2015 (10) TMI 2665 - HC - Companies Law

Approval of Settlement in Companies Act Case: Official Liquidator Appointed, Terms Set

Ganeshi Lal Jain And Suresh Kumar Jain Versus Vasan Health Care Pvt. Ltd.,

The court approved a settlement between the parties in a case under Sections 433(e) & (1) read with Sections 434 and 439(1) of the Companies Act, ... Memorandum of Settlement - Held that:- Memorandum of Settlement is recorded and the Company Petition is closed in terms of the settlement. Memorandum of settlement dated 12.10.2015 shall form part of this order. However, it is made clear that in case of default of any of the conditions, as agreed to by the parties in the Memorandum of settlement, the petitioner is at liberty to revive the company petition. Consequently, connected Applications are closed. Issues:Settlement of disputes under Companies Act, 1956.Analysis:The judgment involves a settlement between the parties regarding a petition filed under Sections 433(e) & (1) read with Sections 434 and 439(1) of the Companies Act, 1956. The petition was admitted by the court, appointing the Official Liquidator as the Provisional Liquidator for the respondent company. Subsequently, the respondent filed applications to set aside the ex parte order and sought an amicable settlement. The settlement terms included vacating the premises, clearing dues related to rent, acknowledging arrears of rent and interest, and agreeing on a payment schedule. The settlement also addressed the transfer of electric connections and machinery, with conditions imposed on the respondent regarding the operation and disposal of machinery. Post-dated cheques were issued by the respondent as part of the settlement, with an undertaking to honor them on due dates. The petitioner agreed to withdraw proceedings under the Negotiable Instruments Act, 1881.The court recorded the terms of the settlement in the Memorandum of Settlement dated 12.10.2015 and closed the Company Petition accordingly. However, it was specified that in case of default by either party, the petitioner could revive the company petition. The judgment emphasized the importance of adhering to the agreed conditions for the settlement to be valid. The settlement was comprehensive, covering various aspects such as property vacation, financial obligations, machinery transfer, and cheque payments. The court's order provided a clear framework for the closure of the petition and outlined the consequences of any future defaults by the parties. The judgment reflected a balanced approach to resolving the disputes between the parties under the relevant provisions of the Companies Act, 1956.