9911796707
TMI Blog2011 (12) TMI 295X X X X Extracts X X X X X X X X Extracts X X X X ..... he date of communication of the decision or order of the Company Law Board to him on any question of law arising out of such order: Provided that the High Court may, if it is satisfied that the appellant was prevented by sufficient cause from filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days.] " 3. Brief facts, in nutshell, as emerged from the pleadings of both the parties, are that Mr. Bimal Kumar Agarwal, Mr. Rajiv Bimal Agrawal and Mr. Amit Agrawal filed the Company Petition No. 129 of 2007 under Sections 397, 398, 402 and 406 read with Sections 235 and 239 read with Sections 539 - 545 of the Companies Act, 1956 against M/s Aarti Sponge & Power Limited and others. 4. It is apparent that until March, 2006 the appellants-Company was being managed by four families namely Agrawal family through Shri Rajiv Agrawal, Mundra Family through Shri Chhagan Lal Mundra, Atlani Family through Shri Suresh Atlani and Modi family through Shri Tara Modi. The Atlani Family and Modi family wanted to disassociate from the appellant-company, whereas the other two families agreed to settle their shares as soon as replacement groups were a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2009, learned Chairman (Mr. S. Balasubramanian) of the Company Law Board passed an order on 16.7.2009 (Annexure A/2) which reads as follows "The Counsel for the parties have agreed before me today (14.07.2009) that the petitioners would go out of the company on receipt of fair value for their shares to be determined by an independent valuer and on return of their unsecured loans to both the company and sister concerns, if any, and also on release of personal guarantees given by them in favour of the company/sister concerns. They have also agreed that M/s Ernst & Young could be appointed to determine the fair value of the shares. Accordingly, I appoint M/s Ernst & Young to determine the fair value of the shares on the basis of the balance sheet as on 31.3.2007. The company will negotiate the fees payable to the valuers and pay the same. Both the sides will provide whatever information that is needed by the valuers and also are at liberty to make both oral and written submissions before the valuers. The valuers will take into consideration these submissions while determining the fair value of the shares. The valuation report should be submitted latest by 30.9.2009. The company shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also one of the objections made to the valuer. In this view of the matter it was submitted on behalf of the petitioners that the company petition is not merged in the order dated 16.7.2009. 11. Learned Member, CLB, having perused all the earlier orders passed in the company petition, including the order dated 16.7.2009, pleadings and the arguments of the parties as well as the case laws cited before it by the respondents, clarified that the order dated 16.07.2009 is not a full and final consent order and the appellants-company have themselves admitted that it was only Part-I of the consent order but on facts and law it was not a consent order, it was only one of the orders in the settlement process attempting to get the matter settled with the approval of the CLB. The petitioners had agreed to go out of the Company on receipt of fair value for their shares, which was to be got done by an independent valuer and that going out was subject to certain conditions. By way of Company Applications No. 134/10 and 178/10 the respondents have sought setting aside of the valuation done by an independent valuer. The subsequent proposals given, subsequent to the order dated 16.7.2009 are not ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an interlocutory order, the same is covered under the ambit of Section 10-F of the Companies Act, 1956. There is only a singular requirement for an appeal under Section 10F that a question of law should arise out of such order. Though the impugned order does not end the company petition and is apparently an interlocutory order, it is a final order in regard to its subject matter. Therefore, the instant appeal is maintainable. In fact, by passing the impugned order the CLB has reviewed the order dated 16.07.2009, which is wholly unauthorized. The CLB being a quasi judicial authority is not vested with the power of review under the Company Law Board Regulations 1991. Earlier it was only Regulation 27 which provided review and the same was omitted vide CLB (Amendment) Regulations, 1992 vide GSR 492(E) dated 14.5.1992. Even if there could be a review in the event of an order sought to be reviewed suffers from some mistake or error apparent on the face of the record but in the instant matter no such mistake or error is apparent on the face of the record. 16. Learned counsel appearing for the appellants-Company next submitted that the order dated 16.7.2009 was an order passed with the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ares to be determined by an independent valuer" and "on return of their unsecured loans to both the company and sister concerns" and also "on release of personal guarantees given by them in favour of the company/sister concerns." Thus, the consent order dated 16.7.2009 was a conditional order and the effect of the same is not that as soon as the valuer will submit its report, the same would be binding on the parties and the matter would come to an end. 20. Learned counsel appearing for the petitioners further submitted that there is no illegality, perversity or jurisdictional error in the order dated 6th October, 2010. Learned Member, CLB, finding that the parties are not satisfied with the valuation report and the valuer has admitted that the issue of shareholding/actual paid up capital is beyond the scope of the terms of reference to the valuer, has rightly proceeded to hear and decide the company petition itself on merits. 21. In Manish Mohan Sharma case (supra), Hon'ble the Apex Court has held that the powers under Section 402 are residuary in nature and in addition to the powers available to the Company Law Board under Section 397(2) and Section 398(2) which permit the Compa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aras 19 & 21 that the order dated 19.8.1999 was not an interim order as contended by the respondents but it was a consent order. The issues resolved thereby could not be reopened or reargued for a different disposal of those issues. The order was passed expressly under Section 402 of the Companies Act. Doubtless in the said order the Company Law Board speaks of `final disposal of the petition and the various interim applications". This was because in terms of the order itself (which included MOFA and the transfer document), various steps had to be taken to complete the severance of the relationship finally between the MMS Group and the respondents. This did not make the affirmation of MOFA and the transfer document an interim arrangement. The operative portion of the order directed the execution of MOFA and the transfer document by the parties after completion of the schedules thereto. The entire order was passed by consent. The parties cannot resile therefrom. Therefore the order cannot be described as an interim order in the sense that the issues decided thereby could be reopened. The Apex Court has also held that consent decree has been held to be a contract with the imprimatur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... into the powers of the parties to rescind the settlement (assuming that such rescissions were at all possible at this stage) as neither of the groups has taken any steps to issue any notice of rescission till today. 22. In view of the above discussion, we are of the considered opinion that the order dated 16.7.2009 is a consent order and it is binding upon the parties to the lis unless it is challenged and the same is interfered with by the Courts above. The matter is to be settled on the basis of the valuation report submitted by the independent valuer appointed by the order dated 16.7.2009 itself. The finding of the learned Member, CLB in the impugned order dated 6th October, 2010 that the issue of shareholding/actual paid up Capital is beyond the scope of the terms of reference to the valuer, is not sustainable. In our opinion, even if, there is no specific wordings used in the consent order dated 16.7.2009 in regard to shareholding/actual paid up Capital, the valuer appointed by the consent order was required to furnish the valuation report after obtaining information that was needed by it and after considering the oral and written submissions made by the parties. Therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
