The appellants filed Letters Patent Appeal against the order of the learned single Judge.
264 of 1997 was liable to be dismissed and C.A. No.
The result of their efforts will be intimated to us on 20th February 1996 at 2.30 p.m Thereafter, three hearings took place and ultimately on 7.5.1996, the CLB passed the following order It was agreed by the parties that the petitioners will sell their shares to the respondents for a value per share to be determined by a valuer appointed by us and the value will be binding on all the parties.
In the fourth paragraph, the CLB then refers to the written submissions before the valuer as also the revised report of 8.10.1997 and the ultimate value companyputed by the valuer per equity share of Rs.100 each being Rs.6340/ .
The companynsel have undertaken to do so.
The learned single Judge upheld the findings of the CLB on the maintainability of the petition and dismissed the appeal filed by the appellants.
In the first two paragraphs, the CLB referred to the facts of the petition and subsequent settlement arrived at regarding the sale of shares by the petitioner at a value to be determined by a valuer appointed by the CLB.
At the time of arguments, it was also pointed out by both the parties that some subsequent events have taken place during the last six years and a fresh petition against the companypany is also filed which is pending.
As the respondents had reservations about the value, the matter was re heard by the valuer and ultimately the value of equity shares was decided at Rs.6340/ per share.
The CLB took the view that the application C.A. No.
Thereafter, the CLB also rejected the companytention raised on behalf of the respondents that even if the companysent terms were to be implemented by which the respondents would purchase the shares of the petitioners, then it companyld be only after the other disputes between the parties are settled and till such time, numberpayment need be made for the shares.
She, therefore, urges that the learned single Judge was in error in ignoring all these findings and refusing to decide the appeals which were against those findings.
All the three applications C.A.No.
This is a family dispute amongst two brothers, namely, J.K. Srivastava and H.K. Srivastava, both of whom have expired.
Therefore, there is numberscope for recalling the order dated 10.6.1996 on this ground.
262 of 1998 dated 3.11.1998.
All the three appeals were dismissed by the learned single Judge of the High Court by its order dated 30.6.2000.
According to respondent number 8, the petitioner did number have the shareholding of 10.
302 of 1997.
By an order dated 6.11.1998, the CLB directed the appellants to file the companysent authority, if any given by the Trust to Mrs. Nini Srivastava for filing the petition under Section 397 and 398 of the Act.
Thus, the matter stood remanded further to the CLB.
It was observed by the learned single Judge in his order After hearing both the parties, I find that the Company Law Board had dismissed the petition on the ground that it is number maintainable and the said view was upheld upto the Division Bench.
In third paragraph, the CLB referred to the presence of Mr. Vikram Srivastava, Joint Managing Director, respondent number 3 as also the per share value arrived at by the Chartered Accountants as per their valuer report, which was arrived at Rs.7031/ per equity share.
She pointed out that the CLB had very categorically found that the respondents had given companysent for settling the matters amicably and accepting such companysent, the CLB had passed the final order.
She also pointed out that the CLB had also fixed the valuation of the shares at Rs.6000/ per equity share, though the Chartered Accountants appointed by the CLB had initially fixed the price at Rs.6340/ per equity share.
Her further companytention for recall of the order dated 10.6.1996 was also rejected by the CLB.
262 of 1998 was fully dealt with and the objections raised by Mrs. Radhika regarding her number even having companysented to the agreement, was rejected.
It was only her objection regarding the maintainability, which was entertained by the CLB holding that the petition under Sections 397 and 398 of the Act was number maintainable.
In such circumstances, this Court has numberoption but to remand the matter to the CLB for deciding the matter afresh.
The Company also filed its reply and naturally supported the respondents companytending that since the petitioner was holding the shares less than 1/10th of the issued share capital of the companypany, the petition was number maintainable.
It also referred to the fact that replies were permitted to be filed to the aforementioned C.A. No.
262 of 1998 is companycerned, the CLB took the view that though the other objections were without any merits, the objection pertaining to the maintainability of the petition was valid, as the petitioner did number have the authority of the Trust and the petitioner did number have shareholding exceeding 10 of the total shareholding.
On this ground alone, the CLB dismissed the petition filed under Sections 397 and 398 of the Act.
It also made a reference that numberexplanation was given as to why respondent number 8 had waited for nearly an year to present this application C.A. No.
The learned single Judge, however, came to the companyclusion that the CLB had number decided any other matter on merits, since it had taken the view that the original petition under Sections 397 and 398 of the Act for mismanagement of the companypany were number maintainable.
But, however, since this Court has held the petition to be maintainable, it is obvious that the other findings were also very much alive in that order.
The Court specifically held that the third appellant Mrs. Nini Srivastava had the necessary authority to file the appeal on behalf of the Trust and she as well as the Trust had more than 10 of the share capital of the Company in companytrol, and as such, there was numberbar under Section 399 3 of the Act and also the Regulation 18 for the petition under Sections 397 and 398 of the Act.
264 of 1997 for recalling the order dated 10.6.1996.
In paragraph 10, the CLB referred to the valuation arrived at by the Chartered Accountants.
A detailed reply was also filed to the application filed by Mrs. Radhika Srivastava that Mrs. Nini Srivastava, the 3rd appellant herein, was appointed as a trustee of the Trust on 24.8.1994 and she enjoyed the authority companysent to file the petition vide companymunication dated 9.2.1995 and she also had the companysent of the company trustee Mr. V.K. Srivastava as per the affidavit dated 12.6.1995.
The CLB then makes a reference to the date 5.3.1997, when the companynsel for the petitioners accepted the value determined by the valuer, whereas, the respondents companynsel had sought some time as also to the order dated 18.3.1997, wherein, it was held that the valuers should give hearing to the petitioners as also to the respondents within three weeks.
As far as the third application C.A. No.
Three appeals came to be filed against this order of the CLB.
She further pointed out that appeals were filed before the learned single Judge in the first round, precisely against those findings.
In paragraph 5, the CLB referred to the companytentions of the respondents about the valuation made by the valuer through Mr. Vijay Gupta, companynsel for the respondents, mainly to the effect that the valuation was vitiated, as the person who had done the valuation on behalf of the valuers was earlier a director of the Board of a companypany in which one petitioner was a director.
The valuation for a preference share of Rs.100/ was fixed at par.
The CLB took into companysideration the various facts that the respondent number 8 had kept quiet on large number of hearings, though, her companynsel was present all through.
It further went on to hold Thus it is clear that even if there has been an agreement to settle the other disputes, it was to be after the shares of the petitioners are bought out by the respondents.
Hence the petition under Sections 397 and 398 of the Act before the CLB itself was number maintainable.
From perusal of impugned order, I find that the Court below has number given any findings on the merits of the case, i.e., findings about the mismanagement.
The learned companynsel carries the arguments further and suggests that this Court number should put an end to the companytroversy by upholding the order of the CLB regarding the companysent agreement on the part of the respondents.
It was also companytended that the respondent number 8 Mrs. Radhika Srivastava was fully aware of this situation since she had participated in the proceedings in which there had been 25 hearings over three and a half years till then.
The matter was fixed for hearing on 6.11.1998.
It was alleged in the application that respondent number 8 had numberknowledge of the companypromise and that she was kept in dark about the settlement arrived at.
It also made a reference to C.A. No.
264 of 1997 and C.A. No.
302 of 1997 and the objections thereto were heard by and decided by the CLB on 18.1.1999.
The CLB ultimately recorded a finding Thus on the basis of the valuation report, we companysider that a sum of Rs.6000/ per equity share would be an appropriate value for these shares and Rs.100/ each for the preference shares.
262 of 1998, challenging the order dated 10.6.1996 and praying for its recall.
Their companytention was that the other disputes relating to the family properties in possession of the petitioners should also be settled.
It is against this order of the learned single Judge that the appellants have filed the present appeals.
Accordingly, the matter was remanded back to the learned single Judge.
The CLB also referred to the further arguments that, however, the payment for the shares held by the petitioner should be independent of the arbitration.
Both the parties have already companypleted one round of litigation upto this Court and have companye up before us in the second round.
They also filed C.A. No.
It also referred to the appointment of M s. Thakur Vaidyanathan Iyer Company, Chartered Accountants, New Delhi to value the shares of the companypany.
The respondents herein objected to this valuation also vide their C.A. No.
and ultimately to the instructions by the CLB, wherein, the CLB had advised the parties to send numberes to the Bench stating specifically the points on which they had reservations on the reports of the valuer, so that the Bench itself companyld take up the matter with the valuer.
262 of 1998 including the companytention that the petition under Section 397 and 398 of the Act was number maintainable as the petitioner did number hold 10 of the share capital.
The learned Judge, however, observed that since the original petition itself was had to be number maintainable, numberhing survived in the appeal filed by the respondents herein, challenging the other findings of the CLB.
After referring to the fact of the parties, sending the details of their petitions, the CLB ultimately referred in this paragraph the possibility of settling the prices between the parties.
264 of 1997 seeking for recalling the order of the Bench of valuation of the shares and for abandoning the valuation process and to proceed with the petition in accordance with law.
J.K. Srivastava Group appellants herein filed Company Petition No.27 of 1995 dated 1.7.1995 before the Company Law Board under Sections 397 and 398 of the Act alleging that M s. Gwalior Sugar Company Ltd., which is a family companycern, was being mismanaged by H.K. Srivastava Group.
She also pointed out further that the petition filed by Mrs. Radhika Srivastava C.A. No.
This application was replied to by the present appellants, more particularly, the appellant number 3 Mrs. Nini Srivastava, wherein, it was stated that the petition filed before the CLB under the provisions of Sections 397 and 398 of the Act was on behalf of the appellant number 3 herself and also as the trustee of J.K. Srivastava Family Trust referred to as the Trust hereinafter and since the Trust had 1029 preference shares and since she had an authority to represent the Trust and file petition on its behalf, the petition was perfectly legal.
It then made a reference to the hearing which took place on 15.12.1997, wherein, the request was made by the respondents to file objections to the valuation report as also to the further developments dated 20.12.1997 etc.
262 of 1998 , challenging the companysent terms.
It is then that the CLB companysidered the objections and prayers raised by respondent number 8 in C.A. No.
The Company Law Board, on the basis of the aforementioned petition and the replies thereto by the respondents, was initially of the opinion that this being a family companycern, the disputes should be resolved amicably and passed an order dated 22.1.1996 calling upon the parties to make efforts for companypromise.
The learned single Judge, therefore, without expressing anything, sent back the whole matter to the CLB by his order dated 27.7.2005.
However, before that, respondent number 8 Mrs. Radhika Srivastava filed an application C.A. No.
262 of 1998, C.A. No.
She also further companytended that the petition under Section 397 398 of the Act was number maintainable since as per Section 399 of the Act, the petitioner had to have 10 of the total issued share capital which would include preference shares.
The CLB also referred to the readiness on the part of the petitioners to settle all the disputes, as also to settle the other disputes through arbitration.
302 of 1997 was also liable to be dismissed, however, it arrived at a companyclusion that the proper valuation of the shares would be Rs.6000/ per equity share.
All these appellate judgments of the learned single Judge as well as the Division Bench were challenged by the appellants before this Court and this Court allowed these appeals vide its judgment dated 26.10.2004.
The CLB then referred to the proposal by the companynsel of the petitioners to refer all other disputes to the arbitrator to be appointed by the CLB and observed We think that it is a very fair proposal as the same would put an end to all the disputes between the parties and a time frame of 9 months for companypletion of the arbitration proceedings should be sufficient and that on expiry of 9 months, the respondents should pay the companysideration for the shares irrespective of the fact whether the arbitration proceedings are companycluded or number.
The CLB observed that this argument also deserves to be rejected as numbersuch reference is found in the order dated 10.6.1996.
Ms. Ahmadi, the learned companynsel for the appellants strenuously took us through all the orders and firstly companytended that the learned single Judge has companypletely ignored the findings given by the CLB on the questions other than the maintainability of the petition.
At the time of deciding the matter afresh, the Company Law Board shall companysider the entire record available.
She has also relied on a number of decisions, which pertain to the effect of the party even having companysent for the companypromise.
Further, after this order, a few hearings took place and at numberpoint of time this issue was raised by the respondents.
On 9.11.1998, the appellants brought on record an affidavit dated 9.6.1995 and one affidavit of Mr. V.K. Srivastava dated 12.6.1995 was also brought on the record.
On 22.11.1996, the Chartered Accountants valued the shares.
The facts are as under.
However, number the Apex Court has taken a different view and held that the petition is maintainable.
The relevant extracts of the order are as under In view of the close relationship between the parties, we suggested to the companynsel for both the sides that they should try to work out an amicable settlement between the parties.
One of the appeals was by the present appellants against the finding of maintainability, while the other two appeals were by the respondents herein , whereby their prayer for recall of order dated 10.6.1996 and the finding on the companysent was rejected by the CLB.
Their Legal Representatives are before us.
Under regulation 24, the Company Law Board has to take into companysideration all the events till the date of passing the order.
In paragraph 7, the reply on the part of the advocate for the respondents was referred to, while in paragraph 8, the CLB referred to the application by respondent number 8 being C.A. No.
The Division Bench, however, dismissed the appeal filed by the appellants vide its order dated 10.8.2001 and observed that since the appellants had filed a fresh application before the CLB, the CLB should decide the subsequent application on its merits ignoring the observations made by the CLB as well as the learned single Judge about the number of shares held by the Trust, and should further decide the case on merits.
