NCLT upholds share valuation at Rs. 10.35, awards 6% interest. Emphasizes procedural fairness and equity.

The National Company Law Tribunal (NCLT) upheld the valuation report valuing shares at Rs. 10.35 each, rejecting objections raised by the original Petitioners. Interest at 6% per annum was awarded on the share value from April 1, 2007. The NCLT had the authority to modify consent orders for fair outcomes. Procedural fairness and equity were emphasized, directing the Petitioners to sell shares to specific shareholders. The final order directed the sale of shares at the determined price with interest, to be completed within two months, with no costs awarded.

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Issues Involved:
1. Validity of the Valuation Report.
2. Objections to the Valuation Report.
3. Grant of Interest on the Share Value.
4. Authority of NCLT to Modify Consent Orders.
5. Applicability of Section 634-A of the Companies Act, 1956.
6. Rights of Shareholders vs. Company in Share Buyback.
7. Procedural Fairness and Equity in Tribunal Orders.

Detailed Analysis:

1. Validity of the Valuation Report:
The National Company Law Tribunal (NCLT) had appointed an independent valuer to determine the fair value of the shares of the company as of March 14, 2007. The valuation report dated July 20, 2012, was submitted, valuing the shares at Rs. 10.35 each. The NCLT rejected the objections raised by the original Petitioners to the Valuation Report and directed them to sell their shares at this fair price.

2. Objections to the Valuation Report:
The original Petitioners raised objections to the Valuation Report, claiming undervaluation of the company's immovable properties and insufficient opportunity to present their case. The NCLT considered these objections but found no fault with the valuation done by the independent valuer. The objections were deemed bona fide but ultimately not persuasive enough to alter the valuation.

3. Grant of Interest on the Share Value:
The NCLT awarded interest at 9% per annum (simple interest) on the share value from April 1, 2007, until the actual date of payment. The NCLT justified this by stating that the company had utilized the Petitioners' funds during this period. The Appellate Tribunal, while upholding the grant of interest, reduced the rate to 6% per annum to balance the equities between the parties.

4. Authority of NCLT to Modify Consent Orders:
The Appellant argued that the NCLT acted as an executing court and could not vary the consent order dated April 1, 2011. However, the Tribunal found that the order was not a final decree but an interlocutory order requiring further application of mind by the NCLT. The NCLT had the authority to accept or reject the Valuation Report and make necessary modifications in the interest of justice.

5. Applicability of Section 634-A of the Companies Act, 1956:
The Appellant contended that under Section 634-A, the NCLT could not go beyond the consent order. The Tribunal noted that the corresponding provision in the new Companies Act, 2013, does not exist, and even under the old Act, the NCLT had the authority to ensure fair and equitable outcomes, which included the power to grant interest.

6. Rights of Shareholders vs. Company in Share Buyback:
The NCLT's order directed the Petitioners to sell their shares to the Respondents, which included the company and other shareholders. The Appellate Tribunal clarified that the order should specifically direct the sale of shares to the Respondents 2 to 9 (shareholders) and not the company, as the procedural requirements and rights differ significantly.

7. Procedural Fairness and Equity in Tribunal Orders:
The Tribunal emphasized the need for procedural fairness and equity. It was noted that the original Petitioners had bona fide objections and were not merely delaying the proceedings. The NCLT's decision to grant interest was within its equitable jurisdiction, ensuring that the Petitioners were compensated for the delay in receiving their dues.

Final Order:
- The Petitioners are directed to sell their entire shareholding to Respondents 2 to 9 at Rs. 10.35 per share.
- The Respondents 2 to 9 shall pay the Petitioners the share value along with 6% per annum simple interest from April 1, 2007, until the payment date.
- The compliances shall be made before the Bench Officer of the Tribunal within two months.
- The appeal is disposed of with no order as to costs.

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