TaxTMI 
TaxTMI 
2025 (11) TMI 386
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.....01.2023, pursuant to the mediation proceedings held by Shri M. Raghunatha Bhat, the Ld. Mediator, be held to be unenforceable and be set aside. 2. Before coming to the impugned order it would be appropriate to state facts of the case: a) On or about 14th June 2014, the Respondents filed a Petition No.56 of 2014 under Sections 397, 398, 402 and 403 of the Companies Act, 1956. The Appellant appeared in the said Petition and contested it by filing Replies. Vide Order dated 11th October 2022 passed in CA 1036/2020, the Ld. NCLT appointed Shri. M. R. Bhat as a Mediator and he commenced mediation; b) the said mediation concluded in terms of the Minutes of Meeting dated 12th December 2022, but these Minutes even though were signed by the Appellant as well as by the Respondents were allegedly never acted upon and hence it is alleged the mediation failed; c) on 9th January 2023, the Appellant sent an email to the Learned Mediator explaining the circumstances in which the mediation was carried out and raised objections. It is alleged on 14th January 2023 the Learned Mediator, without offering any opinion on the contentions raised by the Appellant, proceeded to ....
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....unt to an offence under the Indian Penal Code. The particulars of all facts which go to prove coercion and establish them are missing. Merely, saying that the Applicants were put under coercion would not tantamount to an offence under the Indian Penal Code as is contemplated by Section 15 of the Contract Act. This being so, element of coercion does not exists. 13. Next is undue influence. Section 16 of the Contract Act defines undue influence. It requires that one of the parties have real or apparent authority over the other and the said party is in a position to dominate the will of the other and uses that position to obtain an undue advantage over the other. No such requirement of law, in the instant case, is forthcoming. Particulars of undue influence are not set-forth in the applications in sufficient details. All that the Applicants allege is that the Respondents kept on demanding over the Applicant no. 1 particularly and because of their pressure, anger, emotional outbreaks the consent terms came to be executed. There is absolutely no elaboration as to the kind and nature of pressure anger or emotional outbreaks. The allegations are quite vague and do not enable us t....
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....d have been arrived at in absence of those annexures. 18. We make it clear at the threshold that no specific or precise motive is attributed on the part of the Mediator by Applicants in her e-mail dated 9th January, 2023. If the reply of the Mediator is read carefully we notice that the annexures were not sent to him either by the Counsel of the Respondent or by the parties themselves. It cannot be said that parties were not aware of those annexures particularly when they whole heartedly signed the consent terms on 7th January, 2023. The Applicants cannot take the advantage of the reply of the Mediator now. 19. Consent terms is also assailed on the ground that it is against the directions of this Tribunal given in the order dated 23rd March, 2018. We have gone through the entire record and are unable to lay over hands on the said order. Assuming for the sake of argument that certain directions were given then ultimately the parties to the proceedings are the best masters of their interest and know what is good in their interest and in absence of any extraneous reasons, if they are able to arrive at consent terms then there is no reason to doubt the same. In the pr....
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....Service Business of AECPL and listed specifically in Annexure 2 to these Consent Terms, shall be transferred by ABCPL to ASSPL, on the basis of Slump Sale as referred to in these Consent Terms. "Service Business" for these Consent Terms, shall mean the business of rendering services in relation to third party inspection service and calibration laboratory(ies) including but not limited to the business which was transferred from AECPL to M/s Aditya Engineering (a partnership firm controlled by Mr. Aditya Salunke). If AECPL has transferred to M/s Aditya Engineering and/or if M/s Aditya Engineering is in possession of any plant and machinery relating to the Service Business, then such plant and machinery shall also be transferred by such entity(ies) to ASSPL, at book value." (Emphasis supplied) 5. It is the submission of the Learned Counsel for the appellant such annexures 1 and 2 were never a part of the consent terms, though described wrongly and further the correspondence between the parties and the Ld. Mediator would show said annexures 1 and 2 above were not even drafted as on 07.01.2023 when such consent terms were signed, hence the consent terms were not final and....
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....y mail, a copy of which is attached as Annexure IV. However, no reply has been received as yet from the Petitioner, till date. Thus, the Consent Terms entered on 07.01.2023 is not complete/final yet. 4. That, Sri Aditya Salunke, one of the Respondents, sent a mail on 16.01. 2023, a copy of which is attached as Annexure V, in which he stated that the entire lists that were to be attached to the Consent Terms, should be reviewed and signed in the presence of the Mediator and therefore, had requested for a meeting for further discussions after "IMTEX exhibition', which was to be held and conclude on 25.01.2023." (Emphasis supplied) 8. On the basis of correspondence above, it is submitted by the Learned Counsel for the appellant the Ld. Mediator himself had treated the consent terms as not complete and thus shall not have any binding affect. 9. The Learned Counsel for the Respondents argued otherwise. 10. We have heard the arguments advanced by both the Learned Counsels. Admittedly, the signature of the appellants herein upon the consent terms dated 07.01.2023 are not denied by them. The dispute raised is only qua two annexures viz a) the plant and machin....
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....r. 6. However, to the utter surprise of the Mediator, Mr. Aditya Salunke, who is presently controlling the Company as Managing Director of M/s Accurate Engineering Company Private Limited (R1) to the exclusion of Petitioner, had attempted to disown the "Consent Terms signed on 07.01.2023 by terming the "Consent Terms" as a draft T & C, by his mail dated 07.03.2023, a copy of which is attached as "Annexure C" hereto. It may be noted that he attempted to wriggle out of the "Consent Terms" by stating that the parties are unable to agree on the contents the lists of plant and machinery for manufacturing and service divisions and therefore the same could not be prepared and attached to the terms and conditions He had also sought to raise a dispute that the "Consent Terms" would result in creation of 3 baskets instead of 2 equal baskets per directions of Hon'ble Tribunal It is further submitted in the penultimate paragraph to the attachment in the mail dated 07.03.2023 Mr. Aditya Salunke had requested to treat to the "Consent Terms" as draft till the Annexures (relating to plant and machinery of manufacturing and service divisions) are finalized and attached. 7. Tha....
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....ustained efforts spanning over 5 months though the Hon'ble Tribunal initially fixed a time limit of one month and fee of Rs 3,50,000/- (Three Lakhs and Fifty Thousand Only) for this assignment. 9. 1 finally express my gratitude to the Hon'ble Tribunal for having given me this opportunity to assist this Hon'ble Tribunal in arriving at the settlement of dispute which is the subject matter of the applications mentioned in the title of this report." 13. The third and final report makes it amply clear the consent terms were duly signed on 07.01.2023 and even Annexures 1 and 2 appended to the consent terms dated 07.01.2023 were also signed by both the brothers and thus a final copy of the consent terms dated 07.01.2023 along with its annexures; after according satisfaction to the process, was filed by the Ld. Mediator on record before the Ld. NCLT. Thus as is evident, the contesting parties viz. two brothers had signed such annexures and such properties viz. plant and machinery were only to be distributed between these two brothers. In fact, the consent terms not only dealt with the plant and machinery alone of the two business but was a wholesome settlement betwe....
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....rnment or the Tribunal or the Appellate Tribunal, as the case may be, shall proceed further to decide the remaining issues. 15. A bare perusal of the above rules would show Rule 25 provides the settlement agreement shall be reduced to writing and signed by the parties. As per Rule 25(2), such agreed terms of the settlement agreement shall be submitted before the Ld. Tribunal (Ld. NCLT in the present case). Further, Rule 26(1) mandates the Ld. Tribunal to fix a date and record its satisfaction that the parties have settled their dispute. The Ld. Tribunal is also expected to pass an order to this effect. 16. Reading of Rule 25 stipulates following three factors; a) the agreement must be reduced to writing. b) it must be signed by the parties, and c) it must be submitted to the proper authority with a proper covering letter. In the instant matter, it is clear from the record after entering the duly signed consent terms by the parties, the mediator had forwarded the consent terms dated 7.1.2023 along with his letter dated 18.03.2023 to the Ld. NCLT. Rule 26 lays down the time frame requiring the Ld. Tribunal to fix a hearing date "normally within 14 days "of receiving the mediato....