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2022 (10) TMI 209 - HC - Companies LawOppression and Mismanagement - Enforceability and validity of family settlement agreement entered upon - existence of concluded agreement capable for specific performance - powers of the NCLT in a Petition for Oppression and Mismanagement - Section 242 of Companies Act - HELD THAT:- Under Section 424, the NCLT has all the powers of a civil court under the CPC, while not being strictly bound by it. Read together, this meant that the MOD could be recorded as a compromise by - and only by - the NCLT; assuming that both sides saw it as capable of being recorded as a compromise. If the Sanghvis repudiated it, by word or deed, then what remained was the undoubted power of the NCLT in the O&M proceeding, one that the civil court did not have. Merely demanding ‘specific performance’ did not give the MOD a colour or a character it did not possess, nor did it vest the civil court with a jurisdiction that stood most emphatically ousted. This is not a question of a specific performance being granted by the NCLT but whether the MOD was meant only to compromise the NCLT O&M proceedings or whether the compromise was an incident or a consequence of a larger overall settlement. He maintains that the MOD was only to compromise the NCLT proceedings. If that be so, then surely one would expect to find a reference to the NCLT proceedings in the MOD. Other than the last seven words of the MOD, i.e., the withdrawal of the Company Petition, there is no mention in the MOD of the O&M Petition. But there is a more telling or important clue that the settlement proposed in the MOD was well beyond the Oppression and Mismanagement Petition. The tabulation of the settlement amount payable to the Kamdars clearly includes amounts that are outside even AMPL, the company itself. They include personal obligations of the Sanghvi families. This could never, therefore, have been a proposal only to settle the Oppression and Mismanagement Petition. It is no answer to say that other matters were also being settled but all that was being compromised was the NCLT Petition. The MOD attempted to put a quietus to all disputes by separating out the Kamdar family. The settlement of the NCLT is only one part - and perhaps not even a significant part - of what was decided in the MOD. The MOD contains internal evidence that the settlement was overall and was of an independent valuation agreed by the parties, by which the Kamdars were to be separated for an agreed valuation of their share at Rs. 245 crores. On a fair assessment of the record, we find that it was the Kamdars who attempted to resile from this position. Appeal dismissed.
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