TaxTMI 
TaxTMI 
2019 (6) TMI 1500
X X X X Extracts X X X X
X X X X Extracts X X X X
....mpany Appeal No.39/2009 in Company Petition No.12 of 1998) vide an Order dated 11.12.2013 it was informed that the matter was going on before the CLB hence the Hon'ble High Court has directed that it will be open to the Company Law Board to proceed to decide the issue of 'remuneration' and 'perks' stated to be payable to the Petitioner. Thereafter one more Order was passed dated 27.07.2015 by Bombay High Court (In Company Appeal No.21/2013 in Company Application No.39/2009, with Company Appeal No.88/2013 in Company Application No.39/2009). The said Order of the Bombay High Court of 27.07.2015 was challenged before the Hon'ble Supreme Court in Special Leave to Appeal CC No.1891418915/2016 titled as (arising out of impugned final judgment and order dated 27/07/2015 in CA No. 12/2009 27/07/2015 in CA No. 21/2013 27/07/2015 in CA No.39/2009 27/07/2015 in CA No.88/2013 passed by the High Court of Bombay), wherein parties were Vinod Kumar (Petitioner) Vs. M/s. Sigmalon Equipment Pvt. Ltd. (Respondent) Order dated 03.01.2017 and held as that the Company Law Board was in seisin of the matter which was posted in January 2017 hence directed the Company Law Board to pass final Order within Tw....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ng payment to him @ 2/3 of drawn by the 2nd Respondent and his family members as at 30.9.1999 till his shares are evaluated and payment is made thereof. h. Order Respondent No.1 Company to pay to the Petitioner, arrears of remuneration and perquisites from 1st October 1999 to 31.12.2008 amounting to Rs. 1,39,05,482.00 (at the rate 2/3rd of the respondents group was withdrawing as at 30.9.1999) with interest at the rate 15% (cumulative basis) thereupon from the date amount becomes due till the final payment is made. i. Direct the payment of arrears of remuneration and perquisites of Rs. 33,57,782.00- for the period up to 30.09.1999 as at 31.12.2008 and pay interest of 15% (cumulative basis) thereupon till date of final payment is made by the Respondent No.1 Company." 2. The main Company Petition was originally filed on 20.02.1998 by the Petitioner (Mr. Vinod Kumar) against the Respondent Company [M/s. Sigmalon Equipments Pvt. Ltd. (in short "SEPL")] before the Hon'ble Company Law Board, Principal Bench, New Delhi under Sections 397, 398 r/w Section 402 of the Companies Act, 1956 alleging Oppression and Mismanagement against the Respondent Company. The Main P....
X X X X Extracts X X X X
X X X X Extracts X X X X
....98 at 10.30. AM each day. In the meantime no further shares will be issued nor any assets disposed off without our approval." 3.2. Date : 18.05.1998:- There were 3 Company Applications CA 122, 132 and 133 of 1998 which were decided by Principal Bench, CLB, New Delhi and the directions were as under:- "ORDER Heard on Application. It has been undertaken by the counsel of the respondents that the resolutions passed by the board meeting on 20.5.1998. If passed will not be given effect to till the disposal of the Petition. In view of the undertaking, we are disposing off the application without any order. Reply to the petition handed over to the counsel for the petitioner. He may file his rejoinder by 1.7.98. The application will be heard as scheduled on 14th & 15th July, 98. Liberty to apply in the meantime." 3.3. The allegation of the Petitioner is that to circumvent the Order of the CLB dated 18.05.1998, the Respondent appointed one Mr. Anshul Kumar as Executive VicePresident of the Company with effect from 22.05.1998. 3.4. Date 20.08.1999:- The Main Petition (CP 12/1998) was decided by CLB, Principal Bench, New Delhi on 20/08/1999, wherein it was ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....shares. 3.5. Date : 29.09.1999:- Since the date was given by the CLB to communicate the decision, the Petitioner had communicated his decision and opted to sell his shares to Second Respondent of the Group. 3.6. Date : 10.10.1999:- The allegation is that on the basis of fabricated minutes a Board Meeting had been held on 10.10.1999 and the Petitioner was removed from the directorship. 3.7. Date : 03.11.1999 :- Vide this Order CLB had appointed Price Water House to value the shares. Also directed the Company to pay all dues to the Petitioner subject return of FDRs. The remuneration and perquisites were claimed at Rs.10,51,127/-. The FDR amount was Rs.4,23,625/-. 3.8. Date : 01.05.2000 :- The CLB has announced valuation date as on 31.03.1998. Since there was a dispute remained unresolved about the quantum of arrears of Salary, it was directed to pay Rs.63,590/-. 3.9. Date : 05.11.2001 :- Respondents submitted Form 32 to RoC showing therein "Removal of the Petitioner from the directorship of the Company". 3.10. Date : 05.05.2003 :- The Petitioner had moved Two Miscellaneous Applications (CA 74/2002 and CA 107/2002) on receiving the Order pronounced in the Main Petiti....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ay of remuneration/perquisites. This amount should be paid along with a simple interest at the rate of 12% p.a on or before 30.6.2003. As far as his claim for reimbursement of expenses after the period 1.10.99 is concerned, since he had been directed not to interfere with the affairs of the company the question of his incurring any expenses on behalf of the company and seeking for reimbursement of the same does not arise." 3.11. Date : 16.06.2005 :- The said Order of CLB dated 05.05.2003 (supra) was challenged by both the parties before the Hon'ble Bombay High Court (Company Appeal No.3 of 2004 in Company Petition No.12 of 1998) by Mr. Vinod Kumar and (Company Appeal No.6 of 2003 in Company Petition No.12 of 1998) by M/s. Sigmalon Equipment Pvt. Ltd. Vide an Order dated 16.06.2005, the Hon'ble High Court has reproduced the questions framed by the Ld. Single Judge in Company Appeal No.6 of 2003 Order dated 15.01.2004, as under:- " (1) Whether the market value determined in respect of the shares held by the Respondent can be said to be just and proper ? (2) Whether the Respondent would continue to exercise rights as Director of the Appellant Company until the amo....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... second option and the necessary amount paid by the company as per the valuation report. Arrears of the remuneration as of 31.3.2005 shall be paid within 2 months alongwith interest @ 12% p.a. from the date of impugned order till the date of payment. (v) Furthermore on such payment offered by the respondent company to the petitioner the original petitioner will cease to claim any remuneration and will be entitled to the said price of his shares. The original petitioner on payment being made will effect transfer of all his shares and also will resign from the directorship of the company and will cease to have any claim in respect of the remuneration and perquisites as a director of the company. 3.12. Date : 07.08.2008 : The Petitioner had gone in appeal before the Hon'ble Supreme Court and vide an Order of 07.08.2008, Hon'ble Supreme Court has given the verdict as follows:- "UPON hearing counsel the Court made the following ORDER Learned counsel for the respondents seeks a week's time to secure instructions as to the price which the respondents are willing to offer to the petitioner Vinod Kumar in regard to the 40% shared held by him without pr....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 7. The appellant is at liberty to raise the issue of salary and perquisites payable to the appellant from 1.10.1999, also before the Board. As the matter has been pending for a considerable time and the very pendency has led to the change of the circumstances, we request the Company Law Board to dispose of the mater expeditiously. Both the parties agree to appear before the Company Law Board without further notice on 13.10.2008 and take further order from the Board." (emphasis supplied). 3.13.(a). The Hon'ble Court has narrated that the dispute was among brothers, Petitioner was holding 40% share of the Company and also claimed to be a Director and the other side i.e. Respondent No.2 to 5 of the Petition were holding 60% share and also directors of the Company. In the year 1998, the Appellant (Vinod Kumar) had filed a Petition u/s. 397-398 of the Companies Act, 1956 alleging Oppression and Mismanagement. The CLB had passed several Interim Orders dated 03.11.1999 and 01.05.2000 and gave an option to the Appellant to sell his shares to Respondents 2 to 5 at a price fixed by an independent valuer. Valuer M/s. Price Waterhouse gave valuation at Rs.2,044/- per share based upon th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ealt with so far and thereupon disposed of the CA in the following manner:- "ORDER 1. The Parties are directed to file their respective affidavits within 7 days indicating the facts, circumstances and events that have taken place in between 31/12/1999 until the date of the order of the Hon'ble Supreme Court to enable the bench to pass appropriate directions to the Valuers/ auditors to take into accounts such facts, circumstances and events to arrive at a fair value of the shares as on 17/09/2008. 2. In the event such affidavits are not filed it shall be presumed that the Parties have nothing to say and the Bench shall proceed further on the basis of the material available on record. However, it is made clear that facts and events pleaded in this C.A No. 39 of 2009 by the Petitioner and by the Respondents in reply thereto may be considered and noted by the Bench in terms of the direction of the Hon'ble Supreme Court despite the said application is being disposed off. 3. The Petitioner shall submit details of the amount of the remuneration plus perquisites etc. which has already been received by him month wise after the date of decision and the det....
X X X X Extracts X X X X
X X X X Extracts X X X X
....shares ii. Payment of remuneration and perquisites and its cut off date." According to the CLB, the said Two issues were confirmed by the High Court and Supreme Court when the matter was carried against the Order of the CLB dated 05.05.2003. 3.16. Date : 01.05.2013 : The CLB appointed M/s. Dargdulal K. Jain, Chartered Accountant as an independent valuer. 3.17. Date : 11.12.2013 : On this date as per "Farad Continuation Sheet" matter was adjourned to 15.01.2014 with the direction that it would be open to the Company Law Board to proceed to decide the issue of remuneration and perks stated to be payable to the Petitioner. 3.18. Date : 26.03.2014 : Finally an Order on Misc. Applications was passed on 26/03/2014 by CLB, therein deciding C.A. No. 39 of 2009 & C.A. No. 20 of 2010 after considering the facts and the past history of the case, thus based upon the submissions of the both the sides held as under:- "a. It is declared that the Petitioner was getting Rs.2,40,000/- p.a. as his salary prior to 1/10/1999. Accordingly, the Petitioner shall be paid the arrears of salary by the Respondents in terms of the order passed by the Board w.e.f. 1/10/1999. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....their communication dated 18 November 2002, PWC informed the CLB that its original valuation report dated 13 December 2001 did not need any revision. Thereafter, the CLB, by its order dated 5 May 2003, accepted the valuation and held that the Respondent shall purchase the shares held by the Appellant in the second Respondent company at Rs. 2044/- per share. As the Appellant held 7,420 equity shares of Rs. 100/- each, the CLB arrived at the total amount payable for the shares as Rs. 1,51,66,480/-. It directed that the payment should be made to the Appellant positively by 31 July 2003. The CLB also directed the Respondent company to pay arrears of salary / perquisites to the Appellant for the period upto 31 March 2002. This order of the CLB was challenged by both the parties before this Court. The appeals were disposed by this Court by a common order dated 16 June 2005. This Court set aside the valuation of PWC on the ground of bias and directed the revaluation as of 31 March 2005. This Court also held that the appellant was entitled to remuneration and perquisites till the date of valuation of shares and payment thereof." 3 Not being satisfied with this Order, both sides pr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he Company Law Board to dispose of the matter expeditiously. Both the parties agree to appear before the Company Law Board without further notice on 13.10.2008 and take further order from the Board." 4. The Appellant thereupon preferred the present company application in the original company petition under Sections 397 and 398 of the Act. The Appellant made extensive prayers in the company application, which inter alia included declaration of various Board resolutions passed by the Respondent in 2006 and 200 as null and void and handing over to the appellant the management of the Respondent company as a sole director thereof with directions to the Respondents not to interfere with the day to day affairs of the company till the shares of the Appellant were evaluated and purchased by the legal representatives of the second Respondent (Ashok Kumar - Respondent No.6 herein.) Whilst the matter was pending before the Supreme Court, the original Respondent died. The legal representatives of Respondent No.6 are now before the CLB in the new company application as Respondent Nos.3, 4 and 5. (They are also Respondent Nos.3 to 5 in the present appeal.) The company application is disp....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ent to him @ 2/3 of drawn by the 2nd respondent and his family members as on 30.9.1999 till his shares are evaluated and payment is made thereof. f. To direct the Respondent No.1 company to pay the Petitioner, arrears of remuneration and perquisites form 1st October 1999 to 31st December, 2008 amounting to Rs. 1,39,05,482/- (at the rate of 2/3rd of the respondents group was withdrawing as on 30.9.1999) along with interest at the rate of 15% (cumulative basis) thereupon from the date amount became due till the final payment is made. g. To direct till payment of arrears of remuneration and perquisites of Rs. 33,57,782/- for the period upto 30.09.1999 as on 31.12.2008 plus interest of 15% (cumulative basis) thereupon till date of final payment is made by the Respondent No.1 Company." The CLB proposed to consider these prayers in the main company petition and disposed of the company application in terms of the impugned order. This order is in challenge in the present appeal. 5. In support of the appeal, the only contention advanced by Mr. Damle, learned Senior Counsel, appearing for the Appellant is that the Supreme Court order of 17 September 2008 r....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s were to be considered in the light of and for the sake of the controversy pending before the CLB at that stage, namely, the two aspects described above. the CLB no doubt will take into account everything that has transpired, since the filing of the petition and upto 17 September 2008, including the various resolutions passed by the Board of directors of the Respondent company and its several acts committed in the management of the affairs of the company but only insofar as they have a bearing on the two aspects noted above. The Board resolutions or the acts of the management on the part of the Respondents are not amenable to a per se challenge so as to quash the same. The Appellant also cannot seek an order of taking over the management of the Respondent company under the guise of this fresh consideration. 7. This is precisely what the CLB held. The CLB has correctly construed and applied the order of the Supreme Court passed on 17 September 2008. Leaving open all contentions clearly meant that the parties were entitled to advance all contentions relevant to the valuation of the shares and the determination of the remuneration and perquisites payable to the Appellant by ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....aluer. Ld. Counsel from the side of the Respondent through Letters of 21.10.2015 and 28.10.2015 have asked to mention the name of a Valuer by the Petitioner and due to no specific expression of intention, vide 28.10.2015 the Respondents have communicated the decision to the Hon'ble High Court dated 15.10.2015 appointing M/s. Natu & Phatak as Valuer. The Petitioner has even challenged that appointment on 17.11.2015 before the Hon'ble Supreme Court and the Petitioner's SLP (11513-11514 (C)) was submitted on 17.02.2016. Side by side the Petitioner had intimated on 10.04.2016 that the basis for valuation of the Shares was not correct. According to him since the Balance Sheet of 2008 prepared in Petitioner's absence, therefore, not a fair valuation thus deserves to be rejected. 3.22. Date: 08.09.2016 : The allegation of the Petitioner is that without disclosing the fact that one SLP was filed by the Petitioner against the order dated 15.10.2015 of the High Court Bombay and pending before the Hon'ble Supreme Court , Respondents placed order dated 15.10.2015 of the High Court before the Hon. NCLT with request to proceed to decide the remuneration and perquisites payable to the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....No. 18914-18915/2016 (M), the Hon'ble Supreme Court was pleased to direct the Registry to get telephonically Instruction/ Report from, the Chairman Company Law Tribunal as to whether any order has been pronounced in the matter (C.A. 39/2009 & C.A. 136/2014 in TCP No. 12 of 1998) reserved on 5.10.2017. C) CERTAIN OBSERVATIONS OF THE COURT :- 4. The Petitioner Mr. Vinod Kumar used to appear in person before this Bench throughout during the course of hearing took place in past few months and placed synopsis of dates and events happened in this case since its inception in the year 1998. The Ld. Petitioner has also submitted written submissions and a compilation of several Orders of the respected CLB, Principal Bench New Delhi, order of CLB, Mumbai as well as Hon'ble High Court and Hon'ble Supreme Court. Since the Petitioner is narrating the past history of the case whenever hearing took place for deciding these Miscellaneous Applications, repeated time and again, hence this Bench thought it proper to compile the submissions of the Ld. Petitioner and took pain to put in this Order the relevant dates of several proceedings in above paragraphs. The Petitioner's attempt w....
X X X X Extracts X X X X
X X X X Extracts X X X X
....siness being conducted by M/s Sigma Engineers between two brothers, Late Ashok Kumar and the Applicant. Late Ashok Kumar held 60% of the shares and the Applicant held 40% of the shares of the Respondent No.1. 2. 1998 Disputes and differences arose between the Applicant and Late Ashok Kumar. The Applicant filed a Company Petition No. 12 of 1998 before the CLB under Sections 397 & 398 of the Companies Act, 1956 alleging oppression and mismanagement. 3. 20/8/1999 Order passed by the CLB giving two option to the Applicant that is to continue with the company with 40% shares and also as a director with remuneration but without any power to interfere in the affairs of the company. The second option is that he could sell his shares to the respondnet's group at price to be determined by an independent valuer. 1 - 27 4. 21/12/1999 Order passed by the CLB recording that the Applicant had exercised the 2nd option i.e. chosen to sell his shares to the Respondent group. Price Waterhouse was appointed to determine the fair price for the shares. 28 - 29 5. 10/5/2002 Order passed by the CLB recording that Price Waterhouse had valued the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....licant challenging order dated 29/11/2011 passed by Company Law Board. 19. 16/4/2012 Appeal filed by Respondent against order dated 29/11/2011 rejected. 20. 30/10/2012 The CLB records that most of the time the Applicant is seeking adjournment and seeks adjournment on 30/10/2012. 86 - 87 21. 14/12/2012 The CLB records that Applicant seeks adjournment on the ground that the appeal filed by him against the order dated 29/11/2011 is pending, when infact the said appeal had been rejected on 16/4/2012 88 - 89 22. 4/2/2013 The CLB disposes of CA No. 39 of 2009. The CLB holds that the order of the Supreme Court which states "leaving open all contentions" means that the parties are entitled to raise such contentions which relate to the valuation of the shares by bring to the notice of the Board to consider the same to arrive at a fair valuation. Parties are directed to file affidavits and agree on a valuer. 90-103 23. 29/4/2013 The Applicant files 10F Appeal against the order dated 4/2/2013 - (Appeal No.21 of 2013) 24. 1/5/2013 CLB passes order appointing valuer. 104-106 25. 2/7/2013 The....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ted 15th October 2015 of the Bombay High Court before the Supreme Court. Supreme Court by an order dated 3rd January 2017 directed this Hon'ble Tribunal which is already seized of the matter to pass the required final order. 171-172 " 5.1. Brief particulars of the case, as per submission of the Respondents are that the impugned Company Petition of the Petitioner, Mr. Vinod Kumar, had been finally disposed by the Hon'ble Company Law Board (in short "CLB") by an Order dated 20th August, 1999 offering Two options to the Petitioner viz. (i) to continue with his 20% shareholding and also as a director but without any power to interfere in the affairs of the Company or (ii) to sell his shares to the Respondent group at a price to be determined by an independent valuer. According to the Respondents, the said CLB Order still hold good even today and has not been challenged by either of the parties. 5.2. The Petitioner exercised the 2nd option and agreed to sell his shares to the Respondent group. Vide a Letter dated 29.09.1999 the Petitioner allegedly accepted the 2nd option. The same has been recorded by the Principal Bench, New Delhi in Order dated 21.12.1999, relevant ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....siness of the Company and cause loss to the Company, although he was directed not to interfere in the affairs of the Company even if he had chosen to continue as a director. 5.4. The Respondent submitted that the shares of the Company were valued by Price Waterhouse Coopers (PWC) at Rs.2,044/- per share. The CLB by its order dated 05.05.2003 accepted the valuation (discussed above) and further held that as the Petitioner continues to be a shareholder of the Company, he would continue as a Director with remuneration for the period 1st October 1999 to 31st March 2002. 5.5. However, it is stated that both, Petitioner and the Respondent, had challenged the above Order of CLB dated 05.05.2003 in the Hon'ble Bombay High Court. The Hon'ble High Court vide its Order dated 16.06.2005 read with Order dated 25.08.2005 set aside the valuation of PWC and remanded the matter to CLB for fresh valuation and further stated that the Petitioner was entitled to remuneration and perquisites till the shares of the Company are re-evaluated. 5.6. The Petitioner as well as the Respondents preferred Special Leave Petition before the Hon'ble Supreme Court against the above Orders dated 16.06.2005 an....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 04.02.2013 and 01.05.2013 on the plea that the Order of the Supreme Court dated 17.09.2008 permitted the Petitioner to re-open the entire controversy between the parties, including the original acts of Oppression and Mismanagement and all acts subsequent to the filing of the original Petition. 5.12. The Hon'ble Bombay High Court held by its order dated 27.07.2015 that only Two issues survived viz. (a) the Valuation of Shares to enable the Petitioner to exit from the Company and (b) the payment of remuneration and perquisites to the Petitioner including its cut-off date. The Hon'ble High Court held that "The CLB has correctly construed and applied the order of the Supreme Court passed on 17th September 2008. Leaving open all contentions clearly meant that the parties were entitled to advance all contentions relevant to the valuation of the shares and the determination of the remuneration and perquisites payable to the Appellant by bring to the notice of the Board the happenings subsequent to 3rd December 1999 until the date of the order of the Supreme Court and thereafter to arrive at a fair valuation." 5.13. By Order dated 26.03.2014, the Hon'ble CLB directed the Respondent ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nagement of the company; (iv) By consent of parties, M/s. Natu & Phatak are appointed as valuers to determine the valuation of the Respondent's share in the company in accordance with the order passed by this court on 27 July 2015 in place of M/s.Dargdulal K. Jain and company; (v) The valuers shall hear both the parties, take into account all relevant material and complete the exercise of valuation within a period of two months from the receipt of the order. (S.C. Gupte, J)" 5.15. Against the Orders dated 27.07.2015 and 15.10.2015 of the Hon'ble Bombay High Court, the Petitioner filed Two separate SLPs before the Supreme Court i.e. 18914-15 of 2016 and 11513-14 of 2016. The Hon'ble Supreme Court by its Common Order dated 03.01.2017 directed the CLB/ NCLT to pass the required final Orders in the matter. Accordingly, the Respondents submitted that the Hon'ble Supreme Court has not interfered with the Orders of Bombay High Court dated 27.07.2015 and 15.10.2015 ibid and directed the NCLT to proceed to decide the issue of valuation of the shares and salary and perquisites payable to the Petitioner. 5.16. M/s. Natu & Phatak, Valuers submitted to the Bomba....
X X X X Extracts X X X X
X X X X Extracts X X X X
....er 1999 to 31st March 2008 towards salary and perquisites (for a period of 9 years which is approximately Rs. 15,45,000 per year). Thereafter the Petitioner has claimed an amount of Rs. 1,46,60,000 (for a period of 14 years) which is approximately Rs. 10,47,000/- per year. 5.20. The Respondents vehemently denied the argument of the Petitioner that the perquisites payable to him were the actual amounts spent by him towards various expenses as a Director. According to the Respondents, after the order dated 20th August 1999 the Petitioner exercised the second option (to sell his shares) and hence thereafter has not worked for the 1st Respondent Company at all and therefore there is no question of payment of expenses towards perquisites. Respondents also alleged that the Petitioner had not produced any evidence that he has incurred any expenses during his alleged duties or allegedly acting as a director of the company. Hence pleaded that the question of Petitioner being entitled to any remuneration or perquisites could not arise. 5.21. The Respondents further pleaded that the Petitioner after having opted to exit the company and sell his shares, cannot indefinitely delay the valu....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 5.24. However, without prejudice to the above, the Respondents submitted that the Supreme Court, vide its order dated 17th September 2008, granted liberty to the Petitioner to raise the issue of salary and perquisites payable to him after 1st October 1999. Thus if at all remuneration is payable to the Petitioner it can be only from 1st October 1999 to 3rd September 2001. 5.25. The Respondents submit that the intention of the Petitioner has always been, and continues to be, to harass the Respondents and create difficulties in running of the 1st Respondent Company with intent to subvert the final order dated 20th August 1999 of the CLB in Company Petition No.12 of 1998 and to render the same infructuous. The Petitioner has allegedly always worked against the interest of the company and the details of the detrimental conduct of the Petitioner towards the business of the Company is on record, referred ANNEXURE "1" to the Respondents reply in CA No.39. The Respondents further pleaded that in fact conduct of the Petitioner was detrimental to the business and management of the 1st Respondent Company, as pleaded before the Hon'ble Bombay High Court, placed on record an ANNEXURE "2". ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d 20th August 1999, the Petitioner was given two options, i.e. (1) to continue with a 40% shareholding in the Respondent No.1 Company, and also as a director with remuneration - but without any power to interfere in the affairs of the Respondent No.1 - or (2) to sell his shares to the Respondent Group at a price to be determined by an independent valuer, and thus completely exit from the Respondent No.1 Company. On careful perusal now one thing has become an admitted fact that in case the Petitioner chose the 2nd option, the CLB would appoint a Chartered Accountant to determine the fair price of the shares. This Order has not been challenged by either party, thus, admittedly to be treated as a final Order, so binding upon the parties. In the said Order dated 20th August 1999 it was also held that regardless of which option the Petitioner chose, the Petitioner be paid arrears of remuneration and perquisites as was drawing before the dispute started, latest by 30th September 1999. Facts have revealed that on 28th September 2000 paid a sum of Rs. 63,590.61 to the Petitioner. Facts have further revealed that the Petitioner exercised the 2nd Option granted by the said Order dated 20th A....
X X X X Extracts X X X X
X X X X Extracts X X X X
....oner salary of Rs. 2,40,000/- per annum as salary with interest @ 12% per annum. As far as perquisites is concerned, the CLB directed Petitioner to produce evidence of payment of electricity, house rent and medical expenses incurred by him with effect from 1st October 1999. Both the parties have challenged the Order dated 26th March 2014 passed by the CLB. On 27th July 2015 the Hon'ble Bombay High Court held that the CLB had correctly construed and applied the Order of the Supreme Court passed on 17th September 2008. Such orders are the clear reflection of the intention of the Hon'ble Courts that the valuation is the main issue left for adjudication along with the issue of Salary / Perquisites. It is an interesting feature surfaced in one of the order of the High Court that by consent M/s Natu & Patak was appointed as valuer. At this juncture it is noteworthy that no Court or Tribunal shall appreciate such approach if a litigant after giving consent, take a turtle turn. Enough opportunities were granted to the Petitioner at the time when the process of valuation was going on but not availed. In true sense, the cooperation was not extended by the Petitioner and kept on making al....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rder is that "leaving open all contentions" means that he was given liberty to re-agitate all the issues as raised in the main Petition TCP 12 of 1998. However, on the other hand, Respondent has strongly opposed the said interpretation of the Petitioner and vehemently pleaded that the Hon'ble Supreme Court had given a clear verdict that for the purpose of valuation, all events took place as on the date of passing of the Order by the Supreme Court be taken into account i.e. the Order dated 17th September 2008. After the Supreme Court Order dated 17th September 2008 (supra) the Petitioner submitted a Company Application No.39 of 2009 in the month of January 2009. A counter Application No.20 of 2010 was submitted by Respondent No.1 seeking dismissal of CA 39/2009 filed by the Petitioner. The counter Application 20/2010 was decided by the CLB on 29.11.2011 and held that CA 39/2009 is to be heard on the point of determination of Valuation. Also to be heard on the point of fixing the cut-off date for the purpose of valuation. Thirdly, to take a decision for appointing a Valuer. The CLB has made it clear that this is to be done in due compliance of the directions of the Hon'ble Supreme Co....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... (KANTHI NARAHARI) MEMBER" Dated: 29th November 2011. 6.3. Thereafter, by an order dated 1st May 2013, the CLB appointed the valuer to determine the value of the shares of the Company as on 17th September 2008 i.e. the date of the order of the Hon'ble Supreme Court. It is important to put on record that the said Order dated 1st May 2013 of CLB had not been challenged by either of the parties. In this Order of 01.05.2013, the CLB has made a mention of an earlier Order of the CLB dated 04.02.2013 and proceeded to appoint a Valuer in the following manner:- "6. I have gone through the affidavits filed by the respective parties. Parties have failed to nominate any Valuer by consent. I, therefore, in terms of order dated 4/02/2013 M/s Dargdulal K. Jain & Company., Chartered Accountants having their office at St-1/F-20, 1st floor, Flower valley Complex, Eastern Express-way, Thane (W) - 400 601 (Mob. No. 9819241881) appoint as Valuer to determine the fair value of the shares of the company as on 17/09/2008. The said valuer is on the panel of the Official Liquidator attached to the Hon'ble Company Judge of Bombay High Court." 6.4. Against the afo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Court has given verdict that both the Company Appeals are disposed of on the basis of consent given by both the parties, hence no reasons required to be given vide Para (iv) recorded that, "(iv) By consent of parties, M/s. Natu & Phatak are appointed as valuers to determine the valuation of the Respondent's share in the company in accordance with the order passed by this Court on 27 July 2015 in place of M/s. Dargdulal K. Jain and Company. " 6.6. On 27.06.2016 M/s. Natu & Phatak submitted a valuation report directly to the Hon'ble High Court which was taken on record by the Hon'ble High Court vide Order dated 15.07.2016 (Company Appeal No.54/2014 in CLB Company Petition No.12/1998). 6.7. The Hon'ble High Court thereafter on two occasions i.e. on 17.11.2016 and 18.11.2016 respectively in Company Appeal No.54/2014 and Company Appeal No.88/2014 has given a verdict that the Company Appeal had already been disposed of vide Order of 15.10.2015 and that the said Order of 15.10.2015 was an Order by consent of the parties for appointment of M/s. Natu & Phatak as Valuer, therefore, no issues left and there was nothing for that Court to consider. 6.8. Keeping in view the several ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Worth Method 9,101 2 18,202 Discounted Free Cash Flows Method 8,181 1 8,181 Average (Not legible) 8,794 Based on the above considerations and subject to the facts stated by the management, the information and explanation given to us, in our opinion, the fair value each equity share of Rs. 100 each of Sigmalon Equipment Private Limited as at September 17, 2008 is Rs. 8,794. (Rupees Eight Thousand Seven Hundred Ninety Four only)." 6.9. In the impugned Application, now under consideration, as per the Prayer, the Applicant has not accepted the verdict of the Hon'ble Supreme Court dated 17.09.2008 which in absolute term have held that events were to be taken into account "till now" i.e. up to the date of Order 17.09.2008 (relevant portion already reproduced supra). No ambiguity was left, hence the Hon'ble High Court has also given the direction on the same lines. It is not possible to keep on changing a cut-off date relevant for the purpose of fixation of valuation on a particular date. The Applicant has coined a terminology "changed circumstances", without giving any specific date. Circumstances keep on changing in business-....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ising the litigation, the valuation ought to be accepted by both the sides, specially by the Respondents. During discussion, the Respondents have indicated their acceptance of the valuation report, naturally subject to the Petitioner's willingness to hand over the share certificate of his holding of 7420 shares in Respondent Company in favour of the Respondent. As a result, I find no force in this ground, hence hereby "dismissed". Prayer c. Declare the Board Resolutions dated 9.5.2006, 27.12.2006, 27.1.2007 and 28.9.2007 and minutes of EOGM dated 24.5.2006 and 28.1.2007 passed by the Respondent No.2 to 5 as null, void and direct the second respondent group for not taking any further action based on aforesaid Board Resolution and EOGM without approval of this Hon'ble Board. 6.11. To deal with this Prayer, at the outset it is worth to mention that in the foregoing paragraphs it is elaborately placed on record that the issue of Oppression and Mismanagement not only stood decided but also no party is legally entitled to rake up this issue being closed once for all. As reproduced above, the findings of the final order dated 20th August 1999 passed by the CLB Principal Be....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... filing of the main Petition hence beyond the jurisdiction, and Secondly, the meetings held prior to the filing of the Petition and made part of the grievance in Petition No. CP 12/1998 has already been addressed and adjudicated upon. Precisely thereafter exit option was given to this Applicant, which by itself is a testimony of approving the validity of the conduct of the management and the affairs of the Company. As a consequence this Prayer is hereby rejected. Prayer d. Respondent No.3 to 5 be directed to hand over management of the Respondent No.1 Company immediately to the Petitioner being sole director of the Company and direct them not to interfere in the day to day affairs of the company till the shares held by petitioner are evaluated and purchased by the L.Rs. of the second respondent. 6.12. This Prayer cannot be entertained at this point of time when the entire grievance about removal from directorship and the question of management of the affairs of the Company have been dealt with at length at various levels as discussed in foregoing paragraphs, not only by the CLB but also affirmed by the Hon'ble High Court. The repetition of all those orders is not requir....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ne of the options and communicate the same to the 2nd Respondent by 30.9.1999. We also stipulated in that order that in case the petitioner chose the second option, he would be at liberty to approach this Bench for appointment of a valuer to determine the fair price for the shares. The petitioner has chosen the second option of selling his shares to the respondents and has accordingly approached this Bench for appointment of an independent valuer. In the hearing held on 3.11.1999, the counsel appearing for both parties have agreed that M/S. Price Waterhouse be appointed to determine the fair price for the shares. Accordingly, we appoint M/S Price Waterhouse, Pune/Mumbai to determine the fair price for the shares in accordance with accepted principles of valuation. While doing so, the valuer will taken into consideration the family nature of the company and also the percentage holding of the petitioner who would be going out of the company. Both the parties will be at liberty to make both- oral as well as written -submissions before the valuer and after taking into consideration these submissions, the valuer will prepare a draft report and supply a copy of the same to....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ct to this prayer, the same cannot be granted in view of what is stated by several Courts, already referred supra, thus stood fully covered by those decisions. For example, by an Order dated 27th July 2015, the Bombay High Court recorded that the CLB by its Order dated 4th February 2013 had rejected the aforesaid prayer. Rather, by the Order dated 27th July 2015, the Bombay High Court had held that this prayer was clearly irrelevant and could never be allowed. As a sequel now this ground stood merged with views already expressed by the Hon'ble Courts/ CLB, hence rejected as infructuous. Prayer f. Respondents be directed to give Inspection of statutory records of the companies SEPL and Sigmalloy to the petitioner being 40% shareholder and director as stated at Para-13 of the present application. 6.15. With respect to this prayer, at the cost of repetition, by an Order dated 20th August 1999 Principal Bench CLB, even if the Petitioner chose to continue with the Respondent Company as a Director, he was not given the power to interfere in the affairs of the Respondent Company. Not having accepted this option, and having accepted the option to exit the Company, the Responden....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e mentioned here that according to the Respondents nothing is payable to the Petitioner under the head salary and perquisites. On the other side, the Petitioner claims sum of Rs.1,84,24,285/- w.e.f. 1/10/1999 to 31/03/2013 as salary and perquisites along with interest @ 15% p.a. thereon." unquote. Thereafter, the said Order of 01.05.2013, in a way, stood merged by an Order dated 26th March 2014 of CLB, Mumbai as far as the question of determination of payment of salary and perquisite of the Petitioner as a director is concerned. In the said Order of 26.03.2014 the CLB at the outset at Para 1 had made it clear that by the said Order proposed to deal with the issue of salary and perquisite. Thereupon vide Para 34 it was admitted that the Petitioner was drawing Rs.2,40,000/- p.a. (i.e. Rs.20,000/- p.m.). The CLB has held that the Petitioner was therefore entitled to get the arrears of salary to be calculated in the manner directed in the Order passed by CLB. On the question of perquisites, the CLB has held that :- "35. Now coming to the question of perquisite, the Petitioner's claim is that he was getting the perquisites such like Electricity charges, House rent, Medical ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ve been rendered in compliance of the order passed on 17/09/2008 by the Hon'ble Supreme Court and the order dated 11/12/2013passed by the Hon'ble High Court." 6.18. The order dated 26th March 2014 was challenged in the Bombay High Court by both the Petitioner and the Respondent. The Bombay High Court by order dated 15th October 2015 set aside the Order dated 26th March 2014 (wrongly mentioned as 2004) and remanded to this Tribunal the question of payment of salary and perquisites to the Petitioner after taking into account the material placed before it by both the parties. The Hon'ble Supreme Court vide Order dated 03.01.2017 has directed the CLB to pass the required final Order in the light of the Order of the Hon'ble Supreme Court dated 17.09.2008. 6.19. On the other hand, the Respondent has pleaded that the acts of the Petitioner were detrimental to the Company. The argument is that the Petitioner cannot act against the interest of the Company and simultaneously claim salary. F) CONCLUSIVE DIRECTIONS:- 7. In my humble opinion if a dispute is to be resolved and litigation is to be settled, then both the sides are required to take a pragmatic approach. This case has a ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cheduled in para 7.1 above. 7.3. Directions about the perquisites, the Petitioner is entitled to be reimbursed the expenditure actually incurred towards Electricity, House Rent and Medical Expenses for the period up to the date of removal from the directorship i.e. 10.10.1999. In case the Petitioner is unable to produce the evidence being very old matter, thus there is a possibility of not retaining the Invoices/ payment slips, the Respondent shall pay a lump sum of Rs.10,00,000/- (Ten Lakhs Only). 7.4. Directions for delayed payment : Although not because of the Respondent alone, the Petitioner is to be compensated being deprived of the use of the substantial amount retained and remained in possession of the Respondent, a factor of interest is to be applied. Although the CLB has proposed 12% interest in one of the orders dated 26.03.2014, therefore, up to the date of the Order i.e. 26.03.2014, the interest shall be calculated @ 12% on the amount of share transfer consideration, outstanding salary and amount of perquisites. Thereafter, from 27.03.2014 till 01.08.2019 (i.e. the date of First instalment payment as per para 7.1 supra) interest at the 'historical ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....being Senior Citizen, shall also get interest @ 12 % p.a. (on compounding basis) from the date of original amount becoming due and payable till the date payment is made. (iv) In the premises of para 25 and 29 of the order dated 26/03/2014 clarify, status of the legal heirs of the 2nd Respondent (herein Respondent No.3 to 5) after the date of demise of the 2nd respondent holding 60% of the shares of the Respondent No.1 Company snd (sic) in specific now after the order dated 26/03/2014 pending matter of C.P. No.12 of 1998 comes to an end. (v) In the premises of observation recorded in para 20 of the order dated 20th August 1999 that "there is merit in the contention of the Petitioner that all the minutes are fabricated" and the findings recorded in para 25 of the order dated 26/03/2014, declare all the minutes of Board Meetings, Extra Ordinary General Meetings and Annual General Meetings null and void from the date of the order dated 20th August 1999 onward and in specific Board Meetings, 10/10/1999, 1/4/2008 and 15/05/2010 and AGM dated 3/09/2001 null and void. (vi) In the premises of on going since 1996 and order dated 26/03/2014, direct the Registrar of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....5/11/2013 before the Hon'ble High Court. (xv) Order action under section 219 of Companies Act 1956 against the Respondent No. 3 to 5 for not providing Balance Sheets and Profit & Loss Account along with other documents sought and direct them to provide sought documents within 7days from the date of this order." 9.1. The Applicant/Petitioner had filed this Misc. Application No. 136 of 2014 on 16.05.2014 to seek rectification/clarification of the (i) 'final order dated 20.08.1999 in CP No. 12 of 1998' and (ii) Order dated '26.03.2014 passed by the Hon'ble CLB in CA No.39 of 2009'. During hearing of the above matter, it is argued that apart from there being no provision for review/rectification of orders passed by CLB/NCLT, the order dated 20.08.1999 passed by the Hon'ble CLB had been accepted by both the parties and has never been challenged. Further, in respect of Order dated 26.03.2014 passed by the Hon'ble CLB, the same had been challenged by both the parties before the Hon'ble Bombay High Court , accordingly stood merged with the Order of the Hon'ble Bombay High Court dated 27.07.2015. By order dated 27.07.2015, the Hon'ble Bombay High Court held that ....