TaxTMI 
TaxTMI 
2022 (7) TMI 151
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.... restraining the Defendant Nos. 1 and 2, their servants/agents or any other person directly or indirectly acting on behalf of Defendant Nos. 1 and 2 from taking steps towards valuation of Defendant No. 3 and/or buy-out of inter alia the Defendant Nos.1 and 2's shareholding in Defendant No. 3. Other consequential relief has also been sought against Defendant Nos. 1 and 2 which have been set out in the subsequent prayers viz. prayer clauses (c) and (d). 2. The Applicants have filed the present Suit seeking specific performance of the agreement ("Minutes of Discussion") dated 14th June 2019 (annexed at Exh.A to the Plaint) and declaration that the Minutes of Discussion is valid, subsisting, enforceable and binding. 3. The Applicants along with the Defendant Nos. 1 and 2 are Directors as well as the shareholders of the Defendant No. 3 Company. Defendant No. 3 Company is a Private Limited Company, incorporated under the Companies Act, 1913 and engaged in the business of operating and running automobile dealerships having operations in the State of Maharashtra, Andhra Pradesh and Telangana, Tamil Nadu and Karnataka and Gujarat. The overall control of Defendant No. 3 Company is exer....
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.... therein at Rs. 245 Crores. The Minutes of Discussion further contemplated a scheme of arrangement (demerger) and the appointed date for demerger mentioned therein is 1st April 2020. It was further recorded in the Minutes of Discussion that other than what has been set out in the Minutes of Discussion, no claim from Gujarat family of any sort will be considered and the Minutes of Discussion shall be treated as full and final settlement. It is further recorded that the scheme of arrangement (demerger) was likely to be implementation by 1st April 2020. After Clause 9 of the Minutes of Discussion, parties to the Minutes of Discussion have appended their signatures. Thereafter, the concluding words which are of importance are set out as under :- "The above represents the understanding agreed to between the Gujarat family, Maharashtra family and AP & Telangana family and is without prejudice to the other rights and remedies available to the parties. The detailed understanding and the mechanics would be documented by way of family settlement agreement and Scheme of Arrangement (Demerger) to be filed with the National Company Law Tribunal and withdrawal of the existing Company Pe....
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....epayment of the amounts due and payable by the Gujarat Division to banks and financial institutions as on 31st August 2020. This was considering that the RBI's loan moratorium was ending and NCLT had not heard the Miscellaneous Application No. 1008 of 2020 filed by the Plaintiffs. On 31st August 2020 an order came to be passed by the NCLT in Miscellaneous Application No. 1008 of 2020 recording that the parties to undertake one more round of settlement talks and in the meantime, the Defendants will not incur any further indebtedness (recording the voluntary statement made by the Defendants' Counsel). The Advocates of the Plaintiff Nos. 2 to 4 addressed a letter dated 3rd September 2020 to the Advocates for the Defendant Nos. 1 and 2 recording the statement made by the learned Senior Counsel Mr. Dwarkadas for the Defendant Nos. 1 and 2 before the NCLT. The letter recorded that the payment of Rs. 56 Crores towards the Gujarat Division's dues to banks and financial institutions was made in terms of the Minutes of Discussion and pursuant to the statement made. This was responded to by the Advocates for the Defendant Nos.1 and 2 vide letter dated 4th September 2020 denying the contents o....
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.... 2021, the NCLAT after hearing all the sides, directed the parties to file their respective replies and rejoinders and for the Appeals to be listed on 27th August 2021 under the caption of "for admission (after notice)". 16. Being aggrieved by the said order dated 28th July 2021, the Defendant Nos. 1 and 2 filed Company Appeal Nos. 4588 and 4542 of 2021 before the Supreme Court challenging the said order passed by the NCLAT in the Appeals. 17. The Supreme Court disposed of the Civil Appeals inter alia directing the NCLAT to dispose of the Appeals pending before it by 28th October 2021 i.e. before the date fixed for the main hearing of the Company Petition. 18. The NCLAT disposed of the Appeals on 29th September 2021 directing the NCLT to hear the matter expeditiously uninfluenced by the observations made in paragraph 10(ii) and (iii) of the order dated 11th June 2021. 19. The Company Petition though listed before the NCLT, could not be heard due to paucity of time. 20. On 1st December 2021 an 'Overview Note' is filed by the advocates for Defendant Nos. 1 and 2 in the Company Petition which inter alia seeks fresh valuation and exit from Defendant No. 3 Company. 21.....
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.... really disputed by the Defendants is its characterisation as a "family settlement". 26. Mr. Virag Tulzapurkar has made submissions on the Minutes of Discussion/Agreement which he has submitted is a family settlement and thus, enjoying a special equity. He has submitted that a bare reading of the Minutes of Discussion makes it clear that it is a family settlement. It is an undisputed position that the parties to the Minutes of Discussion are related to each other and are family members. The disputes between the parties to the Minutes of Discussion have been resolved by the execution of the Minutes of Discussion. The mere fact that the disputes in relation to Defendant No. 3 Company was the only dispute which was to be resolved, and in doing so the NCLT Petition was to be withdrawn, does not detract from the Agreement being a "family settlement". 27. Mr. Virag Tulzapurkar has relied upon the decision of the Supreme Court in Kale Vs. Dy. Director of Consolidation (1976) 3 SCC 119 - paragraph 9 to 24 in support of his submissions that the Court in favour of upholding a family arrangement instead of disturbing the same on technical or trivial grounds. Where the courts find that t....
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....cussion and its mechanics of the family settlement agreed to between the participants...". Thus, the parties to the Minutes of Discussion understood the Minutes of Discussion to be a family settlement. The issues of the three families in the Minutes of Discussion are the issues to be settled. Thus, the Minutes of Discussion records a full and final settlement among the three families of the issues pending and is therefore complete. 32. Mr. Virag Tulzapurkar has also submitted that from a reading of Clause 8 of Minutes of Discussion wherein it is stated that "no claim by the Gujarat family of any sort will be considered and this shall be treated as full and final settlement" makes it clear that the Minutes of Discussion was a full and final settlement between the three families namely the Gujarat family, Maharashtra family and Andhra Pradesh/Telangana family. The concluding words of the Minutes of Discussion that it was without prejudice to other rights and remedies available to the parties was only reference to such other rights and remedies available to the parties other than that recorded in the Minutes of Discussion. The reference to detailed understanding and mechanics docum....
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....approximately 8% out of the 12% outside shareholders of Defendant No.3 have exited from Defendant No.3 Company. The buy-back of shares caused increase of Defendant Nos.1 and 2's shareholding from approx. 17% to 19.31%. ii. Defendant No.1, promoter director of one Kimaya Enterprises Pvt. Ltd. addressed a letter dated 26th November 2019 to Defendant No.3 Company's Board, requesting issuance of the NOC to enable Kimaya Enterprises to change the name to Automotive Manufactures (Guj.) Pvt. Ltd. iii. To establish a separate and independent entity, the Board of Directors in its 582nd Board Meeting held on 2nd December 2019 unanimously consented to issue a No Objection Certificate for allowing change of name of the said Kimaya Enterprises Pvt. Ltd. to Automotive Manufacturers (Guj.) Pvt. Ltd., so that it could be the resulting entity in the proposed demerger. iv. The Board of Directors caused payment of approx. Rs.56 Crores, partly from the cashflows of Maharashtra and Andhra Pradesh Divisions and partly by selling listed investments of Defendant No.3 Company to discharge bank/ financial institution liabilities of the Gujarat Division of Defendant No.3 Company. ....
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.... nature. The parties to the Minutes of Discussion have agreed that the three-way demerger shall take place of Defendant No. 3 Company as advised by the consultants. An entitlement of Defendant Nos. 1 and 2 referred to as Gujarat family in the Minutes of Discussion was agreed upon by the parties i.e. the Gujarat Division along with its the assets and liabilities and monies/other assets at Rs.245 Crores. The parties had also agreed that the Defendant No. 3 Company shall offer buy-back of shares which would result in exit of outsider shareholders. Parties had further agreed that the appointed date for the demerger was 1st April 2020. Parties agreed that the settlement contemplated in the said Minutes of Discussion shall be treated as full and final settlement and no claims would be considered. 39. Mr. Virag Tulzapurkar has submitted that the Minutes of Discussion merely contemplated entering into a detailed document, as a formality, by which the terms already agreed upon are to be put in a more formal shape. Nothing prevented the existence of it being a binding contract. The understanding and the mechanism documented by way of a family settlement agreement and scheme of arrangement....
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....e to be followed by the NCLT and NCLAT before passing orders. The Defendants have not identified any section which expressly confer on the NCLT a power to grant specific performance. 41. Mr. Virag Tulzapurkar has further submitted that there is no bar on the present Suit and/or Interim Application under Section 430 of the Companies Act, 2013. Section 430 bars jurisdiction in the courts only in respect of any matter which the NCLT or the NCLAT is empowered under the said Act. In the present case, the question that arises for consideration before this Court is whether the NCLT is empowered under the Companies Act, 2013 to decide the question of specific performance of an agreement. It is only if this question is answered in the affirmative that the Plaintiff can be non suited. He has referred to the decisions of the Supreme Court under Section 9 of the Code of Civil Procedure, 1908 ("the CPC") in support of the submissions that the Civil Court has inherent jurisdiction to try civil disputes unless its jurisdiction is barred expressly or by necessary implication, by any statutory provision, and that jurisdiction is conferred on any other tribunal or authority. He has in this contex....
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....erformance. The bar under Section 430 of the Companies Act, 2013 is not attracted at all in the instant case. The Suit is therefore clearly maintainable. 43. Mr. Virag Tulzapurkar has submitted that there is no bar on the grant of interim relief which is in aid of the final relief in the Suit. Since final relief of specific performance can be granted only by this Court, the interim relief can also be granted by this Court. He has referred to the second part of Section 430 of the Companies Act, 2013 and has submitted that this clearly follows from the first part. The second part of Section 430 provides that "no injunction shall be granted by any court or other authority in respect of any action taken or to be taken in pursuance of any power conferred by or under this Act or any other law for the time being in force, by the Tribunal or the Appellate Tribunal". It thus, follows that though the NCLT and/ or NCLAT does not have jurisdiction to grant the final relief it can never be said that it still has jurisdiction to grant interim relief. Such relief would be outside the jurisdiction of the NCLT. 44. Mr. Virag Tulzapurkar has accordingly, submitted that the NCLT is not having j....
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.... Company. The Plaintiffs have in their Affidavit in Rejoinder as well as additional Affidavit maintained the position that there was no settlement between the parties. Clearly, the stand taken in the captioned Suit is contrary to the Plaintiffs' consistent pleaded position. It is only at the advanced stage of arguments in Miscellaneous Application No. 1064 of 2020 and Miscellaneous Application No. 1008 of 2020 before the NCLT that Plaintiff No.1 filed an Affidavit dated 27th January 2021 stating that the Plaintiffs had filed the captioned Suit before this Court for specific performance of the Minutes of Discussion. There was no application filed/moved by the Plaintiffs before this Court seeking to injunct Defendant Nos. 1 and 2 from seeking a valuation before the NCLT which was sought in Miscellaneous Application No. 1064 of 2020 on the basis that it would run counter to the pending Suit before this Court. He has submitted that it is only with a view to undermine the disposal of the Company Petition in its entirety and deny the Defendants from seeking their just entitlements before the NCLT, that the present Interim Application has been preferred. 46. Mr. Ravi Kadam has furt....
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....jewelry are settled. The present Minutes of Discussion only seeks to settle the disputes of the Defendants on one hand and the Plaintiffs on the other hand, as contained in the Company Petition. If the case of the Plaintiffs that the Company Petition and disputes therein had been settled by a valid binding compromise is to be accepted, the Plaintiffs were and are duty-bound in law obligated to approach the NCLT to record a compromise and for the NCLT to pass the order in terms of the compromise under Order XXIII Rule 3 of the CPC. The NCLT is empowered and able and has jurisdiction to record a compromise and pass an order in terms thereof. Further, the NCLT is empowered to determine the question whether there is a lawful agreement/compromise in writing and signed by the parties which effectively disposes of the pending Company Petition before the NCLT and the Civil Court is not entitled to do so, as its jurisdiction stands ousted by Section 430 of the Companies Act, 2013. 49. Mr. Ravi Kadam has relied upon decisions of the Supreme Court to the effect that the NCLT has power to record and order a compromise under Order XXIII Rule 3 of the CPC. These decisions are namely State of ....
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....filed by them before the NCLT. This Court ought not to interfere and/or circumscribe any of the powers of the NCLT as sought in the Interim Application. He has placed reliance upon decisions of the Supreme Court and this Court in support of his contention that the Suit and Interim Application are barred under Section 430 of the 2013 Act. Following are the decisions :- (i) Shashi Prakash Khemka (Dead) through LR Vs. NEPC Micon (NEPC India Ltd.), (2019) 18 SCC 569 (ii) SAS Hospitality Pvt. Ltd. & Anr. Vs. Surya Constructions Pvt. Ltd. & Ors. - (2019) 212 Comp Cas 102 (iii) Shankar Assana Gaddam Vs. Achanak Associates Realtors Pvt.Ltd. 2021 (2) Mh LJ 159 (iv) Invesco Developing Markets Fund Vs. Zee Entertainment Enterprises Ltd., 2022 SCC OnLine Bom 630 52. Mr. Ravi Kadam has submitted that the Courts in the above decision have considered the bar under Section 430 of the Companies Act, 2013 that restrained the Courts from interfering with the wide powers of the NCLT under the 2013 Act and/or granting any order of injunction which would have the effect of preventing the NCLT from exercising such wide powers. 53. Mr. Ravi Kadam has submitted tha....
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.... of the Company Petition. 54. Mr. Ravi Kadam has submitted that assuming that the Minutes of Discussion is a contract, the Plaintiffs have breached and/or repudiated the same, and are not entitled to enforce the same. He has submitted that the Miscellaneous Application No. 1008 of 2020 was filed by the Plaintiff Nos. 2 to 4 before the NCLT wherein they expressly contended that there was no concluded settlement between the parties. Plaintiff Nos.2 to 4 had by Miscellaneous Application No. 1008 of 2020 sought to wrest control over the Gujarat Division from the Defendants, thereby clearly repudiating Clause 5 of the Minutes of Discussion where the demerged Gujarat Division was to be carved and transferred to the Defendants. 55. Mr. Ravi Kadam has further submitted that the Plaintiffs had by filing the Miscellaneous Application No. 1008 of 2020 as well as challenging to the order of the NCLT rejecting the relief sought for in the Miscellaneous Application No. 1008 of 2020 and being party to the Appeal before the Supreme Court preferred by the Defendants had at no stage contented that the proceedings before the NCLT could not be proceeded with on account of the settlement arrived ....
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.... proposed terms of the Minutes of Discussion, let alone the draft family settlement agreement shared by the Plaintiffs' advocates. He has submitted that the correspondence exchanged between the parties were relied upon by the Plaintiffs before this Court, inspite of the same were marked "without prejudice" and exchanged during settlement talks and discussions. In any case, the correspondence, assuming that they can be relied upon, clearly reflects that the parties were not ad idem and were only attempting to arrive at a settlement, which eventually did not fructify, as recorded in the pleadings filed before the NCLT and the orders of the NCLT and the Supreme Court. 58. Mr. Ravi Kadam has relied upon the decisions of the Supreme Court in support of his contention that the correspondence exchanged in the process of the parties seeking to compromise the action, the evidence of the content of those negotiations will, as a general rule, not been admissible. The correspondence will only be protected by without prejudice privilege if it is written for the purpose of a genuine attempt to compromise a dispute between the parties. The protection of privilege to "without prejudice" corresp....
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....atedly filing the present Suit on 25th January 2021 and the same pending adjudication, did not file an Interim Application or move for interim relief nor previously cited its pendency as a reason for not proceeding with the adjudication of the Company Petition. This is despite the matter having travelled to the NCLAT and the Supreme Court, even after the filing of the present Suit. The Plaintiffs have in fact, time and again consented to the Company Petition being heard finally, even as recently as on 21st January 2022. The present Interim Application was filed on 11th February 2022 and sought to be listed on 16th February 2022, exactly one day before 17th February 2022 being the scheduled final hearing of the Company Petition before the NCLT. The Suit was filed to derail the hearing of Miscellaneous Application No. 1064 of 2020 albeit unsuccessfully. The present Interim Application has been filed in a clear attempt to stall the hearing of the Company Petition. It is obvious that the attempt is to prevent the NCLT from passing orders for valuation and eventual buy-out, an event that would constrain the Sanghvi Group into giving the Kamdar Group a fair and equitable consideration fo....
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....eir contention that necessarily the formal contract must be a condition / term of bargain without which there is no concluded contract. He has submitted that in the present case, the Minutes of Discussion was only a skeletal framework, which did not include "vital terms" and was incapable of implementation. In the cases relied upon by the Plaintiffs, the agreement had been arrived at between the parties, which contained vital terms of the contract as noted by the Supreme Court in Kollipara Sriramulu (supra). In the judgment of the Court of Appeal in England, namely, Branca Vs. Cobarro (supra) relied upon by the Plaintiffs, the agreement was styled as "agreement" albeit a "provisional agreement". The provisional agreement was to continue until drawing up of a formal agreement and that the parties intended that the documents have some efficacy. In the facts of the present case, no such term was concluded in the Minutes of Discussion. In another decision of the House of Lords in England relied upon by the Plaintiffs namely W.J. Rossiter, George Curtis & Ors. (Supra), a clear contract has been made out from the correspondence. In the present case, Minutes of Discussion merely recorded ....
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....submitted that the Minutes of Discussion is not a concluded contract and hence this decision is inapplicable. Further he has distinguished the decision of the Delhi High Court in Dinesh Gupta (supra) where the family settlement was admittedly arrived at and where in which context it was held that it should not be lightly interfered with, especially if acted upon. This is not so in the present case. 67. Mr. Virag Tulzapurkar in his rejoinder submissions has submitted that there is no merit in the Defendants' contention that the Minutes of Discussion was not a concluded contract and/or "an inchoate document" and "an incomplete document" and "a tentative document" as described by the Defendants in their oral submissions. The Minutes of Discussion was entered between the parties after several rounds of negotiations from 2014-15 onwards and thereafter, recorded/ reduced the writing. A plain reading of Clauses 6, 7 and 8 make it clear that the valid and enforceable contract came into existence and which was to be treated as in full and final settlement. 68. Mr. Virag Tulzapurkar has submitted that there is equally no merit in the Defendants' contention that other members of the res....
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....uct of the Defendants. He has in that context submitted that the expression "without prejudice" was first used in the email dated 16th August 2020 by the Plaintiffs' advocate while discussing the modalities for implementing the said Minutes of Discussion. The expression was not used in the context of discussing the said Minutes of Discussion itself. The said Minutes of Discussion was executed long prior to the said email dated 16th August 2020. The said Minutes of Discussion is not a without prejudice document. He has submitted that it is a settled position of law that the expression "without prejudice" is to be understood on the fact situation and in the context in which it is used. 71. The parties clearly understood the said Minutes of Discussion to be a concluded contract and were merely discussing the modalities for implementing the same on a "without prejudice" basis. The fact that the said Minutes of Discussion was in fact a concluded contract is well established from the correspondence prior to July 2020 leading upto Defendant No. 1's email of 24th June 2020, which clearly shows that the parties understood the said Minutes of Discussion was concluded and "in place". 72....
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.... respective advocates. This is borne out from the contents of the correspondence exchanged between the Plaintiffs and the Defendants. This cannot be read in the context of the concluded contract (Minutes of Discussion), as disingenuously sought to be portrayed by the Defendants. In this context he has placed reliance upon the decision in Perry (supra) which holds that when once it is shown that there is a complete contract, further negotiations between the parties cannot, without the consent of both get rid of the contract already arrived at. He has further referred to the decision of the Supreme Court in Udham Singh Vs. Ram Singh (2007) 15 SCC 529 and Gautam Sarup Vs. Leela Jetly (2008) 7 SCC 85 in support of his submission that it is a settled position of law that an admission can always be explained or clarified. 75. Mr. Virag Tulzapurkar has submitted that there is no merit in the contention of the Defendant Nos.1 and 2 that by proposing to sell the Pune property, the Plaintiffs have repudiated the Minutes of Discussions. Clause 4 of the Minutes of Discussion itself contemplates sale of Pune property. The draft scheme of demerger also contemplated such sale. 76. Mr. Virag....
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..... 79. Mr. Ravi Kadam has distinguished the decisions relied upon by the Plaintiff in rejoinder submission. He has distinguished the decisions of the Supreme Court in Udham Singh (supra) and Gautam Sarup (supra) which hold that a categorical admission may be explained or clarified by contending that the facts of those cases are different, as in the present case there is no ambiguity in the admission "proposed settlement proposal", namely that the Minutes of Discussion was not a concluded contract. He has also distinguished the decisions relied upon by the Plaintiffs in support of their contention that abandonment is a positive voluntary act and inactivity or passive attitude does not constitute abandonment. He has submitted that in the present Suit there are positive acts on the part of the Plaintiffs by filing Miscellaneous Application No. 1008 of 2020 before the NCLT, dealing with the Pune property and repeatedly referring to the Minutes of Discussion, as a settlement proposal and representing to the NCLT that the matter could not be settled. 80. Mr. Ravi Kadam has further submitted that the decision of the Supreme Court in Embassy Property Developments Pvt. Ltd. (supra), wh....
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....3 Act, such Interim Application is not maintainable and no relief can be granted. 83. Having considered these submissions, it would be necessary to consider as to whether the Minutes of Discussion is in fact a family settlement agreement which is valid and subsisting. I am mindful of the fact that the present Suit seeking specific performance of the Minutes of Discussion was filed subsequent to the Company Petition having been filed by the Defendants before the NCLT under Section 241, 242 and 244 of the Companies Act, 2013 which sought to restrain the alleged oppressive acts of the Plaintiffs against Defendant Nos. 1 and 2. I am further mindful of the fact that the said Company Petition is at the stage of hearing and final disposal subsequent to the orders passed by the NCLT as well as by the NCLAT and the Supreme Court. However, in my prima facie view, adetermination of the issue as to the Minutes of Discussion being a family settlement is an issue which arises before this Court having jurisdiction and for considering whether interim relief is to be granted in the Interim Application such a prima facie determination would be necessary. I will herein below deal with the submissi....
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....htra family and AP & Telangana family and is without prejudice to the other rights and remedies available to the parties. The detailed understanding and the mechanics would be documented by way of family settlement agreement and Scheme of Arrangement (Demerger) to be filed with the National Company Law Tribunal and withdrawal of the existing Company Petition filed by the Gujarat family." 85. The above concluding words in the Minutes of Discussion make it clear that this was an understanding agreed to between the Gujarat family, Maharashtra family and Andhra Pradesh/Telangana family. The words "and is without prejudice to the other rights and remedies available to the parties" are required to be interpreted according to its plain language and literal interpretation. The words "without prejudice" are followed by the words "to the other rights and remedies available to the parties" have been interpreted by Mr. Virag Tulzapurkar as encompassing those rights and remedies other than the matters covered by the Minutes of Discussion without affecting the binding nature of the Minutes of Discussion. This interpretation is in my view a plausible interpretation and one which requires accep....
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....land relied upon by the Mr. Virag Tulzapurkar would necessary be applicable. In Branca Vs. Cobarro (supra), the Court of Appeal held as under :- ".. Down to the end of the paragraph preceding that final paragraph there can be no question to my mind that the document is a contract. If that final paragraph had not been there, no question could have been raised about it. The sole question is whether that paragraph introduces an element which destroys and contractual efficacy in the rest of the documents. It is in rather an unusual form. "This is a provisions agreement until." That the parties contemplated and wished that there should be what they call a "fully legalized agreement" drawn up by and signed is quite clear. But the first thing to notice about these words is that they are not words expressive of a condition of stipulation to that effect. The familiar words "subject to contract," and many other forms of words that one has come across in this class or case are words of condition. ..." [Pg.856 & 857] "... An agreement which is only to last until it is replaced by a formal document containing the same terms and drawn up by solicitor could I should have thought....
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....can find the true and important ingredients of an agreement in that which has taken place between two parties in the course of a correspondence, then, although the correspondence may not set forth, in a form which a solicitor would adopt if he were instructed to draw an agreement in writing, that which is the agreement between the parties, yet, if the parties to the agreement, the thing to be sold, the price to be paid, and all those matters, be clearly and distinctly stated, although only by letter, an acceptance clearly by letter will not the less constitute an agreement in the full sense between the parties, merely because that letter may say, We will have this agreement put into due form by solicitor... Both parties may desire that it shall be put into a formal shape by a solicitor who, in that case, will not be able to vary the agreement which had been completely formed with unity of purpose with reference to the sale and purchase by the two parties to the contract..." [Pg.1143 & Pg. 1144] "... Thereupon, I think, with the Master of the Rolls, that the contract was complete. Everything essential to the completion of it appears on the written documents - the parties, t....
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....e of arrangement (demerger) are merely formal documents which are required to be executed between the parties to implement the said Minutes of Discussion. The mere contemplation by the Minutes of Discussion of entering into the formal family settlement agreement and scheme of arrangement (demerger), the terms which have already been agreed upon in the Minutes of Discussion and which are to be put in formal shape, does not prevent the existence of it being a binding contract. The decision of the Supreme Court in Kollipara Sriramulu (supra) is apposite in the present case. 91. Mr. Ravi Kadam has contended that the Minutes of Discussion contemplates an alleged compromise of the disputes pending before the NCLT, namely the Company Petition, as it requires the Defendant Nos. 1 and 2 to withdraw the Company Petition and completely disposes of the case before the NCLT. He has submitted that the Plaintiffs were obligated to file an application under Order XXIII Rule 3 of the CPC (read with Rule 11 of the NCLT Rules) before the NCLT based on the alleged compromise contained in the Minutes of Discussion. He has further submitted that the NCLT has the power to decide the question of whethe....
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....cussion should have been given effect to and/or implemented by entering into a formal family settlement agreement and the scheme of arrangement (demerger). 94. It is also necessary to take note of the fact that steps were taken by the parties to the Minutes of Discussion for its implementation. Out of the steps taken, the Defendants have disputed only one step as being according to them, contrary to the Minutes of Discussion i.e. payment of Rs. 56 Crores in discharge of bank liabilities. I am of the view that since the Defendant No. 3 Company was being run as a whole and the Plaintiffs being in management of the Defendant No. 3 Company, in order to protect the interest of the Defendant No. 3 Company, any decision made in good faith and in continuation of the discussions to finalise the scheme of arrangement and the formal family settlement cannot be considered to be an act in repudiation of the Minutes of Discussion. Further, the Defendants themselves have acted in furtherance of the Minutes of Discussion by unanimously approving the buy-back of shares, which resulted in the increase of their own shareholding. It has been held by this Court in Shivanand Vassudev Salgaocar (supra....
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.... respective advocates and which had not been settled. This is borne out by correspondence exchanged between the Plaintiffs and Defendant Nos. 1 and 2 subsequent to the execution of the Minutes of Discussion. Though, the correspondence has been marked without prejudice, this does not depart from the fact that the Minutes of Discussion had been executed prior in point of time and was not marked 'without prejudice' and is as held above prima facie an agreement/family settlement between the parties. I am thus not inclined to accept the submission of Mr. Ravi Kadam that the Plaintiffs had admitted the Minutes of Discussion not to be a full and final settlement and referred to it as a settlement proposal/ proposal for settlement which had failed. 97. The decision relied upon by Mr. Virag Tulzapurkar namely Perry (supra) which is of the English courts has clearly held that when once it is shown that there is a complete contract, further negotiations between the parties cannot, without the consent of the parties get rid of the contract already arrived at. It is settled law that an admission of a party can always be explained. 98. Further, I do not accept the submissions on behalf of ....
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....nce of the Minutes of Discussion. 102. Mr. Ravi Kadam on behalf of the Defendants has submitted that NCLT has wide powers to pass any orders as has been provided in Section 420, 424 and 425 of the Companies Act, 2013. He has submitted that in view of the Company Petition having been filed before the NCLT for oppression and mismanagement, prior to filing of the present Suit, Section 242 (2)(b) of the Companies Act specifically empowers the NCLT to direct the purchase of shares or interest of any member of the company by other members or by the company. He has submitted that in view of the NCLT being empowered under the Companies Act, 2013, to order purchase of shares and, as a consequence the power to direct valuation, it would not be open for this Court to restrain the NCLT from exercising such power. In my view, this submission has lost sight of the fact that in the first part of Section 430 of the Companies Act, the NCLT would necessarily have to be empowered to determine the subject matter of the present Suit filed before this Court and then only the second part, of not granting injunction shall follow. 103. It has been held in paragraph 31 of the decision relied upon by M....
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....ideration of the provisions of the Companies Act has rendered its finding on the jurisdiction of the NCLT, a matter directly for consideration in that case. These observations are binding on this Court. The decision of the Supreme Court in Gujarat Urja Vikas Nigam Limited (supra) which has considered the decision in Embassy Property Developments Pvt. Ltd. (supra) and observed that the latter case dealt with the NCLT's jurisdiction on matters of public law, does not comment and / or distinguish the ratio set out in the extracted paragraph, namely paragraph 31 of the judgement in Embassy Property Developments Pvt. Ltd. (supra). Thus, the Defendants reliance on this judgment is misplaced. 105. I have considered the decisions relied upon by Mr. Virag Tulzapurkar in support of his submission that the Civil Court has inherent jurisdiction to try all types of civil disputes unless its jurisdiction is barred expressly or by necessary implication by any statutory provision and/or jurisdiction conferred in any other Tribunal or Authority. Having arrived at a prima facie finding that the NCLT/NCLAT are not empowered by any of the provisions of the Companies Act, 2013 to grant specific perf....
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....ct to grant the relief sought for in the civil Suit. 109. Insofar as the submissions on delay in filing of the Suit and seeking interim relief is concerned, in my view, the delay by itself is no ground to deny the relief. In the facts of the present case, no prejudice has been caused to Defendant Nos. 1 and 2 by such alleged delay. There has been no attempt made by the Defendants to show any prejudice caused to them on account of the delay in filing of the present Suit and seeking interim relief. There is much substance in the submission of Mr. Virag Tulzapurkar that the question of delay, if at all, is required to be balanced against the likelihood of the Plaintiffs ultimately succeeding in the action and where the strength of the Suit is prima facie strong, the Plaintiffs' delay (assuming there is delay) in filing the action would not disentitle the Plaintiff to the relief. The Supreme Court in Dehri Rohtas Light Railway Company Limited (supra) has held that the principle on which the relief to the party on the grounds of latches or delay is denied, is that the rights which have accrued to others by reason of the delay in filing the petition should not be allowed to be disturb....