9911796707
TMI Blog2011 (9) TMI 1163X X X X Extracts X X X X X X X X Extracts X X X X ..... oup in C. P. No. 17 (ND) of 2008 had agreed for broader family settlement as specified in order dated January 5, 2 4. Bhupinder will take immediate steps to pass necessary resolution appointing Vijay and Anil as directors of Tinna Agro and Tinna Oil as the nominees of Tinna group. 5. Till such time the remuneration for Vijay and Anil is fixed by Tinna Oil and Tinna Agro, Bhupinder will pay a sum of ₹ 5 lakhs per month jointly for both of them... 8. The parties have also agreed that the terms agreed before me today is the last and final settlement superceding all other prior oral or written arrangements between the parties in regard to the settlement... 9. The parties shall prepare a memo of family settlement incorporating the above terms and submit the same to this Board on January 15, 2009, at 4.00 p.m. Pursuant to that order, the petitioner group and the respondent, group arrived at a memorandum of family settlement (MOFS) on March 27, 2009. Further, the petitioner group and the respondent group signed, the scheme of arrangement (SOA) on May 17, 2009. In view of MOFS and SOA the Company Law Board passed consent order dated June 9, 2009. The order dated June ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It is noted now that the petitioners' group has already settled the fair value for their stake with TOCL and TAIL). The petitioners' contended that the respondents have neither fixed their remuneration nor responded to the offer. Therefore, till such time, either of the arrangement is worked out, the respondents have to continue to make the remuneration to Shri Vijay Kumar Sekhri and Shri Anil Kumar Sekhri respectively. 7. It was contended that the grounds raised in reply to C A. No. 471 of 2009 are frivolous for not implementing the consent order dated June 9, 2009. The respondent group cannot interpret the consent order differently after signing MOFS and SOA and passing of order dated January 5, 2009 and consent order dated June 9, 2009, passed by the Company Law Board. 8. The petitioners relied upon the case law in C. F. Angadi v. Y. S. Hirannayya [1972] 1 SCC 191, wherein the hon'ble Supreme Court has held as follows (page 197) : 12. Although a contract is not the less a contract because it is embodied in a judge's order, or, as said by Parke J., in Wentworth v. Bullen (141 ELR 769) 9B and C, 840, 850 'the contract of the parties is not the less a c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e petitioners till TOCL and TAIL were to decide/fix the salary of the petitioners. As TOCL and TAIL have fixed/decided the salary of the petitioners on August 12, 2009, in pursuance of the order dated July 14, 2009, respondent No. 2 is no longer obligated to pay salaries to the petitioners after August, 2009. 12. Respondent No. 2's counsel pointed out that respondent No. 2 had paid remuneration to Shri Vijay Kumar Sekhri and Shri Anil Kumar Sekhri till June, 2009, thereafter, as the petitioners had made no endeavours, in terms of order dated June 9, 2009, to get their remuneration fixed, respondent No. 2 stopped paying them any remuneration. On July 14, 2009, the petitioners approached the Company Law Board seeking a direction to respondent No. 2 to pay remuneration to the petitioners. The Company Law Board after considering the arguments of both the parties and realising that respondent No. 2 cannot be obligated to pay salaries to the petitioners indefinitely, passed the following order : Heard on the application. It has been agreed by counsel that the company would pay to the petitioners an amount of ₹ 2.5 lakhs each which has become due within a week along with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In the present case there was an express contract which relates to payment of remuneration, and the only question with which I am concerned is : according to the terms of that express contract, is any sum payable for remuneration ? When one finds that the express contract is that the remuneration payable is such sum as the directors may determine that the managing director shall have, and that the directors have not determined that any sum is to be payable to the managing director, it seems to me to follow as a necessary consequence that no remuneration can be claimed. It was argued that the present facts and circumstances are squarely covered by the aforementioned judgment of the Chancery Division. 15. Further, counsel for respondent No. 2 argued that in the facts and circumstances of this case respondent No. 2 is under no obligation to pay remuneration to the petitioners, especially after the board of TOCL, and TAIL has fixed/decided the salary of the petitioners on August 12, 2009. 16. Counsel for the TAIL and TOCL contended that they cannot be impleaded in these execution proceedings as they were not parties in the original petition. Further, it was pointed out that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the Company Law Board. But TOCL and TAIL'S contention that C. A. No. 471 of 2009 is an afterthought having been made only on February 21, 2011, in respect of an order passed on July 14, 2009, is not tenable in view of the fact that C. A. No. 471 of 2009 has been filed on September 22, 2009, immediately on expiry of the two months' period for which remuneration was allowed vide Company Law Board's order dated July 14, 2009. 19. It was noted that since inception of M/s. Tinna Oils and Chemicals Ltd., and M/s. Tinna Agro Industries Ltd., two whole-time directors were being appointed by the Sekhri family in both the companies with explicit consent of the joint venture partner M/s. ADM Inter Oceanic Ltd., a company incorporated in Mauritius having its office at 4666, Faries Parkway, Decatur, Illinois, USA (joint venture partner), which is evident from the fact that since 1998, i.e., from the time of inception of joint venture in Tinna Oils and Chemicals Ltd., Shri Vijay Kumar Sekhri and Shri Gaurav Sekhri were the whole-time directors of the company, it had always been the practice and admitted position that Shri Vijay Kumar Sekhri along with Shri Gaurav Sekhri had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld burden the Bhupinder Sekhri group for all times to come. In this view of the matter respondent No. 2's contention that TOCL and TAIL have already fixed/decided their remuneration as 0 on August 12, 2009, is not tenable. When TOCL and TAIL have not even appointed them as whole-time directors where is the question of having fixed/decided their salary/remuneration as 0 . Respondent No. 2's contention that all orders stood modified by the Company Law Board's order dated July 14, 2009, is not tenable in view of the fact that the order dated July 14, 2009, is only in execution of the consent decree, however, full execution is yet to be completed. 22. Furthermore, respondent No. 2's contention that the petitioners made no endeavour to get their remuneration fixed is not borne out from the records which show that the petitioners had insisted for the agenda items to include this item as well, and after the Company Law Board's orders their TOCL and TAIL admit to have considered it by circulation. But the outcome was unexpected and at least not in contemplation of the consenting parties. No doubt, it was the result of changed circumstances. But who can be blamed f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the directions contained in the Company Law Board's order dated December 22, 2009, the respondents had deposited 20 per cent, of the shares of Pratham Road Technologies P. Ltd., in the custody of the Bench Officer. The release of the shares was contingent on the respondent handling over 25 per cent, of the shares of Gautam Overseas Ltd., to the petitioners. The petitioners have specifically mentioned in their Company Application No. 344 of 2010 that their shares in Gautam Overseas Ltd., have been released. It was pointed out that the petitioners had acknowledged and approached Shri R. K. Dhawan behind the back of the respondent and the Company Law Board and obtained their shares. This was not the understanding reached between the petitioner and the respondent in the order dated December 22, 2009, however, the respondent/applicant did not contest it. 26. It was pointed out by the respondent/applicant that C. A. No. 474 of 2010 has been filed to bring to the notice of the Company Law Board that the condition pertaining to the release of the shares of Pratham Road Technologies P. Ltd., from the custody of the Bench Officer has been complied, admittedly the petitioners have dul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the parties are obliged to abide by the same in letter and spirit. It was pointed out that, however, the applicants have consistently been creating hurdles in the implementation of the family settlement. It is for this reason that the petitioners were compelled to file Execution Application No. 471 of 2009 more than a year back seeking the reliefs as contained in that application. 30. My attention was brought to the consistent attempts being made by the respondents to thwart the family settlement pointed out that: (i) In accordance with clause 3.2 of Part II of the scheme of arrangement until Tinna Oils and Chemicals Ltd. (TOCL) and Tinna Agro Industries Ltd. (TAIL), being the two companies falling to the share of the petitioners, fixes the remuneration of Mr. Vijay Kumar Sekhri and Mr. Anil Kumar Sekhri, TOL is obliged to pay ₹ 2,50,000 per month to each of them, subject to their continuing to hold their existing shareholdings in TOOL and TAIL. However, respondent No. 2 has, in contravention of the agreed terms of the family settlement, illegally and arbitrarily stopped paying petitioners Nos. 1 and 2 their legitimate dues; (ii) Clause 3.2 of the scheme of arrangement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e basis of which the Foreign Investment Promotion Board ( FIPB ) has granted approval to ADM to start another company by name of ADM Agro Industries India P. Ltd., which is also carrying on the same business as TOCL and TAIL. Such no objection has been issued without authority since Shri Gaurav Sekhri was not entitled to act as a director pursuant to the order dated January 5, 2009, passed by the Company Law Board more so without the concurrence and consultation of the petitioners. The petitioners have separately challenged the approval granted by FIPB to ADM before the hon'ble High Court of Delhi, the same being W. P. (C). No. 5919 of 2010 which is pending before the hon'ble High Court; (iv) Furthermore, TOCL has been unauthorisedly carrying on the business of future trading/speculative trading and/or derivative trading thereby subjecting TOCL to substantial losses. The speculative and derivative trading is being carried out by TOCL through a business entity known as MAPE ADMISI Commodities P. Ltd . The petitioners after enquiry have found out that MAPE ADMISI Commodities P. Ltd., is an affiliate of ADM group and is a joint venture between MAPE Advisory group and ADM Inve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eprived of their legitimate entitlements. 33. It was pointed out that pursuant to the family settlement, the respondent group is also obliged to share 50 per cent, of the contingent liability of approximately ₹ 14 crores and associated costs related to the National Ability Potato case. However, despite the fact that the hon'ble High Court has asked the petitioners to deposit the principal amount of ₹ 4 crores with the registry the respondent group has failed to come forward and share this burden. 34. It was reiterated that all these violations has tilted the balance in favour of respondent group prejudicing the interests of the petitioners/non-applicants. 35. It was argued that in order to ensure that the settlement is carried out smoothly the Company Law Board imposed certain conditions in its order dated December 22, 2009. Accordingly, the respondents had been directed to deposit 20 per cent, shares of Pratham Road Technologies P. Ltd., in the custody of the Bench Officer pending the handing over of 25 per cent, of Gautam Overseas Ltd., to the petitioners. Although the 25 per cent, shares of Gautam Overseas have been received by the petitioners, the respo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... can be obtained from him by the respondents after handing over the 25 per cent, land or equivalent value to the petitioners as promised during the signing of the SOA dated May 17, 2009. 40. It was prayed, that the Company Law Board may kindly retain custody of the 20 per cent, shares of Pratham Road Technologies P. Ltd., pending implementation of the family settlement, and direct the respondents to have their balance shares of Gautam Overseas Ltd., released from Shri Dhawan. 41. Considering the rival submissions in implementation of the consent orders, I find that the petitioners'/non-applicants' grievances that respondent No. 2/applicant and respondent No. 2's group is in collusion with TOCL and TAIL and the petitioners are oppressed by their acts causing prejudice to their rights by not receiving any remuneration from TOL, by interference of respondent No. 2's group in TOCL's and TAIL's management to the prejudice of the petitioners by letting TOCL and TAIL start competing business, by allowing Shri Gaurav Sekhri continue with TOCL and TAIL despite the Company Law Board's orders, by TOCL and TAIL not fixing their remuneration as whole-time direc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ti Sekhri 10,000 10 Total 20,000 20,000 and for direction to the petitioners to transfer the remaining shares in TAVL to the respondents as above. My attention was drawn to the shareholding pattern of the company prior to the settlement which was as follows : S. No. Name of shareholder Number of shares 1. Shri Bhupinder Sekhri 7,500 2. Shri Vijay Sekhri 5,000 3. Shri Anil Kumar Sekhri 10,000 4. Shri Gaurav Sekhri 10,000 5. Shri Kapil Sekhri 7,500 6. Smt. Sobha Sekhri 5,000 7. Smt. Rooma Sekhri 5,000 It was contended by respondent No. 2 that the shares are distributed among Shri Vijay Sekhri, Shri Anil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were exchanged in bulk to effect the settlement arrived at, the defect in the SOA went unnoticed. However, on subsequent tally of accounts by the accountants of the respondents the said error was brought to the notice of the petitioners and thus respondent has now filed Application No. 475 of 2010 in order to effect the settlement in line with order dated January 5, 2009. 47. It was reiterated that in view of the understanding reached in the MOFS, the petitioners are liable/obligated to transfer all their shares in TAVL. However, due to the inadvertent, bona fide, typographical error contained in the SOA only 200 shares were noted to be transferred to the respondents. 48. Thus, in C. A. No. 475 of 2010 respondent No. 2 has prayed that the petitioners be directed to amend that error in the SOA and the petitioners be directed to transfer their entire shareholding in TAVL. It has been reiterated that the corrections sought in the present application merely reflect the understanding which had already been reached between the petitioners and the respondent. Neither would any inconvenience be caused to either party nor would the said rectification cause any injustice to either par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al error which remained unnoticed whereas the intent and contents of the settlement terms meant the transferring of entire shareholding of 20,000 shares of group B to group A . This typographical error is required to be rectified, and hence is hereby rectified to give proper effect to the settlement, the petitioners are under obligation to transfer all their shareholding in TAVL to the respondents, i.e., the Bhupinder Sekhri group. In any case, since the respondents had, during hearing of this company application, offered to pay the face value of the remaining shares to be transferred, the parties are at liberty to charge or not to charge for the value at ₹ 10 per share for transferring the same to the Bhupinder Sekhri group. SOA also stands modified to that extent. 53. Further, Company Applications Nos. 500 of 2010,131 of 2011 and 166 of 2011 were also heard in this matter. Company Applications Nos. 500 of 2010, 131 of 2011 and 166 of 2011 have been filed by respondent No. 2, namely, Shri Bhupinder Kumar Sekhri to apprise the Company Law Board about the willful, deliberate and intentional violation of order dated June 9, 2009 and the resultant contempt of the Company L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hey act in a manner so as to comply with and give effect to the family settlement both in letter and spirit. No action shall be taken by any party which shall cause any impediment in the aforesaid. Each party hereby undertakes not to do or omit to do any act, deed, matter or thing as may prejudicially affect the other or other's rights conferred or recognised herein. Any party which contravenes the aforesaid by any act or omission or default shall keep the other party(ies) fully and comprehensively indemnified and saved harmless including with respect to all costs, charges, damages and losses. 55. It was contended that the parties on May 17, 2009, also entered into a scheme of arrangement ( SOA ). It was specifically recorded in clause 2 of the SOA that TFL holds 87,000 equity shares of ₹ 10, which are required to be transferred in to the respondents. Further, it was also recorded that the assets of TFL are subjected to an interim order dated August 13, 1998, confirmed by an order dated June 4, 2008, of the hon'ble High Court of Delhi in Execution Petition No. 74 of 2008 in O. M. P. No. 173 of 1998. Until the assets of the of TFL are released and the said shares ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was pointed out that the contents thereof were false and motivated and merely an attempt to hurt the respondents. The petitioners/contemnors had no locus/right to file a complaint with the BSE. Neither the petitioners nor any of the entities in which the petitioners/contemnors have a shareholding have any interest in TOL. TFL only holds the shares of TOL as a custodian and in trust for the respondents. The petitioners/contemnors do not have any equitable interest in TOL and have misrepresented and misstated in their letter to BSE in order to hurt the respondents. 58. The applicant reiterated that the petitioners/contemnors have absolutely no respect at all for any orders of this hon'ble court and they are openly and willfully disobeying the orders. They have time and again acted in violation to the specific directions of the Company Law Board. Further, they have acted in contempt of the order of the Company Law Board dated June 9, 2009, disposing the Company Petition No. 17 of 2008. These acts of the petitioners/contemnors are clearly aimed at interfering with the duty of the Company Law Board to do justice, the petitioners/contemnors are in contempt of the Company Law Boar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d as Shri Gaurav Sekhri was the director in TOCL and TAIL when the no objection certificate was issued. This is a matter of record that Shri Gaurav Sekhri resigned only on March 26, 2009, after signing of MOFS, it is only a pressure tactic that has been adopted by the petitioners/contemnors against the respondents to harass them by filing false and frivolous complaints against them to Economic Offences Wing and the contents of the complaints are false and motivated and merely an attempt to hurt the respondents. None of the allegations levelled by the petitioners/contemnors in the said complaint are true. The petitioners/contemnors had no locus/right to file a complaint with the Economic Offences Wing. 60. The applicant in Company Application No. 166 of 2011 pointed out that besides making complaints to the BSE, the Economic Offences Wing, New Delhi the petitioners/non-applicants have written a similar mischievous letter to the Securities Exchange Board of India, New Delhi office. In their letter dated July 22, 2010, the petitioners have mala fide complained that Tinna Overseas Ltd., is dealing with its stocks and shares at an undervalued rate. It was contended that this complain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d had unauthorisedly signed board resolutions dated March 4, 2009, allowing ADM to commence competing business to the detriment of the petitioners, who are now the joint venture partners of ADM in TOCL and TAIL. Respondent No. 3 did not even deem it fit to inform the petitioners of the said board resolutions despite knowing fully well that he did not have any authority to act as the director pursuant to the order dated January 5, 2009, passed by the Company Law Board. Pursuant to the order dated January 5, 2009, respondent No. 3 could not have acted as director of TOCL and TAIL. The parties understood the import of the order dated January 5, 2009, as is evident from the applications itself, where the applicants are admitting that the premise of the understanding arrived at between the parties and recorded in the order dated January 5, 2009 was that the parties would not impede obstruct/hinder each other in any respect whatsoever . Because of this act in clear violation of the orders of the Company Law Board and the MOFS and the scheme, the Foreign Investment Promotion Board (FIPB) has wrongfully permitted ADM start another business in India in the same field or business activity t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lakhs while the market value of this investment is more than 20 crores. This act is to the detriment of the shareholders of Tinna Overseas Ltd., and cannot be said to be in furtherance of the company's efforts to resume its listing on the stock exchange. Further, the letter to BSE by the petitioners has not been written in violation of the orders of the Company Law Board. On the contrary, it has been written by the petitioners to safeguard their rights under the MOFS and the SOA, which provides that Tinna Overseas Ltd., and Tinna Finex Ltd., will be jointly liable for the contingent liabilities and associated costs relating to the National Ability Potato case, the FCI cases and Market Fee case of FCI, as and when crystallised. It was pointed out that pursuant to the settlement, Tinna Finex Ltd., has come to the share of the petitioners and they are materially affected by any undervaluation of the assets of Tinna Overseas Ltd., since they are required to jointly share the contingent liabilities with Tinna Overseas Ltd. It was pointed out that the respondents, besides a bald denial, have not bothered to controvert the fact that the investment has been sold at an undervalued pric ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
