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2001 (8) TMI 1451 - Board - Indian Laws
Issues: Application for modification of the valuation date in a company law case.
Analysis: 1. Valuation Date Dispute: The respondents sought a modification of the valuation date from 31-3-1997 to 25-9-2000 in a company law case. They argued that events post-31-3-1997, such as the removal of funds by the petitioner and the subsequent closure of the factory, had negatively impacted the company's assets' value. They contended that valuing the shares based on the 1997 balance sheet would be unfair due to these developments. 2. Petitioner's Position: The petitioners opposed the modification, highlighting that the respondents had removed company assets during the dispute, making a valuation as of 25-9-2000 prejudicial to them. They emphasized the standard practice of using the petition date as the valuation reference in such cases, supporting the initial valuation date of 31-3-1997 set by the Bench's order on 25-9-2000. 3. Legal Precedents: The Bench referred to various legal precedents regarding the valuation date in company law cases. It noted that historically, the date of filing the petition was often considered the valuation date due to its significance in highlighting the alleged oppressive conduct. The Bench also highlighted the importance of the date closest to the petition for valuation, as evident in past judgments. 4. Bench's Decision: Despite the standard practice of using the petition date for valuation, the Bench acknowledged the practical challenges in preparing a balance sheet for that specific date due to missing records and post-petition events affecting the company. Consequently, the Bench modified the valuation date to 31-3-1995, the date of the last available audited balance sheet. The valuer was instructed to consider all events post-1995 up to 25-9-2000 that could impact the valuation, ensuring a fair assessment of the company's shares. 5. Valuation Process: The Bench outlined a detailed process for valuation, requiring both parties to provide submissions to the valuer by specific deadlines. The valuer was tasked with preparing a draft valuation report by 10-11-2001, with final valuation due by 15-12-2001. The respondents were directed to pay the petitioner the agreed consideration for the shares within 30 days of receiving the valuation report. 6. Conclusion: The application for modification of the valuation date was granted, with the Bench emphasizing the importance of considering post-1995 events in determining the fair value of the company's shares. The case was disposed of, allowing either party to apply if needed, with the revised valuation process outlined for completion by December 2001.
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