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TMI Blog2024 (5) TMI 729X X X X Extracts X X X X X X X X Extracts X X X X ..... 010. However, the second transfer dated 24.5.2010 was challenged and was adjudicated by the Tribunal as well as this Appellate Tribunal - The second transfer dated 24.5.2010 recorded in the register of members transferred the shares in favour of Appellant No.2 was set aside and further direction was given to the Appellant No.1 company to rectify the Register of Members so as to reflect 16,94,000 shares standing in the name of Respondent No.1 Company w.e.f. 19.5.2010 and second transfer dated 24.5.2010 shall stand ignored. The intent of this Appellate Tribunal was very clear to restore the status quo as was at the time of first transfer of shares on 19th May, 2010 and all subsequent actions of the Appellants was set aside. There are no sound logic of the Appellants to issue alleged fresh transfer dated 28.11.2017 to justify the action of transferring back 14,96,000 shares in the name of Appellant no.2. There are force in the logic of the respondents No.1 to 9 that despite 12 years legal battle and winning the legal battle before the Tribunal as well as this Appellate Tribunal, the Respondents No.1 to 9 are still being treated as minority shareholders - there are no error in the Exec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oil. The Appellants stated that in the year 2009 they held approximately 88.70% of equity shares of the Company and Respondent No.1 to 9 held around 11.30% of equity shares. It was brought to the notice that the Appellants contributed Rs.6,96,70,000/- (88.7%) towards equity capital whereas the Respondents No.1 to 9 collectively contributed Rs.88,45,000/- (11.31%). 5. The Appellants clarified that on 19.5.2010, Respondent No.1 Company purchased 14,96,000 shares of Appellant No.1 Company from the five investment companies and the same is reflected in the register of members of the Appellant No.1 Company at Serial No.16 to 20 and the said transfer dated 19.5.2010 from the five investment companies to the Respondent No.1 Company is called as First Transfer . 6. The Appellants further submitted that on 24.05.2010, the Respondent No.1 Company transferred the 14,96,000 shares to the Appellant No.2 Company and the same was reflected in the register of members of the Appellant No.1 Company at Serial No.21 and is referred in the present case as Second Transfer . It has been submitted that in November 2012, the Respondent No.1 to 9 herein filed Company Petition against the Appellants under Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated 15.11.2017 vide Company Appeal No.55 of 2018. 9. The Appellants claimed that in the meantime on 27.11.2017, the Respondent No.1 Company vide Board Resolution, authorized sale of 14,96,000 shares of Appellant No.1 Company to the Appellant No.2 Company which was in conformity with the Settlement-Cum-Exit-Arbitral Award dated 12.7.2017. It has been stated that on 28.11.2017, the Appellant No.2 Company vide Board Resolution dated 28.11.2017 again authorized purchased of 14,96,000 shares from the Respondent No.1 Company for a consideration of Rs.15,10,960/-. 10. The Appellants clarified that acting on the Board Resolution dated 27.11.2017 and 28.11.2017 passed by the Respondent No.1 Company and Appellant No.2 Company respectively, a separate share purchase agreement was executed between the Respondent No.1 Company and the Appellant No.2 Company for sale/purchase of 14,96,000 shares of Respondent No.1 Company and a fresh transfer deed dated 28.11.2017 was also executed between the parties and further pointed out that a fresh transfer on 28.11.2017 was a new and completely separate independent transaction which was made pursuant to Board Resolution dated 27.11.2017 and 28.11.2017 in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unal and it was also clarified that the said CP No.276/2017 came up for hearing before the Tribunal on 13.12.2017 on which date the Tribunal restrained the Appellant No.2 from further alienating or transferring these 14,96,000 shares. 14. The Appellants further elaborated that in January, 2018, the Respondent Nos.1 to 9 herein as shareholders of Appellant No.1 Company also filed a fresh Company Petition No.24/2018 under Section 241, 242 of the Companies Act, 2013 alleging oppression and mismanagement regarding the affairs of the Appellant No.1 Company and further challenged the fresh transfer of 14,96,000 as fresh transfer on 28.11.2017 which is also pending adjudication before the Tribunal. The Appellants emphasised that the fresh transfer of 14,96,000 shares on 28.11.2017 was neither subject matter of challenge in CP 146/ND/2012 nor was subject matter of Company Appeal No.394/2017 or Company Appeal No.55/2018 in which the Order dated 16th April, 2019 was passed, and, therefore, at the best, fresh transfer of 28.11.2017 can be treated as fresh cause of action which is still sub-judice before the Tribunal in CP No.276/2017 and CP No.24/2018. 15. The Appellants have stated that on 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts Order dated 16.4.2019. The Appellants alleged that the Tribunal erred in wrong interpretation of this Appellate Tribunal s Order dated 16.4.2019 and passed the Order contrary to this Tribunals Order and in fact made out a new case and new decree beyond the jurisdiction of the executing Court. 20. It is the case of the Appellant that the Impugned Order wrongly observed that even if shares were transferred by Respondent No.1 Company to the Appellant No.2 Company on 28.11.2017, then also the shares have to be transferred back in the name of the Respondent No.1 Company in pursuant to the Order dated 16.04.2019 of this Appellate Tribunal. The Appellant claimed that there was no such direction in the Order dated 16.04.2019 passed by this Appellate Tribunal and this Appellate Tribunal only directed the Appellant No.1 Company to rectify the register of members so as to reflect 14,96,000 shares standing in the name of Respondent No.1 Company w.e.f. 19.05.2010 and not from 15.11.2017. The Appellant further argued that the Order of this Tribunal dated 16.04.2019 did not take into cognizance of the subsequent fresh transfer dated 28.11.2017 nor it directed the Appellant No.1 Company to refl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which was challenged by the Respondent in CP 146/ND/2012. 24. It is the case of the Appellants that the Tribunal misinterpreted this Tribunal s Order dated 16.04.2019, especially, contained in para 40(A) where this Tribunal held that steps taken by the party pursuant to such directions include the fresh transfer dated 28.11.2017 despite the fact that the fresh transfer was not deliberated by the Appellate Tribunal. It is the case of the Appellant that this Appellate Tribunal vide Order dated 16.04.2019 merely directed the Appellant No. 1 Company to ignore the Second Transfer of 24.05.2010 and rectify the Register of Member so as to reflect 14,96,000 shares standing in the name of Respondent No. 1 Company w.e.f. from 19.05.2010, and not from 15.11.2017. The Appellants stated that this Appellate Tribunal in its Order dated 16.04.2019 does not take cognizance of the subsequent Fresh transfer of 28.11.2017; nor does it direct the Appellant No. 1 Company to reflect Respondent No. 1 Company as present owner of these 14,96,000 shares; and nor does it prohibit the Respondent No. 1 Company from transferring the 14,96,000 shares to the Appellant No. 2 Company in future. Therefore, direction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d have shown 14,96,000 shares in the name of Respondent No.1 Company and not in the name of Appellant No.2 Company. 30. The Respondents No.1 to 9 stated that the pleading of the Respondents No.1 to 9 was accepted by the Tribunal as contained in para 23 to 26 of the Impugned Order and concluded that Appellants have not complied with this Tribunal Order dated 16.4.2019 and directed the Appellants to transfer back the share certificate to Respondent No.1. 31. The Respondents No.1 to 9 submitted that there has been chequered history of the case which has seen several rounds of litigations and the Orders of the Tribunal as well as this Appellate Tribunal has gone against the Appellants and supported the Respondents No.1 to 9. The Respondents No.1 to 9 further submitted that it is only for the compliance of the Orders of the Tribunal as well as this Appellate Tribunal, the Respondents No.1 to 9 moved for execution Orders and the Impugned Order was passed accordingly in the Tribunal. 32. The Respondent alleged that they have been facing oppression and mismanagement almost since 12 years as they filed the original Petition No.146/ND/2012 in October, 2012 challenging the reduction of their ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and arguments by both the parties and, therefore, this Appellate Tribunal was very conscious and cognizant of these facts including the fact that the Appellant allegedly purportedly transferred the shares to Appellant No.2 only on papers based on forged documents and thereafter this Appellate Tribunal vide its Order dated 16.4.2019 gave clear directions. 36. The Respondents No.1 to 9 further reiterated that this Appellate Tribunal was made aware of the illegal acts of the Appellant after the Order of the Tribunal dated 15.11.2017 regarding alleged paper transfers and this Appellate Tribunal set aside all the steps taken by the parties pursuant to the order of the Tribunal dated 16.11.2017 vide suitable directions as contained in para 40, where it was clearly indicated that any steps taken by the party pursuant to such directions recorded in para (ii) to (vi) pending Appeal shall stand set aside. 37. It is the case of the Respondents No.1 to 9 that this Appellate Tribunal held that 14,96,000 shares would be shown in the name of Respondent No.1 Company w.e.f. 19.5.2010 and thus in effect set aside the fresh allotment of shares of the Appellants on 29.6.2011 and 10.10.2012 along with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there is no legal embargo in execution of the Orders of this Appellate Tribunal which has correctly been passed by the Tribunal in the Impugned Order as Execution Court and, therefore, the Execution Court has not gone beyond the decree i.e. the Judgement dated 16.4.2019 by this Appellate Tribunal. 42. The Respondent submitted that Executing Court i.e. the Tribunal has powers and jurisdiction to interpret the decree for ensuring proper authority and decree and in case any ambiguity found then the Executing Court is required to look into the true import of such decree and cited the Judgement of Raj Kumar vs. Harbans Lal, AIR 1978 P H 186 , Laxmidhar Sahu Vs. Smt. Padmini Tripathy and others, AIR 1991 Ori 9 , Bhavan Vaja and others vs. Solanki Hanuji Khodaji Mansang and Another, AIR 1972 SC 1371 , Manish Mohan Sharma and Others v. Ram Bahadur Thakur Limited and Others, (2006) 4 SCC 416 , Justice (RTD.) Shambhu Singh and Ors. vs. Union of India and Ors., 2020 ILR (M.P.) 2804), Jai Narain Ram Lundia v. Kedar Nath Khetan and Ors., 1956 SCR 62 , Brakewel Automotive Components (India) Pvt. Ltd. v. P.R. Selvam Alagappan, 2017 (5) SCC 371 , Rajinder Kumar v. Kuldeep Singh and Ors. 2014 (15) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions before the Tribunal and accordingly, Company Petition No.276(CHD) of 2017 and Company PetitionNo.24(ND) of 2018 were filed and therefore filing of the fresh Company Petitions does not come in way regarding Execution Order passed by the Tribunal. 47. Concluding their arguments, the Respondents No.1 to 9 submitted that the Appeal may be dismissed with exemplary cost since the Respondents No.1 to 9 have been deprived of their rights despite getting all the favourable decisions from the Tribunal as well as this Appellate Tribunal. 48. We will now examine various issues discussed in preceding discussions. 49. At this stage, we will like to reproduce relevant portions of the Tribunal s Order dated 15.11.2017 as contained in para 161 which reads as under:- 161. From the discussion made above, it is found that the facts of the case would attract the provisions of Section 397 of the Companies Act, 1956, but winding up would unfairly prejudice the members. The instant petition is disposed of with the following directions:- i) CA No. 255 of 1015 filed by the respondents is dismissed; ii) 14,96,000 shares now existing in the name of R-2 company be transferred back in the name of P-1 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ections recoded in para ii to vi, pending Appeals shall stand set aside. (B) For the above reasons, we set aside the second transfer dated 24.05.2010 recorded in the register of members in the record of OR1 transferring the shares of OP1 in favour of OR2. The Respondents will rectify the register of members so as to reflect 14,96,000 shares standing in the name of OP1 Aar Kay Chemicals Pvt. Ltd. with effect from 19.05.2010, and the second transfer dated 24.05.2010 done shall stand ignored. (C) We find that the first allotment made on 29.06.2011 as well as the second allotment made on 10th October, 2012 were both illegal and are hereby struck down. (D) The Company Petitions shall stand disposed accordingly. (E) Original Respondents 3 to 5, each will pay costs of Rs.50,000/- to each of the Original Petitioners (Appellants of CA 394/2017), from their own funds. 51. We note that the first transfer occurring on 19th May, 2010 where the Respondent No.1 Company purchased 14,96,000 shares from five investment companies and this transfer was reflected in the list of transfers in the register of members of the Appellant No.1 company at Serial No.16 to 20 which is termed as First Transfer in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing second transfer dated 24.5.2010 and did not deal with the subsequent fresh transfer of 14,96,000 shares transferring shares from the Respondent No.1 Company to Appellant No.2 Company allegedly done after passing proper Board Resolutions and share purchase agreement by the concerned parties. We also note the plea of the Appellant that they never issued any physical share certificate hence no physical shares have been transferred in name of the Respondent No.1 company. The Appellants have also claimed that since the fresh transfer dated 28.11.2017 were not subject matter of any dispute before the Tribunal or this Appellate Tribunal, they have legally transferred these shares and as such there could not have been Execution Order in this regard. The Appellant has pleaded that in any case, the Respondents No.1 to 9 have already challenged the fresh allotments of shares before the Tribunal and is pending adjudication. 56. We note that there have been series of litigations between the Appellants and the Respondents No.1 to 9 right from the Tribunal to this Appellate Tribunal and up to level of the Hon ble Supreme Court of India. We also observe that the Tribunal gave its specific Orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rders has gone through further objection of the Appellants and accorded clear finding in para 21 of the Impugned Order:- After hearing both the parties and careful perusal of the order dated 16.04.2019, we are of the considered view that there are three cardinal points for determination before this Bench are as under:- i) Whether the present execution application is not maintainable in view of pendency of appeal against order dated 16.04.2019 before the Hon ble Supreme court? ii) Whether applicant No.1 has itself transferred 14,96,000 shares to Dhuri Cold Storage Private Limited, respondent No.2? If so its effects? iii) Whether respondents have already acted upon for implementation of order dated 16.04.2019? 61. We further take into consideration that the issue framed in the Impugned Order regarding maintainability of the Execution Petition pending adjudication Civil Appeal before the Hon ble Supreme Court was rejected in para 22. Another issue regarding Respondent No.1 itself transferred back 14,96,000 shares to Appellant No.2 on 28.11.2017 was also discussed and rejected in para 23 of the Impugned Order by referring to para 40(A) of this Appellate Tribunal on 16.4.2019. Third iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1.2017, the Respondent No.1 company vide separate new Board Resolution authorized sale of 14,96,000 shares of Appellant No.1 company to the Appellant No.2 company and same was in conformity with the Settlement-Cum-Exit-Arbitral Award dated 12.7.2017. It has been stated that on 28.11.2017, the Appellant No.2 Company vide Board Resolution dated 28.11.2017 again authorized purchased of 14,96,000 shares from the Respondent No.1 Company for a consideration of Rs.15,10,960/- and acting on Board Resolution dated 27.11.2017 passed by the Respondent No.1 Company and Board Resolution dated 28.11.2017 passed by Appellant No.2 Company, a separate share purchase agreement was executed between Respondent No.1 company in the name of Appellant No.2 Company for sale and purchase of 14,96,000 shares of the Respondent No.1 company and therefore a fresh transfer deed dated 28.11.2017 was also executed between the parties whereby 14,96,000 shares from the Respondent No.1 Company to the Appellant No.2 company on 28.11.2017 which is a case of fresh transfer (Fresh Transfer) and there was no restriction by the Tribunal or this Appellate Tribunal and this transaction being completely new, separate and inde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g to do with the present Petition. NCLT in para 106 of the judgement took up CA 255/2015 which claimed that the Petition deserved to be dismissed on the ground of Arbitration Agreement and said Award and after discussing the matter and the provisions of Arbitration and Conciliation Act, 1996, found that the jurisdiction of the Tribunal was not barred and for reasons recorded, dismissed CA 255/2015 (para 144 of the Judgement). 69. The pleadings of the Appellant regarding alleged fresh transfers of shares dated 28.11.2017 are not sustainable in view of very clear directive of this Appellate Tribunal contained in para 40(A) especially in view of the last sentence which is again reiterated:- (A) We do not disturb directions in para marked 163 of the Impugned Order. We agree with the learned NCLT as regards operative direction i in para 161 of the Impugned Order that CA 255 of 2015 filed by the Respondents deserved to be dismissed. However, for reasons discussed above, we set aside rest of the operative Order as recorded in para 161 of the Impugned Order and reasons recorded by NCLT in support of the same. Any steps taken by the parties pursuant to such directions recoded in para ii to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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