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TMI Blog2021 (10) TMI 596X X X X Extracts X X X X X X X X Extracts X X X X ..... llary would be that on receipt of the report, if objections are not filed, the parties can be asked to buy out or sell out. Given the facts of the matter, what appellants of these appeals are, in the name of principles of natural justice seeking is that they should have been allowed to take their own time before National Company Law Tribunal acted upon the valuers report that had been received. The appellants are critical of the Special Officer appointed by the learned National Company Law Tribunal (who was appointed to ensure smooth holding of board meetings) and took opportunity to file even against such Special Officer a contempt application. The impugned order shows that when the original respondents did not co-operate in naming a valuer the Special Officer selected a name and got the valuation done. The respondents have been agitating over this claiming that the Special Officer could not have on his own gone ahead to appoint a valuer and should have moved the National Company Law Tribunal for modification. The learned National Company Law Tribunal does not appear to have found fault with such procedure adopted by the Special Officer. The impugned order as has been pass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titioners Nos. 1 and 2 who filed C. P. No. 492/KB/2017 before the learned National Company Law Tribunal, Kolkata Bench, Kolkata. Original respondent No. 1 arrayed in the company petition is M. P. Jewellers and Co. (1945) P. Ltd. (hereinafter referred as company ). Biplabaankur Roychowdhury, Ratnankur Roychowdhury and Shibaankur Roychowdhury are the brothers of the original petitioners arrayed in the company petition as respondents Nos. 2 to 4. M. P. Jewellers (G. B.) and Co., M. P. Jewellers (B. S.) and Co., M. P. Jewellers (JSK) and Co., and M. P. Jewellers (Calcutta) and Co., have been arrayed as respondents Nos. 5 to 8 in the company petition which are registered partnerships established by these brothers. For the sake of convenience (and order in which these appeals have been argued before us) we are treating Company Appeal (AT) No. 141 of 2020 as a leading matter for the purpose of reference (unless appearing otherwise). When we refer to documents and page numbers unless mentioned otherwise we would be referring the same form the record of Company Appeal (AT) No. 141 of 2020. 2. These appeals are arising out of same impugned order dated August 3, 2020-(Pralayankur R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6-Mr. Biplaankur Roychowdhury and M. P. Jewellery (BS) and Co. (C) Company Appeal (AT) No. 123 of 2020 is filed in the name of the company original respondents Nos. 3 and 7-Mr. Ratnankur Roychowdhury and M. P. Jewellers (JSK). 4. The litigation is between five brothers with regard to the M. P. Jewellers (1945) and Co., and thus it is inherently a family dispute. 5. We now refer in short contents of the company petition. Original petitioners Nos. 1 and 2-Mr. Pralayankur Roychowdhury and Rudrankur Roychowdhury in the company petition filed, stated as to how one Mr. Phanindra Bikash Roy Chowdhury (since deceased) established in partnership the business of gold, gems, silver articles, diamond, platinum jewellery, etc., in the name of M. P. Jewellers and on his expiry the company was incorporated in 2005 dissolving the earlier partnership which contained the brothers. It is stated that the company is holding of several trademarks and four are registered trademarks. The petition claimed that the original petitioners and original respondents Nos. 2 to 4 (the five brothers) realised that to conduct the jewellery business it was necessary for them to constitute their own part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... February 25, 2009 and as to how the right to enjoy trade name was shared leading to the establishment of the partnership firms as appearing in the cause title. The respondents have also referred to the contents of the memorandum of understanding. It is stated that each of the shareholders was to pay yearly royalty at the rate of ₹ 50,000 per annum for using the registered trademark to respondent No. 1-company with an increase at the rate of 10 per cent. every year. It is stated that memorandum of understanding was agreed to be valid till July 31, 2011 as per the memorandum of understanding but was carried on and continued by the acts and conducts of the parties. The respondents claimed that the petitioners were starting unit within five kilometres radius of existing unit of original respondent No. 2 which led to the filing of these title suits. The reply before the learned National Company Law Tribunal makes averments against the petitioners. 7. The above is bird's eye view of the set up between the parties, their relationships and as to how relations between the parties who are brothers strained. M. P. Jewellers (GB) and Co., has in Diary No. 23590 filed list of lit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . v. M. P. Jewellers (G. B.) and Co. and Ors. 7. In the court of learned 6th Civil Judge (Junior Division) at Alipore Title Suit No. 343 of 2019 M. P. Jewellers and Co. (1945) P. Ltd. . . . Plaintiff v. Pralaynkur Roychowdhury and Ors. . . . Defendants 8. In the court of learned 6th Civil Judge (Junior Division) at Alipore Misc. Case No. 59 of 2019 (Arising out of Title Suit No. 343 of 2019 M. P. Jewellers and Co. (1945) P. Ltd. . . . Plaintiff v. Pralaynkur Roychowdhury and Ors. . . . Defendants 9. In the court of the learned District Judge at Alipore Misc. Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecial Officer. 9. Against this, respondents Nos. 1 and 2 of Company Appeal (AT) No. 141 of 2020 are supporting the impugned order and claimed that the company which was to carry on various aspects of jewellery business in terms of the memorandum of understanding dated April 7, 2009 the same was for limited duration which expired by afflux of time on July 31, 2011. It is claimed that company has no running business and the only asset is five registered trademarks which are licensed to the five branches against which the company earns nominal license fee every year. Apart from that the company has some nominal fixed deposits. Respondents Nos. 1 and 2 (original petitioners Nos. 1 and 2) are 40 per cent. shareholders in the company while the other brothers hold 60 per cent. shares. Based on the memorandum of understanding, the respective appellants in these appeals initiated proceedings against the original petitioners and obtained ex parte orders which order ultimately merged in the order of District Judge on January 31, 2018 and the interim orders were set aside and that it was held that the memorandum of understanding had expired by afflux of time. It is stated that as per arti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , including the right to exercise the option to buy out the minority shareholding at fair value, if situation arises. It is denied that the petitioners have done everything to build the brand value of M. P. Jewellers or its respective trademarks as alleged. Referring to this paragraph, respondents Nos. 1 and 2 (original petitioners Nos. 1 and 2) are submitting that even the respective appellants claimed right to exercise option to buy out the minority shares at fair value. Thus it is argued that no fault can be found with the impugned order which has been passed by the learned National Company Law Tribunal considering situation of deadlock between the parties, keeping in view the interest of the company. The order directing buy/sell shares is only with the object of bringing to closure the disputes between the parties. 10. It has been argued on behalf of respondents Nos. 3 and 4 (original respondents Nos. 1 and 2) (Company Appeal (AT) No. 132 of 2020) adopting the arguments of original respondents Nos. 4 and 8 that while dealing with and disposing the un-numbered I. A. so as to pass the impugned order principles of natural justice were not followed. It is claimed that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l respondent No. 2-Bipla baankur Roychowdhury for rectification of order dated January 3, 2020. 11. These respondents claimed that the impugned order has been passed even without deciding such applications and it is claimed that the appointment of the valuer and valuation report are both bad in law and the same were in violation of orders dated December 3, 2019 of the National Company Law Tribunal itself. 12. Respondents Nos. 5 and 8 in Company Appeal (AT) No. 141 of 2020 (original respondents Nos. 3 and 7-Ratnankur Roychowdhury and M. P. Jewellers (JSK) and Co., in Company Appeal (AT) No. 123 of 2020) have also made similar averments against the impugned orders. 13. Respondent No. 6 (original respondent No. 5) and original respondents Nos. 1 and 2 (original petitioners Nos. 1 and 2) are supporting the impugned orders. 14. Now if the impugned order is perused the order shows as to how the present parties who are brothers have been litigating. The order has been criticised as un-numbered but it would be appropriate to record that impugned order shows that said I. A. was moved on July 24, 2020 through video conferencing. That was some time after, when Covid-19 aff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. I. A. No. 834/KB/2019 is filed by the petitioner for valuing the shares with an offer to buy back either to the respondent or he may buy the share. It is a family company and the petitioner and respondent cannot go together as it appears from the pleading. We direct the Special Officer to appoint valuer by taking names from petitioner as well as respondents of their choice. Valuer to value all shares in terms of prayer A of this application and file report within two weeks. Matter to come up on January 3, 2020. 16. Paragraph 8 of the impugned order then reads as under (page 233 of 228 Comp Cas) : In compliance of the aforesaid orders the petitioners have suggested names of valuer to the learned Special Officer but the respondents did not give any suggestion for appointment of a valuer nor reverted on the petitioners' suggestion. Ultimately, the learned Special Officer on his own appointed M/s. L. S. I. Financial Services P. Ltd., having their office at Sagar Trade Cube, 5th Floor, 104, S. P. Mukherjee Road, Kolkata-700 026 requesting to submit report by December 30, 2019 to enable the Special Officer to file his report by January 3, 2020 before thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he impugned order heard both sides is also criticised by original respondents Nos. 3 and 7 that they were not heard. Paragraph 17 of the impugned order itself mentioned that no one appeared for original respondents Nos. 3 and 7. Written submissions of respondents Nos. 5 and 8 (original respondents Nos. 3 and 7) Diary No. 23583 show in paragraph i that their representative had sent e-mail to registry with copy to all parties on August 31, 2020 (should be August 3, 2020) about inability and furnished medical prescription and thus one-third of the respondents were not present. Thus they were aware. There is no reason why counsel could not appear. 18. The learned National Company Law Tribunal referred to the averments being made by the parties against each other and observed in paragraphs 19 and 20 as under (page 236 of 228 Comp Cas) : Learned senior counsel Mr. Abhrajt Mitra, in his reply submitted that excepting respondent No. 5, all the respondents are objecting to this application. When the valuation report has been received, no one filed any objection to the valuation report. The respondents cannot object to buy out and sell out the shares because the valuation orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns already pending for consideration and that he is filing another application for early hearing. Altogether six (6) application filed is pending for consideration. To have a better understanding of those I. As. pending for consideration, and for an eye view to understand the ligation instinct in the respondents not to exist from respondent No. 1-company by selling out their shares, or they themselves will not takes over respondent No. 1 buying the shares from the petitioners, even if a competitive price is arrived at upon conducting bidding between the parties, it is good to read some of the I. As. (emphasis supplied) 19. The learned National Company Law Tribunal after such observations referred to the manner in which the respondents had filed some of the I. As. and observed in paragraphs 22 to 23 as follows (page 237 of 228 Comp Cas) : An overall screening of the pending I. As., I am unable to find out any serious objections raised on the side of the respondents challenging the valuation done by the valuer. What is under challenge is that valuer has not given an opportunity to suggest the name of the valuer at their instances and appointing the valuer by the Special O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndents group are brothers. They know each other better than me and their professionals. It is difficult to have a reunion when brotherhood between them is broken irrevocably. I am afraid they are controlled by their emotions despite the highs and lows of relationships between them. They want to add fuel to burning flame. In a situation brought out in the peculiar nature of the instant case why they disagree to buy the shares of the petitioners or selling out their shares to the petitioners not at a value fixed by the Tribunal or by the valuer, but in an auction in between them giving an opportunity to quote highest price to take over the company in their hand safely without any sort of interference from rival group of brothers ? No valid explanation is forthcoming from the side of the respondents. (emphasis supplied) 20. The learned National Company Law Tribunal relied on the judgment in the matter of Namtech Consultants P. Ltd. v. GE Thermometrics India P. Ltd. MANU/KARN/7403/2007 ; [2008] 141 Comp Cas 697 (Karn), passed by the hon'ble Karnataka High Court at Bengaluru for a way out in situation recorded above and taking a clue from observations in the said judgment obser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o buy out or sell out. Given the facts of the matter, what appellants of these appeals are, in the name of principles of natural justice seeking is that they should have been allowed to take their own time before National Company Law Tribunal acted upon the valuers report that had been received. The unnumbered I. A. was only to give further orders on valuation received. It is not that, for every application filed whole drill of reply affidavit, and rejoinder, etc., must be compulsory. The impugned order and record show that multiple I. As. were being filed by the respondents and the learned National Company Law Tribunal has found their conduct to be a litigation instinct. The learned National Company Law Tribunal which has been dealing with parties in the company petition has taken such view and it would not be appropriate for us to question the observations of the learned National Company Law Tribunal. In appeal also, the appellants instead of one appeal preferred to file multiple appeals although it appears that in the company petition original respondents Nos. 1 to 4, 6, 7 and 8 (brothers) filed common reply (annexure A3). Adding multiple I. As. in National Company Law Tribuna ..... X X X X Extracts X X X X X X X X Extracts X X X X
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