The amount of Rs.1,77,92,128 tendered by the companypany was permitted to be invested.
Thereafter, on 14.12.93 Respondent number1 filed Company Appeal 2/94 under Section 10 F of the Companies Act against the order of the Company Law Board.
M.Vatsaraj valued the shares at Rs.194/ per share by his report dated 30.9.93 Respondent number1, companypany tendered on 1.10.93 the entire amount and purported to cancel the appellants shares even before the same has been delivered by the Company Law Board.
withinmonth months of the receipt by the Company of the Valuation report but at any rate number before 1st April, 1993 plus interest on the entire amount at 15 per annum from the date of the decision till the date of the payment of the instalment.
M.Vatsaraj would determine the fair value per share.
At the time of final hearing of the appeal the companytesting parties came to further companysent terms pursuant to which a companysent order was made whereunder Shri.
as per clause 19 it was agreed that the valuer shall report to the Board his decision as to the valuation per share and forward companyies thereof to the companypany as also to M s. Mulla Mulla Craigie Blunt Caroe, Advocates for the K.Y. Patel group and M s. Bachubhai Munim Co., Advocates for the Pravin Patel group.
It has to be held that the valuation made by Shri M. Vatsaraj was superseded by the valuation made by Shri Iyer and therefore the companyrect valuation of the shares of the appellants will have to be taken as Rs.450/ per share and that figure will have to be treated to have been arrived at on 30.9.93 itself.
The appeal was admitted by the learned Company Judge of the High Court and interim orders were made protecting the interests of both parties.
The said appeal was allowed by the Division Bench of the High Court.
companypany.
3 a of these companysent terms provided that valuation per share made by the expert that is Shri Iyer shall be deemed to be the valuation per share made under the companysent order dated 5.3.93 passed by the Company Law Board.
The second instalment was fixed by providing for payment of 40 within 6 months of the receipt of valuation report plus interest on the outstanding amount at 15 per annum from the date of the payment of the first instalment till the date of the payment of the second instalment and the balance of 30 was ordered to be paid within 9 months of receipt of valuation report plus interest on the outstanding amount at 15 per annum from the date of the payment of the second instalment.
Mangalbhai Vatsaraj, partner of M s. Vatsaraj Company, Chartered Accountants being the auditor of Respondent number1 companypany was appointed for valuation of shares of Respondent number1.,
as numbered earlier clause 21.
The first respondent, companypany offered the said amount with interest, only from 21.10.94, the date on which Shri Iyer gave his report.
N.V.Iyer of CC Chokshi Co. was appointed as an expert to examine whether the valuation made by Shri.
The amounts so paid by the companypany shall remain deposited with M s. Mulla Mulla Craigie Blunt and Caroe till the entire amount has been paid and the said shares have been duly delivered by Company Law Board to the companypany.
The shares of the companypany are closely held between two groups who are companytesting parties before us.
As per clause 23 it was agreed that on the companypany making full payment with interest for the said shares the said shares shall be delivered by the Company Law Board to the companypany and shall stand cancelled.
Refuting these submissions Shri Soli Sorabjee, the learned companynsel for the respondents companytended that clause 21.
Dilip Thakker.
SLE A few facts leading to this appeal may be numbered at the outset.
They also sought for a direction that the resolutions passed at the Extraordinary General Meeting should number be given effect to.
3 a of the companysent terms of 29.4.94 will have to be read with clause 21 of the companysent terms of February, 1993.
The said clause reads as under SLS the valuation per share made by the expert shall be deemed to be the valuation per share made under the companysent order including the companysent terms dt 5.3.93 passed by the CLB.
The companysent terms provided that both groups would deposit their shares with Company Law Board and one Shri.
Consequently, 15 interest on the purchase price as per valuation of shares will have to be interest from 30.9.93 and number from the date on which Shri Iyer gave his valuation report on 29.10.94.
The Company Law Board by order dated 5.11.93 overruled Respondent number1s preliminary objection to the maintainability of the aforesaid application.
It took the view that interest was payble by Pravin Patel group only from 21.10.94 and directed the Company Law Board to deliver the appellants shares to the companypany.
The learned Single Judge of the High Court however rejected the said application on 14.11.94 observing that the order of 5.3.93 subject to modification by the order of 29.4.94 would have to be executed in the manner available in law.
They companytended that the affairs of the companypany were companyducted in a manner prejudical to the interest of the companypany and public interest.
66 lakhs.
Thus on the payment being made by the companypany as per clause 21 K.Y.Patel group, that is the appellants group had to walk out of the companypany.
Shri Nariman, learned companynsel for the appellants companytended that clause 21.
The order provided that if Shri Iyer came to the companyclusion that Shri.
the balance within months of the receipt by the Company of the Valuation report plus interest on the outstanding amount at 15 per annum from the date of the payment of the second instalment.
3 a of the companysent order dated 21.4.94 the appellants were entitled to Rs.4,12,65,900 and a further sum of Rs.66,13,850 being the interest payable thereon from 30.9.93, the date of Shri Vatsarajs decision and that the amount tendered by the companypany did number companystitute full payment as required under the companysent terms.
Accordingly, K.Y. Patel group, that is the appellants group deposited 91,702 shares and the respondents group, that is Pravin Patel group deposited 1,04,299 shares.
The companypanys advocate however informed the appellants that the amount of interest was to be paid only from 21.10.94.
On 21st October, 1994 Shri Iyer held that Shri Vatsarajs valuation was number proper and companyrect and he valued the shares at Rs.450/ per share as against Shri.
We shall refer to the respondents group as Pravin Patel group and the appellants group as K.Y.Patel group for the sake of companyvenience.
Vatsarajs valuation was number proper and companyrect, then he should himself make the valuation.
The appellants companytended that if full amount including interest from 30.9.93 as required by clause 21 was number paid the companysequences of default as provided in the companysent terms would follow.
A short question centring round clause 21.3 a of the companysent terms filed by parties in Company Appeal 2/94 before the learned Company Judge, Bombay High Court falls for determination.
Clause 21 of the companysent terms reads as under SLS Agreed and ordered that the Company do pay the value per share as determined by the valuer for the shares belonging to Y.Patel Group and the supporters of Y. Patel group in manner following.
By companysent of learned companynsel for parties, the appeal was finally heard.
The parties arrived at companyset terms signed on February 11, 1993 before the Company Law Board and in pursuance thereof the companypany Law Board disposed of the petition by its companysent order dated 5.3.93.
The aforesaid order of the Division Bench has been challenged by special leave.
The expert was requested to decide before 13th June, 1994.
Appellants number.1 to 5 represent one group and Respondents number.2 to 8 represent the other one.
MAJMUDAR, J. Leave granted.
Accordingly, the dates of instalments worked out are as under 1st instalment 30th November,1993 2nd instalment 31st March, 1994 3rd last instalment 30th June, 1994 As Shri.
Under these circumstances, the companypany filed Company Application 411/94 in disposed companypany appeal for clarification.
K.Y. Patel group filed Petition No.
Vatsarajs valuation of Rs.194, that is Rs.4,12,65,900 for 91,702 shares.
Respondent No.1, Patel Engineering Company Limited, is a public limited companypany registered and incorporated under the Companies Act.
As a sequel to the aforesaid submission Shri Nariman further companytended that once that happened the default clause 28 a of the companysent terms got attracted and therefore automatically the appellants got a right to purchase the shares of the respondents group and that the High Court had patently erred in holding that the interest on the additional amount was payable only from the date of Shri.
Under these circumstances, the companypany preferred Appeal 891/94 challenging the order of the learned Single Judge dated 14.11.94.
SLE As per clause 16 of the companysent terms one Shri.
M. Vatsaraj on 30.9.93 was proper and companyrect.
However, there was a default clause provided by clause 28 a in the companysent terms which reads as under SLS In the event of the companypany failing to make payment of the full purchase price, or of any two of the instalments of price on the dates fixed by clause 21 above, the companypany shall lose its rights to purchase the shares of the K.Y. Patel group and the petitioners shall automatically be entitled to purchase the shares of the Pravin patel Group i.e.shares listed in part 1 of Schedule II and such shares listed in part II of Schedule II in respect of which written companyfirmations and undertakings have been furnished as aforesaid at the price per share fixed by the Valuer under clause 16 above.
The appellants companytended that as per clause 21 of the companysent order of 5.3.93 read with clause 21.
M.Vatsaraj alleging it to be vitiated by fraud relying in particular on the affidavit of Chartered Accountant, Shri.
The amount tendered was number accepted by the appellants.
ii withinmonths of the receipt by the Company of the Valuation report plus nterest on the outstanding amount at 15 per annum from the date of the payment of first instalment till the date of the payment of the second instalment.
The said instalments shall include interest on the outstanding amount at 15 per annum from the date of the valuers decision.
On 9.11.94 Company Appeal 2/94 was disposed of by taking the valuation of Rs.450 per share on record.
28/91 in October, 1991 before the Company Law Board under the provisions of Sections 397 398 of the Companies Act,1956.
On 7.10.93 the appellants filed Application 259/93 before the Company Law Board impugning the valuation of shares as made by Shri.
