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TMI Blog2016 (12) TMI 1841X X X X Extracts X X X X X X X X Extracts X X X X ..... and Conciliation Act 1996. 10.12.2 Notwithstanding anything contained in the agreement to the contrary, the parties to the agreement hereby agree that they intend to discharge their obligations in utmost good faith. Therefore, the parties agree that they will, at all times, act in good faith, and make all attempts to resolve all differences, howsoever arising out of or in connection with the agreement by way of each appointing one nominee/representative who shall discuss in good faith to resolve the differences (Amicable Settlement). In case the Amicable Settlement does not resolve the dispute within 30 days calendar days, it shall be referred in accordance with this clause 10.12. 10.12.3 All disputes and differences arising out of or in connection with any of the matters set out in the Agreement, if not resolved by Amicable Settlement, shall be settled by a sole arbitrator to be appointed by the parties to the dispute, if the parties to the dispute are unable to appoint a sole arbitrator by way of mutual consent, the sellers shall together appoint one arbitrator, the purchaser and the company shall appoint one arbitrator and the two arbitrators so appointed shall be entitled ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eteriorated by Kidney problem and owing to uncalled behaviour of R2, she resigned from the directorship of the company on 25th May, 2015. The company being mounted with dues, R2 approached BIFR without keeping the petitioner in loop. 3. While the petitioner was suffering from her health problem and being kept in dark, the petitioner says, R2 started pressing the petitioner to sell her shareholding to the answering respondent, succumbing to the pressure of answering respondents, the petitioner executed SPA in favour of R2 on 2nd November, 2015 on the assurance that R2 would pay and discharge the bank liabilities relieving the petitioner from the claim of the bank, but to the surprise of her, she received a demand notice on 16th March, 2016 from the Bank of India recalling the dues of the company amounting to Rs. 37,41,75,836. Looking at R1-company being classified as NPA, she has been time and again requesting the company to furnish the details of the business, but R2, till date, has not furnished any information in respect to the business of the company. Furthermore he has not even been complying with the terms and conditions of the SPA dated 2nd November, 2015. She further submit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rchase price to the seller through normal banking channel as mentioned in the table mentioned above. It is also agreed between them that the existing registered office of the company situated at the premises owned/occupied by the seller shall be shifted before 31st December, 2015 to any other suitable place, accordingly, the registered office of R1 was changed from 8th October, 2015 Canara Business Centre, behind Everest Bldg., Laxmi Nagar, Ghatkopar, Mumbai-400075 to Gala No. 206, 2nd floor, Dhamji Shamji Industrial Complex, Kurla, Mumbai-400070 indicating that the SPA has already been being acted upon. On every closing date mentioned in the Table, R2 shall pay the tranche of purchase price in the identified bank account to the petitioner, simultaneously, the seller shall handover the relevant share certificates to the purchasers, thereafter the company shall, in a meeting of Board of directors, approve the transfer of tranche of sale shares to the purchasers from the seller and register the same in the name of R2. The petitioner, on her own undertook that from 1st October, 2015, the sellers are no longer associated with day to day affairs/management of the company and they shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... October, 2016. Of course said notice has not been annexed nor referred in this CP filed on 10th October, 2016. As to this notice, the respondents submit that petitioner has wrongly proceeded to terminate the SPA after the first closing date, i.e., 1st October, 2016; therefore, clause 9.1 of the SPA is not applicable. They further submit that they have not committed any breach or default of their obligations under the SPA. It is matter of fact on record that R2 vide letter dated 26th September, 2016 called upon the original petitioner to sign and execute the share transfer forms and revert back the same along with the original share certificate in terms of this share purchase agreement. Along with the said letter, the respondents forwarded a copy of the demand draft dated 20th September, 2016 as first tranche payment of 37,50,000 as mentioned in the table above, but whereas the petitioner failed to express her willingness to transfer first tranche of shares as mentioned in the table above. The petitioner resigned from the company on 25th May, 2015, but her brother who came in as nominee director on 2nd May, 2015, continued until 22nd October, 2015. 9. As to sale of the property imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y except such liability which is due to their shareholding in the company in accordance with the Companies Act, 2013. Further, the company shall provide to the sellers the duly updated and signed (by the purchaser) balance sheet of the company which shall have all requisite details pertaining to the company." From reading of it, the petitioner is bound by the SPA reciting that she would not be associated with the day-to-day business of the company from 1st October, 2015 and she is not responsible to any of the decisions of the company since 1st October, 2015 except to the extent of the liability due to her shareholding. The respondents already tendered to make payment towards first tranche of payment and for transfer of first tranche of sale shares before first transaction closing date, i.e., 1st October, 2016, through the letter dated 26th September, 2016 along with Xerox copy of DD for an amount towards "first tranche purchase on price". The respondents filed that letter showing that when time came for making first tranche payment, R2 well before first tranche payment, i.e., 1st October, 2016 sent the letter dated 26th September, 2016 (Exhibit R2 to the rejoinder in CA No. 149/2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SPA. 14. On reading aforesaid termination letter, it appears that the petitioner felt that she is aggrieved for the Bank loan has not been paid and financial statements not provided. Other aspects of allegation of scrap agreement, they are nowhere present in the SPA, therefore, this allegation of understanding in regard to the scrap can't be said as part of the SPA, and, hence, it could not become a cause for termination of the SPA. As to payment of 37 crore, it is no where covenanted that R2 shall pay off the loan before first tranche of payment, no collateral asset security has been given by the petitioner to the loan pending, moreover some loan liability brought over along with the company remaining loan liability has been accrued upon the company in the tenure of the petitioner in the management from 19th January, 2012 - 25th May, 2015, thereafter the petitioner brother continued as nominee director until November 2015. The losses in the company amounted to 14 crore in the FY 2014-15 and around 4 crore in FY 2015-16, in fact to salvage the position of the company, R2 has taken it upon himself, since it is not in dispute about the petitioner continuing as whole-time direct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asoning, hence, it cannot be called as cause of action to consider this company petition under section 241 of the Companies Act, 2013. Another point arising in this company petition that the company alienated one of the properties of the company, namely, Panoli Industrial Estate to a third party keeping the petitioner in dark. It is very much on the record that at the execution of purchase agreement on 6th May 2015 for transfer of such property to a third party was in her knowledge because the petitioner was continuing as director until 25th May, 2015, and thereafter the transfer of the said property on 29th February, 2016 took place in furtherance of the earlier agreement executed by the company. It is not that the respondents secretly entered into an agreement with the third party to sell the property to reduce the value of the company. It is a fact that the company already laden with debt burden, therefore, to clear the same, the company transferred the property to the third party long before execution of share purchase agreement, therefore, the acts of the respondents could not be considered, which the petitioner painted as conduct oppressive to the interest of the petitioner. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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