AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2021 (1) TMI 514
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....the application as well as the valuation report and CP. Interim application mentioning for urgent hearing stands disposed off." 2. As directed, the petitioners have filed an e-copy of unnumbered I.A. No. ......./KB/2020 as well as the valuation report and CP, praying for the following reliefs :- a) Order be passed directing the respondent Nos. 2 to 4 to sell their shareholding in the respondent No. 1 Company to the petitioners and/or their nominees at rate considered fit and appropriate by the Hon'ble National Company Law Tribunal in accordance with valuation report dated 30th December, 2019 filed before the Hon'ble NCLT; b) Alternatively and only if order in terms of prayer (a) is not granted, directions for open bidding amongst the parties for buyout/sell out of shares followed by transfer of all the shares of the unsuccessful bidder/bidders to the successful bidder; c) The following, amongst other, restrictions for ensuring that buy/sale of shares is in fact restricted to the existing shareholders and not to any third party: i. Restriction on future transfer of shares in the respondent No. 1 company to any third party by the successful bidder for a period of at ....
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.... partially; ii) The Ld. Sr. Counsel, Mr. Shyamal Sarkar, hawing Mobile No. 98300-60931 is appointed as the Special Officer, who shall preside and hold the meetings of the Board of Directors of the Respondent No. 1 Company periodically (preferably within every four months) and to implement the resolutions passed in such meetings; iii) The Special Officer to give 15 days' clear notice to all the Directors informing them the Agenda, date, time and venue of the meetings; iv) Agenda to be finalised in consultation with parties to proceeding; v) The Special Officer to implement resolutions passed in such meetings but he will take care of the fact that no resolution which is detrimental to the interest of either party to the proceeding is being passed; vi) An amount of Rs. 1,00,000/- shall be paid to the as fees of the Special Officer from the Respondent No. 1, Company's account for each such meeting; vii) The Special Officer to submit reports to this Bench as and when such meeting is held. 6. In the meanwhile, petitioners have filed an interlocutory application being IA No. 834/KB/2019 for further illegal acts committed by the respondents and in view of the continuin....
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....2020." The Respondents have not preferred any appeal against the aforesaid order. 8. In compliance of the aforesaid orders the petitioners have suggested names of valuer to the Learned Special Officer but the respondents did not give any suggestion for appointment of a valuer nor reverted on the petitioners' suggestion. Ultimately, the Learned Special Officer on his own appointed M/s. L.S.I. Financial Services Pvt. Ltd. having their Office at Sagar Trade Cube, 5th Floor, 104, S. P. Mukherjee Road, Kolkata 700026 requesting to submit report by 30/12/2019 to enable the Special Officer to file his report by 03/01/2020 before this Adjudicating Authority. The applicants-petitioners have annexed the minutes of the meeting held by the Learned Special Officer on 11/12/2019,13/12/2019 and 18/12/2019 and collectively marked as Annexure - 'C with this application. Upon receiving the valuation report from M/s. L.S.I. Financial Services Pvt. Ltd. (Annexure - 'D' to this application), the Learned Special Officer has filed the same along with his report (Annexure - 'E' to this application) and the same was recorded vide order dated 03/01/2020 as follows: "Ld. Counsel f....
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....in CP No. 492/KB/2017 has been filed praying for various reliefs, which was taken up for consideration on today. 12. Heard both sides. Perused the documents and valuation report. Despite direction to the respondents no written notes of defence filed. 13. The Ld. Sr. Counsel Mr. Abhrajit Mitra, submitted that there is nothing further that remains in the present company petition. R1 Company is a family concern and petitioners group and respondents group are held by brothers, who are not in good terms, and this Tribunal while passing an order dated 03.012.2019, for valuing the equity share of the R1 observed that: "It is a family company and the Petitioner and Respondent cannot go together as it appears from the pleading", and that the relationship between the group of brothers of R1 is still going worst and the respondents is filing frivolous applications one after the other, in order to cause delay in the disposal of the application and therefore in order to attain a finality, it is fair and just to allow one of the rival groups to exist by selling the shares held by the group at a competitive price fixed by the Tribunal or through an auction to be conducted by fixing the price of....
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....her as to buy out or sell out of shares of R1 as prayed for in the application and also not suggested any valuation on self valuation by the respondents 4 and 8. 17. No one appeared for Respondent Nos. 3 and 7. 18. Ld. Counsel Mr. Shaunak Mitra, appears for R5 and submitted that he is supporting the argument advanced on the side of the petitioners. He further submitted that Respondent No. 5 is a Partnership Firm and is a separate entity and is supporting the Application. 19. Ld. Sr. Counsel Mr. Abhrajit Mitra, in his reply submitted that excepting Respondent No. 5, all the Respondents are objecting to this Application. When the Valuation report has been received, no one filed any objection to the Valuation Report. The Respondents cannot object to buy out and sell out the shares because the valuation order was made on 03-12-2019 without anybody's objection. Whenever there is a valuation done, the valuation order implies that the parties agree to buy and sell. The Order dated 03-12-2019 did not dispose of the Application. The Application is pending. Nobody challenged the valuation, appointment of Valuer etc. For directing buying out and selling out on the basis of valuation re....
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....ved at upon conducting bidding between the parties, it is good to read some of the IA's. 21. IA No. 173/KB/2020 was filed for dismissal of the company petition. It may be a belated attempt to delay the proceedings filed by the respondent No. 2. IA Nos. 175 & 177/KB/2020 filed by the respondent No. 2 for review of orders and/or rectification of orders. The law is settled that the Tribunal has no power to review. One another application is Contempt Application No. 176/KB/2020. Pendency of these applications have nothing to do with the disposal of this application. If one group is allowed to legally exist from the R1 company, it amounts to ending the pending litigation of oppression and mismanagement as alleged. So allowing to conduct bidding is one step forward to dispose of the CP on merits. Accordingly, I do not find any force in the submission on the side of the contesting respondents. 22. An overall screening of the pending IA's, I am unable to find out any serious objections raised on the side of the respondents challenging the valuation done by the valuer. What is under challenge is that valuer has not given an opportunity to suggest the name of the valuer at their in....
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....ts group are brothers. They know each other better than me and their professionals. It is difficult to have a reunion when brotherhood between them is broken irrevocably. I am afraid they are controlled by their emotions despite the highs and lows of relationships between them. They want to add fuel to burning flame. In a situation brought out in the peculiar nature of the instant case why they disagree to buy the shares of the petitioners or selling out their shares to the petitioners not at a value fixed by the Tribunal or by the valuer, but in an auction in between them giving an opportunity to quote highest price to take over the company in their hand safely without any sort of interference from rival group of brothers? No valid explanation is forthcoming from the side of the respondents. 24. At this juncture the Ld. Sr. Counsel for the petitioners, cited a decision of Karnataka High Court at Bangalore (Equivalent Citation ILR 2008 KARNATAKA 1187) in Company Appeal No. 3/2006, decided on 13/11/2007 (Namtech Consultants Private Limited and Ors. -vs- GE Thermometrics India Private Limited and Ors.). He takes me to para 30-31. it is good to read the said para. It is reproduced as....
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....and we answer the same accordingly. In the result, the present appeal deserves to be allowed in part. Accordingly it is allowed in part and consequently the impugned order and the direction therein that the appellants shall sell their shares in JV Co. to the second respondent and its nominees at the price to be determined by the independent firm of chartered accountants need to be modified as under: The Company Petition No. 11/2006 filed by the appellants is allowed in part as against the contesting respondents-1 to 11 only. After the independent firm of chartered accountants namely M/s. Price Waterhouse Coopers, New Delhi-110002, appointed by the CLB by its order dated 19.6.2006 (Annexure- C, appended to the memorandum of appeal), submits its report determining the price of each share in JV Co. held by both the appellants' and respondents' groups, the same shall be made known to each group and then each group shall quote in sealed cover before the CLB the competitive price of each share in JV Co. which shall be higher than the price determined by the said firm of chartered accountants, agreeing to buy the shares of other group or to sell its shares to the other group at ....