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TMI Blog2016 (5) TMI 884X X X X Extracts X X X X X X X X Extracts X X X X ..... be accepted. The question No.(i) is therefore answered in the negative. Whether ICDs form part of the larger transaction of investment by the Urban Group in the joint venture business and therefore amounts under ICDs are payable only out of the profits earned by the joint venture business or whether it is a standalone transaction? - Held that:- The fact, that supplemental agreement which contained all these clauses of there being a web of transactions which was delivered by the Appellants to the Respondents was, in fact, not signed, which fact indicates that from the beginning understanding between the parties was that the ICDs were to be treated as separate and distinct transaction. Moreover, if the contention of the Appellants was to be accepted then there was no need to enter into new ICDs. The flow chart and the correspondence between the parties does not establish the case of the Appellants. Defence of the Appellants is neither bonafide nor substantial defence. We are of the view that finding given by the learned Single Judge on this issue is neither perverse nor unreasonable and, therefore, we do not propose to interfere with the said finding while exercising our appellat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Respondents/original Petitioners. By the said impugned order, the learned Single Judge was pleased to pass an order of winding up of the Appellants/Company subject to the Appellants depositing the amount which was due and payable under the Inter Corporate Deposits made by the Respondents/original Petitioners. 2. Few facts as are necessary to decide the aforesaid appeals are as under : At the outset, it may be noted that the facts in the aforesaid three appeals are substantially similar and that only the amounts in each appeal differs. The learned Single Judge, in the impugned order, has referred to the facts in Company Petition No. 31 of 2013, which is appeal No. 102 of 2015. 3. The respondents/original petitioners' case as disclosed in the company petitions broadly is as under : According to the respondents/original petitioners, the appellant companies were incorporated under the Companies Act, 1956 as Private Companies Ltd. by shares on 1st March, 2007, and that the main objects for which the said Companies were incorporated, were set out in the Memorandum of Association, in particular clauses (1) and (2) thereof. It is further stated that the said Companies we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nies were trying to confuse the matter with a view to avoid their liability, by referring to unconnected and unrelated transactions. The Respondents filed three Company Petitions. 4. The appellants case, in brief, is as under : According to the appellants, Neelkanth Soham Developers Private Limited ( Neelkanth Soham ) - appellant in Appeal No. 102 of 2015; Neelkanth Kalindi Realtors Private Limited ( Neelkanth Kalindi ) - appellant in Appeal No. 109 of 2015; and Neelkanth Devansh Developers Private Limited ( Neelkanth Devansh ) - appellant in Appeal No. 100 of 2015 are, companies of the Neelkanth Group. The said Neelkanth Group is stated to comprise of certain companies and entities, engaged in particular, in real estate development all over India. The said Neelkanth Group is stated to be controlled by Mohan V. Patel and his family. 5. On the other hand, the Urban Infrastructure Venture Capital Limited ( UIVCL ), one of the several companies and entities, is described by the appellants as the Urban Group . We may note here, that the said description of the Urban Group is not accepted by the respondents. The said Urban Group is stated to be controlled by Anand J. Jain an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... advanced a loan of ₹ 20.75 crores to NMIPL. In February, 2007, a further intercorporate deposit (`ICD') of ₹ 50 crores was placed by Dharti with NMIPL and between September, 2007 and November, 2007, ₹ 84 crores were placed on ICDs with NMIPL by one Vinamra Universal Traders Private Limited (`Vinamra'), another Urban Group entity. The ICDs placed by Dharti were completely repaid by NMIPL. Out of the amount of ₹ 84 crores, NMIPL repaid Vinamra ₹ 20 crores in February, 2007 and the balance amount of ₹ 60 crores which was due to Vinamra was repaid in February/March, 2010. In February and March, 2010, respondents-UIVCL, placed two ICDs of ₹ 36 crores and ₹ 23.44 crores (totalling to ₹ 59.44 crores) with NMIPL. 9. The fact that in March, 2010, NMIPL had an ICD of ₹ 59.44 crores from UIVCL, is not disputed. However, the appellants and the respondents have given different interpretation to the events and circumstances that have led to giving of these ICDs. The appellants' contention is that the investments of the so-called Urban Group were being recycled through various joint ventures or Neelkanth Group companies to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y contractual documents between UIVCL and the aforesaid companies i.e. Neelkanth Soham, Neelkanth Devansh and Neelkanth Kalindi and that there is no supplemental agreement between these parties nor is there any joint venture. 11. The disputes between Mohan Patel, the Neelkanth Group and the Urban Group in relation to the investments made by the UIOF (the domestic fund) in NUDPL, Neelkanth Somnath, Neelkanth Ricelands, and Nilayami Realtors; and investments made by UIREF (the foreign fund) in Neelkanth Ricelands and Nilayami Realtors were going on simultaneously. However, according to the appellants, these disputes were related to the ICDAs, whereas, according to the respondents, the disputes were completely independent and unrelated in any way to the ICDAs. 12. The learned Single Judge by the impugned order held that the defence of the Appellants herein/original Respondents was neither bonafide nor substantial and came to the conclusion that the Company was under an obligation to pay its debts and ordered winding-up. He, however, gave a further opportunity to the Appellants to pay the amount due within fourteen weeks, failing which directed admission of Company Petitions. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or on behalf of the Respondents in accordance with Clause 19 of the Six Subscription cum Shareholders Agreements. (c) In the alternative to Prayer (a) and (b), appoint the said Mr. Justice F.I. Rebello (Retd) as sole Arbitrator in accordance with Clause 19 of the said Six Subscription cum Shareholders Agreements. (d) Costs of this Application and the order to be made thereon be provided for; and (e) Pass any such other or further orders and directions which this Hon'ble Court may deem just, fit and proper in the circumstances of the case and in the interests of justice and equity. (D) In the said application, initially, Respondents were not parties. Three months after the application was filed, on 04/02/2015 an application was taken out for impleadment of Respondents as proposed Respondent No.7. (E) Respondents filed affidavit-in-reply opposing the said impleadment on the ground that there was no arbitration agreement between the Respondents/original Petitioners and any of the applicants and, secondly, that the ICD Agreement was a separate, distinct and independent Inter Corporate Deposit Agreement which does not have the arbitration clause. The contention th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e one hand Mr. Dwarkadas, the learned Senior Counsel for the Appellants has contended that Appellants are the part of the Neelkanth Group of Companies viz (1) Neelkanth Mansion Infrastructure Pvt. Ltd. (NMIPL), (2) Neelkanth Soham Developers Pvt. Ltd. (NSDPL), (3) Neelkanth Kalindi Realtors Pvt. Ltd. (NKRPL) and (4) Neelkanth Devansh Developers Private Limited (NDDPL). The contention of the learned Senior Counsel for the Appellants is that the Respondents viz Urban Infrastructure Ventures Capital Ltd. (UIVCL) is a lead Company of the group which is known as Urban Group. According to him Respondents are part of the following Companies, Trusts, Funds and Entities viz. 1) Urban Infrastructure Real Estate Fund ( UIREF ) 2) Urban Infrastructure Trustees Ltd. ( UITL ) 3) Urban Infrastructure Venture Capital Fund ( UIVCF ) 4) Urban Infrastructure Ventures Capital Ltd ( UIVCL ) i.e. the Respondents herein. 5) Jai Corp. Ltd., ( Jai Corp ) 6) Sharanya Trading Pvt. Ltd. ( Sharanya ) 7) Dharti Investments and Holdings Pvt. Ltd. ( Dharti Investments ) 8) Vinamra Universal Traders Pvt. Ltd. ( Vinamra Universal ) 21. The case of the Appellants is that the Urban Group an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of parties through E-mail, which, according to him, showed that they acted as a Group. Reliance was also placed on the proceedings of mediation of Mr. K.G. Kirshnamurthy. He also submitted that there was a gross suppression of facts by the original Petitioners in the Petition. In support of the said submission, he relied on E-mails dated 24/03/2010, 25/03/2010, 26/03/2010 and 27/03/2010. He also relied on various additional affidavits filed by the Appellants, which showed that Respondents/Petitioners had knowledge of the said facts and had admitted the same. He took us through synopsis-cum-note which he tendered. He also showed various documents resulting in final appoint of Mr. Justice R.M. Lodha, a former Chief Justice of India as a sole arbitrator. 25. On the other hand, Dr. Tulzapurkar, the learned Counsel for the Respondents submitted that the contention of the Appellants that the ICDs form part of an integral part of the web of transactions is not borne out by any document. He submitted that this agreement of understanding was supposedly oral. He pointed out the entire history as to how ICDs came to be executed from paragraph 15 of the affidavit-in-rejoinder which is fou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of web of transactions between the two groups. The Inter Corporate Deposits by the Respondents/original Petitioners are independent transactions unrelated to five Subscription/Share Holders Agreements and one Shareholder Agreement which were executed on 24/08/2007 and 18/10/2008 though in these Shareholders Agreements there is a reference to parties, which, in turn, includes the definition of the term Affiliate'. It is obvious that the term 'Affiliate' is a defined term in relevant Shareholders Agreement and it cannot be read in isolation and, secondly, it has to be noted that Shareholders Agreement is not signed by the original Petitioners. In our view, therefore, there is no material on record to indicate that the ICDs were part of the larger web of transactions between the parties. Thirdly, the supplemental agreement is admittedly not executed. The agreement itself shows that it is only a draft for approval. There is no material on record to show that Respondents/original Petitioners were accepted as part of the Urban Group or as part of dispute resolution process. No reliance therefore can ever be placed on the supplemental agreement since it was not executed and s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore confirm the finding of the learned Single Judge and are of the view that defence of the Appellants is neither bonafide nor substantial defence. We are of the view that finding given by the learned Single Judge on this issue is neither perverse nor unreasonable and, therefore, we do not propose to interfere with the said finding while exercising our appellate jurisdiction under Clause 15 of the Letters Patent Act. In our view, there was no suppression of fact by the Respondents/original Petitioners since the ICDs were separate and independent agreements. There was no occasion the Respondents/original Petitioners to mention the facts which, according to the Appellants, were allegedly suppressed. The question No.(ii) is therefore answered in the negative. 32. The third question which falls for consideration before this Court is as under:- (iii) Whether the impugned order directing the Company to pay a sum of ₹ 23,04,59,942/- amounts to a decree when the Company Court was not justified in passing the said Order? 33. The said submission of the Appellants is without any substance. The learned Single Judge in his order has clearly observed that he is not deciding the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hese principles Gajendragadkar, J. in Printers (Mysore) Private Ltd vs. Pothan Joseph (1960) 3 SCR 713 : AIR 1960 SC 1156 : (SCR 721). ...... These principles are well established, but as has been observed by Viscount Simon in Charles Osenton Co. v. Jhanaton [1942 AC 130) ' .the law as to the reversal by a court of appeal of an order made by a judge below in the exercise of his discretion is well established, and any difficulty that arises is due only to the application of well settled principles in an individual case. The appellate judgment does not seem to defer to this principle. 36. This Court therefore while exercising its appellate jurisdiction under Clause 15 of the Letters Patent Act is not expected to interfere with the order passed by the learned Single Judge, unless it comes to the conclusion that the finding is perverse or is based on material which is not part of the record. As mentioned hereinabove we are of the view that finding of the learned Single Judge is neither perverse nor is based on the material which is not there on record. The question No.(iv) is therefore answered in the negative. 37. Consequently, appeals are dismissed. Time ..... X X X X Extracts X X X X X X X X Extracts X X X X
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