TaxTMI 
TaxTMI 
2013 (5) TMI 246
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....property being building No. B-1-1214 near Kailash Cinema Chowk in Civil Lines, Ludhiana was divided into two parts. One part was allotted to the parties of the 4th, 5th and 6th parts i.e. Mr. Ashok Kumar, Mr. Rajan Kumar and Mr. Mukesh Kumar sons of Mr. Dharam Pal. The other portion was given to the parties of the 1st, 2nd and 3rd parts i.e. Mr. Ravinder Kumar, Mr. Nagesh Kumar and Mr. Rakesh Kumar. Likewise, another immovable property being a building at GT Road, village Bhaura, Ludhiana was divided into two parts and distributed to the two sets of parties. The relevant clause in this regard reads as under: "(d) That immovable property being Building No. B-XXXII-933 at G.T. Road, Village Bhaura, Ludhiana has been divided into two parts as indicated in the plan attached herewith marked annexure 4. The portion shown by the slightly irregular rectangle ABCDEFGHIJ shaded green (Area of land 15,310. 7/9 Sq. Yards) in the plan has been allotted and given to the parties of the 4th, 5th and 6th parts hereto collectively, while as the slightly irregular rectangle BCEDEFGHIJKL shaded red (Area of land 15,310. 7/9 sq. yards) in the plan has been allotted and given to the parties of the 1s....
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....ai (a brother of Mr. Vidya Prakash Mehra), Mr. R.S. Walia and Mr. Shambu Nath Khanna. Genesis of the disputes 6. The genesis of the disputes which led to the filing of the petition before the CLB by the Appellants is stated to be a notice dated 2nd January 2006 issued for convening an Extraordinary General Body Meeting ('EGM') of NHEL for the removal of Appellant 1. It is the case of Appellant 1 that he never received any such notice. It is further stated that a board meeting was convened on 9th January 2006 as a precursor to the convening of the EGM on 8th February 2006. Appellant 1 contends that he did not receive notice of the said board meeting either. Appellant 1 also denies receiving the notice claimed by the Respondents to have been purportedly sent to him on 10th January 2006. 7. The EGM was held on 8th February 2006 in which a resolution was passed removing Appellant 1 as Director of NHEL with immediate effect. Appellant 1 states that he learnt some time in August 2006 that a board meeting had been convened in which it was decided that NHEL would apply to the State Bank of India ('SBI') for a loan of Rs.1 crore. Accordingly, on 16th August 2006, Appellant 1 sen....
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....ditional affidavit was filed by the Appellants in the CLB bringing on record further facts to show oppression and mismanagement by the Respondents. It is stated that no interim orders were passed by the CLB but arguments were heard from time to time and orders reserved on 5th March 2008. Impugned order of the CLB 11. On 11th June 2008, the CLB passed the impugned order, inter alia, holding as under: (a) The allegations of acts of oppression and mismanagement of the affairs of NHEL resulting in the depletion of its reserves remained uncontroverted. Though it was a fit case for winding up of NHEL, such an order would clearly prejudice the interests of the Appellant 1 and other shareholders. (b) The petition was a composite one in which complaints were made not just about the Directors but also of siphoning of the funds resulting in depletion of the reserves. The objections as to maintainability were not tenable. The petition could not be thrown out at the threshold. (c) The prayers sought in the petition were different from those in the civil suits between the parties. The contention of the Respondents that the Appellants had indulged in forum shopping was, therefore, ....
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....o have been dismissed and all interim orders shall also be deemed to have been vacated." Proceedings in the present appeal 14. In the present appeal, notice was first issued on 21st July 2008, on which date the following order was passed:- "CA No.759 of 2008 & CO.A. (SB) No. 18 of 2008 Notice. Mr. Sanjay K. Maria, Advocate accepts notice. Let a copy of the paper book be supplied to learned counsel for the respondent. Memo of appearance filed in court is taken on record. Let reply be filed within six weeks. Rejoinder thereto, if any, be filed before the next date of hearing. Upon hearing learned counsel for the parties and perusal of the record placed before this court, it is directed that the parties shall maintain status quo with regard to the title, possession and construction on the property bearing Khasra No.6/2/2, 3/2, 4/1/2/2, 4/2/2, 6/2-6/3, 7/1, 7/3, 8, 9/1, 9/3, 3/1/1, 13/1/2, 14/1, 14/1/2, 18/2/1/1, 18/2/1/2, 19/1/1, 19/1/2, 22/1/1, Khata/K No.139/136 Jambandi 2004-2005, Taraf Vill. Bhoura, HB No.88, district Ludhiana as well as the property at M.C. No.B-XXXII 933, G.T. Road, Village Bhoura, Ludhiana being Khasra No.6/9/4, 10/4, 11/3, 12/1, 12/2, 19/1....
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....ion in the CLB, i.e., 11th October 2006. The valuation, as determined by the CLB, was inadequate and unreasonable. In any event, the impugned order had been passed on 11th June 2008 and even on that date, the valuation of the assets was in excess of the value as on 27th May 2007. It is contended that inasmuch as the Respondents failed to comply with the impugned order of the CLB by not making the payment within the time stipulated, and also not seeking extension of time for making the payment, the question of the Respondents now making the payment of only so much of the amount as directed by the CLB was ruled out. It was submitted that the Respondents could not take advantage of their own wrong. The land belonged to NHEL and in May 2007 its value was about Rs. 4.75 crores, while at the time of passing of the impugned order by the CLB, i.e., June 2008, its value was Rs. 15 crores. It is stated that the present value of the land in question is about Rs. 24 crores. What was originally agricultural land has since been declared to be industrial land and, therefore, commands a good price in the market. 19. Thirdly it is submitted that the condition that the Appellants should return th....
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....the event, value to the extent of only 20.57% is taken i.e. actual holding, in such an event, the Petitioners may be entitled to claim further reliefs in respect of the other shares held indirectly as legal heir and as member of HUF.)" 22. It is further prayed that an independent Chartered Accountant should be appointed to conduct a special audit to determine the amount siphoned off by the Respondents during the period and to ask them to make good the losses. It is prayed that a direction should be issued to the Respondents not to dispose of the vacant land of the company and to preserve the assets in the meanwhile. Submissions of counsel for the Respondents 23. Mr. Sanjay Maria, learned counsel for the Respondents, vehemently opposed the above contentions of the Appellants. It is stated that the Appellants had themselves restricted their prayers before the CLB by filing an additional affidavit dated 12th February 2008, para 8 of which reads as under: "8. That as already pointed out in the proceedings the issue that requires to be resolved is only: a. the extent of shareholding b. the value of shares that belong to the Petitioners' group." 24. It is submitted t....
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....by the learned counsel for the appellants. It is settled law that if a finding of fact is perverse and is based on no evidence, it can be set aside in appeal even though the appeal is permissible only on the question of law. The perversity of the finding itself becomes a question of law. In the present case we have demonstrated that the judgment of the Company Law Board was given in a very cursory and cavalier manner." (emphasis supplied) 28. Consequently, the question whether, as contended by the Appellants, the CLB has in the present case passed a perverse order has to be determined by the Court even for the purposes of maintainability. Relief granted by the CLB not legally tenable 29. Learned counsel for the Appellants is justified in the criticism of the impugned order of the CLB that despite the finding that there was no defence to the charge of oppression or mismanagement, the CLB did not pass a proper consequential order to bring to an end the matters complained of. 30. In Dale & Carrington Invt. (P) Ltd. the Supreme Court explained that it was settled law "that if a finding of fact is perverse and is based on no evidence, it can be set aside in appeal even thoug....
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....balance sheet of NHEL as of that date signed by Appellant 1. In matters of this nature, there is no question of estoppel. A company is statutorily required to maintain its accounts. A shareholder has the right to insist upon this. The fact that the Appellant 1 may have attended the board meetings held on 1st September 2004 and 1st September 2005 and approved the annual accounts for those respective years does not answer the submission that the accounts as on 31st March 2006 were not approved by Appellant 1. 35. As regards the fair market value of the shares, there ought to have been a proper valuation thereof by an approved valuer. As explained by this Court in Hemant Kumar Rohatgi case (supra), a fair market value had to be determined. The assets of NHEL had to be valued, as contended by the Appellants, as on 31st March 2006. This Court is not satisfied with the manner of arriving at the value of the shares by the CLB on the basis of purported admissions. This does not appear to be the correct approach. 36. It was observed by the CLB that if the Appellants failed to cooperate with NHEL for the determination of the value of the occupied premises, including land, plant and mac....