TaxTMI 
TaxTMI 
2015 (12) TMI 421
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....the impugned order"] on the ground that the Company Law Board ("CLB") inter alia granted ingress to Respondent No. 2 Mr. Rajinder Kumar Malhotra ("RKM") into Plant No. 2 of the Respondent No. 1 - Vidyut Metallics Pvt. Ltd. ("VMPL"), which is in possession and control of SPCPL since the year 2010/11, without SPCPL being a party to the proceedings pending before the CLB, and which is the subject matter of an Arbitration Petition pending before this Court arising out of a Business Transfer Agreement ("BTA") dated 30th December, 2010. Even in the written submissions tendered in Court by SPCPL, it is categorically mentioned that, "The Appellants' case is of possession of Plant 2 by virtue of the BTA dated 30th December, 2010 and the Supplementary BTA dated 18th March, 2011 (Appeal Pgs. 12-13)." 2. It is very necessary to point out at the outset, that SPCPL has in the above Appeal alleged that pursuant to the BTA and the Supplementary BTA it is in possession and control of VMPL's Plant 2 since 30th December, 2010 / 18th March, 2011 and is carrying on its business operations from the said Plant No.2. The contents of the Appeal are reiterated and confirmed by Mr. Sanjay Jagtap (....
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.... not made at the instance of RKM because before the said Affidavits were filed by Jagtap and Chaudhari, RKM had on 2nd/3rd February, 2012, already filed a Company Petition before the CLB under Sections 397-398 of the Companies Act, 1956 alleging acts of oppression and mismanagement by the then Directors of VMPL i.e. Shri Paresh Vyas (Vyas) and Chaudhari. This clearly demonstrates that these days, litigants show scant respect for Courts and the rule of law. They not only brazenly take a stand contradictory to that taken earlier on oath, but subsequently, and equally brazenly, also attempt to justify the same on a false and illegal premise. 3. One more fact which needs to be brought out to the forefront in this Appeal is that though SPCPL has repeatedly tried to assert in the present proceedings that it is an independent legal entity which has nothing to do with the disputes between the members of Malhotra family, the present dispute is essentially one of the many proceedings arising out of a long standing feud between Rakesh Malhotra (the son) on the one hand and Rajinder /RKM (the father) and his entire family on the other. Rakesh Malhotra ("Rakesh") who in fact has admitted in ....
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....and Chaudhari) through whom he was exercising control over VMPL's assets and properties shall no longer be able to wrongfully retain charge of VMPL's assets. Rakesh therefore arranged for SPCPL to make a false claim for the first time that it is in possession and control of Plant No.2 of VMPL pursuant to the BTA of December, 2010 and Supplemental BTA dated 18th March, 2011, which is nothing but a mala fide attempt to somehow exercise control over VMPL's assets, and properties. According to RKM, the above Appeal therefore clearly constitutes an abuse of the process of this Court. 4.1 SPCPL has denied and disputed that SPCPL has made a claim of being in possession and control of Plant No. 2 of VMPL at the instance of Rakesh. SPCPL has submitted in the above Appeal filed on 3rd February, 2015 that : "4 (a) .... The Appellant is a professionally led and managed Company and none of the members of the Rakesh Malhotra family are on the Board of Directors of the Appellant"; and "5 (o) The Appellant herein came to learn of a significant family dispute within the R.K. Malhotra Family between R.K. Malhotra and his younger son Mr. Rajiv Malhotra on one side and....
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.... is a purely family dispute and ordinarily the Petitioner should not be at all concerned about it, the Petitioner started getting very anxious and apprehensive about the same only when the disputes between the family reached the Petitioner's doorsteps and started interfering with the Business of the Petitioner. Over the last few months, the Respondent whether at the behest of RKM or otherwise has started to significantly interfere with and obstruct the Business of the Petitioner". It is pertinent to note from the purported instances set out by SPCPL in the said paragraph 16 of the Petition that the alleged obstruction commenced only from 31st December, 2014. 4.5 This Court after hearing the Learned Advocates appearing for the Parties and after going through all the papers, placed the matter on Board on two occasions to put its queries to the Advocates for the Parties and get their response to the same. In view of the above stand on the part of RKM on the one hand that Rakesh has put up SPCPL to make a false claim of being in possession and control of Plant No.2 from the year December 2010/March, 2011, and SPCPL on the other hand contending that SPCPL is in no way concerne....
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....t of SPCPL in not being fair and honest with the Court but instead misrepresenting facts which are incorrect to its knowledge, only to seek favourable reliefs as sought by it in the proceedings. 5. Since the disputes between Rakesh on the one hand and his father RKM and his entire family on the other qua various Companies which are hereunder referred to as the "RKM Indian Companies", has a chequered history, it is necessary to set out hereunder the relevant facts which have led to the filing of the present Appeal, which Appeal this Court has, with the consent of the Parties, decided to dispose of at the stage of admission itself. 5.1 The Super Max Group was a family-owned Group of Companies founded by RKM in the year 1949 and its business was and is that of manufacturing and selling razor blades and related products internationally. The Super Max Group Companies were held through a number of foreign holding Companies and ultimately forms part of the Lichtenstein Foundation. 5.2 RKM was and is also the effective owner of 5 Indian Companies (the RKM Indian Companies) which either manufactured products for the Super Max Group, or owned land/plant, or intellectual property rig....
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....h March, 2011. Vyas and Chaudhari, who were the two Directors of VMPL had now become employees/Consultants of SPCPL. However, since they had been the Directors of VMPL since 1993 and 2001 respectively, RKM believed that they would continue to protect the interest of VMPL and therefore allowed them to continue as Directors of VMPL. Similarly, the Directors of the other RKM Indian Companies remained unchanged. However according to RKM his son Rakesh misused the trust reposed in him by RKM and used his influence over the Directors of the RKM Indian Companies including VMPL (now employees/Consultants of SPCPL) to exclude RKM who held 99.99% of the shares of the five Companies. According to RKM, the Directors of the 5 Companies acting upon Rakesh's instructions refused to give RKM, who was the effective owner of the said 5 RKM Indian Companies, information and access to records, registers and accounts. Through these pliant Directors, Rakesh also sought to utiize the funds, assets and properties of the five Companies (including VMPL) for the benefit of SPCPL/himself. 5.7 On 2nd/3rd February, 2012, RKM either directly or through Companies belonging to him, filed four Company Petiti....
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....and securities of the Company (including bank account) except for the purpose of making statutory payments that may be required to be made to any government authorities and salaries of the employees in the ordinary course of business until further orders. (ii) The Respondents shall not dispose off, transfer, encumber or create any charge on the assets of the Company including the immovable properties until further orders". Interestingly, neither Vyas nor Chaudhari (employees/consultants of SPCPL) who continued to be the Directors of VMPL, nor Rakesh who admittedly was managing the affairs of SPCPL took a stand similar to the stand now taken through SPCPL, namely that all the assets of VMPL including Plant No.2 are transferred to and/or in control and possession of SPCPL by virtue of the BTA dated 30th December, 2010 and the Supplementary BTA dated 18th March, 2011. 5.9 Instead, Rakesh obtained an ex-parte ad-interim anti-suit injunction from the Commercial Court of the Queen's Bench Division of the Royal Courts of Justice in the U.K. RKM and the other Petitioners in the Petitions filed by the Indian Companies thereafter approached the English Court and contested ....
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....ndian Cos., and deployed their funds to further the interests of entities controlled by him. (ii) That although RKM owned and controlled 99.9 % of the Shares of the said Indian Cos., the said Directors acting as puppets of Rakesh, had continued in control of the RKM Indian Cos. and had continued to be "obdurate & obfuscatory". That as a consequence the said RKM Cos. were exposed to considerable financial risk, severe financial distress and even possibly ruin. (iii) That considerable harm and profound prejudice was likely to occur if these state of affairs were allowed to continue. (iv) That it would be wholly inequitable to allow such a state of affairs to continue and there could not possibly be any equity in Rakesh's favour in a situation like this. The interim orders dated 9th February 2012 and 7th November 2012 were continued. 5.15 Against the said Judgment and Order dated 12th/20th August, 2014, Rakesh preferred a Special Leave Petition before the Hon'ble Supreme Court of India. Rakesh applied for a stay of the said Judgment and Order dated 20th August, 2014, inter alia on the grounds set out below: "A. Because the Petitioner i....
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....f SPCPL) had continued to be the Directors of VMPL in view of the pending Appeals in this Court. However, after the Judgment and Order dated 12th/20th August, 2014 was passed, the newly appointed Directors immediately addressed a letter dated 25th August, 2014 to Vyas and Chaudhari calling upon them to forthwith seize and desist from acting as Directors of the Company and on and from 27th August, 2014 to hand over to them the entire charge of the Company along with all its records (statutory, financial and otherwise) including all original documents of all assets owned by VMPL. 5.18 In response to the said request made, the newly appointed Directors received a letter dated 26th August, 2014 from Vyas stating that he was replying on behalf of himself and Chaudhari and that they were unable to meet on 27th August, 2014 as it was not possible to reschedule their prior commitments. He suggested that the parties meet on 5th September, 2014. 5.19 RKM by his Advocate's letter dated 30th August, 2011, called upon Vyas and Chaudhari through their Advocates to immediately (not later than 2nd September, 2014) hand over the entire charge inter alia of VMPL along with its records (sta....
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....premises along with their security guards to take charge of the same. However, they were denied entry by the security guards employed by Vyas and Chaudhari. 5.25 By a letter dated 10th October 2014, Vyas, Choudhari and Rakesh through their Advocates replied to the RKM Advocate's letter dated 26th September, 2014. By the said letter, they purported to contend that the Petitioner was erroneously interpreting the orders passed by this Court and the statements made by them in the Special Leave Petition filed before the Hon'ble Supreme Court of India. They also refused to give the Petitioner the 'User ID' and 'Password" with regard to the Company's on- line account. In fact, on 13th October, 2014, Vyas and Choudhari, in the name of VMPL purported to issue a public notice in the Times of India newspaper stating that they continue to be the Directors of VMPL. 5.26 According to RKM, notwithstanding the fact that the Judgment and Order of this Court dated 12th/20th August, 2014, was clear and unambiguous, only by way of abundant caution, RKM filed a praecipe before this Court seeking clarification of its Order dated 12th/20th August, 2014. The said application ....
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....t Vyas and Chaudhari were wilfully disobeying the orders and not handing over charge. 5.31 According to RKM, realizing that the ex-Directors would no longer be able to retain control/change of the funds and assets of VMPL, on 12th January, 2015, Rakesh caused SPCPL to file Arbitration Petition (L) No. 55 of 2015 against VMPL. By the said Petition SPCPL falsely purported to contend that it was not concerned with the disputes between the Malhotra family. The reliefs sought in the Arbitration Petition related to restraining VMPL from interfering with the business of the SPCPL, from obstructing the water supply from the Peeco Plant to Plant Nos. 1 and 2. VMPL filed its Affidavit-in-Reply dated 27th January, 2015 in the said Arbitration Petition. However, till date no ad-interim/interim reliefs are granted in favour of SPCPL. 5.32 At the hearing of the said Company Application No. 296 of 2015 on 2nd February, 2015, Vyas and Chaudhari who had till then refused to hand over charge on diverse grounds, now confirmed/accepted that they had ceased to be Directors of VMPL from November,2014. However, the said erstwhile Directors for the first time now orally alleged that SPCPL (which is ....
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....and SPCPL and all dated 18th March, 2011. In fact, the same three agreements dated 18th March, 2011 had also been referred to in para 5 (g) of the Company Appeal as having been executed to take forward the job work arrangement between SPCPL and VMPL under the BTA and the said three Agreements had also been annexed as Exhibits-E, F and G thereto at pages 489, 514, 530. 6. As stated hereinabove, the case set up by SPCPL in the present Appeal is that pursuant to the BTA and Supplemental BTA, it is in possession and control of Plant No.2 since 10th December, 2010/18th March, 2011. In support of its case, SPCPL has, in its Appeal inter alia, stated/submitted as under: (i) That as part of the restructuring of the Supermax Group around the year 2010-2011, the entire business of shaving products, including all the business assets, which includes Plant No. 1 and Plant No. 2 was to be transferred to SPCPL. (ii) That on 30th December, 2010, VMPL entered into a BTA with SPCPL wherein VMPL agreed to sell, assign and transfer all its business, including all the business assets, licenses and employees to SPCPL. (iii) That subsequent to the BTA, SPCPL and VMPL also executed a Supplemen....
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....sset register maintained by the Transferor, the summary of which is annexed as Annexure-1 Part D; (v) all Business IPR including but not limited to the (i) licenses with respect to (a) all computer software being used in connection with the Business, as set out in Annexure-1 Part E and (b) the payroll software being used in connection with the business, as set out in Annexure-1 Part F; (ii) trademarks owned and applied for by the Transferor, as set out in Annexure -1 Part G; (iii) goodwill of the said Business; and (iv) Business Information held by the Transferor which in any way relate to the Business, if any (v) all patents, designs (registered or unregistered). Copyrights, technical information used in respect of the Business, including drawings, sketches and blue prints, designs, product manuals, specifications, data, processes, operation sheets, quality control and inspection data, instructions and other such information, details of which are set out in Annexure - 1 Part H; (hereinafter referred to as "Business IPR"); (vi) all the current assets of the Transferor including (i) all accounts receivable or portions thereof, and other rights to payments of the Tr....
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....ancial, acceptance credit, lending or other similar institution or organization) and its cash equivalents, including all interest accrued thereon, as shown by the books of the Transferor in connection with the Business. 1.1.25 "Licenses'' shall mean all licenses, permissions authorizations (public or private), consents, approvals, certificates, permits or other evidence of authority issued by a Regulatory Authority relating to or utilized in connection with the Business or any part thereof or the Business Assets, including any and all consents and approvals required to be obtained from any Regulatory Authority under any applicable Laws for the Transferor to sell, assign and transfer, or procure the sale, assignment or transfer of the Business, to the Transferee. 1.1.33 ''Records'' shall mean and include the files, books, records, customer and supplier information and other documents relating to the Business, in the possession or control of the Transferor, in whatever form and upon whatever media they may be recorded, as set out in Annexure-4. 1.1.36 "Slump Sale" shall mean and transfer of the Business, as an inseparable whole, as a going concern on an as ....
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.... is in possession and control of the same. (c) That a conjoint reading of Clauses 1.13, 1.1.4, 6.6, Annexure-8- Clause 5.3 and Clause 9.1 of the BTA, makes it apparent that all assets and properties used by VMPL as part of its business were agreed to be transferred by VMPL in favour of SPCPL which includes Plant No.2. (d) That post execution of BTA, all employees and assets of VMPL including Plant No.2, stood transferred in favour of the Appellant . As such post the BTA, SPCPL stood possessed of Plant No.2 and its employees started operating Plant No.2. (e) That it is clear from the terms relating to transfer of Licenses (Clauses 1.1.4 (vii) read with Annexure-1 Part L (Appeal Page 178) that licenses inter alia in respect of Plant No.2 were to be transferred to SPCPL. (f) That Respondent Nos. 1 and 2 have failed to make any submissions with regard to the need for the employees and equipment in respect of Plant No. 2 being transferred to the Appellant under the BTA and purportedly leased back/seconded under the BTA. The employees were obviously transferred to SPCPL, since Plant No. 2 was to come to SPCPL. (g) That till August/September, 2013, VMPL had no knowledge of ....
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....ttedly controls SPCPL to deprive VMPL and his father RKM who holds 99.99 per cent of the shareholding of VMPL, to inter alia take possession of the assets of VMPL including Plant No. 2 from the ex- Directors Vyas and Chaudhari, having been unsuccessful in stalling the same right upto the Hon'ble Supreme Court. 9.2 The present Appeal is filed by SPCPL at the instance of Rakesh and is a part of Rakesh's mala fide (and judicially stigmatized attempt) to somehow wrongfully continue to exercise control over the assets and properties of VMPL and the same clearly constitutes an abuse of the process of the Court. 9.3 That under the BTA dated 30th December, 2010, while VMPL's Plant No. 1 is listed and included in the definition of "Business Assets" in Clause 1.1.4, VMPL's Plant No. 2 is not included. Therefore, VMPL's Plant No. 2 is not amongst the business assets required to be transferred by VMPL to SPCPL. Moreover, the BTA specifically deals with Plant No. 2 in Clause 1.1.13(d) and requires VMPL to carry out "toll manufacturing" (job work) thereat and supply the products to SPCPL. Such specific provision made in the BTA for Plant No. 2 necessarily excludes any contrary infe....
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....bstantial losses while carrying out such job work inasmuch as the lease rentals and the staff secondment charges required to be paid by VMPL to SPCPL are higher than the conversion charges received by VMPL from SPCPL. 9.9 That it was under the said Secondment Agreement that SPCPL employees were deputed/made available to VMPL for operating/manning its Plant No.2. However, clauses 2.1 to 2.5 of the Secondment Agreement make it clear that Plant No. 2 is in the possession and control of VMPL and that Plant No. 2 is being operated by VMPL and that the staff deputed/seconded from SPCPL to VMPL are operating Plant No. 2 under the supervision and control of VMPL. 9.10 That the job manufacturing activities at Plant No. 2 were and are being carried on by VMPL and not by SPCPL. The said activities were being carried on and the deputed employees were operating Plant No. 2 under the supervision of Vyas and Chaudhari, the ex-Directors of VMPL till February, 2015. Accordingly the fact that SPCPL's employees, who were seconded/deputed to VMPL under the Secondment Agreement, are operating VMPL's Plant No.2, or that SPCPL has been paying the wages/statutory dues of such seconded employ....
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....f the said Plant No. 2 from March, 2011. As stated above, that baseless/false case is fully answered by the BTA and the staff Secondment Agreement. 9.13 That there can be no better evidence to belie the case of SPCPL being in possession of Plant No. 2 since 30th December, 2010/18th March, 2011, than the Affidavits of Jagtap and Chaudhari dated 14th March, 2013 and 28th February, 2012 respectively, filed on behalf of VMPL in C.A. No. 2023 of 2012 in Writ Petition No. 4358 of 2001, wherein they have categorically denied that SPCPL is in occupation or possession of the suit property (Plant No.2) and asserting that VMPL has not created any third party interest over Plant No.2 or parted with possession of Plant No.2, and also the List of Assets dated 4th September, 2014, submitted by Rakesh in the UK Court wherein he has affirmed on oath that VMPL's Plant No.2, Peeco Plant and staff quarters are in possession of VMPL. 9.14 That the CLB's order dated 2nd February, 2015, falls squarely within its powers/jurisdiction under Section 403 of the Act as it in effect directs the removed/ex-Directors of VMPL to hand over charge of the Company's properties and assets to its newly....
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....s obligation to execute further documents, if required, to effectively transfer the "Business Assets", which term is defined in Clause 1.1.4 and does not include VMPL's Plant No. 2. Instead, as stated earlier, it is specifically provided in Clause 1.1.13 (d) that VMPL is to carry on its job work at Plant No. 2 and supply the products to SPCPL. Also Clauses 2.1, 5, 9 and Annexure-8 of the BTA and the other provisions which are relied on by SPCPL are general provisions regarding transfer of the business and do not alter the above position or in any way detract from the specific provision made in Clause 1.1.13 (d) regarding Plant No.2. 12. Therefore, in my view, SPCPL has been unable to show a single provision from the BTA or the Supplemental BTA whereunder Plant No. 2 is either transferred to SPCPL, or the control and possession of Plant No. 2 is handed over to SPCPL. 13. SPCPL's allegation/case that it has been in possession of VMPL's Plant No. 2 since December 2010/March 2011 is further belied by the following: 13.1 Under the BTA whilst VMPL is to carry on toll manufacturing/job work at its Plant No.2 and supply such products to SPCPL (Clause 1.1.13 (d) of the BTA), its pl....
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.... and SPCPL: "..... .... .... .... ........ AND WHEREAS VMPL HAS AGREED TO CARRY OUT AFORESAID JOB HANDLING FOR SPCPL AS ENUMERATED BELOW: JOB HANDLING ACTIVITIES BY VMPL AT ITS PREMISES LOCATED AT PLOT NO. 153 TPS NO. 1 VILLAGE NAUPADA TAL. & DIST. THANE". (iii) Equipment Lease Agreement dated 18th March, 2011 executed between VMPL and SPCPL: "...Now therefore, in consideration of the reciprocal promises and obligations a d mutual covenant between the parties recorded hereinafter, the parties hereto, are entering into this Deed which witnesses as follows: The lessor hereby grants lease and the lessee takes on lease (lease) with effective control and possession, the equipment for the fixed period with effect from the commencement date subject to the terms and conditions, covenants and agreements herein contained and part of the lessee to be observed and performed provided that all of the equipment shall be located solely at the lessee's premises located at Plot No. 153, TPS No.1, Village Naupada, Taluka & Dist. Thane. Admittedly Plant No. 2 is located at Plot No. 153, TPS No. 1, Village Naupada, Taluka and District Thane. The releva....
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....mplemented. However, at the time of advancing arguments, SPCPL realised that the incorrect case advanced by it viz. that Plant No. 2 of VMPL is transferred to SPCPL and/or is in control and possession of SPCPL since December 2010/18th March, 2011, was completely negated/contradicted by the BTA and more particularly the said three Agreements. SPCPL therefore, for the first time in the list of dates tendered in Court and in its written submissions, falsely alleged that the said three Agreements were not acted upon. Again, the allegation that the Agreements were not acted upon is also belied by the fact that VMPL's ledger folio in SPCPL's books of account (produced and handed over in Court during the hearing), has regular debits for payment of "Equipment Lease Charges" and "Secondment Charges" by VMPL to SPCPL and payment of conversion charges - as per Agreement by SPCPL to VMPL. SPCPL has tried to incorrectly draw support to their contention that the three Agreements were not acted upon, from the submission of RKM that he was handed over copies of the three Agreements only in the year 2013. However, Mr. Chinoy has correctly explained that RKM was always aware that the three A....
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.... alleged. 18. The most glaring facts which belie the allegation of SPCPL that it is in control and possession of Plant No. 2, are, at the cost of repetition, once again set out hereunder as follows: 18.1 Mr. Sanjay Jagtap, Head Legal and Secretariat of SPCPL who has filed his Affidavit-in-Support in the above Appeal claiming control and possession of Plant No. 2 by SPCPL since December, 2010/March, 2011 has filed an Affidavit dated 14th March, 2013, in Civil Application No. 2023 of 2012 in Writ Petition No. 4358 of 2001 in this Court wherein he has stated that, "I deny that SPCPL has been put in possession of the suit property (i.e. Plant No. 2) or that they are now carrying on the business from the suit property" (Para 20 of the Affidavit) and "I deny that SPCPL are in occupation and possession of the suit property...." (para 21 of the Affidavit). 18.2 Similarly, Mr. Subhash Chaudhari, General Manager - Corporate Legal of SPCPL, Respondent No. 9 herein, who has filed Affidavit/s in the present proceedings and had orally contended before the CLB on 2nd February, 2015, when the impugned Order was passed that SPCPL was allegedly in possession of VMPL's Plant No. 2 had fi....
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....eld that RKM meant that each and every asset along with the liabilities of VMPL was under the BTA transferred to SPCPL in view of the following averments/prayers contained in the Company Petition No. 13 of 2012 itself: (i) "...... The Company, in addition to the investments held as stated above, is the owner of several immovable properties, which are more particularly described in Annexure "2" hereto annexed" (Para 15 page 175 of Compilation Volume 1). It is pertinent to note that Annexure "2" also includes Plant 2 of VMPL and therefore as on 2nd February 2012 it is the case of RKM in the Petition that the Company (VMPL) is inter alia the owner of Plant No.2. (ii) "....... The Petitioner states that by issuing the said corporate guarantee, Respondent Nos. 2 and 3 have not only breached the fiduciary responsibilities to the Company but have also jeopardized the assets of the Company" ( Para 21 page 178 of Compilation Volume 1); (iii) "The Petitioner apprehends that under the influence of Mr. Rakesh Malhotra, Respondent No.6 (Rakesh), Respondent Nos. 2 and 3 (Vyas and Chaudhari) are likely to engage in further activities of mismanagement that may permanentl....
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....M from removing Vyas and Chaudhari as Directors of VMPL. Since Vyas and Chaudhari have during the interregnum throughout denied access to RKM qua the working and affairs of VMPL and have acted as per the directions of Rakesh who admittedly controlled SPCPL and allowed Rakesh to deal with the finances and assets of VMPL as per his wishes, Rakesh or SPCPL now cannot be allowed to take advantage of the same and contend that SPCPL was in possession and control of the assets of VMPL, since RKM is unable to show which Officer of VMPL supervised the working of Plant No. 2 or that VMPL never made a demand for conversion charges or that there were only book entries made qua the conversion charges or that some property tax bills were paid by SPCPL, etc. All these happenings were only because Rakesh, who controlled SPCPL, also controlled Vyas and Chaudhari, who were employees/consultants of SPCPL and also the ex-Directors of VMPL and through them acted completely against the interest of VMPL and RKM. If Rakesh/SPCPL is allowed to take advantage of their own wrongs, it would amount to Rakesh/SPCPL being paid a premium on their dishonesty. 21. SPCPL has in its desperate attempt to point out ....
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....ees/consultants of VMPL and not the family members of RKM, pursuant to the BTA all the employees including the ex- Directors of VMPL (Vyas and Chaudhari) were transferred as employees/consultants of SPCPL. RKM at this stage could have removed Vyas and Chaudhari and appointed new Directors. However, since mortal beings are unable to foresee the future, and RKM being no exception, RKM not only trusted Rakesh, but Vyas and Chaudhari as well, and continued Vyas and Chaudhari as Directors of VMPL. Rakesh misused the trust placed on him by RKM and used his influence over Vyas and Chaudhari, the Directors of VMPL (who pursuant to the BTA were now employees/Consultants of SPCPL), to exclude RKM who held 99.99% of the shares of the five Companies. Through these pliant Directors, Rakesh also sought to utilise the funds, assets and properties of the 5 Companies including VMPL for the benefit of SPCPL/himself. Therefore in 2012, RKM was constrained to file Petitions in the CLB under Sections 397/398 of the Companies Act for removal of the said hostile Directors Vyas and Chaudhari. Rakesh, at whose instance the said Directors were acting, was joined as a party Respondent to the Petition. Ordina....
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.... and records of VMPL to the newly appointed Directors. In the said application, Rakesh and the ex-Directors of VMPL were represented by the same Advocates. By Orders dated 20th November, 2014 and 5th January, 2015, made in Company Application No. 296 of 2014, CLB had restrained the ex- Directors of VMPL i.e. Respondents Nos. 8 and 9 therein from acting and holding themselves out as Directors of VMPL and had recorded a finding that the ex-Directors were wilfully disobeying the orders and not handing over charge. Rakesh and the ex- Directors now realised that it would no longer be possible for the ex- Directors to hold on to the assets of VMPL. Rakesh therefore caused SPCPL to file an Arbitration Petition under Section 9 of the Arbitration and Conciliation Act, 1996 against VMPL restraining VMPL from communicating with the statutory authorities regarding Plant No.2 and against discontinuation of water supply from the Peeco Plant to Plant Nos. 1 and 2. VMPL has in its reply set out the aforesaid facts and pointed out that at the instance of Rakesh the removed/hostile Directors had wrongfully been retaining control of VMPL's Plant No.2; that under the BTA, SPCPL has no right to con....
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....ard Resolution on record qua the litigation expenses having been borne by SPCPL on behalf of Rakesh. Therefore the entire litigation expense of Company Petition No. 13 of 2012 incurred by Rakesh has been throughout borne by SPCPL and is shown as the litigation expense of SPCPL. So much for the assertion on oath by SPCPL that it is an independent entity which has nothing to do with the disputes between Rakesh and RKM. I have therefore no doubt that Rakesh after leaving no stone unturned in trying to prevent the removal of Vyas and Chaudhari as Directors of VMPL and having failed in his endeavour, realised that the assets of VMPL, viz. Plant No. 2, will have to be handed over to the new Directors. He has therefore put up SPCPL to file the above appeal making statements/submissions which are false and incorrect to the knowledge of SPCPL. SPCPL, which has admittedly financed the entire litigation pursued by Rakesh against his father RKM, cannot be heard to say that since they were not parties to Company Petition No. 13 of 2012 they were not aware that in the said Petition, RKM had sought protection qua the assets and immovable properties of VMPL and the same were protected by Orders da....
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....e assets of VMPL and the very same Order was continued by this Court whilst dismissing the Appeals filed by Rakesh in August, 2014, at no stage had Rakesh (who admittedly controlled SPCPL) and the ex-Directors Vyas and Chaudhari submitted before the CLB or before this Court or before the Hon'ble Supreme Court that the said Order dated 9th February, 2012 ought not to have been passed since allegedly all the assets including Plant No. 2 of VMPL are in possession and/or control of SPCPL from 30th December, 2010/18th March, 2011. Even after Rakesh failed to obtain a stay from the Hon'ble Supreme Court on removal of Vyas and Chaudhari as Directors of SPCPL, Rakesh and the ex-Directors, as stated hereinabove, refused to accept that Vyas and Chaudhari had ceased to be the Directors of VMPL and that consequently they were required to hand over the assets of VMPL to the new Directors. Extensive correspondence was thereupon exchanged by and between the Advocates for RKM/ VMPL and the Advocates for Rakesh/ex-Directors Vyas and Chaudhari. However, in none of the letters it was contended on behalf of Rakesh, Vyas and Chaudhari that all the assets of VMPL are transferred to SPCPL or are ....