TaxTMI 
TaxTMI 
2017 (4) TMI 1630
X X X X Extracts X X X X
X X X X Extracts X X X X
....peals were heard together and are being disposed of by a common judgment. 2. Insofar as Company Application No.457 of 2011 filed by the appellant, which came to be dismissed by the said common order dated 2nd September, 2011 is concerned, the appellant in the said company application had prayed that the order dated 25th June, 2011 passed by the Company Law Board be modified and the respondent nos.2 and 3 be directed to exit the respondent nos.1 and 6 companies. The appellant had also prayed for an order of dispensation of valuation ordered by the Company Law Board by the said order dated 25th June, 2009 and to hear the company petition itself on merit. The appellant in the alternate prayed that the valuation shall be done on the basis of the audited balance sheet ending on 31st March, 2011 and the value of diversion of business of other entities incorporated by the respondent nos.2 and 3 should also be factored in the valuation process. 3. Insofar as Company Application No.399 of 2011 filed by the appellant is concerned, the appellant had prayed for an amendment in Company Petition No.177 of 2007. The appellant also filed Company Application No.398 of 2011 inter-alia praying for ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nt nos.2 and 3 the said Mr.Anthony Maynard had contributed only Rs. 77,87,680/- and thereafter did not contribute any further capital / investment. 7. On 7th January, 2007, the said Mr.Anthony Maynard expired. The appellant claims to be the widow of the said Mr.Anthony Maynard. Ms.Georgina Maynard, who is the respondent no.7 in Company Appeal Nos.18 of 2012 and the respondent no.11 in Company Appeal No.19 of 2012 and the respondent no.8 in Company Appeal No.49 of 2014 is daughter of the said Mr.Anthony Maynard. The respondent no.7 in Company Appeal No.49 of 2014 is son of the said Mr.Anthony Maynard. Some time in the month of October, 2007, the appellant along with her daughter filed two separate petitions i.e. Company Petition No.177 of 2007 and Company Petition No.199 of 2007 before the Company Law Board, Delhi under sections 397, 398, 402 and 403 of the Companies Act, 1956 against the respondent nos.1 and 6 and also impleaded its promoters and others alleging oppression and mismanagement by other two promoters and prayed for various reliefs. The Company Law Board, Delhi passed an interim order in the said Company Petition No.177 of 2007 on 30th October, 2007 directing the respo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e respondent nos.1 and 6. By the said memorandum, the appellant sought inclusion of the other companies incorporated by the respondent nos.2 and 3 in which the husband of the appellant or the appellant was not a shareholder and made various other suggestions. It is the case of the appellant that the said memorandum was relied upon by the appellant and her daughter before the Company Law Board. 12. On 25th June, 2009, the Company Law Board recorded that in the hearing held on 20th April, 2009, the parties had agreed that the appellant and her daughter would go out of the respondent nos.1 and 6 on fair valuation of their shares as a 1/3 shareholders, and consideration so arrived at would be subject to the deduction of the amount of issue price on the entitlement of the appellant and her daughter in the right share. It was recorded that the valuation is to be based on the balance sheets as on 31st March, 2008. It is further recorded that since the parties could not agree on the name of the valuer, the Company Law Board had indicated during the hearing on 21st May, 2009 that the Company Law Board itself would appoint a valuer. 13. The Company Law Board appointed M/s.Chaturvedi and S....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ter to the valuers M/s.Chaturvedi & Shah, Chartered Accountants recording that a meeting was held on 16th July, 2009. In such meeting, they had handed over a copy of the memorandum which was filed by the appellant before the Company Law Board on 21st May, 2009 containing relevant matters required to be factored into determination of "Fair Value" of Equity in two companies and requested to inform about the steps being taken in regard to the valuation process. 17. The appellant and her daughter requested the valuers to arrange a meeting and inform the appellant to enable the appellant to participate and discuss the matter. They also requested the valuers to inform whether any communication / liason had occurred between the valuers and the respondent companies. On 25th August, 2009, the said valuers recorded that the said copy of the memorandum furnished by the appellant and her daughter to the said valuers was unsigned and undated document and did not carry any acknowledgement of the Company Law Board. The appellant and her daughter were informed that the said valuers had called the information and details from the respondents and were awaiting the same. Learned advocates representi....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Nos.530 of 2009 and 531 of 2009 and directed issuance of notice to the valuers. By an order dated 22nd January, 2010, the Company Law Board directed that the valuers shall submit its report on valuation within four weeks from the date of the said order. 22. On 20th January, 2011, Mr.Brett Maynard, the respondent no.7 in Company Appeal No.49 of 2014 who is son of Mr.Anthony Maynard filed a Company Application (42 of 2010) before the Company Law Board and applied for his impleadment as a corespondent. The Company Law Board recorded that the appellant and her daughter had admitted that the respondent no.7 was the son of Mr.Anthony Maynard from a former marriage and was entitled in equal proportion in the shareholding of late Mr.Anthony Maynard in the first respondent no.1 company by operation of law. The Company Law Board also referred to paragraph 4 of the company petition No.177 of 2007 filed by the appellant herein and her daughter stating that they would welcome Mr.Brett Maynard-respondent no.7 to join the company petition. 23. The Company Law Board accordingly passed an order on 20th January, 2011 permitting impleadment of the respondent no.7 as a co-respondent. The said order....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... before this Court. 28. On 22nd July, 2011, the parties filed minutes of the order before this Court duly signed by their respective counsel. In the said minutes of the order, it was agreed and ordered that in the order dated 25th June, 2009 passed by the Company Law Board, Principal Bench, New Delhi in Company Petition Nos.177 of 2009 and 199 of 2009, for the name "M/s.Chaturvedi & Shah, Chartered Accountants" substituted the name "M/s.V.B. Haribhakti & Co." 42, Free Press House, Nariman Point, Mumbai. It was further ordered that the said valuers M/s.V.B. Haribhakti & Co. shall complete the valuation and submit a fresh report to the Company Law Board or or before 31st October, 2011. Rest of the said order remained unaltered, including the parties agreement that the appellant would go out of the two companies of fair valuation of their shares. The parties agreed that the representations to the valuers shall be in accordance with the said order dated 25th June, 2009. It was clarified that the said substitution was being ordered without any adverse reflection on M/s.Chaturvedi & Shah or any of its partners and on the express condition that all the allegations against them were withd....
X X X X Extracts X X X X
X X X X Extracts X X X X
....utes of the order. No order came to be passed by Shri Justice S.J. Kathawalla on the said praecipe. 33. On 29th July, 2011, the then appellants i.e. the appellant herein and her daughter through their advocates addressed a letter to M/s.V.B. Haribhakti & Co. contending that the valuation exercise might not be required at all, in view of the fact that they had instructed their learned advocates to move an application before the Company Law Board to submit that they were not bound to sell their stake in the respondent no.1 company and/or respondent no.6 company and as such it would be pointless to embark on such an exercise. In the alternate, it was contended that it was their case that any valuation of the respondent nos.1 and 6 must occur based on the latest books of accounts of the respondent nos.1 and 6 as also factor in diversions of corporate opportunities to Contrans Logistics, Navitrans Terminals, Aditya Container Freight Station and Altair Infrastructure Private Limited in such valuations. 34. It was the case of the appellant and her daughter that with a view to ensure that a fair and transparent valuation process was carried out, they had requested the valuers to issue ap....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... M/s.Contrans Logistic Pvt. Ltd., Navi Trans Terminals Pvt. Ltd., Aditya Container Freight Station Pvt. Ltd. and Altair Infrastructure Private Limited. The appellant and her daughter also prayed that the costs of the valuation be borne by the respondent nos.2 and 3 including in relation to the costs paid to M/s.Chaturvedi & Shah and M/s.V.B. Haribhakti & Co. 38. The appellant and her daughter also filed a separate Company Application (398 of 2011) on 2nd August, 2011 before the Company Law Board inter-alia praying for the directions that the Company Petition No.46 of 2011 which was filed by them before the Company Law Board, Mumbai against Mundhra Corporate Services Private Limited be transferred to the Principal Bench, New Delhi and be consolidated and heard along with the present Company Petition No.177 of 2007 and Company Petition No.199 of 2007, which was already pending before the Company Law Board, New Delhi. 39. On 21st June, 2011, the appellant and her daughter also filed company application (399 of 2011) in Company Petition No.177 of 2007 before the Company Law Board inter-alia praying for a permission to amend some of the averments made in the said Company Petition No.1....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the respondent no.11 in Appeal No.19 of 2012 as as respondent no.8 in Company Appeal No.49 of 2014. Ms.Georgina Maynard was accordingly transposed as one of the respondent. 44. Ms.Sethna, learned counsel for the appellant invited my attention to some of the above referred orders passed by the Company Law Board and also by this Court including the order dated 22nd July, 2011. She submits that the original petitioners had filed a memorandum before the Company Law Board on 21st May, 2009 thereby making various suggestions which were to be considered by the Company Law Board before passing any further order in the pending proceedings filed by her client. She submits that the said memorandum dated 21st May, 2009 was not controverted by any of the respondents and was admittedly on record before the Company Law Board when the Company Law Board passed an order on 25th June, 2009 thereby appointing M/s.Chaturvedi & Shah, Chartered Accountants as Valuers. 45. It is submitted by the learned counsel that since the Company Law Board did not accept the request made by the appellant and her daughter and did not consider the suggestions made by them in the said memorandum and remanded the said m....
X X X X Extracts X X X X
X X X X Extracts X X X X
....uly, 2011. She submits that this Court did not pass any order on the said praecipe dated 29th July, 2011, however granted liberty to the appellant to apply for modification of the order dated 25th June, 2009 before the Company Law Board. 48. It is submitted that pursuant to the said liberty granted by this Court, the appellant filed an application (457 of 2011) before the Company Law Board for various reliefs. She invited my attention to the averments made in the said application before the Company Law Board. She submits that the appellant had accordingly prayed before the Company Law Board for modification of the order dated 25th June, 2009 and to direct the respondent nos.2 and 3 to exit the respondent nos.1 and 6 and in the alternative to dispense with any valuation of shareholding of the respondent nos.1 and 6 and in the alternative to direct any valuation of share to be carried out on the basis of the audited financial statements of the respondent nos.1 and 6 on the basis of balance sheet as on 31st March, 2011 and to factor into the valuation the value of diversion of business of M/s.Contrans Logistic Pvt. Ltd., Navi Trans Terminals Pvt. Ltd., Altair Infrastructure Pvt. Ltd.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....parties in the said order as is apparent from bare perusal of the said minutes of the order dated 22nd July, 2011. She submits that the respondents had asked the appellant to withdraw the said affidavit. She submits that the appellant and her daughter had accordingly by letter dated 23rd July, 2011 recorded as to what transpired in the Court. She submits that the Company Law Board did not consider the contents of the praecipe filed by the appellant and her daughter before this Court and that there was no denial to the contents of the said praecipe. The Company Law Board did not consider the letter dated 23rd July, 2011 addressed by the appellant and her daughter. She submits that there was no affidavitin- reply filed by the respondents to the averments made in the Company Appeal No.457 of 2011. She submits that interpretation of the order dated 22nd July, 2011 passed by this Court by the Company Law Board is totally perverse, without any basis and overlooking the memorandum which was on record before the Company Law Board as well as before this Court, the affidavit filed by the appellant and her daughter, recording letter dated 23rd July, 2011 and the praecipe filed by the appellan....
X X X X Extracts X X X X
X X X X Extracts X X X X
....order in favour of the appellant be passed by accepting the suggestions made by the appellant in the affidavit and also in the memorandum. She submits that the Company Law Board ought to have considered those points/suggestions raised by the appellant while passing the impugned orders in the company applications filed by the appellant. 55. Learned counsel for the appellant placed reliance on Article 16 of the Articles of Association in support of her submission that even under the said Articles of Association which is a contract between the parties, respondent nos. 2 and 3 were bound to offer and pay the fair value for exit of the appellant. She submits that the said agreement provides for payment of a fair value for exit of minority shareholders. 56. It is submitted by the learned counsel for the appellant that under the Articles of Association of the respondent nos.1 and 6, the appellant had claimed the right. She submits that since the appellant had established that there was corporate diversion of the business opportunity by diverting the entire business of respondent nos.1 and 6 to other companies incorporated by the respondent nos.2 and 3, the appellant was right in demandi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....and in particular paragraphs 14 to 22 in support of her submission that even while construing the consent decree passed by the court, evidence is permitted to show the real intention of parties as to why the consent terms were filed and the consent decree was obtained. 60. Learned counsel for the appellant placed reliance on the judgment of Supreme Court in case of M/s.Motilal Padampat Sugar Mills Co. Ltd. vs. The State of Uttar Pradesh & Ors., AIR 1979 SC 621 and in particular paragraph 6 and would submit that it must be intentional act with full knowledge of rights of the parties failing which there would be no waiver/abandonment of the rights. 61. It is submitted by the learned counsel that since the respondent nos.1 and 6 being Private Limited Company and being in the nature of quasi partnership, the valuation of the share of the appellant will have to be made on the basis of a going concern. She submits that the valuation of the share of the appellant cannot be on the basis of the assets as on 31st March, 2008 but has to be on the basis of the date when the order is passed by this Court in this petition. Learned counsel placed reliance on the judgment of the Supreme Court in....
X X X X Extracts X X X X
X X X X Extracts X X X X
....valuation has to be on the closest date of the judgment. She submits that this Court also while passing an order dated 22nd July 2011 had directed that the valuation report shall be submitted within six months from the date of the said order. She submits that the appellant cannot suffer any prejudice because of the delay in submission of the valuation report or due to pendency of the proceedings before the Company Law Board or before this Court. 66. Learned counsel for the appellant placed reliance on the judgment of this Court in the case of Nafan B.V. Vs. Saf Yeast Company (P) Ltd. & Ors., (2016) 1 Comp LJ 36 (Bom) and in particular paragraph 147 in support of her submission that for the purpose of the valuation of the shares, it would be most appropriate to consider the date on which the judgment is delivered as a reference. 67. Learned counsel for the appellant placed reliance on the judgment of the Supreme Court in the case of Commissioner of Wealth Tax vs. Mahadeo Jalan and Mahabir Prasad Jala and Ors. , (1973) 3 SCC 157 and in particular paragraphs 4 to 12 and 14 in support of her submission that the valuer has to take into consideration various principles of law laid down....
X X X X Extracts X X X X
X X X X Extracts X X X X
....or of the respondent nos.1 and 6. 71. It is submitted by the learned counsel for the appellant that by the said order dated 22nd July, 2011 passed by this Court, only the name of the valuer was substituted. She submits that the said order was only a conditional consent order and in view of the conditions imposed while passing the said order were not acted upon by the respondents, the said conditional consent order was not binding upon the appellants. 72. Mr.Singh, learned counsel for the respondent no.7 who is daughter of the appellant and the deceased Anthony Maynard submits that his client was the original appellant no.2 in the Company Appeal Nos.18 of 2012 and 19 of 2012 and was subsequently transposed as the respondent no.7 in view of there being conflict of interest between the appellant and his client. It is submitted that the orders passed by the Company Law Board which are impugned by the appellant and his client in these proceedings are illegal. He submits that admittedly the respondent no.7 was minor when various orders came to be passed by the Company Law Board which are impugned by the appellant in the present proceedings. He submits that the respondent no.7 has attai....
X X X X Extracts X X X X
X X X X Extracts X X X X
....arguments advanced by the learned counsel for the appellant in so far as the alleged consent not given by her either before the Company Law Board or before this Court is concerned. 76. Mr.Narichania, learned senior counsel for the respondent nos.1 to 6, on the other hand, invited my attention to various orders passed by the Company Law Board in the company petition filed by the appellant along with her daughter and more particularly the orders dated 30th October, 2007, 15th November, 2007, 20th April, 2009 and 25th June, 2009 and in various applications made by the applicants from time to time before the Company Law Board. It is submitted by the learned senior counsel that various orders passed by the Company Law Board would clearly indicate that the appellant along with her daughter have chosen to exit from the respondent nos.1 and 6 with open eyes and thus there was no question of the appellant and her daughter exercising an option to buy shares of other two groups. He submits that the appellant and her daughter had also agreed to the valuation of assets for the purpose of valuation of their shares as on 31st March, 2008. 77. It is submitted that though the appellant, her daugh....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y appointing M/s.V.B. Haribhakti & Co. Other terms of the order passed by the Company Law Board remained unaltered. It is submitted that in the memorandum of appeals in Company Appeal (Lodging) Nos.24 of 2011 and 25 of 2011, the appellants had challenged the said order dated 25th June 2009 on the ground that the appellants had not agreed to exit. The appellants also placed reliance on the Memorandum dated 21st May, 2009 in the appeal memo. He submits that in view of the consent order obtained by the parties on 22nd July, 2011 in those two company appeals, all issues raised by the appellant and her daughter in the memorandum and also in the appeal memos in the Company Appeal (Lodging) Nos.24 of 2011 and 25 of 2011 filed in this Court were given up. He submits that the valuation date which was 31st March, 2008 agreed before the Company Law Board was unaltered by consent of the parties in the said order dated 22nd July, 2011. 81. It is submitted that in the said order dated 22nd July, 2011, the appellant and her daughter also did not raise any issue of alleged siphoning of the income of the respondent nos.1 and 6 by the respondent nos.2 and 3 in favour of other four companies or that....
X X X X Extracts X X X X
X X X X Extracts X X X X
....or for an express direction that the valuers should take into account the entities to which business of the 1st respondent company in Company Appeal (Lodging) No.24 of 2011 had been siphoned off, however, the same had not been reflected in the said order and thus may be suitably incorporated in the manner deemed appropriate. 84. It is submitted by the learned senior counsel that admittedly no clarification was issued by Shri Justice S.J. Kathawalla on the said praecipe dated 29th July, 2011 as prayed by the appellant and her daughter. He submits that it is clear that the said clarification sought by them were thus rejected by this Court. 85. Learned senior counsel for the respondent nos.1 to 6 invited my attention to the averments made in three company applications filed by the appellants before the Company Law Board in the month of September 2011 for various reliefs. He submits that the Company Appeal (49 of 2014) was filed by the appellant along with her daughter on 4th December, 2013. He invites my attention to ground 'H' on page 4 of the appeal memo in the said appeal contending that the Company Law Board had failed to appreciate that it was the case of the appellant ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ments ascribed to them are correct or expressed correctly and fully what they had in view. He submits that in this case, though certain allegations were sought to be made by the appellant and her daughter about what transpired in Court are allegedly not part of the order passed by this Court, this Court did not pass any order on the said praecipe thereby rejecting the same. He submits that the argument of the learned counsel for the appellant and her daughter that the order dated 22nd July 2011 did not record the facts correctly as agreed by the parties before this Court is contrary to the principles of law laid down by this Court in the case of Adarsh Toddy Kamgar Sahakari Sanstha, Nagpur & Ors. (supra). 88. Learned counsel for the respondent nos.1 to 6 also placed reliance on the judgment of the Supreme Court in the case of State of Maharashtra vs. Ramdas Shrinivas Nayak and Anr., (1982) 2 SCC 463 and in particular paragraph 4 thereof and would submit that the appellant and her daughter cannot be allowed to make a statement contrary to what was recorded by the Court in the said order dated 22nd July, 2011. He submits that in any event, it was incumbent upon the appellant to call....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ompany Law Board had though found the oppression by majority but had directed the company to buy share of the minority shareholding at the face value of the share. He submits that however in this case, there is no finding of any oppression or mismanagement rendered by the Company Law Board against the respondent nos.1 and 6 till date. Mere allegations in the company petition made by the appellant without any finding thereon in favour of the appellant would be of no significance. He invited my attention to paragraphs 5, 6, 7, 9, 11, 22, 29, 30 and 38 of the said judgment and distinguished the said judgment. He submits that there are no allegations of fraud in this case made by the appellant against the respondent nos.1 to 6 nor any such allegations are proved. He submits that reliance on paragraph 38 of the said judgment in the case of Dale & Carrington Invt. (P) Ltd. & Anr. (supra) is out of the context. 92. Learned senior counsel placed reliance on the judgment of the Supreme Court in the case of P.S. Sathappan (dead) by Lrs. vs. Andhra Bank Ltd. & Ors., (2004) 11 SCC 672 and in particular paragraphs 118 and 148 (8) in support of the submission that the judgment of the Court must....
X X X X Extracts X X X X
X X X X Extracts X X X X
....der dated 25th June, 2009. He submits that admittedly the said order dated 25th June, 2009 passed by the Company Law Board was not challenged by the appellant. The appellant and her daughter had gone to the said valuer. He submits that even in the subsequent orders passed by the Company Law Board and finally by this Court on 22nd July, 2011, the cut off date fixed as on 31st March, 2008 was not deviated. The parties did not agree at any point of time that the alleged siphoning of business opportunity was to be factored in the valuation of the assets of the respondent nos.1 and 6. 96. Learned senior counsel for the respondent nos.1 to 6 placed reliance on the judgment of this Court in the case of Unmesh Kantilal Shah & Ors. vs. Chemosyn Limited & Ors., (2008) 2 Bom CR 761 and in particular paragraphs 72 to 75 and would submit that the principle of interpretation of contract and/or any any documents cannot be extended to the interpretation and/or for clarification of unchallenged Consent Order. He submits that the order dated 22nd July, 2011 passed by this Court was final and binding and therefore there is no question of re-opening or reagitating any issues after the consent order w....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ard that the valuation made by M/s.V.B. Haribhakti & Co. is not realistic. 101. Learned senior counsel placed reliance on the judgment of the Supreme Court in the case of Suvaran Rajaram Bandekar & Ors. vs. Narayan R.Bandekar & Ors., (1996) 10 SCC 255 and in particular paragraph 3 in support of the submission that the consent order passed by the Court cannot be modified unless both the parties give consent for modification thereto. This Court thus cannot modify the order dated 22nd July, 2011 passed by this Court in view of the respondent not having given any consent for such modification. 102. Insofar as the submission of the learned counsel for the appellant that the valuation date of 31st March, 2008 cannot be sacrosanct and the valuation has to be considered on the date of payment to the appellant is concerned, learned senior counsel for the respondent nos.1 to 6 submits that the parties had agreed before the Company Law Board on 25th June, 2009 that the valuation of the shares was to be on the basis of the balance sheet as on 31st March, 2008. He submits that the parties once again agreed before this Court that on 22nd July, 2011 that the valuation was to be done in terms of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ered by this Court is pending. It is submitted that the said judgment applies to the facts of this case. In the said judgment, the High Court approved the order passed by the Company Law Board not fixing the date of the valuation as the date of the petition but considering the pendency of the petition for about three years, for default of none, fixing a 50% mark - up on the share of profit determined as on the date of the petition to compensate one of the party for delay between the presentation of the petition and order. It is submitted that in this case the appellant herself was fully responsible for the gross delay in the valuation process on one or other ground. This Court thus cannot shift the valuation date or to pay any mark - up. 106. Insofar as the judgment of the Calcutta High Court in case of Bajrang Prasad Jalan & Ors. (supra) relied upon by the learned counsel for the appellant is concerned, learned senior counsel for the respondent nos.1 to 6 distinguished the judgment and placed reliance on paragraphs 97 and 98 and would submit that in this case there are no immovable properties of the respondent nos.1 and 6. He submits that though in this judgment the judgment of L....
X X X X Extracts X X X X
X X X X Extracts X X X X
....led by the appellant before the Company Law Board, Delhi. It is submitted that the transfer application made by the appellant was also with a view to nullify the effect of the order passed by the Company Law Board and this Court. 110. It is submitted that insofar as the company which was the subject matter of the company petition filed before the Company Law Board, Mumbai is concerned, no business was carried on by the said company and there was thus no question of any apprehension to the appellant. He submits that if the application of the appellant to transfer the said proceedings pending before the Company Law Board, Mumbai to Company Law Board, Delhi would have been allowed, hearing of the petition and the application filed by the applicant before the Company Law Board, Delhi would have been further stalled, including the process of valuation which was already delayed at the instance of the appellant and would have complicated the matter further. He submits that it is not in dispute that in the company petition before the Company Law Board, Mumbai, the respondent nos.1 and 6 were impleaded as party respondents. The Company Law Board had directed the appellant to delete the nam....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Board. She submits that the company petitions filed by the appellant have to be heard on merit. The pleadings filed by the parties are not tested by the Company Law Board till date and no finding of fact is rendered on merit of the matter. It is submitted by the learned counsel that this Court cannot consider the written note submitted by the respondent nos.1 to 6 alleging the efforts alleged to have been made by the respondent nos.2 and 3 before the death of the husband of the appellant and post his demise to expand the respondent nos.1 and 6. She submits that these allegations were not on record before the Company Law Board and thus cannot be considered by this Court. 115. It is submitted that none of the orders passed by the Company Law Board can be considered as orders under Section 402(b) of the Companies Act, 1956 for purchase of the shares of the appellant by the other members of the respondent nos.1 and 6 companies. It is submitted that the order dated 22nd July, 2011 passed by this Court is a conditional consent order which is revocable in view of the conditions imposed by the appellant were incapable of implementation or not implemented. She submits that it is not the c....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rcumstances. She submits that the powers of this Court under Section 10F of the Companies Act, 1956 are very wide. This Court has equitable jurisdiction under Section 10F of the Companies Act, 1956. It is submitted that parties were not ad-idem about the terms and conditions of exit before the Company Law Board. It is submitted that no application is admittedly filed by the respondent nos.1 to 6 under Section 634-A of the Companies Act, 1956. 119. Learned counsel for the appellant distinguishes the judgment of the Madras High Court in the case of the Kuki Leather Private Ltd. & Ors. vs. T.N.K. Gonvindaraju Chettiar & Co. and Anr. (supra) on the ground that the order passed by the Madras High Court was comprehensive order. The date and amount was provided in the consent order which recorded a concluded agreement. It is submitted that the appellant, however, did not agree to any such concluded agreement. It is submitted that in this case, the advantage is accrued in favour of majority share holders. It is submitted that the said judgment of the Madras High Court in the case of Kuki Leather Private Ltd. & Ors. vs. T.N. Gonvindaraju Chettiar & Co. and Anr. (supra) is clearly distingui....
X X X X Extracts X X X X
X X X X Extracts X X X X
....o the facts of this case. He submits that some of the respondents had not filed any reply to the Company Application No.457 of 2011 filed by the appellant before the Company Law Board and thus the averments made in that company application are deemed to have been accepted by the respondents. She placed reliance on the judgment of the Supreme Court in the case of Needle Industries (India) Ltd. and Ors. vs. Needle Industries Newey (India) Holding Ltd. & Ors. (supra) and more particularly on paragraph 172 thereof. She submits that the Company Law Board, in this case, has admittedly restrained the respondent nos.1 to 6 from diluting the shareholdings of the appellant and her daughter which would clearly indicate that the acts of the respondent nos.1 to 6 are lack of probity, lack of fairness and duty and not just and equitable. He submits that if the orders passed by the Company Law Board are considered as consent orders, it would have act of unfair prejudice against the appellant. 124. It is submitted that the orders passed by the Company Law Board are perverse and thus questions of law arise which have to be adjudicated upon by this Court under Section 10F of the Companies Act, 1956....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ifted the valuation date. 129. Learned counsel for the appellant distinguishes the judgment of the Calcutta High Court in the case Bagree Cereals (P.) Ltd. & Ors. vs. Hanuman Prasad Bagri & Ors. (supra) on the ground that the facts of that case are totally distinguishable. She submits that the Company Court cannot go into the allegation that the appellant was only an investor. She submits that the valuation report of M/s.V.B. Haribhakti & Co. is stale, not equitable and contrary to unconscionable bargain. 130. It is submitted that the daughter of the appellant has attained the age of majority in the year 2015 and thus the appellant is unable to deliver 1/3rd shareholdings of the daughter of the appellant. She submits that the appellant cannot compel her daughter to deliver her shares in the respondent nos.1 and 6 companies for exit. She submits that it is not pleaded by the respondent nos.1 to 6 that there is any collusion between the appellant and her daughter. It is submitted that this Court has ample power under Section 10F of the Companies Act, 1956 to direct M/s.V.B. Haribhakti & Co. to make an additional valuation report on the two factors i.e. firstly on the date of valuat....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ontract or order as voidable. The respondent no. 8 has not taken any steps to recall such orders passed by the Company Law Board or by this Court on 22nd July, 2011 in last two years. 134. It is submitted that outcome of these appeals is not dependant upon outcome of the application that could be filed by the respondent no.8 before the Company Law Board. He submits that the order dated 25th June, 2009 is not challenged by any of the parties. He submits that the interest of the daughter was not affected by the action of the appellant. In her affidavit, the daughter has already acted upon in her interest. Learned senior counsel distinguishes the judgment of the Supreme Court in the case of Dale & Carrington Invt. (P) Ltd. vs. P.K. Prathapan & Ors. (supra) and placed reliance on page 222 thereof. He submits that this Court cannot go beyond the order dated 22nd July, 2011 passed by this Court. He submits that the order dated 25th June, 2009 passed by the Company Law Board has merged with the order dated 22nd July, 2011 passed by this Court. He submits that the prayers of the appellant for shifting the date of valuation and for taking into consideration of the alleged business of oppor....
X X X X Extracts X X X X
X X X X Extracts X X X X
....luation as provided in the articles. The Company Law Board however made a suggestion that instead of time consuming valuation, the respondent was to indicate total sums which was to be paid to the appellant and her daughter against their shares. The matter was adjourned to 29th November, 2007. On 7th January, 2008, the Company Law Board directed that on the adjourned date, both the parties will indicate the quantum of consideration for the shares of the appellant and the daughter. 140. On 20th April, 2009, the Company Law Board recorded that the parties had agreed that the appellant and her daughter will get out of the company on valuation of the shares in both the companies as a 1/3rd shareholder subject to the deduction of the amount of issue price on price of their entitled shares in the right issue. It was agreed that the valuation will be based on the balance-sheet as on 31st March, 2008. The matte was adjourned to 14th May, 2009. 141. On 21st May, 2009, the appellant and her daughter submitted memorandum i.e. "Points To be Factored into Determination of Fair Value" of equity in the respondent nos. 1 and 6. In the said memorandum, the appellant sought inclusion of other comp....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the appellant to agree to any order for sale of shares without all the conditions imposed in the memorandum dated 21st May, 2009 were being considered by the respondents. 145. On 22nd January, 2010, the Company Law Board directed that the valuers shall submit its report for valuation within four weeks from the date of the said order. It is not in dispute that the respondent no.7 who was son of Mr.Anthony Maynard was thereafter impleaded as respondent no.7 in the Company Petition No.177 of 2007. On 9th February, 2010, the said M/s.Chaturvedi & Shah, the valuers submitted a report opining the fair value of the equity shares of the company as on 31st March, 2008 at Rs. 2,944/- per equity share of Rs. 10 each fully paid up. The appellant and her daughter thereafter applied for setting aside the said report or to keep the same in abeyance until disposal of the Company Application No.531 of 2009. 146. The Company Law Board however was of the view that a fresh opportunity shall be granted to the appellant and her daughter to make submission on the valuation. The Company Law Board deemed fit not to accept the valuation dated 9th February, 2010 and directed the said valuer to submit a fr....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... filed by them in favour of the advocate on record. It is also not disputed by the appellant that the appellant had not taken any action against the counsel who appeared for her and her daughter for signing the said minutes of the order on behalf of the appellant and her daughter without any authority of the appellant and her daughter or that the appellant and her daughter had not agreed for what was provided in the said minutes of the order. The appellant has not disputed that this court had taken the said minutes of the order dated 22nd July, 2011 on record and had disposed of Company Appeal (Lodging) No.24 of 2011 and Company Appeal (Lodging) No.25 of 2011 respectively. 149. A perusal of the said order dated 22nd July, 2011 passed by Shri Justice S.J. Kathawalla and the said minutes of the order duly singed by the respective counsel of the parties clearly indicates that the parties had agreed that by consent, the earlier valuer M/s.Chaturvedi & Shah be substituted by M/s.V.B. Haribhakti & Co. The parties also agreed that the other terms of the order passed by the Company Law Board on 25th June, 2009 remained unaltered. It is not in dispute that the appellant and her daughter di....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ppeal (Lodging) No.24 of 2011 had been siphoned of. It is not in dispute that the allegations of the appellant belatedly made to the effect that the business opportunities and the profit of the respondent nos. 1 and 6 were diverted to those four companies incorporated by the respondent nos. 2 and 3 was disputed by the respondents and there is no adjudication thereon by the Company Law Board till date. 153. In my view, in view of serious dispute raised by the respondents about the allegations of the appellant and her daughter about siphoning of the business opportunity and the profit of respondent nos. 1 and 6 to those four entities having not been adjudicated upon till date, no prudent person would have agreed to permit the other party to raise such plea for factoring such assets and profit of those four entities as if the assets of the respondent nos. 1 and 6 for the purpose of valuation of shares. 154. A perusal of various orders passed by the Company Law Board from time to time indicates that in the consent of the appellant and her daughter was recorded that they had agreed to exit from the respondent nos. 1 and 6 however on the condition of payment of fair value on the basis ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....case of the appellant now before this court during the course of the arguments that except the said order dated 22nd July, 2011 passed by this court which was though a consent order was a conditional consent order, no other orders passed by the Company Law Board were passed by consent of parties. A perusal of the order dated 22nd July, 2011 ex-facie indicates that no such conditions as are canvassed by the appellant were recorded in the said order dated 22nd July, 2011. Even if the argument of the appellant is accepted that the order passed by the Company Law Board including the order dated 25th June, 2009 was not a consent order, the fact remains that the appellant did not challenge any order passed by the Company Law Board except the order dated 9th May, 2011 by which the Company Law Board had directed M/s.Chaturvedi & Shah, the valuer to submit a fresh report of valuation after complying with the directions at serial no. (iv) to (viii) as contended in the order dated 25th June, 2009. 159. A perusal of the order dated 25th June, 2009 passed by the Company Law Board indicates that the said order refers to an agreement arrived in the hearing held on 20th April, 2009 that the appel....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d 'X'. When the parties filed typed/fair copy of the said minute of the order dated 22nd July, 2011, even at that stage, the appellant did not raise any objection and/or pointed out that something more was allegedly agreed by and between the parties or various liberties were granted by this court to the appellant but were not recorded in the said minutes of the order. 162. In my view, the parties who had made several corrections on the said minutes of order and had initialled those corrections had consciously agreed to the said order after reading and understanding the consequence thereof. The minutes of the order was signed by the practicing counsel of this court who were duly authorized by their respective client. None of the parties had challenged the authority of the learned counsel who had signed that minutes of the order. 163. Ms.Sethna, learned counsel appearing for the appellant agreed before this court that it was not the case of the appellant that Mr.Ram Kakkar was not authorized to appear on behalf of her client or was not authorized by her advocates' firm who had filed Vakalatnama to appear as counsel on behalf of the appellant and her daughter. A praecipe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nd 25 of 2011 clearly indicates that it was not the case of the appellant and her daughter that the said order dated 25th June, 2009 was challenged on the ground that the memorandum dated 21st May, 2009 was not considered by the Company Law Board. A perusal of the record further indicates that the appellant and her daughter had accepted all consent orders passed by the Company Law Board recording that the appellant and her daughter had agreed to exit the respondent nos. 1 and 6 on payment of fair valuation. The appellant and her daughter had also approached M/s.Chaturvedi & Shah, the erstwhile valuers for implementing the order of Company Law Board for the purpose of their exit. 167. A perusal of the order dated 22nd July, 2011 passed by this court indicates that the appellant and her daughter did not raise any issue of any alleged siphoning of the business opportunity of the respondent nos.1 and 6 or profit by the respondent nos. 2 and 3 in favour of other four companies or that income and assets of those companies shall be treated as assets of respondent nos. 1 and 6. Even if the said order dated 22nd July, 2011 passed by this court in terms of the minutes of the order dated 22n....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ht that the appellant started raising various issues contrary to the agreement arrived at between the Company Law Board. Be that as it may, the parties fully agreed before this court on 22nd July, 2011 that except the substitution of M/s.Chaturvedi & Shah by M/s.V.B. Haribhakti & Co., order dated 25th June, 2009 passed by the Company Law Board remained unaltered. 171. This court in case of Adarsh Toddy Kamgar Sahakari Sanstha, Nagpur & Ors. (supra) has held that the written order passed by the court cannot be interpreted in the light of parole discussion nor the written order could be treated as valid or modified on that basis. It is held by this court that the observations made by the Judge during the course of hearing or even a declaration by the Judge of his intention of what his judgment is going to be is not a judgment or an order of the Court until the Judge has crystallized his intention into a formal shape and has pronounced it in the open Court as the final expression of his mind. It is held that the decision which is so pronounced or intimated must be a declaration of the mind of the Court as it is at the time of pronouncement. Judges may, and often do, discuss the matte....
X X X X Extracts X X X X
X X X X Extracts X X X X
....udgment of Supreme Court in case of Associated Tubewells Ltd. v. R.B. Gujarmal Modi, AIR 1957 SC 742 in which it was held by the Supreme Court that in the review application whereof a party had referred in detail as to what, according to him, happened in Court on the prior occasion and what each Judge said in the course of the arguments and as to how and on the application was dismissed. 174. The Supreme Court held that action on the part of the review petitioner was wholly improper. The Judges of the Court cannot be dragged into a controversy as to whether the statements ascribed to them are correct, or express correctly and fully what they had in view. The Supreme Court observed that to permit the atmosphere of the Court to be vitiated by such controversy would be detrimental to the very foundation of the administration of justice. Supreme Court expressed that the said act on the part of the review petitioner was really very unfortunate. This court held that recording of what allegedly transpired in court by one of the party was really very unfortunate. This court deprecated the course adopted by the parties controverting the order passed by this court by making various allegati....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he request of the appellant, were heard by Shri Justice S.J. Kathawalla for sometime. It is not in dispute that even at that stage also, the appellant and her daughter did not seek any clarification of the said order dated 22nd July, 2011 though there were ample opportunities to the appellant. On the contrary, the record further indicates that Shri Justice S.J. Kathawalla had removed these matters from his board. In my view the application thus made by the appellant by way of praecipe and thereafter various company applications filed before the Company Law Board on the premise that such applications were made based on the liberty alleged to have been granted by this court was based on a false premise by putting the words of the appellant in the mouth of this court which act of the appellant is deprecated and not acceptable. 178. Supreme Court in case of State of Maharashtra vs. Ramdas Shrinivas Nayak and Anr., (supra) has held that the court cannot launch an inquiry as to what transpired in the High Court. It is held that it is simply not done. Public Policy bars the court, the Judicial decorum restrains the court. Matters of judicial record are unquestionable and are not open to ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....by the parties themselves or through their advocates. The court has taken on record the minutes of the order duly signed by the advocates by the parties and has disposed of company appeals in terms of those minutes of the order. It was for the parties to record additional terms if any, agreed upon by and between them in the said minutes of order before signing those minutes and ought to have obtained any further liberty and/or directions sought by such party from the court and/or granted by this court. In my view, the application made by the appellant by way of praecipe and thereafter filing of subsequent applications before the Company Law Board based on the alleged understanding of the order dated 22nd July, 2011 passed by this court was mischievous and was not in accordance with the said order dated 22nd July, 2011 which records the agreement arrived at between the parties and is deprecated. The statement made by the learned counsel for the appellant that the appellant is entitled to rely upon the memorandum, affidavit and the praecipe filed by her before this court to read those demands in the consent order is ex-facie frivolous and untenable. 181. Supreme Court in case of Dr.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....kar & Ors. (supra) has held that if the order is passed by consent of the parties by the court, the same can be modified only by consent of the parties and not otherwise. In my view since the respondents have opposed these appeals and more particularly the arguments that various alleged agreements entered into between the parties before filing the minutes of the order dated 22nd July, 2011 shall be read in the said order and are opposing such arguments vehemently, in my view the said consent order dated 22nd July, 2011 cannot be modified without consent of the respondents. The principles laid down by the Supreme Court in case of Suvaran Rajaram Bandekar & Ors. (supra) applies to the facts of this case. 185. Insofar as submission of the learned counsel for the appellant that the memorandum dated 21st May, 2009 was not relied upon by the appellant was allegedly not controverted by any of the respondents and was admitted on record before the Company Law Board when the said order dated 25th June, 2009 was passed by the Company Law Board or that the Company Law Board did not accept the suggestions made by the appellant in the said memorandum is concerned, in my view even if the said me....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ghter. Be that as it may, the fact remains that the said order dated 22nd July, 2011 was passed after both the parties through their respective counsel had signed and initialled the said minutes of the order. These allegations made by the appellant are thus without any basis and are incorrect. The respondents were not required to file any reply to the praecipe filed by the appellant and her daughter. In my view, there is no merit in the submission of the learned counsel for the appellant that the interpretation of the order dated 22nd July, 2011 passed by this court by the Company Law Board is perverse or by overlooking the memorandum on record before the Company Law Board, affidavit filed by the appellant recording letter dated 23rd July, 2011 and the praecipe filed by the appellant and her daughter on 29th July, 2011. In my view, the Company Law Board had rightly considered various orders passed by it and also the order dated 22nd July, 2011 passed by this court based on the consent minutes of order. 188. Insofar as submission of the learned counsel for the appellant that Shri Justice S.J. Kathawalla had granted stay of the proceedings before the Company Law Board after having b....
X X X X Extracts X X X X
X X X X Extracts X X X X
....pany petition was filed by the appellant in the year 1997 whereas the parties had agreed to have valuation of the respondent nos. 1 and 6 as on 31st March, 1998. There is no substance in the submission of the learned counsel for the appellant that the appellant could not have waived her alleged right to seek valuation of the shares of the other companies incorporated by the respondent nos. 2 and 3 and allegedly diverting the business of the respondent nos.1 and 6 to those companies as part of valuation of respondent nos. 1 and 6. The appellant and the other party having signed the minutes of the order and having taken consent order cannot be now allowed to resile from the said agreement. Admittedly no such adjudication of such allegation is made even till today by the Company Law Board in any of the proceedings filed by the appellant nor such allegation can be gone into by the Company Law Board in view of the consent order passed by the Company Law Board as well as by this court. 191. Insofar as reliance placed on Article 16 of the Articles of Association by the learned counsel for the appellant is concerned, in this case the parties have agreed by consent that the appellant and h....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s reliance placed on the judgment of Supreme Court in case of Parayya Allayya Hittalamani (supra) is concerned, Supreme Court in the said judgment has held that in the event, the document is vague, the same must be construed having regard to surrounding and/or attending circumstances. It is held that in a case where a consent decree cannot refer to the entire disputes between the parties and some vagueness remained, the factual background as also the manner in which existence of rights have been claimed by the parties would be relevant. In the said judgment, the Supreme Court was considering the vague consent terms. It is held that while construing a decree, this court can and in an appropriate case ought to have taken into consideration the pleadings as well as the proceedings leading upto the decree. 194. In this case, the minutes of the order filed by the parties before this court were absolutely clear. The minutes of the order were signed by the learned counsel appearing for the parties whose authority has not been disputed by the parties. This court disposed of the proceedings in terms of those minutes of order signed by both the parties through their respective counsel. The ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... before this court in the said judgment. Both the parties were aggrieved by the valuation report determining the market value of the said shares. This court accordingly held that since both the parties were aggrieved by the valuation report, the valuation ex-facie could not be considered as just and proper. In this case, M/s.V.B. Haribhakti & Co. has already submitted a report. The valuation carried out by the valuer is whether realistic or not has to be still considered by the Company Law Board. The judgment of this court in case of Vinod Kumar & Anr. (supra) thus would not assist the case of the appellant. 197. Insofar as judgment of this court in case of Nafan B.V. (supra) relied upon by the learned counsel for the appellant is concerned, in my view the said judgment would not assist the case of the appellant. There was no agreement between the parties about the date of valuation as in this case. A perusal of the record indicates that though the first order was passed by the Company Law Board for such valuation by appointing M/s.Chaturvedi & Shah on 25th June, 2009, the appellant though had sought appointment with the said valuer M/s.Chaturvedi & Shah, later made a grievance be....
X X X X Extracts X X X X
X X X X Extracts X X X X
....thus cannot be allowed to raise this issue that the valuation of the shares shall be fixed as on the date of passing of the judgment keeping in mind that the properties of the respondent nos. 1 and 6 are immoveable properties and valuation thereof might have gone up. 201. Insofar as submission of the learned counsel for the appellant that the respondent nos. 1 and 6 and the directors have illegally diluted the shareholding of Mr.Anthony Maynard is concerned or that the respondent nos. 1 and 6 have failed to transmit the shareholding of the appellant is concerned or that the respondent nos. 1 and 6 have excluded the appellant from participating in the management is concerned, these allegations need not be gone into by this court in the present proceedings and if any such allegations are made by the appellant in the company petitions which were pending before the Company Law Board and are now pending before the National Company Law Tribunal, the appellant can agitate these allegations in those proceedings. 202. Insofar as the submission of the learned counsel for the appellant that none of the orders passed by the Company Law Board can be considered as the orders under section 402(....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ke out a case of oppression, the court is not powerless to do substantial justice between the parties and place them, as nearly as it may, in the same position in which they would have been, if the meeting was held in accordance with law. 205. As a measure of neutralisation of the benefit which one set of shareholders received, the Supreme Court issued certain directions regarding payment of dividend. In this case without prejudice to the rights and contentions of the respondents that the appellant is not entitled to seek shifting of the date of valuation from 31st March,2008 to some other date, the respondent nos. 1 and 6 have offered interest at the rate of 10% per annum on the amount payable to the appellant in terms of the valuation report of M/s.V.B. Haribhakti & Co. from the date of report i.e. 30th October, 2011 till 31st December, 2017, in the event of the appellant accepting the valuation report submitted by M/s.V.B. Haribhakti & Co. on 30th October,2011. The said without prejudice statement is made in writing by the respondent nos. 1 to 6 before this court on 17th January, 2017 and is taken on record. It was made clear in the said statement that the said statement was va....
X X X X Extracts X X X X
X X X X Extracts X X X X
....counsel for the respondent nos. 1 and 6 that though the husband of the appellant did not have 1/3rd shareholding in the respondent nos. 1 and 6, the respondent nos. 1 and 6 had offered 1/3rd shareholding to the appellant and her family is concerned, this court cannot re-open this issue in view of the parties having agreed before the Company Law Board that fair value would be paid by the respondent nos. 1 and 6 to the appellant, legal heir of said Mr.Anthony Maynard on the basis of 1/3rd shareholding. 209. This court in case of Akkadian Housing & Infrastructure Pvt. Ltd. & Ors. (supra) approved the order passed by the company Law Board not fixing the date of the valuation as on the date of petition but considering the pendency of the petition for about three years for default of none fixed 50% mark up on the share of profit to compensate one of the party. The Special Leave Petition against the said judgment delivered by this court is pending. In this case, this court is of the view that the delay was attributable on the part of the appellant. The said judgment of this court thus would not assist the case of the appellant. 210. A perusal of the impugned order passed by the Company ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e appellant in Company Application No. 399 of 2011 was in teeth of the various orders passed by the Company Law Board and this court and thus this court does not find any infirmity with the order passed by the Company Law Board dismissing the Company Application No.399 of 2011 for the reasons recorded therein. There is no perversity in the said order passed by the Company Law Board and thus no interference is warranted in this company appeal. 212. Insofar as Company Application No.398 of 2011 inter-alia praying for transfer of company petition (46 of 2011) which was filed by the appellant before the Company Law Board, Mumbai is concerned, the said Company Petition No.46 of 2011 was filed by the appellant against Mundhra Container Freight Station Private Limited for various reliefs before the Company Law Board, Mumbai. The appellant had also impleaded the respondent nos. 1 and 6 herein in the said company petition as respondents. The names of the respondent nos. 1 and 6 are subsequently deleted by the appellant from the arena of the said Company Petition No.46 of 2011 pursuant to an order passed by the Company Law Board. A perusal of the record indicates that the reliefs and the na....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... vs. Sigmalon Equipment P. Ltd. & Ors. (supra) relied upon by the learned counsel for the appellant is concerned, the said judgment would not assist the case of the appellant in view of the fact that the parties in this case had by consent agreed that the valuation shall be on the basis of the balance sheet of the respondent nos.1 and 6 as on 31st March 2008. 216. In so far as the allegation of the appellant that the other directors of the respondent nos.1 and 6 had diluted the shareholdings of Mr.Anthony Maynard from 33% to about 17% is concerned, since those allegations are to be dealt with the National Company Law Tribunal in the company petition filed by the appellant, this Court need not go into those allegations at this stage in these appeals arising out of the interlocutory orders. Similarly, the allegation of the appellant that the respondent nos.1 to 6 did not permit the appellant to take inspection of the record is concerned, the said issue also can be raised before the National Company Law Tribunal in the pending company petitions if already raised in those petitions and need not be dealt with by this Court. 217. A perusal of ground 'H' on page 4 of the appeal....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... learned counsel for the appellant can be read in the said order as the same had not been contemplated and agreed by the parties in the said order. 220. The Kerala High Court in the case of Subash Jain & Ors. vs. Pioneer Shopping Complex Pvt. Ltd. & Ors. (supra) has held that after having agreed to purchase the minority shares on the basis of a report submitted by the valuer appointed by the Company Law Board, majority shareholders cannot wriggle out of their agreement which was accepted by the minority shareholders. It is held that the Company Law Board is duty bound to pass orders under Section 402(b) on the basis of the valuation report submitted by the valuer after hearing both the parties. In my view, the principles of law laid down by the Kerala High Court in the case of Subash Jain & Ors. vs. Pioneer Shopping Complex Pvt. Ltd. & Ors. (supra) would apply to the facts of this case. In this case, the appellant who was the minority shareholder had agreed to exit on payment of fair valuation and also agreed to the appointment of the valuers by the Court which order was also agreed by the respondents, the appellant cannot be allowed to wriggle out of the said agreement. I am resp....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d be binding on the parties is concerned, in my view, there is no merit in this submission of the learned counsel for the appellant for the reason that the counsel for the parties had put their initials on the corrected portion of the Minutes of Order containing handwritten corrections. Admittedly in the re-typed Minutes of Order dated 22nd July, 2011, corrected Minutes of Order which were duly agreed by the parties and signed by their respective counsel were re-typed. This Court had thereafter passed an order in terms of the Minutes of Order and thus there was no question of any inconsistencies/difference in those two sets of Minutes of Order. 225. In so far as the submission of the learned counsel for the appellant that in this case, no time, date and amount of the valuation was mentioned in any of the orders passed by the Company Law Board or by this Court is concerned, a perusal of various orders passed by the Company Law Board and the order dated 22nd July, 2011 passed by this Court clearly indicates that the parties had agreed about the shareholdings of the appellant, name of the valuer, valuation to be made on the basis of the balance sheet of the respondent nos.1 and 6 as ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t of various rights permitted under the Articles of Association and Memorandum of Association and/or of the provisions of the Companies Act, 1956. 229. In so far as various judgments relied upon by the learned counsel for the appellant referred in paragraph 127 aforesaid in support of the submission that the valuation of the property has to be on the date of the order is concerned, in my view, the parties having agreed the date of valuation as on 31st March, 2008 cannot be now allowed to insist for some other date for the purpose of valuation of the property including the valuation as on the date of order or actual exit. Those judgments thus would not assist the case of the appellant. 230. In so far as the submission of the learned counsel for the appellant that the valuation report of M/s.V.B. Haribhakti & Co. is stale, not equitable and contrary to unconscionable bargain is concerned, in my view, since the said report has been submitted pursuant to the consent order passed by this Court, the said report cannot be challenged on such ground. Be that as it may, whether the valuation made in the said report is realistic or not has to be decided by the Company Law Board. 231. In so....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e has not applied for setting aside those consent order either before the Company Law Board or before this Court on such grounds. On the contrary, the record indicates that she has also acted upon those consent orders. 234. In my view, the transposition of the respondent no.7 at belated stage clearly indicates the collusion between the appellant and her daughter. The respondent no.7 has not alleged any malafides against the appellant in recording consent on her behalf before the Company Law Board and before this Court. 235. In so far as the submission of the learned counsel for the respondent no.7 that the principles of natural justice apply to the proceedings before the Company Law Board as well as before this Court and in support of this submission, reliance placed on Section 10 E (5) of the Companies Act, 1956 and on Order XXXII Rule 7 of the Civil Procedure Code, 1908 is concerned, in my view, the order passed by the Court under Order XXXII Rule 7 is voidable at the instance of minor and unless such minor chooses to challenge such consent order, such order is good and cannot be set aside. 236. In so far as the reliance placed on the judgment of the Himachal Pradesh High Cour....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ad given before the Company Law Board and also before this Court and were ad-idem about the terms and conditions of exit. The appellant never applied for recall of any of those orders at any point of time on the ground that the appellant was not ad-idem about any terms and conditions of exit before the Company Law Board and before this Court. On the contrary, the appellant had raised a false plea that various terms and conditions demanded by the appellant were not incorporated in the order passed by the Company Law Board and by this Court. The appellant was throughout under legal advice and cannot be allowed to urge that the parties were not ad-idem about the terms and conditions of exit. 240. Supreme Court in the cases of Purnima Manthena & Anr. vs. Ranuka Datla & Ors. (supra) and V.S. Krishnan & Ors. vs. Westfort Hi-Tech Hospital Ltd. & Ors. (supra) has dealt with the powers of the Company Court under Section 10F of the Companies Act, 1956 and has held that the findings of fact cannot be interfered with by this Court under Section 10-F of the Companies Act, 1956 unless the order passed by the Company Law Board demonstrate perversity or arbitrariness and only if the question of l....
X X X X Extracts X X X X
X X X X Extracts X X X X
....prayers sought by in the said company application. 244. It is submitted by the learned counsel for the appellant that the respondent no.7 is the step son of the appellant. The appellant has 26% shareholding interest in the respondent no.1 company. If the respondent no.7 sells his 1/3rd shareholding out of shareholding of the late husband of the appellant i.e. Mr.Anthony Maynard, the shareholding of the appellant in that event would be less than 26%. She submits that the appellant has right of permanent directorship in the respondent no.1 on the basis of the shareholding of her late husband. She placed reliance on Article 27(b) of the Articles of Association of the respondent no.1 in support of her submission that she is entitled to be a permanent director of the respondent no.1 company. She submits that the appellant is entitled to buy the shares of the respondents including respondent no.7. The respondent nos.1 to 6 cannot enter into any Agreement with the respondent no.7 in violation of the Articles of Association. 245. At this stage, Mr.Narichania, learned senior counsel appearing for the respondent nos.1 to 6 states that no agreement between the respondent nos.1 to 6 and the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
...., the appellant filed the said Company Application No.389 of 2012 inter-alia praying for various reliefs already referred to aforesaid. Learned counsel for the appellant invited my attention to Article 3(a), Articles 5, 16 to 22 and 27. It is submitted by the learned counsel that there are two categories of preemption rights provided in the Articles of Association. She submits that the shareholders of the respondent no.1 are entitled to exercise intra-group preemption right. She submits that in the event of there being no scope of intra-group pre-emption right because of any member not willing to purchase the share of another member for a fair value, only then Article 18 will be triggered. She submits that admittedly since the respondent no.7 never offered to sell his entitlement of 1/3rd share in the shareholding of late Mr.Anthony Maynard to the appellant for the fair value, the respondent no.7 could not have offered to sell his 1/3rd shareholding to the other shareholders / members of the respondent no.1. 250. It is submitted that the Board of Directors of the respondent no.1 acted as an agent for sale of the shares of one member of the company to another member of the company.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e entitlement of the respondent no.7 provided he would have joined the appellant in the company petition. She submits that the said alleged admission in the company petition as construed by the Company Law Board was not an unconditional averment, but was subject to the condition that the respondent no.7 ought to have joined the appellant in the company petition against the respondent nos.1 to 6. Learned counsel invited my attention to the prayer clauses (h), (l), (p) and (o) in support of her submission. She submits that the respondent no.1 and its directors could not have even maintain the application filed before the Company Law Board for transmission of the shares in favour of the respondent no.7 to the extent of 1/3rd shareholding of late Mr.Anthony Maynard in favour of the respondent no.7. 254. It is submitted that since the order passed by the Company Law Board for transmission of the shares in favour of the respondent no.7 itself was without jurisdiction and illegal, the appellant was not required to challenge the said order by filing any appropriate proceedings for declaration that the said order was illegal and void. She submits that though the appellant had not impugned ....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... Learned counsel for the appellant placed reliance on the judgment of the Supreme Court in case of Bihar State Electricity Board, Patna & Ors. vs. Green Rubber Industries & Ors. AIR 1990 Supreme Court 699 and in particular paragraph 21 in support of her submission that the Court has to consider and interpret the contract with reference to its object and the whole of its terms and shall make an endeavor to collect the intention of the parties even though the immediate object of enquiry is to ascertain the meaning of an isolated clause. She submits that the Company Law Board thus ought to have applied the articles which provide the right of the preemption inter-se between the members of the respondent no.1 before seeking transfer of their shares to an outsider or others. 259. Learned counsel for the appellant placed reliance on the judgment of the Supreme Court in case of M.O.H. Uduman & Ors. vs. M.O.H. Aslum, AIR 1991 Supreme Court 1020 and in particular paragraph 14 and would submit that the Court has to construe a contract as a whole and the intention of the parties must be gathered from the language used in the contract by adopting harmonious construction of all the clauses con....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on the judgment delivered by the Division Bench of this Court in case of Bajaj Auto Ltd. vs. Western Maharashtra Development Corporation Ltd. 2015(4) Bom C.R. 499 and in particular paragraph 27 in support of the submission that right of pre-emption provided in the Articles of Association to a third party or another shareholder does not constitute restriction of free transferability and has to be strictly complied with. 264. Learned counsel for the appellant placed reliance on the judgment of this Court in case of Sugrabai Alibhai & Ors. vs. Amtee Properties Pvt. Ltd. & Ors. (1984) 55 Company Cases 734 and in particular relevant paragraphs on pages 735 and 736 in support of her submission that the appellant was entitled to inspect the books of account of the respondent no.1 under section 208 of the Companies Act, 1956 and other books and papers referred in the said provision. She submits that the respondent no.1 however, did not permit the appellant to take inspection of the books of accounts and other related documents. She submits that the respondent no.1 has refused to provide access and inspection of the books and documents to the appellant. 265. Learned counsel for the appell....
X X X X Extracts X X X X
X X X X Extracts X X X X
....by her. He submits that it is the case of the appellant herself that the said shareholding of the said Mr.Anthony Maynard has to be divided in equal proportion to the appellant, her daughter and the respondent no.7. It is submitted that the question of exercising any alleged preemptive right by the appellant did not arise. The respondent no.7 is entitled to 3118 equity shares out of the total shareholding of late Mr.Anthony Maynard in the respondent no.1 which is rightly transmitted by the respondent no.1 in favour of his client. He submits that the respondent no.7 had absolute right in those shares and thus the appellant could not exercise any alleged right of preemption in those shares. 269. It is submitted by the learned senior counsel that the appellant never argued before the Company Law Board or had pleaded that the entitlement of the respondent no.7 to the 3118 shares was conditional upon the respondent no.7 joining the appellant in the company petition filed by her. He submits that in view of prayers in the said company petition, the arguments now advanced across the bar in this appeal are totally untenable and contrary to the pleadings and prayer clauses in the said compa....
X X X X Extracts X X X X
X X X X Extracts X X X X
.....7 as per the directions of the Company Law Board and issuance of the duplicate shares and transmission of shares was further ratified in the board meeting dated 19th June, 2012. He submits that the appellant has admittedly not challenged the said order passed by the Company Law Board directing the respondent no.1 to transmit 3118 shares in the name of the respondent no.7 and to rectify register of shares. 274. It is submitted that the said order itself could have been challenged under section 10-F of the Companies Act, 1956 or before the Supreme Court. The said order having attained finality thus cannot be directly or indirectly challenged in this company appeal by the appellant. He submits that the resolution for transmission of shares has also attained finality in view of the appellant not challenging the said resolution. She was also issued a notice dated 19th June, 2012 by the respondent no.1. He submits that the respondent no.1 has also issued duplicate shares of the entire shareholding of Mr.Anthony Maynard and not only duplicate shares only to the respondent no.7 as is apparent from the affidavit filed by the respondent no.1 company before the Company Law Board. 275. Mr.D....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... that no such alleged oral agreement was pursued by the appellant in her submission before the Company Law Board. 278. Learned senior counsel for the respondent no.7 placed reliance on Article 5 of the Articles of Association and would submit that under the said Article, member cannot transfer his share to a non-member if buying member is available and is willing to purchase the same at the price agreed upon by the transferor and the Board of directors and failing agreement at the price fixed by the auditors of the company. He placed reliance on Articles 16 to 18 and would submit that Article 16 is not redundant and must be given due meaning to it. He submits that under Article 16, it is not mandatory that if the member decides to sell his shareholding, he must first offer to his immediate family members. No such restriction is imposed under the said Article. He submits that Articles 17 and 18 are procedural in nature, whereas Articles 5 and 16 gave right to the member to sell his shareholding to other members of the company. He submits that there is no dispute that the Articles of Association are in the nature of contract and shall be given a business meaning. Learned senior coun....
X X X X Extracts X X X X
X X X X Extracts X X X X
....llant cannot demand possession of the shares of the respondent no.7 in her favour. The appellant has not amended the appeal memo for transfer of proportionate share in her favour. The appellant had filed the joint application with her daughter before the Company Law Board. 282. Insofar as issuance of duplicate shares is concerned, learned senior counsel for the respondent nos.1 to 6 submits that the respondent no.1 had followed requisite procedure under section 84(2) of the Companies Act, 1956 before issuance of duplicate shares not only to the respondent no.7 but also in the name of late Mr.Anthony Maynard. He submits that the appellant was admittedly present in the board meeting when such decision was taken. He submits that all three members i.e. the appellant, her daughter and the respondent no.7 have conceded that all three members are entitled to 1/3rd share each in the shareholding of late Mr.Anthony Maynard. He submits that since the original share certificates were not with the appellant or with her daughter or with the respondent no.7, the respondent no.1 had issued the duplicate share certificates. 283. It is submitted that since the order of the Company Law Board direc....
X X X X Extracts X X X X
X X X X Extracts X X X X
....res since the shares are transmitted in favour of the respondent no.7 on the basis of the order passed by the Company Law Board which has attained finality. Learned senior counsel distinguished the judgment of the Company Law Board relied upon by the learned counsel for the appellant in case of Dr.Rajiv Das vs. United Press Ltd. & Ors , 111 Company Cases 584 (CLB) on the ground that the said judgment does not assist the appellant. He submits that the order passed by the Company Law Board is even otherwise not a precedent and is not binding on this Court. 287. Learned senior counsel also distinguished the judgment in the case of Rai Bahadur Gujarmal Modi & Brothers Pvt. Ltd. vs. Goderfy Philips India Ltd., (2008) 143 Company Cases, 148 on the ground that in that case the objection was raised by the objector, whereas in this case there is no controversy that the respondent no.7 is entitled to 1/3rd share in the shareholding of late Mr.Anthony Maynard. Insofar as the judgment of this Court in case of Bajaj Auto Ltd. vs. Western Maharashtra Development Corporation Ltd. 2015(4) Bom C.R. 499 is concerned, learned senior counsel submits that he has no dispute about the proposition of law....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f Association cannot be taken away. The respondent nos.1 to 6 have no answer to Article 27(a) of the Articles of Association. The appellant has nominated her daughter as a director under Article 27(c) of the Articles of Association. She submits that the appellant had never opposed the right of the respondent no.7 to intervene before the Company Law Board. 291. It is submitted that the appellant had not challenged the order opposing the right of the respondent no.7 to intervene in the company petition. She submits that the entire order passed by the Company Law Board is based on the premise that the appellant had agreed to exit though the appellant had always claimed her right of pre-emption. She submits that the finding of the Company Law Board is totally perverse and thus have to be interfered with by this Court under section 10-F of the Companies Act, 1956. She submits that the appellant has already filed a separate proceeding i.e. testamentary suit. The legal heirs of the shareholders can also allege the oppression and mismanagement against the company under section 397 and 398 of the Companies Act, 1956 before the Company Law Board. 292. Learned counsel for the respondent no.....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the appellant, her daughter and the respondent no.7 in equal proportions. It is averred in the company petition that the respondent no.2 had promised the appellant that he would ensure that requisite measures would be taken after which duly transmitted share certificates would be delivered over back to the appellant. 295. In paragraph 20 of the company petition, it is averred that the appellant had received the intimation of purported extra ordinary board meeting scheduled to be held on 21st April, 2007 at Days Inn Hotel in Navi Mumbai with an agenda of the meeting annexed with the said notice. 296. A perusal of the prayers in the said company petition indicates that in prayer clause (H), the appellant and her daughter prayed for restoration of the appellant and her daughter / Maynard's family shareholding in respondent no.6 to 33.34% and to restrain the respondents by an order and injunction from in any manner whatsoever selling, transferring, alienating, assigning, encumbering, altering or dealing with either the shareholding of the respondent no.6 or the shareholding of the respondent no.6 in the respondent no.1 company. Punjab Terminals Private Limited was impleaded as th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....2010), for seeking impleadment in the company petition filed by the appellant, the Company Law Board passed an order for impleadment of the respondent no.7 in the said company petition. The said order for impleadment of the respondent no.7 in the company petition, which was filed by the appellant and her daughter has not been impugned by the appellant or by her daughter. It is also not in dispute that the respondent nos.1 to 6 thereafter filed a company application (112 of 2012) in the said company petition filed by the appellant, inter-alia praying for permission to purchase the shareholding of the respondent no.7 in the respondent no.1 company. The said application was opposed by the appellant. On 17th May, 2012, the Company Law Board passed an order directing the respondent no.1 to transmit 1/3rd of the shareholding of the late Anthony Maynard in favour of the respondent no.7 and to rectify the register of shares of the respondent no.1. 301. It is not in dispute that on 5th June, 2012, the respondent no.1 has already rectified the register of shares and has given effect to the order of transmission passed by the Company Law Board in favour of the respondent no.7. The respondent....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Mr.Anthony Maynard in favour of the respondent no.7 and to rectify the register of shares to the extent of 1/3rd of the total shareholding of the late Anthony Maynard in the respondent no.1 company. The appellant thus cannot be permitted to advance any arguments contrary to the pleadings filed by her before the Company Law Board. 305. Insofar as the submission of the learned counsel for the appellant that the Court has to consider the pleadings and the prayers in the company petition and the company application filed by the appellant in toto to ascertain the true and correct meaning thereof is concerned, on a plain reading of the entire pleadings in the company petition as well as in the company application makes it clear beyond reasonable doubt that the appellant had admitted that the respondent no.7 was entitled to 1/3rd of the shareholding of the late Mr.Anthony Maynard in the respondent no.1 company and had as a matter of fact prayed for transmission of the shareholding of the late Mr.Anthony Maynard and for delivery of related share certificates to the appellant, her daughter and the respondent no.7 in equal proportions. The appellant had also prayed for a declaration that th....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Court that the duplicate share certificates in respect of 1/3rd share of the appellant and her daughter also would be issued by the respondent no.1 and can be deposited with the National Company Law Tribunal. The appellant is thus not affected in any manner whatsoever insofar as the duplicate share certificates are concerned. 309. A perusal of prayer clause (a) of the company application clearly indicates that the ownership of the respondent no.7 of 3118 shares in the shareholding of late Mr.Anthony Maynard in the respondent no.1 is accepted by the appellant. The appellant thus cannot be allowed to now urge that the respondent no.1 could not have transmitted 3118 shares in the name of the respondent no.7 and those shares ought to have been offered by the respondent no.7 or by the respondent no.1 company to the appellant first to enable the appellant to exercise her alleged pre-emptive rights to purchase those shares. In my view, Mr.Dhond, learned senior counsel for the respondent no.7 is right in his submission that it was for the respondent no.7 to decide whether to offer his shares to the appellant or to other members of the respondent no.1. Admittedly the respondent no.7 has r....
X X X X Extracts X X X X
X X X X Extracts X X X X
....m thus not inclined to accept the submission of the appellant that the appellant would have better bargaining power to negotiate the price or transfer of any shares with other members of the respondent no.1 even if she was forced to exit from the respondent nos.1 and 6. 313. The Gauhati High Court in case of Radhabari Tea Co. Pvt. Ltd. (supra) has held that the pre-emptive rights to buy the shares of the company are granted in favour of a member by a private company under the Articles of Association so that his right of control is not taken away. In my view since none of the Articles of Association in this case provides for a mandate to offer the shares to the family members first before offering the same to the other members of the company, the judgment of the Gauhati High Court would not assist the case of the appellant. The respondent no.7 being one of the legal heir of the late Anthony Maynard is entitled to deal with those 3118 shares in the manner he deems fit subject to the provisions of the Articles of Association, Memorandum of Association and other provisions of law. 314. Insofar as the submission of the learned counsel for the appellant that the respondent no.1 had not....
X X X X Extracts X X X X
X X X X Extracts X X X X
....therwise not applicable to the facts of this case. 317. Insofar as the judgment of this Court in case of Rai Bahadur Gujarmal Modi & Brothers Pvt. Ltd. (supra), relied upon by the learned counsel for the appellant is concerned, the said judgment would not assist the case of the appellant for the reason that in this case there is no dispute raised by the appellant that the respondent no.7 is not entitled to 1/3rd in the shareholding of the late Mr.Anthony Maynard but has proceeded on the premise that the appellant, her daughter and the respondent no.7 are entitled to 1/3rd share each in the shareholding of the late Mr.Anthony Maynard. 318. Insofar as the submission of the learned senior counsel for the respondent no.1 that though the late Mr.Anthony Maynard did not have 1/3rd shareholding in the respondent no.1, the respondent no.1 had offered to pay to the appellant, her daughter and the respondent no.7 for 1/3rd shareholding is concerned, since the parties have agreed that the appellant and her daughter would be paid fair valuation on the basis of 1/3rd shareholding of the late Mr.Anthony Maynard, this Court cannot go into the issue as to whether the late Mr.Anthony Maynard was ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....2. There is no substance in the submission made by the learned counsel for the appellant that the respondent no.1 has not followed the mechanism for transfer or transmission of shares under Articles 18 to 21. The respondent no.1 has complied with the order passed by the Company Law Board for transmitting the shares in favour of the respondent no.7, which order has attained finality and the validity thereof cannot be gone into by this Court in these company appeals. 323. There is no merit in the submission of the learned counsel for the appellant that the Company Law Board has dismissed the company application which is the subject matter of the Company Application No.49 of 2014 only on the ground that the appellant had agreed to exit and thus was not entitled to claim any pre-emptive rights over the shares of the respondent no.7. In my view, the order passed by the Company Law Board is a reasoned order and is not perverse. 324. Insofar as the submission of the learned counsel for the appellant that since the order passed by the Company Law Board directing the respondent no.1 to transmit 3118 shares in favour of the respondent no.7 is illegal, the appellant was not required to chal....