The meeting was attended by Muthu, Lucian Lesaffre, Alain Laloum, and Alain De Gouy. In the meeting, a resolution was passed that it would be in the interest of SAF Yeast to settle the dispute with the Calyon Bank against the payment of compensation of Euros 5,00,000 and a draft of discussion was forwarded to Calyon Bank and to Muthu. (v) After the meeting, Muthu's attitude underwent a change. Muthu group was under a belief that the dispute with the Calyon Bank was something that could be used to their advantage by placing Nafan in difficulties. Muthu started his attempts to force Lesaffre to sell 51% shares held by Nafan so that he could control SAF Yeast. The minutes of the meeting of 14 April 2005 were incorrectly recorded and when it was pointed out, Muthu disputed the position. Correspondence ensued between the parties. Alain De Gouy informed Muthu that on Lesaffres intervention, the Calyon B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 26 July 2005, without any notice to Nafan. Nominee Directors of Nafan came to know of the meeting on 26 July 2005 for the first time when it was referred to in Muthu's letter on 2 March 2006 addressed to Alain Laloum. Muthu attempted to falsify the record of SAF Yeast. Such meeting was invalid and illegal. Nafans Nominee Directors also sought for convening of Annual General Meeting and an explanation for not holding the same on time. Letters were written on 21 February 2006, 5 May 2006. These letters invoked no response and it is only when Nafan took inspection that it found out that the meeting was held on 23 November 2005. Nafan was deliberately not given notices of Annual General Meeting to avoid the majority shareholders from raising their funds, to change the number of directors and for declarations of dividend. Nafan requested Muthu to provide copies of various litigations in respect of Calyon Bank, however, Muthu failed to give these documents. Instead, Muthu persisted in his baseless allegations that Nafan was forcing him to settle with Calyon Bank. When Nafans nominee directors came to know that Muthu had held a meeting without notice to them, they thought it necessa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which was rejected by the High Court of Allahabad where the contempt proceedings were pending. A Special Leave Petition was filed in the Apex Court and the Apex Court by order dated 17 July 2006 directed dispensation of personal appearance. A senior advocate on behalf of SAF Yeast opposed the Special Leave Petition, and even requests for adjournments were opposed. Meetings were held between the parties. Heads of Agreement were entered into on 14 August 2007. (xiii) On 17 April 2009, Nafan received a notice from Company Registrar, Pune as to why action should not be taken for non-filing of annual returns and balance sheet for the year ending 31 March 2006 to 31 March 2008. A notice for calling a meeting at Brussels or Geneva was sent to Muthu. In the meanwhile, Alain Laloum informed that he had been induced to sign some papers by Muthu for their Montreux (Switzerland) and pursuant to that; he has received some valuation made by Sharp & Tannan. The valuation had no sanctity and validity and it was just a scrap of paper. Nafan had not called it and therefore it was to be ignored. On 3 May 2009, Muthu made the usual allegations and referred to a Memorandum of Understanding (MOU) alle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecting the Respondent Nos.1 to 6 to rectify the Register of Members (ROM) of the Respondent No.1 Company by inserting name of the Petitioner in relation to 80722 shares held by the Petitioner. (b) To pass an order terminating the appointment of the Respondent No.2 as Managing Director and the Respondent No.3 as Joint Managing Director with immediate effect and remove them from the Board without prejudice to the rights of the Respondent No.1 Company to appoint any professional Managing Director. (c) To pass an order removing the Respondent No.2 to Respondent No.4 as directors and/or any other nominee directors of the Respondent No.2. (d) To pass an order directing that the board of Respondent No.1 Company be reconstituted at a suitable general meeting of its shareholders. (e) To pass an order declaring Articles 14 to 18 of the Articles of Association of the Respondent No.1 Company as null and void. (f) To pass an order thereby directing the Respondent Nos.2 to Respondent No.6 to sell the shares held by them in Respondent No.1 Company to the Petitioner and/or its nominees at a value which is double the value relied on the Respondent No.2 i.e. Rs. 8,630/per share. Reply by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o tie up with someone like Muthu. A joint venture was formed on 6 June 1981. SAF Yeast was incorporated on 12 August 1981. There were three Directors, Muthu, B.B. Paymaster, and Lucian Lesaffre. Muthu was the Managing Director right from the inception. It was the obligation of the Lesaffre Group to provide technical assistance, which they failed to do. (ii) Muthu single handedly set up a factory at Chiplun, without any assistance from Lesaffre. He raised loans from various banks and gave personal guarantees. Lesaffre Group did not give any such guarantee. When the factory became functional, it was found that strength of yeast given by Lesaffre was unsuitable and Lesaffre had rendered no technical assistance or advise. Muthu made efforts to get the correct strength. As the factory at Chiplun progressed, a second factory was set up at Sandhila through efforts of Muthu. The assertion of Nafan that the name SAF comes from Lesaffre is not correct. The participation agreement dated 22 March 1991 was not to be acted unless the clauses were consequential to the Articles of Association. The participation agreement was never in accordance with the Articles of Association. (iii) The partici ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , minus the commission in the account of SAF Yeast. Calyon Bank wrote to SAF Yeast on 4 March 1997, enclosing a telex message of Meespierson NV, stating that an amount of US $ 1,01,531.25 was being deducted as demurrage charges and an amount of US $ 4,58,040.67 was being paid under letter of credit. (vi) Lesaffre transferred its entire shareholding in SAF Yeast through Nafan. J.L. Meurant on behalf of Lesaffre informed SAF Yeast and Muthu of the transfer and request was made to SAF Yeast to take all necessary legal steps to register the transferred shares. (vii) Calyon Bank filed a civil suit, which was, transferred to Debt Recovery Tribunal, against SAF Yeast for recovery of an amount approximately, Rs. 45.76 lacs including interest. Prior to filing a suit, the Calyon Bank issued the caution notice against SAF Yeast, Muthu, and Pay Master to the State Bank of India and Indian Bank Association. The State Bank of India circulated the caution notice widely to all their branches across the country. This caused serious damage to the reputation of SAF Yeast. The Calyon Bank thereafter proceeded to misappropriate about Rs. 13.79 lacs and did not permit SAF Yeast to withdraw its funds e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bank, Nafan and Lesaffre were not giving any support, on the contrary, they were forcing SAF Yeast to settle with Calyon Bank on unreasonable terms. (xii) Muthu wrote to Alain De Gouy on 21 November 2005 complaining about the attempts of Lesaffre to force SAF Yeast in settling with Calyon Bank, in terms proposed by it. Muthu asserted that, in the meeting of 14 April 2005, Lucien Lesaffre had stated that SAF Yeast would have to accept the proposal for settlement. It was further stated that Lesaffre and Calyon Bank were proposing to settle the terms without consulting SAF Yeast or its Directors. Muthu made the grievance that, throughout the dispute with Calyon Bank, Nafan and Lesaffre were supporting Calyon Bank and not SAF Yeast. Muthu also pointed out that Nafan and Lesaffre were threatening to use their majority shareholding to achieve its objects of forcing SAF Yeast to settle with Calyon Bank. Muthu also wrote to Denis Lesaffre reminding him that the Directors of SAF Yeast owed fiduciary duty to SAF Yeast and not to Calyon Bank. He asserted that it is not correct that Lesaffre sought to benefit from its relationship with Calyon Bank at the cost of SAF Yeast. He also stated tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ders and reiterated stand of Nafan in settling the dispute with Calyon Bank in such a manner that would benefit SAF Yeast. Laloum also stated that there was no evidence that SAF Yeast was finding it difficult to raise finance through banks and in fact, it appeared that SAF Yeast was doing well. Laloum also asserted that offer of USD one million made by Calyon Bank, as a compensation was a fair offer. Laloum objected to the meeting of 26 July 2005 without notice to nominee Directors of SAF Yeast and approval of the minutes of the meeting dated 14 April 2005. Laloum sought appointment of alternate Directors in India and to convene a Board meeting in Paris. Laloum also stated that is is more than 15 months since a general meeting was held which was contrary to Articles of Association. Muthu wrote back on 10 May 2006 stating that it will not be possible for him to attend the meeting at Paris due to personal difficulty. He also pointed out that the atmosphere resulting due to the exchange of correspondence was not conducive for meaningful Board meeting to be held. Around this time, Muthu Group had received various caveats filed by Nafan and Lesaffre Group. Laloum asked for a dial-in-con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Lesaffre Group and Muthu Group finalized the Heads of Agreement setting out certain broad terms and as to how their relationship in SAF Yeast would continue. It was agreed that the shareholding of both the groups be 50:50percentage. The agreement, however, did not fructify into final agreement. Thereafter correspondence ensued between Alain Laloum, Lucien Lesaffre with Muthu between October 2007 to November 2008, in which it appeared that the relation between the parties had not deteriorated further. (xvii) On 29 April 2008 Alain de Gouy resigned from the Board of Directors and Lucien Lesaffre resigned on 6 June 2008. Lesaffre appointed a new group Managing Director Jean Louis Meurant. Meetings were held between Muthu and Alain Laloum between February 2008 to August 2008 to resolve the differences, at Montreux, Geneva, and London. A meeting was held in Montreux in February 2008 on invitation of Alain Laloum where several modes of resolution were discussed. Muthu made it clear that his shareholding was not for sale. (xviii) Laloum had been to Algeria for resolution of some issues on behalf of Lesaffre. On 10 January 2009, Laloum telephoned Muthu to come to Montreux to resolve the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rant with a copy to Laloum about the further steps taken pursuant to the MOU. Muthu tried to call Meurant on several occasions from 11 February 2009 to 18 February 2009 but Meurant was not available in the office. Laloum informed Muthu that Nafan could not locate the original share certificate. Between March and April 2009, Muthu took the matter of transfer of shares pursuant to the MOU and copy to Laloum and Corinne Wisniewski regarding the steps of process for completing the transaction. (xxi) On 3 May 2009, Muthu sent an email to Denis Lesaffre replying to the email sent by Corinne Wisniewski dated 30 April 2009 and mentioned regarding several meetings and telephonic calls. Corinne Wisniewski replied and demanded meeting of Board of Directors of SAF Yeast. An issue was raised by Corinne Wisnieswski regarding letter from ROC, Pune. Muthu clarified that it was a non-issue at the registered office of SAF Yeast was at Mumbai and not within the jurisdiction of ROC, Pune, and the steps have been taken to close the file. Muthu also stated that the permission of the Reserve Bank of India was obtained in reference to the MOU and called upon Nafan to honour and abide by the MOU. (xxii) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tors considered the request of SAF Yeast as an agent of the Nafan for issuance of duplicate share certificate for 80,772 shares. The issue was discussed and not having found any adverse evidence, resolved to cancel the lost original share certificates and issue duplicate share certificates to enable issuance of duplicate share certificate to enable issuance of duplicate share certificate. The meeting was adjourned by 45 minutes. (xxiii) After the duplicate share certificates were prepared, the duly executed share transfer forms were taken on record along with the duplicate share certificates. The share transfer forms were accepted and resolution was passed to transfer the shares in the name of A.M. Muthiah and accept him as a shareholder for the 80,772 shares. It was thus resolved to delete the name of Nafan as a shareholder from SAF Yeast. SAF Yeast, through Muthu informed Corinne on 28 May 2009 stating the steps taken pursuant to the MOU referring to previous correspondence and that the MOU has been implemented. Muthu informed of the Board resolution taken in the meeting dated 25 May 2009 after receiving purchase consideration for transfer of shares of Nafan. The letter also sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Bank has been set out in the reply filed by Muthu, which is adopted. Affidavit of Alain Laloum 14. On 10 June 2010, Alain Laloum filed his affidavit taking briefly the following contentions: (i) In 2006, Muthu initiated proceedings in Allahabad High Court, Lucknow Bench, against Laloum and other nominee directors. Several discussions took place between Muthu and Lucian Lesaffre to resolve the dispute. Lucian Lesaffre and Muthu signed Heads of Agreement at London. After the Heads of Agreement were signed, they exchanged draft of redemption shareholder agreement. Muthu and Lucian Lesaffre agreed that their lawyers would discuss and finalize the agreement. Muthu was aware that neither Lesaffre nor Nafan will execute any agreement without first it drawn by their lawyers and placing it for approval before the Board, having been finally executed by Lesaffre family. Muthu was also aware that no policy decision, more particularly, a decision to exit from India would ever be taken without Lucian Lesaffre and Denis Lesaffre being involved and with approval of the Board of Lesaffre. (ii) In January 2009, Muthu called upon Laloum and requested for a meeting. Muthu drew attention of Lalou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iction. Various false statements have been made in the reply filed by Muthu especially regarding meeting between Muthu and Laloum in Montreux, Switzerland. The entire basis of the case put up by Muthu Group is the MOU being a binding agreement to transfer the share, is incorrect. The case put up in the reply is fraudulent, the alleged transfer of shares is void ab initio, and no Board meeting took place, which is concocted for giving effect to fraudulent scheme. Records have been fabricated and shares, worth not less than Euro 25 Million Euros, as in May 2009 have been sought to be misappropriated. ii) The Company did not have sufficient means and but for the loans provided by Lesaffre and through its good offices from Bank Indosuez, SAF Yeast Company would not have the adequate finances. SAF Yeast Company was incapable of surviving without the support of Lesaffre. Lesaffre also provided technical assistance regarding strains, testing and technical advise. The Company profits grew not because of efforts of Muthu Group but because the yeast market in India had grown as were foreseen by Lucien Lesaffre. iii) Muthu used the pendency of criminal proceedings to intimidate the Nafan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e made a ridiculously low valuation. The valuation report did not take into consideration Discounted Cash Flow method, which is a detailed exercise. There was no basis for valuation to be carried out as of 31 March 2008. The manner in which the valuation was carried out and the speed at which it was carried out was entirely suspicious. The valuation was done by Nafan from reputed firms of Chartered Accountants would show that the valuation of SAF Yeast was wholly fraudulent. Even the well settled methods of valuation were not applied. vi) Attempts were made to meet Muthu in Paris to discuss future progress of the joint venture. Muthu avoided doing so. The Special Leave Petition before the Apex Court was adjourned on 27 March 2009 on the basis that negotiations are in progress and it was never contended that there has been any agreement to sell the shares. There was no reference to any Board meeting regarding the MOU. Muthu's lawyers opposed the adjournments thereafter in the Apex Court. It was informed by Corinne that the assertion of Muthu regarding MOU could not even be considered. vii) On 28 May 2009, Muthu sent a shocking email that he had transferred the shares and paid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was not brought to the notice of Lesaffre. Meurant did inform Lesaffre about Muthu's wish to buy the shares and valuation. When Lesaffre asked Laloum to have a meeting in Paris, he did not agree insisting upon receiving agenda for the meeting. Affidavit filed by Muthu Group in response to affidavit filed by Alain Laloum. 17. On behalf of Muthu Group, Muthu briefly stated as under. If there was any truth in assertion of Laloum, then he should have affirmed the petition as being the person most likely involved in the proceedings. The case that MOU is a mere proposal is contrary to the averments made in the petition. The MOU was culmination of series of meetings to settle the dispute. Laloum had a clear authority to execute the MOU. The averments made by Laloum in the affidavit were dealt with parawise and denied and the fact that the MOU was binding and Laloum had the authority was reiterated. Sur-rejoinder filed by Muthu Group 18. Sur-rejoinder was affirmed by Arunachalam Muthu on behalf of Muthu Group on 17 July 2010 to deal with the rejoinder filed by Denis Lesaffre. It was in short, stated as under. (i) Inspection of documents has been given by Nafan. In spite of the sam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... There was hardly any financial assistance provided by Lesaffre to SAF Yeast, so also the technical assistance. Both the terms, Muthu Group and Lesaffre Group are well known, and it is ridiculous to suggest that MOU is not binding on that count. 19. Further affidavit was also filed by Mr. Muthu on 11 October 2010 by placing certain documents on record. Proceedings before the Company Law Board 20. With these pleadings, the parties went for hearing before the Company Law Board. In addition to the voluminous pleadings and documentary evidence, the parties also filed their written submissions. 21. The CLB framed points for determination. The points for determination were - (i) Whether the petition has not been properly verified and filed as per CLB Regulations ? If so, its effect. (ii) Whether the petition is not maintainable on the grounds stated in the reply(s) filed by the Respondent Nos.2 to 4? (iii) Whether the rejoinder/replication is part of the pleadings ? If not, its effect. (iv) Whether the Petitioner has suppressed the material and vital facts in its petition ? If so, its effect. (v) Whether the impugned MOU dated 23 January 2009 is invalid and unenforceable docu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... MOU. The Board concluded that Nafan and Lesaffre wanted to sell the shares, and in fact agreed to sell their shareholdings vide the MOU. It was held that Muthu Group took immediate steps for withdrawal of the cases at their end. The MOU was not bad on the ground of uncertainty in terms and conditions. The Board held that it was competent to take into consideration the intention of the parties from the MOU to pass appropriate orders in exercise of its rights and powers under Section 402 of the Act. A transfer notice must fulfill both the conditions stipulated in Article 15, that, it must be a notice of the members desire to transfer the shares and it must appoint the Company as an agent for finding a transferee. The first part of Article 14 is separate, distinct, and independent of latter part of Article 14 and that the contention of Muthu Group that Articles 15 and 18 are applicable is incorrect. Board further held that the MOU was not a transfer notice as contemplated under Article 15. The Board held that the meeting on 29 January 2009 was held and the allegation of fabrication of record of Board meeting could not be accepted. (II) The Board took note of the fact that admittedly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... istrator was appointed. The administrator so appointed was authorized to appoint an independent auditor. After the complete exit of Nafan and Lesaffre of receiving the consideration, the administration function would come to an end. Accordingly, the Company Petition was disposed of by the impugned order dated 28 March 2013. Present Appeals 23. Thereafter the abovementioned four appeals have been filed. A Company Appeal was first filed by Nafan, in which a Company Application was taken out for interim relief. By order dated 8 May 2013, the Court did not accept the contention of Nafan that only part of the impugned order be stayed and placed the matter on board for admission. The matter thereafter came up on board on 11 June 2013, when Muthu Group, Lesaffre, Union of India, and Sharp & Tannan filed their appeals. The appeals were admitted. Pending disposal of the appeals, order passed by the Board dated 24 June 2009 read with order passed by this Court earlier on 15 January 2010, was directed to be continued. By a separate order, the appeal filed by the Union of India was disposed of. Thereafter, the petitions were heard from time to time on various dates, as per the request of var ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irection to sale 51% shares of Lesaffre in the SAF Yeast; other consequential findings and directions. Mr. Dwarkadas, senior advocate appearing on behalf of Muthu Group taken a preliminary objection regarding the maintainability of the appeal filed by Lesaffre. He contended that Lesaffre was joined as a proforma respondent in the petition filed by Nafan and it was specifically stated in the Petition that Lesaffre is only proforma respondent in the proceeding. He submitted that Lesaffre did not have any cause of action to file its own petition, as it holds no shareholding in SAF Yeast neither Lesaffre was a joint petitioner with Nafan. He further submitted that Lesaffre had not filed any affidavit in reply neither any statement on oath. Mr. Dwarkadas submitted that Lesaffre had sold its entire shareholding in SAF Yeast to Nafan and Lesaffre had no interest or ownership of the shares. Mr. Dwarkadas submitted that an appeal under Section 10F of the Act can only be filed on a question of a law and a new factual position, which is sought to be introduced by Lesaffre that the shares were held by Nafan for its benefit, cannot be permitted. He submitted that the Lesaffre was not a member a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by Lesaffre, it was kept open to be decided at the time of final order and Mr. Khambata on behalf of Lesaffre has made the submissions on merits as well. I am therefore not inclined to dismiss the Appeal No.24 of 2015 filed by Lesaffre only on the ground of maintainability. Lassafre is entitled to contend that the directions issued to it should be set aside. However a positive relief,if any, can only be granted to Nafan as per its prayers in the petition. Preliminary 29. I now proceed to consider the controversy at hand dealing with the four appeals on merits. Learned Counsel have taken great pains to expound the law on the subject. The Counsel and their teams have meticulously done research on various legal aspects. What needs to be kept in mind are the parameters of the jurisdiction is exercised by the Company Law Board, the role that is played by it, and the scope of appellate power under Section 10F. Though the learned counsel for the parties have advanced elaborate submissions on all facets of the controversy and have urged this Court to dwell into findings of facts, one cannot lose sight of the limited jurisdiction conferred on this Court under Section 10F of the Act. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s legal may be oppressive. A deliberate act to cause harm to the members of the Company in respect of the affairs of the Company would be an act of oppression. Therefore, the enquiry in such matters will be focused on probity and fairness in dealing amongst the shareholders, rather than only testing only the legality of the actions. 32. Various decisions have been cited by the learned counsel for the parties on the concept of oppressive conduct falling within the ambit of Section 397. It is not necessary to refer to all of them individually as in the case of Sangramsinh P. Gaekwad v/s Shantadevi P. Gaekwad (2005) 11 SCC 314, the Apex Court has outlined them as under. "180. The expression 'Oppression' complained of, thus, must relate to the manner in which the affairs of the company are being conducted and the conduct complained of must be such as to oppress the minority members. By reason of such acts of oppression, it must be shown that the majority members obtained a predominant voting power in the conduct of the company's affairs. 181. The jurisdiction of the Court to grant appropriate relief under Section 397 of the Companies Act indisputably is of wide amplitu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct designed to secure pecuniary advantage to the oppressors; they cover the case of wrongful usurpation of authority, even though the affairs of the company prosper in consequence." 190. In Shanti Prasad Jain v. Kalinga Tubes Ltd., etc.: [1965] 2 SCR 720 , this Court quoted with the approval the following passage from the decision in Elder's Case, , as summarized at page 394 in Meyer's case,: "(4) Although the word 'oppressive is not defined, it is possible, by way of illustration, to figure a situation in which majority shareholders, by an abuse of their predominant voting power, are' treating the company and its affairs as if they were their own property' to the prejudice of the minority share-holders-and in which just and equitable grounds would exist for the making of a winding-up order... but in which the 'alternative remedy' provided by Section by way of an appropriate order might well be open to the minority shareholders with a view to bringing to an end the oppressive conduct of the majority." 191. In Shanti Prasad Jain (supra) referring to Elder Case, it was categorically held that the conduct complained of must relate to the manner of man ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view". Dealing with the true character of the company, Lord Keith said at page 361 that the company was in substance, though not in law, a partnership, consisting of the society, Dr. Meyer and Mr. Lucas and whatever may be the other different legal consequences following on one or other of these forms of combination, one result followed from the method adopted, "which is common to partnership, that there should be the utmost good faith between the constituent members". Finally, it was held that the court ought not to allow technical pleas to defeat the beneficent provisions of Section (page 344, per Lord Keith; pages 36869, per Lord Denning). 195. In Re Five Minute Car Wash Service Ltd., the Court upon considering the nature of relief which can be granted under Section of the Companies Act, 1948 observed that in a case falling under Section of the Companies Act, 1948, relief will be granted if the petitioner establishes that at the time when the petition was presented the affairs of the company were being conducted in a manner oppressive of himself and if he fails to allege facts capable of establishing that the company's affairs are being conducted in such a manner the petit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e oral or documentary. (See In re Bengal Luxmi Cotton Mills Ltd.: 69CWN137). 201. In Shanti Prasad Jain Vs. Union of India it was held that the power of the company court is very wide and not restricted by any limitation contained in Section 402 thereof or otherwise 202. In Shoe Specialities Ltd. v. Standard Distilleries and Breweries (P) and Ors. , it is stated: "While exercising the powers under sections 397 and 402 of the Companies Act, the Court is considering not only the relief that is sought for but also considers as to what is the nature of the complaint and how the same has to be rectified. It is the interest of the company that is being considered and not the individual dispute between the petitioner and the respondent. If that be so, the interest of the company requires that the majority shareholders must have their say in the management." 203. In Jesner v. Jarrad Properties, a question arose as to whether the conduct and the background of the two companies (their informed way of doing business disregarding the Companies Act, etc.) could be taken into account to decide whether there had been unfair prejudice to one party in an application under Section of the Eng ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition and is attested prior to that date. He submitted that by making a person, who is not aware of the facts, the conduct of Nafan demonstrates lack of bonafides. He relied on decision of this Court in Intesa Sanpaolo SPA v/s Videocon Industries Ltd. Rendered in Company Petition No.528 of 2012. Mr. Dwarkadas submitted that the verification would have to comply with the provisions of Order XIX Rule 3 of Code of Civil Procedure. He relied upon the decision of the Apex Court in the case of State of Bombay v/s Purshottam Jog Naik. A.I.R. 1952 SC 317. He submitted that, the Apex Court and various High Courts emphasized the need of appropriate verification. He submitted that merely because Mr. Siraj Ahmed, has a Power of Attorney he does have a personal knowledge. Mr.De'Vitre submitted that the argument regarding lack of bonafides was not taken in the affidavit in reply nor in the rejoinder before the Board. The Board held that Siraj Ahmed being Power of Attorney had the lawful authority to the Petitioner and furthermore, Lasaffre and Laloum have filed their affidavits. 36. The Company Law Board Regulations provides that the petition can be filed through an authorized representativ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith the finding of the Board that the Petition ought not to have been dismissed on this count. 37. The second objection is that the petition ought to have been dismissed since Nafan had suppressed various facts. This argument was made before the Company Law Board and it was rejected. The Board concluded that, considering the petition and rejoinder, the facts and events stated to have been suppressed pertain mostly to the period 20052006 which were not much relevant. 38. Mr. Dwarkadas submitted that Nafan suppressed several material documents and material facts despite them being within their knowledge. He submitted that many documents were brought on record by the Muthu Group and when Nafan submitted list of dates and events and compilation in this Court, they have given an impression that all these events and documents were always part of the record, which is not so. He submitted that, if the petition is taken as it is, it presents a complete misleading picture. According to Mr. Dwarkadas, annual accounts for the year of incorporation and for other relevant year and Directors Reports were suppressed. He submitted that these documents would have clearly shown the falsity in the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xt messages and emails prior to the meeting; (iv) The Petition conveys the clear impression that apart from Alain Laloum, no other officer or representative of the Petitioner / Respondent No. 8 / Lesaffre Group was aware of the MOU and valuation of the shares. Contrary to this, the Reply disclosed that in addition to Alain Laloum, Mr. J.L. Meurant (the Group Managing Director) was in the know of the meeting at Montreux on 23rd January 2009, the MOU, the valuation of the said shares and Respondent No. 2's assertion seeking the transfer of the said shares. The Petition completely suppresses Mr. Meurant's role in the matter. His name is not to be found in the Petition at all. (v) After the role and knowledge of the Group Managing Director Mr. J.L. Meurant was placed on record in the Reply filed by the Respondents, in its Rejoinder Affidavit, the Petitioner has admitted (in June 2010) that Mr. J.L. Meurant was in fact aware of the meeting at Montreux on 23rd January 2009, that Mr. Laloum spoke to him immediately after executing the MOU and that on 24th January 2009 a copy of the MOU was sent by Mr.Alain Laloum to Mr. J.L. Meurant. (vi) The Petitioner further suppressed th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dependently authorized", in accordance with the Articles of Association of the Petitioner and there was no change in his power during the intervening period (between 21st July 2008 and 21st June 2009). (vii) The Petitioner did not disclose its own document i.e the flower of Attorney dated 31st January 2005 issued by the Petitioner to TMF Management, the Petitioner was able to solemnly argue that TMF Management was the only entity authorized to execute the MOU and bind the Petitioner. The Power of Attorney (for which Notice to Produce (and reminder) was also given to the Advocates of the Petitioner and to which there was no response at all forthcoming) clearly establishes that the Powers of the said TMF Management was very specific and restricted to routine administrative matters and that TMF Management had no such authority to execute the MOU on behalf of the Petitioner as solemnly argued by the Petitioner at the time of oral submission. (ix) The Petitioner suppressed crucial facts and emails of the year 2005 and 2006, in relation to the issue of the Board Meeting of the Company held in France in April 2005 and the Minutes of the said Meeting as prepared by Respondent No. 2, wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to disclose the facts and events which shows that the Petitioner was never excluded from the administration of the Company and in particular was not unaware of the holding of AGM's. Neither was the Petitioner unaware of the financial position of the Company. The documents and facts disclose that the Directors Reports for the years from 2004 2005 onwards (which is the period during which the Petitioner alleges exclusion from the Company) were always signed by a representative of the Petitioner on the Board of the Company. In some cases the Board Resolution for holding the AGM for a given year was signed by a nominee Director of the Petitioner. The Petitioner always received the dividend declared at the AGM's and on many occasions advised the rate of dividend to be declared. The Petitioner also suppressed communications by the Petitioner nominee Director's to the Respondents complimenting them on the performance of the Company in various years and in particular for 20062007 and 20072008, thus establishing their complete knowledge about the Company's affairs and financial position. (xi) Although the Petition alleges that three Alternate Directors were appointed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Chemicals Ltd.Rendered in Appeal No.332 of 1991, decision of the Apex Court in Gujrat Bottling Co. Ltd. & ors. v/s The Coca Cola Co. & ors.A.I.R. 1995 SC 2372, and S.P.Chengalvaraya Naidu v/s Jagannath. A.I.R. 1994 SC 853. Mr. Dwarkadas submitted that these decisions and several others have laid down that the Courts exercising equity jurisdiction must not allow any attempt to mislead them and the party coming to the Court must come with clean hands and produce all the necessary documents required for adjudication. He submitted that it is not open for the party to decide which document is material and must produce all the relevant documents. 41. Mr. Dwarkadas further submitted that the documents, which were produced through a rejoinder and additional affidavits, could not be taken into consideration, as a rejoinder could not form part of the pleadings. He submitted therefore that the finding of the Board that there was no suppression and that rejoinder forms part of the pleadings is incorrect. He submitted that a rejoinder would not form part of the pleadings. According to him, charge of oppression or the cause of action must be pleaded in the petition itself. He submitted that re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... register of members should be rectified by inserting the name of Nafan in respect of 80,772 shares and an order terminating the appoint of Mr.Muthu as the Managing Director and that Muthu Group be directed to sell their shares to Nafan. In the petition, the Nafan has pleaded the relevant particulars. It has placed on record the particulars of the parties, the backdrop to the joint venture. Then it stated that Muthu Group is attempting to prohibit Nafan from participation in the management. It is attempting to compel transfer of Nafan's shareholding. Muthu Group is committing acts of mismanagement. It has inserted the name of Muthu Group as a shareholder of 51% of Nafan although Nafan has executed no share transfer deed. Then, Nafan gives background how the dispute arose between the parties is given by narrating the events that transpired leading to litigation between SAF Yeast and Calyon Bank and the contempt petition filed in the Allahabad High court and thereafter proceedings in the Apex Court. Nafan alleged that Muthu Group failed to give statutory records, minutes of Board meetings, financial statements, then it made a grievance of holding Board meetings without notice, fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rds the legality, validity and binding effect of the MOU, but from Nafan's point of view in the petition the real issue in the matter was the oppressive nature of the Board meetings through which the transfer of share have taken place. 45. The Lesaffre and Nafan had made it clear through the email written by Corinne Wisniewski that the valuation was ridiculously low. Whatever may be the stand of Nafan and Lesaffre regarding the MOU, apart from making general enquiries regarding valuation, there were no further steps taken by them for execution of the MOU. In fact, they had specifically made their intention clear that they will not be going to do so in view of the valuation. The MOU did specify that there would be fair valuation and withdrawal of the Court proceedings. Therefore, according to Nafan, the MOU had to be worked upon and taken further by both sides, rightly or wrongly, which aspect is dealt with later. The case of Nafan in the petition was clear that it not ready to go by the MOU. They did not consider it as a valid piece of document. This case is clearly reflected in the petition. Therefore, the primary grievance of Nafan that the way the meetings were held in whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Brothers (supra) is of no assistance to Mr. Dwarkadas, as in that decision, the Court was concerned with the subsequent events and held that the matter needs to be decided upon the facts pleaded in the petition. In the present case, it is a grievance of Nafan that various facts leading to the meetings were suppressed from them, which they came to know after filing of the petition and therefore rejoinder had to be filed. In this case, not only rejoinder but also sur-rejoinder has also been filed. 48. In the case of Sangram Singh Gaekwad (supra), a dispute arose between the heirs of Sir Pratapsinhrao Gaekwad, Ruler of Baroda and the companies floated by them. Certain civil suits came to be filed by shareholders of Indreni Holdings Pvt. Ltd. challenging transfer of shares. An application also came to be filed before the Gujrat High Court under Sections 397 and 398 of the Act. The Companies Act was amended and the jurisdiction of the High Court in respect of Sections 397 and 398 was vested in the Board. Simultaneous proceedings were filed before the Company Law Board and by consent; the matter was taken up before the Company Judge to dispose of the matters based on affidavits. Appeals ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions made by the respondent therein in the proceedings. The decision of the Apex Court in the case of Sangram Singh (supra) therefore does not state that in spite of the fact that the parties knew the case and all pleadings were on record, the petition ought to have been dismissed because the cause of action could not have been made out in the rejoinder. 49. Furthermore, there are more reasons why reliance cannot be placed on the decision of Sangram Singh Gaekwad (supra). In the present case, the cause of action has been sufficiently pleaded in the petition for the relief that is sought. The decision of the Apex Court in Sangram Singh (supra) after taking review of the powers of the Board, has in fact emphasised that, looking at the nature of the proceedings, the Board will have to take into consideration the entire material on record. The other decisions cited by Mr. Dwarkadas, arise from either Civil Suit, Election Petition or a Writ Petition. The nature of jurisdiction executed by the Board is very different from exercised by the courts trying civil suit, election petition, and writ petition. It is not necessary to deal with these decisions arising under different jurisdictions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as agreed that Muthu Group would buy 51% shareholding of the Lesaffre Group in M/s SAF Yeast Co. Pvt. Ltd. immediately. The fair valuation of the shares will be done by the company (M/s SAf Yeast Co. Pvt. Ltd.) Auditors in accordance with clause 17 of the Articles of Association and the Memorandum of SAF Yeast Co. Pvt. Ltd. As soon as the valuation is carried out by the Auditors, the certificate of valuation will be forwarded by the Auditors to Lesaffre. The Muthu Group will pay Lesaffre Group according to the certificate of valuation by the Auditors. Muthu Group and Lesaffre Group agree to end all litigation pending in the Lucknow High Court and the Hon'ble Supreme Court immediately within the legal frame work". 53. The points of determination by the Board on this topic were, whether the MOU is invalid and enforceable document as stated by the Petitioner; Whether the MOU amounted to transfer notice contained in Article 15 of the Articles of Association. The Board then listed further sub-points regarding the MOU. Those were, whether the MOU has been obtained by fraud and inducement; whether Laloum had no authority to execute the MOU; whether the MOU is mere offer or expres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f and through its servants, officers and agents be restrained by an order of injunction from in any way selling, transferring, encumbering, dealing with or creating any third party rights in respect of the suit shares; (e) That, pending the hearing and final disposal of the present suit, Defendant No.1 by itself and through its servants, officers and agents be restrained by an order of injunction from exercising any voting rights or any other proprietary/membership rights in respect of the suit shares; (f) For ad-interim reliefs in terms of prayer (c) above; (g) For such further and other reliefs as the nature and circumstances of this case may require; and (h) For costs of the present suit." The suit was filed on 30 April 2012. In the plaint it is stated that the suit is filed to enable the plaintiff i.e. Muthu Group to secure a decree of specific performance in the event the Board in the present Company Petition holds that the MOU remains executory and has not been duly performed. It is also stated that the suit is filed to save the bar of limitation that may apply in the event the Board or any other Court holds that the MOU is only executory. 56. Therefore, a suit for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not have any power to grant declaration of the validity, more particularly, since Muthu Group had already filed a civil suit for specific performance. To hold that the MOU is arrived with consent and for consideration and is nothing but to decide on its validity. He submitted that parties had initiated their respective proceedings in competent Courts. The Muthu Group had initiated civil suit in this Court and Nafan and Lesaffre had initiated proceedings in the Court at Switzerland. He submitted that dismissal of the suit in Switzerland was only on the ground of jurisdiction. It was then submitted that, even assuming the Board had jurisdiction, it could not have been directed Nafan and Lesaffre to sell their shares. He submitted that the MOU mentioned a fair valuation and withdrawal of proceedings. The valuation was not a fair valuation and Muthu Group had not taken immediate steps to withdraw the contempt proceedings. He submitted that Nafan did not ask for invalidation of the MOU, but it was put-forth as a defence by Muthu Group, and it is Muthu Group who is asking for direction based on the MOU, in spite of the fact that they have filed a civil suit. 59. On the other hand, Mr. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n and the additional affidavits. Mr. Dwarkadas referred to various documents on record in detail seeking to demonstrate that the MOU was not an isolated piece of document but there were series of meetings and exchange of emails, fax messages that led to execution of the MOU. He submitted that the MOU is a clear and binding contract and if Nafan had to wriggle out the same on the ground of fraud and inducement, the heavy burden was upon it to demonstrate the same. The MOU fulfills all the ingredients of being a binding contract and Laloum who had full authority to do so executed it. He also submitted that there is no uncertainty or vagueness in the MOU. It is handwritten. Laloum carried out corrections and initialed them. Laloum is an experienced business. He was commercial director of Lesaffre group. There was no special relationship with Muthu that he could have induced Laloum. He submitted that the conduct of the parties clearly shows that Nafan and Lesaffre were fully aware of the MOU and did not raise any objection, which would have been the first reaction if Laloum had signed a contract without their authority. He submitted that the entire conduct of Nafan in respect of this M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 466, has made it clear that the Board has no power to decide disputes regarding transfer of shares. Similar view is taken in the case of Sangramsinh Gaekwad (supra); Incable Net (Andhra) Ltd. v. AP Aksh Broadband Ltd. 2010 (6) SCC 719; T.Vinayaka Perumal v. T. Balan (2011) 167 CompanyCases 45 (Madras); and Zora Singh v. Amrik Singh Hayer (2009) 149 Company Cases 328 (Punjab and Haryana), which have also been followed by the High Courts. 63. If the entire correspondence of the record is perused one thing is clear that when the Board meetings took place in May 2009 to transfer the shareholding of Nafan, Nafan had made it clear that it is not abiding by the MOU. When Muthu sent an email on 30 April 2009, referring to the MOU, Ms. Corinne Wisnieswaski had clearly replied on 3 May 2009 that Nafan cannot even think considering the price, which was obviously not calculated on correct basis. In spite of the specific email, the same valuation was used to give effect to the MOU. Therefore, when the act of transfer of shares took place, the Nafan was not ready. The MOU did mention that there should be a fair valuation of shares. The fair valuation of shares therefore was one of the precondit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whether it could be said that the MOU was such a clear unequivocal document that it presented an open and shut case, and that a clear intention of Nafan to act on the MOU followed therefrom and all that had to be done was to only complete the procedural formalities of transfer. In given case, it may be argued that a clear intention flowed from an agreement and for all purpose it was complete and only procedural formality remained and therefore the board even though cannot enforce the agreement can look at the intention. However, the present case, in my opinion, cannot be pitched at that level. Can an absolute conclusion can be drawn that the MOU was a concluded contract with full knowledge, it has been acted upon and after it is acted upon only a procedural formality remains and at that stage a grievance is being made by Nafan. 67. The question therefore is whether Nafan and Lesaffre had no case at all to dispute that they are not bound by the MOU and a clear intention emerged. Thus if they have a prima facie case that the MOU was not to be acted upon and that theory is reasonably possible then appropriate course of action for Muthu group would be to pursue their rights in the Ci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... afts would be exchanged. The understanding would be reduced to a formal documentation. There may be meetings at both ends to finalise the decisions, there would be negotiations, discussions on the price. Before the drafts are finalized, the parties could back out for legitimate or otherwise reasons. If any steps were to be taken before completion of the documents, they would be discussed specifically. This would be the practice followed in routine business transactions. In the present case, entire 51% shareholding of Nafan is sought to be transferred. The value of the same clearly exceeds millions of Euros. It is difficult to believe prima facie that Muthu and Laloum would simply write out the entire transaction by hand on a small piece of paper in a hotel and part ways deciding that 51% shareholding is sold, and nothing further is needed, and the agreement stood concluded, and it constituted a transfer notice which Muthu will unilaterally execute. One may advance lengthy legal arguments regarding what is meant by a contract and the binding effects etc, but any reasonable man would say, in today's age of commercialism and professionalism, this is not the way of two business gro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith this submission. To my mind, the MOU is nothing but a red herring to divert the controversy. Assuming MOU exists, it is the manner in which the shareholding of Nafan has been transferred which is the crux of the dispute. 73. Furthermore, there was another contingency in the MOU i.e. withdrawal of contempt proceedings by Muthu group. The Board has observed that Muthu group took immediate steps to withdraw the contempt proceedings and it was not in the hands of the Muthu group to withdraw the contempt proceedings. It has been placed on record that after the MOU there were 22 dates in the Courts and at the stage of rejoinder arguments that the contempt petition was withdrawn. The Board has therefore, fallen in clear error to hold that immediately after signing the MOU the contempt proceedings were withdrawn. A stand is taken on behalf of Muthu group that since the transfer of shares were being agitated in the Board issue of withdrawal of contempt proceedings had become irrelevant. Therefore, even assuming Laloum signed the MOU and Laloum had an authority to sign the MOU it is not possible to conclude that the MOU was complete in all respects and was at such a stage that even noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... REVIOUS MEETING The Minutes of the previous Board Meeting held on 17th May, 2009 were noted, confirmed and signed by the Chairman. 4 PURCHASE BY THE MUTHU GROUP OF THE SHARES IN THE COMPANY HELD BY LESAFFRE GROUP THROUGH NAFAN B. V. PURSUANT TO THE MOU DATED 23RD JANUARY 2009 RECEIPT OF WRITTEN OPINION FROM MR. SHANTI BHUSHAN SENIOR ADVOCATE The Chairman referred to the discussions at the Board Meeting held on 17th May 2009 wherein it was resolved to seek expert legal advice on the purchase by the Muthu Group of the Shares in the Company held by Nafan B. V. of Lesaffre Group at the fair value as determined by the Statutory Auditors in accordance with Article 17 of the Articles of Association as stipulated in the MOU dated 23rd January, 2009. The chairman tabled before the Board the written opinion dated 20th May, 2009 received from Mr. Shanti Bhushan, an eminent Jurist and Senior Advocate of the Supreme Court which states, inter alia, as follows: "Having considered all the facts of the law particularly, the Articles of Association..... In these circumstances, the Company is required to act in terms of Articles 18 by causing the name of Mr. A. M. Muthiah of the Muthu Grou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount with the Axis Bank Ltd., Chembur Branch, Mumbai". "RESOLVED FURTHER THAT the Common Seal of the Company be affixed wherever necessary in this regard". Mr. A. M. Muthiah, being interested in the matter, disclosed his interest and did not participate in the discussions. 7 PURCHASE BY THE MUTHU GROUP OF THE SHARES IN THE COMPANY HELD BY LESAFFRE GROUP THROUGH NAFAN B. V. PURSUANT TO THE MOU DATED 23RD JANUARY 2009 AUTHORIZATION OF PERSON FOR EXECUTION OF NECESSARY TRANSFER DOCUMENTS The Chairman informed the Board that as per the provisions of the Articles of Association and in particular Article 18, it is necessary to authorize a person to execute the share Transfer Forms / instrument of Transfer in the name of the proposing Transferor Nafan B.V. in favor of Mr. A. M. Muthiah, Purchasing Member of the 80,722 Shares from Nafan B. V. After discussion it was: "RESOLVED THAT in terms of Article 18 of the Articles of Association, Mr. K. Narasimhan, Vice President Finance, be and is hereby authorized to execute the Share Transfer Forms / Transfer documents in the name of the proposing Transferor Nafan B. V. in favour of Mr. A. M. Muthiah, Purchasing Member of the 80,772 Sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Chairman also tabled before the Board an Advice dated 25.5.2009 received by the Company from the Axis Bank Ltd., Chembur Branch that an amount of Rs. 27,49,38,822/has been credited to the Company's Account from Mr. A. M. Muthiah. After discussion, it was: "RESOLVED THAT in accordance with the Articles of Association and Written Opinion received by the Company from Mr. Shanthi Bhushan, Senior Advocate, the sum of Rs. 27,49,38,822/being the purchase money / consideration for the 80,722 Shares, Net of TDS, be and is hereby accepted from the Purchasing Member Mr. A. M. Muthiah and the same be held in Trust for and on behalf of the Proposing Transferor Nafan B.V. till repatriation to them". "RESOLVED FURTHER THAT a receipt for Rs. 27,49,38,822/being the purchase money / consideration for the purchase of 80,772 Shares from Nafan B. V., net of TDS, be issued by the Company to Mr. A. M. Muthiah". "RESOLVED FURTHER THAT the purchase money of Rs. 27,49,38,822/be and is hereby transferred from the Company's Current Account with Axis Bank Ltd., Chembur Branch to the designated Account "SAF YEAST CO. PVT. LTD. SHARES ACCOUNT" with Axis Bank Ltd., Chembur Branch till repatria ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ". "RESOLVED FURTHER THAT the Common Seal of the Company be affixed on the duplicate Share Certificates". Mr. A. M. Muthiah, being interested in the matter, disclosed his interest and did not participate in the discussions. 6. ADJOURNMENT OF MEETING At this moment the Chairman inform the Board that the duplicate Share Certificate need to be prepared as per law before proceeding with the transfer and hence requested the Board to consider an adjournment of the meeting by forty five minutes. After discussion, it was: "RESOLVED FURTHER the meeting be adjourned and reassemble at 5.15 p.m. to continue with the remaining business, the time now being about 4.30 p.m. Chairman" * * * * * 75. The Board has concluded that the meetings held on 29 January 2009, 23 May 2009 and 25 May 2009 are illegal and the resolutions passed in the meetings are invalid and ineffective. Mr. De'Vitre and Mr.Khambatta contended that firstly, no such Board meetings were held and even if had to they are illegal and contrary to law. They submitted that admittedly Muthu Group served no notice, which was required under the provision of Participation agreement and as per provisions of Section 286 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctice of not giving notice even to nominee Directors of Nafan, which was continued for the meetings in question. No alternate directors were appointed and notice was irrelevant because Muthu group would have carried the votes in terms of their majority. He submitted that there was quorum for the meeting and Section 299 and 300 of the Act were not applicable. He further contended that there was no challenge to the meetings by Nafan nor there was any prayer to set aside the same. 77. I have considered the submissions. As regards the argument of Nafan and Lesaffre, that the meeting dated 29 January 2009 did not take place and the meetings were fabricated, the Board has rendered a finding of fact that the meeting in fact was held and the minutes were not fabricated. The Board has concluded that the charge of fabrication is akin to fraud and heavy burden lies upon the party to make such allegation. It is the contention of Mr.De' Vitre that the minutes inter-se show complete inconsistencies. It is stated that no individual or any person of Muthu group is identified as purchaser. He submitted that decision taken in the minutes were not informed to Nafan as Muthu's letter dated 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. and Ors. reported in (2004)9SCC204 , it was found that notice not less than 21 days was not given by personal service or service by post and on facts it was found that requirement of Section 189 of the Act was not complied with. Under Section 53 of the Act, service of notice of the Board's meeting by post and by certificate of posting were not found to be reliable when the relationship between the parties was already bitter. In this case, on evidence it was found that the entries in the register were not sufficient to establish the service of notice on the Director. So far as service by certificate of posting, it raises a rebuttable presumption and the onus is on the addressee to show that the document under certificate of posting was not received by him. 36. In Dale & Carrington Investment (P) Ltd. v. P.K. Parthapan and Ors. reported in, (2005)1SCC212 , their Lordships with regard to oppression held if a member who holds the majority of shares in a company is being reduced to the position of minority shareholder in the company by mala fide act of the company or by its Board of Directors, such act must ordinarily be considered to be an act of oppression against the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contract. In his judgment Swinfen-Eady, J. said' there is no question of unfair dealing in this case. The Directors did not approach the shareholders with the view of obtaining their shares. The shareholders approached the Directors and named the price at which they were desirous of selling'. 43. In Pennington's Company Law, 6th Edn. At pp.60809, it is stated Directors owe no fiduciary or other duties to individual members of their company in directing and managing the company's affairs, acquiring or disposing of assets on the company's behalf, entering into transactions on its behalf, or in recommending the adoption by members of proposals made to them collectively. If the Directors mismanage the company's affairs, they incur liability to pay damages or compensation to the company or to make restitution to it, but individual members cannot recover compensation for the loss they have respectively suffered by the consequential fall in value of their shares, and they cannot achieve this indirectly by suing the Directors for conspiracy to breach the duties which they owed the company. However, there may be certain situations where Directors do owe a fiducia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g. Section 286 of the Act: 286. Notice of meetings. Section 286: Notice of Meetings (1) Notice of every meeting of the Board of directors of a company shall be given in writing to every director for the time being in India, and at his usual address in India to every other director. (2) Every officer of the company whose duty it is to give notice as aforesaid and who fails to do so shall be punishable with fine which may extend to one hundred rupees. Neither Article 55 nor Section 286 of the Act state that the notice that shall not be given in any circumstances to a director residing outside. Art.55 refers to a director who at present not in India. It only indicates that one who has gone out will not be entitled to any notice. This article will have to read in a common sense manner. It does not refer to the directors who are 'residing' outside India. The articles are the one agreed by the parties and they will have to be read in that manner. It is inconceivable that the parties meant that Muthu Group could do what they want; take decisions of any magnitude like shutting down the plants, without notices to Nafan. The articles regulating notice of meetings cannot be st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upp (2) 406 held that freedom of contract can be restricted by law only in cases where it is for some good for the community. Companies Act 1956 or the FERA 1973, RBI Regulation or the I.T. Act do not explicitly or impliedly forbid shareholders of a company to enter into agreements as to how they should exercise voting rights attached to their shares. 264. Shareholders can enter into any agreement in the best interest of the company, but the only thing is that the provisions in the SHA shall not go contrary to the Articles of Association. The essential purpose of the SHA is to make provisions for proper and effective internal management of the company. It can visualize the best interest of the company on diverse issues and can also find different ways not only for the best interest of the shareholders, but also for the company as a whole. 265. In Shanti Prasad Jain v. Kalinga Cables Ltd. (1965) 2 SCR 720, this Court held that agreements between nonmembers and members of the Company will not bind the company, but there is nothing unlawful in entering into agreement for transferring of shares. Of course, the manner in which such agreements are to be enforced in the case of breach ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Muthu has continued as the Managing Director of R1 even after the expiry of 15 years; (iii) After, the retirement Mr. B.B. Paymaster, as chairman only the Respondent No.8/ Petitioner's nominee Directors acted as the Chairman of the Rl acting under Article 7.6 of the Participation Agreement page 108 of Volume 1; (iv) The AOA do not provide for Board of Director meetings to be held outside India; by Article 7.10 (a) of the Participation Agreement page 111 of Volume 1, it was provided that Board Meetings may be held in or outside India; Board Meetings have in fact been held outside India, acting on Clause 7.10 (a) of the Participation Agreement-See: Board Meeting dated April 2005 held in France; (v) Respondent No.8/Petitioner provided technical and financial assistance to the R1; (vi) Pursuant to the 06 June 1981 Agreement, the Respondent Company No.1 was incorporated with the name "Saf Yeast" Clause IV(2) of the first agreement dated 06 June 1981 provided that " ... At any time, should Lesaffre wish to acquire further shares in SAF Yeast Co., Mr. Muthu is prepared to sell to Lesaffre or any other individual or legal entity Lesaffre might name, 25% of his shareholdings to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were taken pursuant to the Participation agreement and it did not remain only a dead letter. The Muthu group knew that the Participation agreement required notice to the directors outside India. The stand of Muthu group that neither Articles of Association nor the Act required that notice be given, apart from not being tenable, is not reasonable. The argument that in the past no such notices were given is also not tenable. The decision of exit of one group and bringing the association, which existed for decades to an end, was one of the most important decision for SAF Yeast. It was not an ordinary routine business to be transacted. Neither the Articles of Association nor Section 286 prohibited issuance of notice for such decision. The Participation agreement contemplated issuance of notice. Ultimately, the allegations of all acts of oppression are rooted more in fairness than in legality. Once the Participation agreement existed and it contemplated issuance of notice, it was only reiteration of the obvious, which is otherwise a requirement. In fairness, the notice ought to have been given. It is the most unfair stand to be taken that the Articles of Association were not amended to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y 2009 also has to be held as oppressive apart from being illegal. The finding of the Board to that effect will have to be modified. 87. Next heads of debate are whether the MOU could be treated as a transfer notice, issuance of duplicate shares and the manner of valuation of shares by the valuer. I have already held that the holding of these meetings without notice to the Nafan and Lesaffre was illegal, unfair, and oppressive and the findings of the Company Law Board on that count are not perverse, except the modification above. However, the main argument advanced by the Muthu group is that the MOU was a transfer notice and transfer was effected as per the Articles. Question then arises is whether the MOU constituted a transfer notice. The learned counsel advanced the detailed submissions on the interpretation of the articles to demonstrate that the MOU can be treated as a transfer notice. There was also a question as to whether the transfer between member to member is covered by first part of Article 14 of the Articles of Association and the applicability of Articles 15, 18, 19 and 22 in respect of transfer of shares. 88. At this stage, it is necessary to reproduce the relevant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... od discharge to the purchasing member, and after his name is entered in the Register in purported exercise of the aforesaid power, the validity of the proceedings shall not be questioned by any person. The Company may authorise any person to execute the necessary transfer document in the name of the proposing transferor. 19 If the Company shall not, within the space of sixty days after being served with the transfer notice, find a member or person selected as aforesaid, willing to purchase the shares or any of them and give notice in manner aforesaid, the proposing transferor shall at any time thereafter be at liberty subject to Article 20 hereof to sell and transfer the shares to any person at any price. 22 The Directors may at their absolute and uncontrolled discretion decline to register or acknowledge any transfer of shares and shall not be bound to give any reason for such refusal and in particular may so decline in respect of shares upon which the Company has a lien. These Articles shall apply notwithstanding that the proposed transferee may be already a member'. Transfer of shares in a company are governed by Section 108 of the Act. Section 108 (1) and (1A) of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... first part of Article 14 is the separate, distinct, and all independent of latter part of Article 14. The Board has held that even if all the Articles constitute a scheme, the transfer notice must satisfy both the conditions stipulated in Article 15, that it must be a specific notice of the member desiring to transfer the shares and it must appoint a Company as the agent. The Board has held that the MOU did not satisfy these requirements. 90. Mr.Dwarkadas assailed the finding of the Board on the Articles of Association. Mr.Dwarkadas contended that Article 14, 15, 17 and 22 are applicable to transfer of shares between members, as is contemplated under the MOU. According to him, the SAF Yeast was validly appointed as an agent of Nafan, the proposing transferor, and it had validly exercised its powers under Article 18. According to Mr.Dwarkadas, the argument that Article 15 and 19 will apply only to a transfer to a nonmember is incorrect as seen from the scheme of the Articles. He submitted that right to transfer shares is not unfettered and the Article 14 makes it clear that even transfer inter-se between members is regulated in the manner provided by the Articles. He contended tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orty v. Presidency Nursing Homes Pvt. Ltd. (1975) ILR 2 Cal. Page 219, it was submitted that restrictions on transferability in the Articles could not provide for any absolute prohibition against transferability. Even the right of preemption does not constitute an absolute fetter on transferability. It was submitted that generally Court should lean towards transferability of shares keeping in mind preemption clause with sufficient latitude. Reliance is placed on the decisions in Enercon Gmbh v/s. Enercon (India) Ltd. & ors.(2008) 143 Comp Cas 687 (CLB), Ratan Mohan Sarda & ors. v/s Capricon Oils Ltd. And ors. (2010) 157 Comp Cas 470 (CLB), and Dhanraj Mills Pvt. Ltd. and anr. v/s Global Trust Bank Ltd. & ors. (2003) 105 BOMLR 609. It was contended that Article 14 gives unfettered right to transfer the share to another member and the second part of Article 14 refers to restriction by way of preemptive right in favour of the members of the Company. According to the learned counsel, prohibition against transfer operates only in respect of a proposed transfer to a nonmember and it is for that reason that the Article subjects the right of transfer to a nonmember selecting the existing m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... member may transfer the shares or other person is entitled to transfer to any member selected by the transferor. This part covers a contingency of a transfer of share by a member entitled to transfer to any other member. In case of a public limited company listed on the stock exchange, the shares are generally freely transferable. In a private limited company share transfers can have restrictions. However, normally there is no absolute bar to transfer the shares. As a broad proposition, generally law does not recognize an embargo on transfer of shares. The first part of Article 14 therefore merely reiterates the obvious position that a member can transfer the share to another member. This obvious position is stated only to emphasize the restrictions that follow in the second part of Article 14. Second part states that the shares shall not be transferred to a person who is not a member, as long as any member or any person selected by the directors is willing to purchase the same at a fair value. Such embargos are placed in closed held Company to keep them that way, discouraging the outsiders. The Article 15, 16, 17 and 18 thereafter lay down a methodology where the Company gets inv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en step in and undertake further acts as provided in subsequent Articles. The person giving notice to the Company must have a clear and unequivocal intention that he desires to transfer the shares. Further, the notice must specifically appoint the Company as the agent. The words 'Notice shall constitute' does not mean the factum of notice to transfer itself will automatically constitute the company as agent. 'Notice shall constitute' means notice 'must' constitute the company as an agent. There cannot be a notice by implication, because it will lead to uncertainty and confusion. The notice will have to be clear, and addressed to the Company to constitute an agent. 95. Even assuming that even this was done, the Article 16 mandates the Company, within period of 60 days after having been served with a notice to find a member or person selected to purchase the shares and give notice to proposing transferor. No such notice was given to Nafan. 96. Mr. Dwarkadas placed heavy reliance on the phrase 'these articles apply' occurring in article 22. However if this argument is accepted then it runs counter to the argument that Article 14 to 22 do not apply to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nds support in the observation of the Apex Court in the case of Claude Lila Parulekar Vs Sakal Papers (P) Ltd. & ors. (2005) 11 SCC 73. In this case, the Apex Court analyzed the Articles of Association of Sakal papers, which was put in issue. The Apex Court held that there were four categories in the hierarchy - first: the preemptors; second: any member willing to purchase the shares at a fair value; third: any person selected by directors; fourth: the person to whom transferor may choose to sell the shares. The Apex Court held that only in the second and third case, the directors need to be constituted as agents. The following articles came up for consideration before the Apex Court. Articles 57A and 58 to 64, read as under: "57A. In the event of any member of Company desires to transfer his shares he shall be bound to offer the same either to Dr. N.B. Parulekar or to Madame Shanta Parulekar or such other person or persons as Dr. N. B. Parulekar or Madame Shanta Parulekar may direct or may nominate and in which event the transferee or transferees shall pay such price as may be certified by the Auditors of the Company." 58. Subject to Cl.57A no shares shall be transferred so lo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e validity of the transfer shall not be questioned by any person. 63. If the Directors, shall not, within the time prescribed as aforesaid after being served with the Notice, find a purchasing member or select a person as aforesaid willing to purchase the shares or any of them and give notice in manner aforesaid, the transferor shall at any time within 30 days thereafter be at liberty subject to Article thereof to sell and transfer the shares to any person and at any price. 64. Every share specified in the Notice given pursuant to the Article hereof shall be offered to the members in such order as shall be determined by the Directors and in such manner as the Directors think fit. If no member is ready and willing to take up such shares the same may be offered to any person selected by the Directors as one to whom it is desirable in the interest of the company to admit to its membership". These articles are similar to the ones at hand and, therefore, they have been reproduced in full as above. The Apex Court analyzed the articles as under: 24.1 The Articles give the hierarchy of the persons entitled to purchase shares upon transfer. The first right is given to the preemptors ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otice of the failure of Article 57A how would a willing member know whether he/she has a right or when the period fixed for intimating their willingness to purchase was to lapse? Article also requires the Directors to give a notice to the transferor after finding a willing purchasing member or selected under Article Giving of this notice is important because if 30 days expires without such notice by the Directors, Article would come into play and the transferor would be at liberty to sell the shares to any person and at any price, albeit also within a period of 30 days from the expiry of the first period of 30 days. It follows that a notice issued prior to the preemptor exercising or failing to exercise the right under Article 57A would not be in keeping with Articles and 60 as this would make the period of 30 days uncertain if not illusory. Thus the notice by the transferor under Article must succeed the factual failure of Article 57A and notice, if any, under Article must follow the failure of Article. 24.3. Assuming there is a willing purchaser under Article there is no time limit fixed either for the parties to arrive at a negotiated price or for the Auditor to fix a fair val ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mr.Dwarkadas submitted that any document which shows that there is an intention to sell can constitute a transfer notice. Reliance was placed on the decision of the English Courts in the case of Lyle & Scott Ltd. Vs Scott's Trustees (supra), Mannai Investments Co. Vs.Eagle Star Life Assurance Co. Ltd. [1997] AC 749, and Re Ringtower Holdings plc [1989] 5 B.C.C. 82. It was submitted that there is no specific need to address any separate notice to the Company. It was submitted that Laloum was fully aware that Muthu was the Managing director of the Company and the signing of the MOU in the circumstances constituted sufficient notice. 100. The Board rejected the contentions of Muthu group on the ground that the Article 15 and the other modalities did not apply. I am in agreement with the view taken by the Company Law Board that the scheme as propounded by Muthu group did not apply to member-to-member transfer. However, for sake of completeness, I will consider the alternate position that even assuming the articles as contended apply, whether MOU could be treated as a transfer notice. 101. In Sakal papers (supra) in para 24.2, the Apex Court noted that the notice of transfer is re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... civil suit for specific performance based on the preemptory clauses. Furthermore, as has been rightly pointed out by Mr.De'Vitre, the concerned articles in that case only envisaged an intention to transfer and did not provide for a formal notice. Furthermore, the action of treating the MOU as a transfer notice in the present case is not to be considered as an isolated incident but in the larger scheme of things. In the case of Re Ringtower Holdings (supra) the Court concluded that there was no intention to sell the shares in the facts of the case. Merely because some observations can be used to support the submission, a judgment cannot be read de hors the factual backdrop. Reliance on the case of Mannai Investments Co. Vs. Eagle Star Life Assurance Co. Ltd. (supra) is equally misplaced. That was a case arising from termination of lease and the notice was construed in the context of the provisions of that Act. 103. Therefore, the action of transfer of shares based on Articles and constituting the Company as an agent based on MOU was not only illegal and contrary to the articles on the part of Muthu group but in the factual backdrop, it was highly inequitable. Therefore, not onl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #39;s current account. Mr.Muthiah placed the letter dated 23 May 2009 from the Company as an agent of Nafan requesting the issuance of duplicate share certificates in view of Laloum, having been informed to Muthu on 20 February 2009 that Nafan had lost original share certificates. The meeting was adjourned at 4.30 p.m. for preparation of duplicate share certificates and was reassembled at 5.15 p.m. on the same day. On reassembling, the resolution was passed, the transfer was completed, and the meeting ended. It is in this fashion that the duplicate share certificates have been prepared and issued. 105. It is an admitted position on record that there is no written communication from either Nafan or Laloum informing that the share certificates were lost and duplicate share certificate need to be issued. The Company Law Board has disbelieved the theory of oral request. 106. Mr.Dwarkadas submitted that if the duplicate share certificates were not lost then nothing stopped Nafan from producing the original certificates. This submission cannot be accepted. What needs to be considered is the act of Muthu group in seeking duplicate share certificates at the time of transfer of shares on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y member, shall be prima facie evidence of the title of the member to such shares. [2] A certificate may be renewed or a duplicate of a certificate may be issued if such certificate- a. is proved to have been lost or destroyed, or b. having been defaced or mutilated or torn is surrendered to the company. [3] If a company with intent to defraud renews a certificate or issues a duplicate thereof, the company shall be punishable with fine which may extend to ten thousand rupees and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to six months, or with fine which may extend to ten thousand rupees, or with both [4] Notwithstanding anything contained in the articles of association of a company, the manner of issue or renewal of a certificate or issue of a duplicate thereof, the form of a certificate (original or renewed) or of a duplicate thereof, the particulars to be entered in the register of members or in the register of renewed or duplicate certificates, the form of such registers, the fee on payment of which, the terms and conditions, if any (including terms and conditions as to evidence and indemnity and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any person on the original certificate. He is also required to prove a guarantee by way of double security." In Palmer's Company Precedents, it has been noted as under: "The company incurs a serious responsibility by issuing a new certificate unless the old one is cancelled, and it ought not to be done except on very satisfactory proof of loss or destruction, or on a satisfactory indemnity being given." Taking note of these passages, the Division Bench observed thus "Before taking a decision to issue duplicate certificates, a decision had to be taken or satisfaction must be entered that the original certificates was lost. In this case, the very request by the second respondent says that the original certificate is with the first petitioner herein. Hence, by no stretch of imagination, can it be said that the share certificate is lost or destroyed. The authority to issue a duplicate certificate rests with the company only on proof that it is lost, or at least there must be some investigation before coming to the conclusion that it could not be traced. The first respondent company is aware of such a procedure. One of the constituents, Sanman Investments Pvt. Ltd., requested ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be raised with no foundation in law. Language of Section 84 clearly speaks to the contrary for any such implication. It was also submitted that the case in Shoe Specialties (supra) is distinguishable on facts. It was also contended that not every conduct need be considered as oppressive. I am not impressed by any of these submissions. The conduct of issuance of duplicate certificates was clearly a part of a design to remove Nafan and Lesaffre from the Company. Once it is held that meetings itself were illegal, the MOU did not constitute the transfer notice, then get duplicate share certificates in absence of any written authority only compounds the acts of oppression. What is sought to be done is that each act is sought to be justified in isolation, but what needs to be considered is totality of the actions leading to acts of oppression. The issuance of duplicate share certificates in this manner surely constituted one piece in the large scheme of their. I am therefore, in agreement with the Company Law Board in respect of the finding rendered by it on this count. Valuation 110. The next issue is regarding the valuation submitted by M/s Sharp & Tannan. The Board has concluded th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accounts for the years ending 31 March 2004, 31 March 2005, 31 March 2006, 31 March 2007, 31 March 2008 and after applying methods of valuation as per guidelines issued by Controller of Capital Issue Guidelines (CCI guidelines) for valuation of Equity Shares of the Companies and the Business and Net Assets of Branches. The valuation was done by capitalising value of average of the profits of the past for the accounting year and Net Assets Value (N.A.V) method. He submitted that the valuation had to be done on urgent basis in light of the MOU. The valuation was prepared on 9 February 2009 and forwarded to Laloum on 10 February 2009. He submitted that the Department of Foreign Exchange of Reserve Bank of India raised a query, which was replied stating that CCI Guidelines were followed. He contended that there are many methods of valuation available. No valuation report can possibly mention all methods of valuation and from that conclusions of bias, impartiality and unreliability, cannot follow. Nafan has produced no proof in support of allegations of collusion and fraud. He submitted that in a valuation report, all conceivable methods of valuation are never adverted to. Merely becaus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (India) Ltd. (2010) 157 C-C 0287, and G.L.Sultania v. SEBI AIR 2007 SC 2172. He reiterated that merely because CCI guidelines have been followed it could not be said that the valuation is fraudulent. He submitted that contention that there is no basis for valuation as of 31 March 2008 as incorrect as MOU required sale consideration to be paid immediately. He submitted that as laid down by Chancery Division in Re a Company (No: 004377 of 1986)[1987] 1 WLR 102, that wide discretion is conferred upon a statutory auditor for carrying out the valuation. 114. On the other hand, it is the contention of De'Vitre that Nafan was not a seller of the shares at all. The valuation was challenged to show the oppressive acts of Muthu group and the Board has rightly held that the way the valuation was carried out is oppressive. He submitted that even assuming the MOU is executable it contemplates fair valuation. The valuation carried out is not only not fair but no valuation in eyes of law. He submitted that the valuation does not take into account the well-settled methods of valuation. He submitted that the methods, which are generally adopted and mandated, have not been carried out by the va ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the expertise of the valuer and merely because another valuer by adopting some other method can achieve different valuation that the valuation in question is not fraudulent. However, the issue has to be approached in the context of charge of oppression. The entire line of argument of Mr.Subramaniam and Mr.Dwarkadas has been to show that how M/s.Sharp and Tannan followed particular permissible method and how there is lack of pleadings and scope of Court to interfere with the valuation report. 117. The conduct of Muthu group in getting a valuation report in 24 hours to arrive at a valuation, which he knew was not reflecting the correct value, in itself, is alleged to be part of oppressive conduct. The Board found that M/s Sharp and Tannan did not give any reason for not adopting the DCF method and choosing Comparable Companies Analysis method of valuation and even though they were the most common method and M/s Sharp and Tannan went ahead with the CCI guidelines. In the case of G.L.Sultania the Apex Court has laid down that the valuation report can be questioned when well established principles of valuation are, departed without any reason, and demonstrably wrong approach is adopt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (c) Combination above ; (d) Valuation based on discounted cash flow technique (DCF). The chartered accountants have then discussed the merits and demerits of the different techniques and thereafter suggested that since the DCF method captures all the elements of the value of a business compared to the other methods, the DCF method comprehends the difference between the values of firms having similar accounting earnings due to the difference in capital investments and other cash flows required to sustain these earnings. By adopting the said technique, the chartered accountants have worked out the fair value per share of Alembic Ltd. and Darshak Ltd. as under: Company Valuer per share Alembic Ltd. Rs. 287.17 Darshak Ltd. Rs. 15.91 The chartered accountants have, therefore, suggested that on the basis of the aforesaid fair value per share, they consider fair and reasonable, a share exchange ratio of one equity share of Rs. 10 each of Alembic Ltd. for 18 equity shares of Rs. 10 each of Darshak Ltd. for the purpose of the proposed merger. Thus the company has accordingly adopted the share exchange ratio of six equity shares of Rs. 10 each of Alembic Ltd. for 100 equity shares of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce of the letter dated 19 February 2009 is misplaced. This letter from Reserve Bank of India is a routine letter which only directs that Company to carry out transactions in terms of the circular. It is farfetched to suggest that the RBI itself applied its mind and approved the valuation carried out treating it as a fair valuation. 121. It is contention of Muthu group that in the previous valuation report dated 17 January 1992 by M/s Sharp and Tannan, the CCI guidelines have been used. However as it has been rightly pointed out by Mr.De'Vitre that the report of the year 1992 was for the purpose of an application to the Controller of Capital Issues seeking its prior approval to price of new shares. It did not require valuation of the Company as a going concern. No capital can be made therefore, on the ground that 1992 valuation was based on CCI method. The contention that NAV method was rightly followed cannot be accepted as the VIRC reference manual which explains the NAV method shows that it is to be adopted in case of manufacturing companies where fixed assets have greater relevance for earning revenues. Nothing is shown as to how this is so and the Board therefore, has corr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Mihir Charkraborty (supra), the learned Single Judge noted the rival contentions as under: "A preliminary point has been taken on behalf of the respondents to the maintainability of the challenge mounted by the petitioner to the valuation report. Mr. P.C. Khanna, learned senior counsel appearing on behalf of the respondents, submitted that the valuer's report was binding on the parties and the court cannot go behind the same. While computing the stake/share of the petitioner in the company the valuer acted as an expert and not as a quasi arbitrator or an arbitrator. This being so his report cannot be attacked in the instant proceedings. The valuation given by the valuer is final and conclusive between the parties. In case the petitioner is aggrieved of the valuation determined by the valuer, his remedy lies in filing a suit for damages against the valuer for negligence. Mr. Khanna canvassed that initially the view of the English courts was that no action lay against the experts such as valuers, auditors, brokers etc in tort for giving an opinion or making a determination negligently. This was on the ground that they were discharging professional duties of quasi judicial c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that the compromise recorded by the court constitutes a decree and if this is so the valuation arrived at by the valuer cannot be challenged in these proceedings. I regret my inability to accept the submission of the learned senior counsel. While it may be true that the compromise recorded by the court constitutes a decree but that does not mean that the report of the valuer which was directed to be filed under the order of this court cannot be touched in these proceedings. In case the report suffers from mistake or perversity, the same can certainly be set aside in these proceedings and the matter can be referred for fresh valuation by an expert. The court is not bound to accept the report in case the same is erroneous. Mr. Sanghi, learned counsel for the petitioner, claimed that M/s Coopers & Lybrand Pvt. Ltd was actually appointed by the Court under Order 26 Rule 9 C.P.C. as Local Commissioner to determine the valuation. On the other hand, Mr. Khanna, learned senior counsel for the respondents, refuted this position and submitted that the appointment of the valuer was made by by this court order on the basis of the terms of the compromise arrived at between the parties and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w Bros.,(1992) 1 SCC 534 , their Lordships considered a similar question as to how far fraud and collusion invalidate any decision or action. In paragraph 20 of the judgment, their Lordships said thus (page 553): "Fraud and collusion vitiate even the most solemn proceeding in any civilised system of jurisprudence. It is a concept descriptive of human conduct. Michael Levi likens a fraudster to Milton's sorcerer, Comus, who exulted in his ability to, 'wing me into the easy-hearted man and trap him into snares'. It has been defined as an act of trickery or deceit.....". After extracting the various definitions in the dictionaries, their Lordships further held thus: "... fraud in public law is not the same as fraud in private law. Nor can the ingredients which establish fraud in commercial transaction be of assistance in determining fraud in administrative law. It has been aptly observed by Lord Bridge in Khawaja that it is dangerous to introduce maxims of common law as to the effect of fraud while determining fraud in relation to statutory law... The present day concept of fraud on statute has veered round abuse of power or mala fide exercise of power. It may arise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Trusts by Philip H. Pettit, fifth edition (1985), at page 148, the learned author says that there is no distinction between the words "fraud" and "dishonest". Both of these mean the same thing and the use of the two together does not add to the extent of dishonesty required. The learned author also says at page 149 what a trustee should know before he is made liable or charged with dishonesty or fraudulent act. The learned author says thus: "(i) actual knowledge; (ii) wilfully shutting one's eyes to the obvious' Nelsonian knowledge'; (iii) wilfully and recklessly failing to make such inquiries as an honest and reasonable man would make; (iv) Knowledge of circumstances which indicate the facts to an honest and reasonable man; (v) knowledge of circumstances which would put an honest and reasonable man on inquiry." A director of a company must know that he is a trustee for the company; though he need not know all the details of it. He must know of the dishonest and fraudulent design, though not necessarily of the whole design; and he must know that his act assisted in the implementation of such design if these acts proved, fraudulent act on the part of the di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lled for such immediate report within 24 hours. Though it is stated on behalf of Muthu group that Nafan and Lesaffre were insisting on valuation nothing is shown on record that 24 hours valuation was insisted upon. The learned counsel for the parties relied upon decisions dealing with instances where valuation reports have been prepared in short time. It is correct that technology and faster processing of information will expedite preparation of reports. However, whether a valuer should produce report in 24 hours, whether technology permits it to do so will have to be assessed on facts of each case. In the present case, there was absolutely no need to prepare report in a hurry and to omit the most relevant method. Nafan has placed on record that they had obtained a valuation report from another reputed valuer, which shows the same shares as valued substantially higher. According to them, the correct valuation was about 25 million Euros at that time while Sharp & Tannan valued the shareholding at approximately 27 crores only. Thus, price of a majority stake in one of leading yeast manufacturing company in India is valued at 27 crores. It cannot be helped but observing that is the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d, even though it has held that Nafan succeeded in proving the case of oppression, concluded that the ultimate relief should be that Nafan and Lesaffre must sell its shareholding to Muthu group. The Board concluded that two groups could not run the Company together as the relations between the parties have become acrimonious. The Board opined that the permanent solution in the paramount interest of SAF Yeast is sale of shares of one group to another. The Board thereafter considered the claim of both the parties as who should buy out whom. According to Nafan and Lesaffre, they are a leading business group worldwide in the yeast business. They supplied financial and technical support to SAF Yeast and they have substantially contributed to its growth. They also contended that the title 'SAF Yeast' is derived from the word 'Lesaffre'. A grievance was made that Muthu group caused SAF Yeast to file criminal complaints, which were subsequently withdrawn. On behalf of Muthu group, it was contended that they should be permitted to buyout the share holding of the Nafan. According to Muthu group, Muthu was Managing Director since inception. The Company was managed successfully ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of ways is imminent. The Board has also rightly discarded the rival contentions of regarding contributions. SAF Yeast is a joint venture. It was created together. Nafan and Lesaffre held 51 per cent shareholding and Muthu group 49 per cent. Nothing stopped Muthu group from establishing the Company on its own, yet the Company was started as a joint venture. Nothing stopped Muthu from establishing a unit on the technology stated to be available with him, yet joint venture was formulated with Lesaffre who are already in the business of manufacturing of yeast. It was a mutual agreement and no party was coerced or forced to set up a joint venture. Obviously therefore, it was set up for mutual benefit. Nafan and Lesaffre had placed on record their stand that they wanted to set up a unit for manufacturing of yeast in India as they saw potential in the market and in view of restrictions placed by the Indian government they had to start it in a joint venture. Therefore, once joint venture had been set up the aspect of contribution does not assume so much of importance as rightly held by the Board. The Board however proceeded to hold that Lesaffre and Nafan had already received their money b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... will be on streets. Furthermore, if a buyout is ordered, it is not that Muthu group will be thrown out on the streets without any money. The buyout will be of the value of their shareholding, which will be substantial, and Muthu group will be free to carry on their business activities elsewhere or can always invest it. Even Mr.Dwarkadas has not contended that Muthu and his family will be on the streets. The next reason is that no prejudice will be caused to Nafan and Lesaffre if they are directed exit because they are running various other companies worldwide. If SAF Yeast was a joint venture in the area in which Nafan and Lesaffre have expertise, they cannot be ordered to be exited from SAF Yeast simply because they have other companies in other developing countries. In fact, it would strengthen the case of Nafan and Lesaffre that they should be allowed to run the Company since they have expertise and experience in running various companies in other developing countries. Then the Board has brought in the intention of Nafan and Lesaffre while executing the MOU to order the buyout, which aspect I have already dealt with. Equally untenable is the ground that since Nafan and Lesaffre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SAF Yeast, the Muthu group should be allowed to buy out the Nafan and Lesaffre. However, this finding is contrary to the Board's own finding earlier that it is not inclined to accept contentions of either parties regarding their contribution as they had entered into joint venture for commercial purpose. The Board has then gone on to hold that in case Nafan is allowed to take over the management, it may not be capable of handling the situation. This is a rather simplistic view of the way large scale industrial operations are run. Merely because if Nafan takes over the control, does not mean that it will terminate all the existing staff. Professionals manage the business nowadays. Though majority shareholders are based out of India, a professional staff can manage the day-today basis. Though the expertise of Muthu may not longer be available but that does not mean that Nafan and Lesaffre cannot carry out affairs of the Company by employing competent professionals. To my mind all the grounds given by the Company Law Board to order a buy out in favour of Muthu group, are completely irrelevant. 136. Though the Board has wide powers under Section 402 of the Act, the power is not to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... my opinion, should never be ordered, or directed to sell their shares to the minority group of shareholders. An order directing the majority group of shareholders to sell his shares to the minority group of shareholders will not redress the wrong done to the majority group of shareholders and will not give him sufficient compensation or relief against the acts of oppression complained of by him, and, on the other hand, may add to his suffering and grievance and cause him greater hardship. Such an order, to my mind, will not further the ends of justice and indeed the cause of justice may be defeated." Mr. Dwarkadas contended that in none of the decisions cited by Mr. De' Vitre, more particularly, Dale & Carrington (supra), a MOU such as the present one was involved. This argument cannot be accepted. As far as MOU is concerned, I have already rendered my findings on the same. Furthermore, the basic proposition that normally majority should not be ordered to exit is not diluted in any manner. 138. There could possibly be an exceptional circumstance where the minority could be directed to buy out the shares of the majority. Question is whether any exceptional circumstance in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l was set up with 88 per cent shareholding. 88 per cent were NRI shares and balance by the resident Indian. Dr. Kamal Kumar Dutta contributed 4.26 crores while his brother Sajal Dutta contributed 1.23 crores. The hospital was established in the memory of late wife of Dr.Kamal. Since he and Dr.Sinha were NRIs the company was being looked after by Dr.Sajal Dutta. After the hospital prospered, dispute arose between brothers. The attempts were made by the younger brother to throw out the elder brother and Kamal Kumar Dutta filed a petition under Section 397 and section 398 of the Act before the Board. The stand of the Company was that Dr.Kamal and Dr.Sinha had discontinued themselves as directors. The Apex Court noted that when the meeting where the resolutions were passed to oust Dr.Kamal from managing directorship and install Sajal Dutta, notices were not given. In paragraph 46, the Apex Court observed as under: "46. The CLB has in minute detail discussed with regard to all the resolutions which we have already adverted to. No proper notice was served on the appellant No. 1 who is a major shareholder of the company or to appellant No. 2. If the Board meeting had been convened witho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anaging Director in place of Dr. Kamal Kumar Dutta and the minutes of the said meeting dated 7.2.1996 were not brought forward in the meeting of 16.2.1996 in which Dr. K.K. Dutta was present. The IDBI nominee reported to have advised that the draft minutes of the meeting dated 7.2.1996 to be placed before the meeting dated 16.2.1996 which would correctly reflect Sajal Dutta as the Managing Director but it was not included in the meeting of 16.2.1996. However, Mr. Nariman tried to persuade us to show that there was some defect in drafting of minutes of the resolution and therefore, it was not reflected in the meeting dated 16.2.1996. It does not appeal to us. Be that as it may, when such an important decision was taken in the absence of the main promoter of the company to oust him from the Managing Directorship and to install Sajal Dutta in his place, it is the grossest act of oppression by the Board of Directors. Sometime after dispatching Dr. Dutta from the Managing Directorship most of the shares were cornered by the subsidiary companies of Sajal Dutta so as to acquire the management of the company and to alter material change in the management of the company. What can be more ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mportant decision to be taken in the entire existence of the company. After having successfully gone through the plan of usurping the share holding of a majority group, detailed justifications advanced to cover up the conduct, which on the face of it, lacks in fairness. Taking law in own hands cannot be termed as a normal human behaviour, as the Board has observed. If this is tolerated, it will create serious uncertainties for joint ventures and leads to complete lawlessness, as one group will simply transfer share holding of others to themselves without notice. 142. The dispute has to placed on a larger canvas. The government of India encourages inflow of foreign investment. One of the ways is setting up collaborations and joint ventures with foreign partners. Such joint ventures are common in the age of globalization. The economic policy Indian government pursues needs the business climate in India to be stable and supportive to investments, collaborations, and joint ventures. The Board cannot be oblivious to these wider issues when it passes orders of buyout in respect of joint ventures between an Indian resident and a foreign collaborator. It is of utmost importance that the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that amounts were guaranteed to be repaid to the Petitioner by the respondent company. Respondent has resolutely refused to pay it back inspite of assuring to do so many times earlier. Absolutely nothing is placed on record to even hint that the Respondent Company does not owe the money to the Petitioner. Any other creditor would be as a right entitled to ask for admission of the petition against such a company. If so then why the Petitioner be kept away from this right, its only fault being that it lent the monies outside India and filed a suit for recovery of the same in the Court where the transaction took place. To deprive the Petitioner will encourage Indian companies to be dishonest in their international dealings. With globalization of trade and investments, cross border flow of capital and the dependence of the country's economy on international commerce, the company court needs to be alive to the changing commercial and economic realities, and exercise its discretionary powers accordingly." (emphasis supplied) 144. Nafan has pressed for the buyout in its favour. It has requested that any reputed valuer be appointed and they are ready to buyout the shares of Muthu Gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. However, if Muthu group is not ready and this object is not being achieved then buyout in favour of Nafan will have to follow. I am, therefore, of the opinion that, before ordering a buyout in favour of Nafan, possibility of a forward competitive bid be explored. That way, both the parties will make a competitive bid and one who will sell out, will get a fair value. It will also put an end to the litigation once for all and a single group can then manage the company. It will be in benefit of Nafan also as the bidding will take place without any future uncertainty and it is Nafan itself, which has suggested auction as an alternate mode. This will however depend on the undertaking of the Muthu group. Otherwise, I have already concluded that there can be no buyout in favour Muthu group on a fixed valuation. 147. For the purpose of valuation of shares, it will be most appropriate that today's date is taken as a reference. The order could thus be in two steps. Part I will be the forward competitive bid for which Muthu Group will have to withdraw the civil suit they have filed and not take any steps based on MOU henceforth and convey its acceptance within a particular period .If ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he suit and undertake not file further proceedings based on the MOU then the dispute can be put an end to by holding a forward competitive bid. If Muthu Group is not agreeable then buyout in favour of Nafan will follow. For overseeing the two options, as suggested by the Board, Justice J.N.Patel is appointed as an Administrator. M/S Ernst and Young is appointed as Chartered Accountants to carry out the valuation. A regards the modalities for holding the auction and the buy out, the modalities suggested by Nafan are proper and can be adopted. ORDER A. The declaration by the Board that the MOU dated 23 January 2009 is valid, effective and enforceable document and the terms thereof are binding upon the Petitioner and Lesaffre Group, is quashed and set aside in light of what is observed above. B. The declaration by the Board that the Valuation Report prepared by Sharp and Tannan is biased, partial and in contravention of the statutory guidelines and rules to carry out the valuation of shares of a going concern and the direction to set it aside, is confirmed. C. i) The declaration by the Board that the Board Meeting held on 29 January 2009 is invalid and illegal, is confirmed. ii) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the petition (Muthu Group) shall forthwith deposit with the Administrator signed, duly filled in but undated share transfer forms along with the original share certificates in regard to all the shares held by them in the Company. c. Until the process of sale/purchase is complete, the powers of the Board of Directors shall be vested in an equal number of Directors/alternate directors nominated by Nafan and the Muthu Group (as one group) with the Administrator holding the casting vote, the Directors/alternate Directors nominated by Nafan and the Muthu group shall be entitled to attend meetings of the Board and/or general meeting of the Company; all such meetings, whether meeting of the Board or General Meetings, if any, shall be convened and presided over by the Administrator alone. d. Until the process of sale/purchase is complete, the SAF Yeast and the Administrator shall not (except in the ordinary course of business), (a) sell or otherwise dispose of or encumber the Company's assets, (b) incur liabilities, (c) distribute funds from the Company, (d) enter into any contracts to be performed for a period longer than six months for or on behalf of the Company, (e) change the n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l to the higher of either Euros 28 Million (i.e. Rs. 196,83,79,380/at the current rate of exchange), or the amount of the next highest bid (with the unsuccessful bidder getting credit for its own shares - either 51% for Nafan or 49% for the Muthu Group Respondent Nos.2 to 6) less a twenty-five per cent reduction, by depositing the amount payable in Court within fifteen business days after default. l. Upon the completion of the exercise of transfer of shares and its consequent registration in the Register of Members of the Company, the functioning of the Administrator appointed shall stand terminated automatically and at this time, the process of sale/purchase will be deemed complete. m. The currency for any payments made hereunder shall be Indian rupee. n. The Nafan as well as the Muthu Group Respondent Nos.2 to 6 shall fully cooperate in the completion of all formalities, including signing and execution of share transfer forms, compliance with any and all necessary requirements under the Company law to effect the transfer of their shares in favour of the successful bidder under the auction. PART - II a. M/s.Ernst and Young, Chartered Accountants are appointed to value the 49% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Board and/or general meeting of the SAF Yeast; all such meetings, whether meeting of the Board or General Meetings, if any, shall be convened and presided over by the Administrator alone. h. Until the process of sale/purchase is complete, the SAF Yeast and the Administrator shall not (except in the ordinary course of business), (a) sell or otherwise dispose of or encumber the Company's assets, (b) incur liabilities, (c) distribute funds from the Company, (d) enter into any contracts to be performed for a period longer than six months for or on behalf of the Company, (e) change the nature of the business of the Company, (f) alter or increase the share capital or issue further shares of the Company, or (g) enter into any related party transactions for or on behalf of the Company. i. The Administrator shall be entitled to appoint (at an appropriate monthly compensation to be paid by the Company as the administrator deems fit) an independent, suitably qualified person conversant with the yeast industry to assist him or her in the functioning of the Company. j. Upon the completion of the exercise of valuation, the valuation report, including the Chartered Accountant's opin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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