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TMI Blog2009 (5) TMI 985X X X X Extracts X X X X X X X X Extracts X X X X ..... any from their own sources by mortgaging personal assets; (g) preventing the Company from pursuing its lawful object and carrying out profitable projects by withholding funds contrary to the Investment Agreement, etc., have invoked the equitable jurisdiction of the Company Law Board under sections 397, 398 and 402 of the Companies Act, 1956 ("the Act"), seeking the following, among other, reliefs:- (a)to declare that acts of the respondents 2 to 5 as oppressive to the shareholders of the Company and constitute acts of mismanagement and to put an end to such acts; (b) to direct the second respondent to transfer its investments and shares in the Company to the petitioners at the price already agreed to by the respondents; (c)to remove the respondents 3 to 5 from the office of director and appoint such other person or persons as this Board may deem fit; (d)to direct the respondents 2 to 5 to compensate the Company for the losses caused due to their acts of oppression and mismanagement in the affairs of J the Company; and (e)to restrain the respondents 2 to 6, their men, agents, and other group companies from in any manner dealing with the Consortium partners of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to exclude the respondents from the affairs and management of the Company under the guise of the MOU, which is neither valid in the eyes of law nor enforceable in a section 397/398 proceeding. With these contentious and substantial issues, involving the port projects of national importance, the rival parties are before me. 3. Shri Vedandam Srinivasan and Shri Sudipto Sarkar, learned Senior Counsel, while initiating arguments in support of the petitioners, submitted: The petitioners, being qualified Engineers from IIT Madras and possessing MBA with rich and unique experience in the port development and management sector formed the Company in February 2006, with 100% of shares equally held between them for development of infrastructure projects in the Sea Port Sector in India and Overseas. In terms of an Investment Agreement executed between the second respondent, the petitioners and the Company on 26.05.2906, 70% of shares of the Company came to be divested at par in favour of M/s Infrastructure Project Development Fund, a scheme managed by the second respondent, a 100% subsidiary of the sixth respondent (SREI), in consideration of providing necessary funds for development, of p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tten notice setting forth all the details as specified in the Investment Agreement, upon receipt of which the promoters are at liberty to exercise the purchase option and execute a binding purchase contract and shall settle the consideration in the specified manner. The promoters, by virtue of clause 16.1.2, cannot engage in any other business, save those explicitly specified therein, without the consent of the second respondent. Clause 17.1 dealing with the pre-emption rights of the petitioners to sell their ordinary shares and the mechanism thereto, will show the confidence, which the second respondent reposed on the petitioners and further establish that the second respondent will not remain in the Company, if the petitioners are desirous of leaving the Company. Maytas and NCC having pre-qualified to develop a Port at Machilipatnam in Andhra Pradesh, against a tender of the Government of Andhra Pradesh, approached Creative Infrastructure (Creative) a firm owned by the petitioners, in order to strengthen the technical qualification of the bid submitted to Government of Andhra Pradesh. Nevertheless, the petitioners asserted even before incorporation of the Company, in terms of e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n view of this, all the pre-tendering expenses relating to the 49% share of SREI and the Company were incurred by the Company. The e-mail dated 05.02.2006 sent by P. Kishore, representing SREI would show that it was solely due to the petitioners that SREI was allowed to participate in the Machilipatnam Port Project. The Board minutes dated 04.06.2007 would disclose that the Machilipatnam as well as the Subarnarekha project was awarded to the Company and that these two port projects are the projects of the Company. The Service Provider had acknowledged the receipt of the first payment on account of the Machilipatnam Port Project, from the Company, as borne out by an e-mail dated 15.07.2006 of the former. Maytas in its e-mail dated 11.04.2007 requested the first petitioner to expedite the issue of bank guarantee of ₹ 4.9 crores to be given by SREI in favour of Andhra Pradesh Government, especially when Maytas already furnished the bank guarantee for the entire amount of ₹ 10 crores. The third respondent in his e-mail sent on 24.04.2007 assured the first petitioner that SREI would give the bank guarantee after formation of the Special Purpose Company for undertaking the Ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ium need not be a party to the present proceedings. The clandestine and unilateral withdrawal by SREI of its commitment in nominating the Company as its investment vehicle, towards funding the project, without the knowledge and consent of the petitioners, constitutes a deliberate act of oppression, thereby completely depriving the Company and the petitioners of the rights over the Machilipatnam Port Project and by virtue of section 39 of the Contract Act, 1872, the petitioners may put an end to the Contract and any benefit derived by the second respondent on account of the Machilipatnam Port Project, must be restored in favour of the petitioners, in the light of the principles embodied in section 64 of the Contract Act. These acts of the second respondent, as a majority shareholder are grossly against the interest of the Company, amounting to fraud against the minority shareholders and mismanagement in the affairs of the Company. The second respondent, therefore, must account for the benefit enjoyed out of the Machilipatnam Project and compensate the losses suffered by the Company. Where the directors were guilty of a breach of duty in securing a contract in their own favour, they ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ereby pleaded ignorance of the status of the project. It is not known as to what happened to 49% of shares of the second respondent in the Machilipatnam Port Project. The second respondent would have relinquished its interest in the Machilipatnam Port Project, in which case the second respondent shall part with any benefit derived on account of such relinquishment, in favour of the Company. The main object of inducting the second respondent, as a shareholder of the Company was for infusing funds to implement all its projects, as and when required by the petitioners and the Company, in terms of the Investment Agreement. The second respondent was offered shares of the Company worth ₹ 35 crores for a mere ₹ 7 lakhs on the understanding that the second respondent would finance the projects of the Company as stipulated in the Investment Agreement to which the Company is a party and accordingly the second respondent is bound to extend the project development expenses as unsecured loans in order to identify, procure, develop and operate the port projects. Any breach of the Investment Agreement results in its termination. The Government of Orissa awarded the Subarnarekha Port ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n act of oppression. The action of the second respondent has become so onerous on the Company and the petitioners, that the Company could not fulfil its commitments under the various agreements and arrangements reached by the Company for the purpose of implementation of the projects. The second respondent stopped since July 2007 providing any funds to the Company for its operations, bringing the business operations to a grinding halt and the Company faces the danger of losing the projects awarded to it. Any further continuance of association of the respondents 2 to 5 with the Company will cause irreparable losses to the petitioners and the Company and therefore, there were deliberations between the petitioners, the representatives of the second respondent and SREI, as borne out by exchange of e-mails on record, which culminated into a Memorandum of Understanding dated 14.11.2007 between the petitioners and the second respondent, whereby the second respondent had agreed to sell its investments in the Company to any prospective investor to be brought in by the petitioners, after necessary due diligence by 31.01.2008 and the payment was to be made by 28.02.2008 at a consideration to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his e-mail communication dated 19.01.2008 sent to the third respondent confirmed the completion of due diligence to the satisfaction of M/s Clear Waterfund, the prospective investor, who was ready to complete the transaction and payment as per clause 3 of the MOU and awaited the response of the third respondent to the transaction. The first petitioner in his e-mail sent on 20.01.2008 to the Managing Director of SREI pointing out the default on the part of SREI to give a bank guarantee of ₹ 4.90 crores for the Machilipatnam Port Project; (ii ) payment in favour of DPR parties by SREI Capital Markets and (iii ) inability to infuse funds into the Company in a timely manner, requested for the exit of SREI from the Company, in terms of the MOU at the agreed price of ₹ 52.50 crores well before 28.02.2008 and expressed the preparedness to complete the transaction by 31.01.2008, whereas the second respondent reneged from the MOU, with a view to make unlawful gains and the Managing Director of SREI, in his e-mail dated 23.01.2008 sent to the first petitioner, apart from recognising the professional experience of the petitioners reiterated that SREI is committed to continue its i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the respondents cannot ignore the MOU. The third respondent was the joint signatory for operating the bank account on behalf of the Company. The third respondent had signed all the financial statements on behalf of the second respondent, including the minutes of the Board meeting, approving the annual accounts of the Company for the year 2006-2007 and every important document, including the Shareholders Agreement with Maytas and NCC for the Machilipatnam Port Project. The third respondent was present at every hearing before the CLB, instructing learned Counsel representing other respondents also. The third respondent filed a joint reply with the respondents 2, 4 & 5. The third respondent was present, while the Advocate Commissioner took the inventory of records at the registered office of the Company and signed the inventory of documents on behalf of the second respondent. The legal notice dated 31.01.2008 calling upon SREI to complete the exit formalities, as voluntarily agreed under the MOU led to the unlawful locking of the registered office of the Company at the instance of the second respondent. The petitioners were, therefore, constrained to lodge a police complaint on 05. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... O' neill's and another v. Phillips and another (supra) that "company law has developed seamlessly from the law of partnership, which was treated by equity, like the Roman societas, as a contract of good f aith. One of the traditional roles of equity, as a separate jurisdiction, was to restrain the of strict legal rights in certain relationships in which it considered that this would be contrary to good faith. These principles have, with appropriate modification, been carried over into company law." The respondents lacked "utmost good faith", which is expected from every member of a partnership towards every other member, in view of the rule as regards the duty of utmost good faith, laid down in Needle Industries (India) Ltd. v . Needle Newey (India) Holding Ltd. AIR 1981 SC 1298. Furthermore, no narrow legalistic view should be taken and technical pleas should not be permitted to defeat an action under section 397 and at the same time broad and liberal interpretation must be given to the Court's powers, as observed by the Supreme Court and, therefore, the second respondent should not be permitted to continue to be shareholder of the Company. The par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, 1962 or any Rules framed thereunder, but the Company will have to only furnish to the Government, the requirements of land for undertaking the Subarnarekha Port Project. The first petitioner in his communication dated 14.02.2008 requested the Principal Secretary, Government of Orissa to make necessary arrangement for alienation of the land for the port purposes and further requested to allot in favour of the Company quarry in Nilangari area and other possible locations which are close to the port location. The Government of Orissa by a communication dated 29.04.2008, advised the Collector, Balasore, to take necessary action for alienation of land in favour of the Company for the port purposes, in response to which, the Collector in terms of a communication dated 18.08.2008 advised the Tahasildar, Baliapal, to process the proposal on filing of requisition for allotment of Government land for development of port at Subarnarekha by the Company. In the meanwhile, the first petitioner had taken up the issue of encroachment of Government land, with the Collector of Balasore District by forwarding on 23.06.2008 a copy of the "Report on Encroachment of Government Land under alie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... des 'Dharma' and 'Truth'. The petitioners are 100% promoters, and the second respondent is only an investor. The second respondent was to fund 38% of shares of the SPV to undertake Machilipatnam Port Project, though the Company, but did not keep up the commitment. The second respondent not being solvent enough to meet the fund requirements failed to fulfil their obligations under the Investment Agreement, towards funding the projects and therefore, cannot charge the petitioners with breach of the terms and conditions of the Investment Agreement. The petitioners are dependent upon the projects, which cannot be implemented without the involvement of the petitioners, while the second respondent is an investor and can survive without the projects, undertaken by the Company. The respondents have convened a Board meeting on 21.05.2008, during the pendency of the present proceedings, despite the objections of the petitioners and passed several resolutions, thereby causing prejudice to the interest of the Company as well as the petitioners, and therefore, must be declared as null and void, as claimed in C.A.No.92 of 2008. The petitioners can no longer co-exist with the se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dent from the Company, with a view to regulate the future affairs, in the best interest of the Company Petition. 4. Shri S N Mookherjee, learned Senior Counsel appearing for the respondents 2 & 6, while vehemently opposing the Company Petition submitted: The averments contained upto para 6.6 of the Company Petition are narration of facts relating to the Subarnarekha and Machilipatnam Port Projects. The allegations forming part of paragraph nos. 6.7, 6.8, 6.10, 6.12 to 6.19 & 6.21 of the Company Petition deal with the purported understanding between the parties in relation to the Port Projects. The main grievances of the petitioners as stated in paras (h) & (i) at page 20 of the Company Petition are on account of non-fulfilment of the commitments of the second respondent under the Investment Agreement dated -26.05.2006 and the consequent breach of the MOU dated 14.11.2007. The petitioners are claiming by way of interim reliefs to induct an equity investor of their choice in the place of the second respondent and remove respondents 3 to 5 from the Board of the Company on account of the alleged breach of the stipulations contained in the Investment Agreement. The Supreme C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etition is not maintainable, the CLB has no jurisdiction to grant any reliefs. SREI is not a shareholder or director and therefore, there is no fiduciary relationship between the petitioners and SREI. SREI has not derived any benefit and no relief has been claimed against SREI. SREI being one of the leading infrastructure companies, is a market leader in infrastructure financing business in the area of power, ports, etc. and a leading Non-Banking Finance Company in India. The Company is a joint venture company formed by the petitioners as well as the respondents and further the respondents were actively involved in preparation of the Shareholders Agreement as well as the Investment Agreement, as borne out by the e-mails sent on 14.12.2005, 23.12.2005, 12.03.2006, 16.03.2006, 21.03.2006, 22.03.2006 and 03.05.2006 exchanged between the first petitioner and the respondents. By virtue of article 37, the general management of the business of the Company is in the hands of the Managing Director, which shall subject to the control and supervision of the directors. After formation of the Company, the respondents have remitted the share application money of ₹ 7 lakhs to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he port projects. The organisational expenses must be approved by the Board of the Company from time to time. All the obligations of the second respondent under the Investment Agreement are conditional on the Company's and promoters' continued compliance with the requirements as set out in clause 7.2, dealing with the insurance cover for all its assets, appointment of auditors, management of the Company and execution of service agreements. The project development expenses include the fixed organisational expenses agreed to by the Board of the Company and not the petitioners, as per the Investment Agreement. The Board has to be restructured from time to time in a manner acceptable to the second respondent in due consultation with the promoters, (clause 7.3.1) The Managing Director shall always be one of the promoter directors of the Company. The second respondent would appoint the Director (Finance), Chief Financial Officer and Company Secretary (clause 7.3.2). The budget must be approved by the Board, (clause 7.4) The Company and the promoters shall consult and advise the second respondent on all the issues which are likely to affect the value of the second respondent's ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d respondent contain an endorsement to the effect that any sale, transfer or other distribution is subject to the terms and conditions set forth in the Investment Agreement. The second respondent has met all the expenses towards implementation of the projects, which were approved by the Board. All payments necessary for the project of the Company have been promptly made, after receipt of due request from the petitioners and there has been no delay on the part of the respondents in releasing payment for the project of the Company. The respondents have been always ready and willing to bear all the costs of the Company with regard to the Subarnarekha Port Project. The funds released in terms of the Investment Agreement by the second respondent should be used for the sole purpose of meeting the project development expenses of the Company, whereas the petitioners demanded from time to time exorbitant sums of money from the respondents and mismanaged large sums of money, obtained from the respondents, without the approval of the Board of the Company. The petitioners have not furnished the exact nature and details of the financial commitments to ensure that respondents are not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Agreement, set out in the affidavit; and (iii) will fulfil its obligations and exercise its rights under the Investment Agreement. Shri Rajesh Sirohia, by way of yet another affidavit dated 01.04.2009, affirmed, inter alia, that (i) the respondents 2 to 6 are willing to perform all the obligations under the Investment Agreement and the assurances given to this Bench in terms of the earlier affidavit filed, pursuant to the directions of this Bench; (ii) the respondents are ready and willing to provide necessary finance to the Company to ensure operation of the Subarnarekha Port Project in terms of the Concession Agreement. The petitioners failed to withdraw the present proceedings, despite the unequivocal undertaking given on behalf of the second respondent to fund the Company as per the terms and conditions of the Investment Agreement, thereby rendering infructuous several of the interim orders already passed by the Bench. The parties have acted upon the aforesaid CLB order and therefore, the petitioners cannot now seek to enforce the MOU in the present proceedings. In view of this, the petitioners are not entitled to proceed any further with the main petition and therefore, the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es of association, being the regulations- of the Company are binding on the Company and its shareholders, contravention of which will be fatal to any transfer of shares, as held by the Supreme Court in V.B. Rangaraj v. V.B. Gopalakrishnan and others- AIR 1992 SC 453. The MOU does not specify any price. The buyer has to agree for the sale as well as price. The mode, manner and the time schedule are yet to be agreed. The MOU never had the approval of the Company or the second respondent. The MOU was subject to an agreement between the prospective investor and the parties to the MOU, which never materialised. The MOU is not for the benefit of the Company. The MOU between two group of shareholders concerning transfer of shares does not relate to the conduct of affairs of the Company as held in Government of West Bengal v. Chatterjee Petrochem (Mauritius) Co. [2008] 143 CC 837 and the terms of the MOU are not incorporated the articles. The Company not being a party to the MOU is not bound by the MOU and the case of oppression based on the MOU, being the sheet anchor of the petitioners' case must fail, as observed by the Supreme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ain the petitioners from persuading with the Subarnarekha project in the name of the Company; (v) to restrain the petitioners from taking up the project with the Jindal Steel to the exclusion of the respondents; (vi) to disclose all the correspondence exchanged between the petitioners and the Government of Orissa concerning the Subarnarekha Port Project and the land acquisition documents. The petitioners, with a view to ensure paramount interest of the Company urged in C.A.No.26 of 2008 (correct C.A. No. 160 of 2008) for passing of appropriate orders, as prayed for in C.A.No.136 of 2008 and constituting a Project Co-ordination Committee having one member each from the petitioners group and the respondents group, with an independent person for the purpose of proper and timely implementation of the Subarnarekha Port Project. Any correspondence with the Government of Orissa and any work which may be undertaken in the name of the Company in relation to the Subarnarekha Project must be undertaken only by the Project Co-ordination Committee which will not only benefit the Company but also the public at large. The petitioners are misrepresenting and distorting the facts to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he extract of the RFP copies. The Government of Andhra Pradesh has not approved the inclusion of the Company in the Machilipatnam Port Project, inspite of the efforts of the respondents to help the Company by expressing their willingness to invest in the Machilipatnam Port Project through the Company. The petitioners were involved to a limited extent as advisors, in the Machilipatnam Port Project on account of their technical knowledge of port projects as borne by a letter dated 24.05.2006 of Maytas sent to the Government of Andhra Pradesh stating that an MOU has been entered into with M/s Creative for advising Maytas in port development. The petitioners can only claim consultancy fee at the prevailing market rate for their involvement in the Machilipatnam Port Project and are not entitled for any other relief or benefit relating to the Machilipatnam Port Project, without Maytas, NCC, Machilipatnam Ports Private Ltd. and SARAT being parties to the present proceedings. The petitioners have not carried out any work in relation to the Machilipatnam Port Project entitling them to any fees. The tendering expenses relating to the share of SREI and the Company combine were not incurred by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the bank account, inspite of the directions of the Bench. The petitioners have not proved any act of oppression on the part of the respondents, as contemplated in section 397 of the Act. It is now well-settled that a case for grant of relief under sections 397 and 398 of the Companies Act must be made out in the petition itself and the defects contained therein cannot be cured nor the lacuna filled up by other evidence oral or documentary proof as held in Sangramsingh P. Gaekwad and others v. Shantadevi P. Gaekwad (Decd.) by lrs. And others (supra) . The act of oppression must be harsh and continuous affecting the proprietary rights as shareholders. In English law all that the petitioner had to establish was a case of unfairness coupled with prejudice to himself and there is no need to establish oppression or establish just and equitable winding up and therefore, the authority on the English law would not be of any assistance for the construction of sections 397 & 398 of the Act and only those parts of English judgments which are applicable to our law can be adopted as held in Vaishnav Shorilal Puri and another v. Kishore Kundan Sippy and others [2006] 131 CC 690 and Bagree ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... This Bench by an order dated 18.09.2008, while directing the petitioners (a) to make available to the respondents copies of all the correspondence so far exchanged between Government Authorities and the petitioners in connection with the land requirement for the development of the Subarnarekha Port Project; and (b) endorse henceforth copies of any correspondence which may be made with Government Authorities, directed the respondents not to correspond directly with Government Authorities in connection with the Subarnarekha Port Project. The petitioners failed to comply with the aforesaid directions, compelling the respondents to issue a legal notice dated 24.12.2008 calling upon the petitioners (a) to act in accordance with the order dated 18.09.2008 of the Bench; and (b) to obtain copies of the relevant correspondence from the Government of Orissa, invoking the provisions of the Right to Information Act. Nevertheless, the petitioners have suppressed many material documents, correspondence received from and/or send to the Government of Orissa and thereby, they are not acting in a bona fide manner and in the interest of the Company. The Principal Secretary to Government, Government o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... how that the petitioners are not acting in a bona fide manner and in the interest of the Company. When the hearing on the main Company Petition came to be concluded, this Bench by an order dated 03.12.2008 directed that neither of the parties shall precipitate the issues, being subject matter of the Company Petition, till pronouncement of the order. The petitioners, despite the directions of the Bench, have written to Government of Andhra Pradesh and Maytas on 05.01.2009 and 07.01.2009 respectively, misrepresenting the facts behind back of SREI, and thereby acted in gross violation of the orders dated 18.09.2008 and 03.12.2008. The petitioners have also sent representations dated 07.01.2009 & 22.01.2009 to Government of India, making serious false allegations relating to the purported "Accounting Fraud & Mis-representation of Maytas, SREI & NCC Ltd" on account of "Machilipatnam Port Ltd", the Special Vehicle Company, formed for implementing the Machilipatnam Port Project. The petitioners are acting with malafide intentions and oblique motives, thereby causing enormous prejudices, suffered by the respondents. In these circumstances, the respondents have prayed fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ys and is entitled to enjoy in accordance with the provisions of Company Law in the matter of administration of the affairs of the company by electing his own men to the Board of directors of the company and that no direction for sale of shares of a majority to minority or minority to manage the Company shall be given save only in exceptional cases. Moreover, the second respondent has huge funds, whereas, the petitioners do not have such financial backup to fund the projects. No third party investor has undertaken to perform the obligations of the second respondent, while there are several other experts to implement the port project work. The second respondent is willing to work with the petitioners, and in the light of the decision in Tea Brokers (P) Ltd. and others v. Hemendra Prosad Barooah ( supra) if the parties cannot work together, the general body may decide the course of action and no order for sale of the shares of the majority be made on the lines of several decisions cited supra. The CLB has to consider the interest of the Company and the claim of the majority shareholders and grant appropriate reliefs. 5. Shri Mookherjee, learned Senior Counsel, while distinguishing t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spondents are sought to be exited from the Company is under dispute and contrary to the facts of the case cited by the petitioners. 6. Shri P.H.Arvindh Pandian, learned Counsel, appearing for the respondents 3 to 5 submitted: The petitioners have claimed reliefs against the respondents 3 to 5, being directors of the Company in terms of para 8 of the Company Petition, thereby enforcing the MOU for their exit under the pretext of section 397/398 proceeding, as sought to be made in para 4 of the Company Petition. The exit process of the second respondent shall have the approval of the Board of directors of the Company. The grievance and relief flowing from the agreement must be agitated in a competent civil court having jurisdiction over the matter as held in R. Easwaran and others [2007] 137 CC 605. The specific performance of the MOU can lie only in a competent court of law as held in Ramesh Chand Goyal and another v. Himalaya Communications Ltd. and others Satish Chand Jain and others v. Ramesh Chand Goyal and others [2006] 129 CC 297. Under, the terms of the Investment Agreement, the entire rights in regard to the projects are vested with the second respondent, which c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the first petitioner in his e-mail dated 20.02.2007 never got approval of the Board of directors of the Company. The funds reportedly brought in by the petitioners have not been approved by the Board of directors of the Company. The status report on the projects produced along with the Company petition has not been placed before the directors and the respondents 3 to 5 have been kept in dark in regard to the affairs of the Company. The charges of the petitioners that the respondents 3 to 5 locked the registered office of the Company, thereby preventing the petitioners and the Company from carrying on the business operations are not supported by any materials. The police complaint dated 05.02.2008 lodged by the Manager of the Company on the instructions of the petitioners would show only his suspicion over the respondents 3 & 4 in locking the registered office of the Company. The categorical claim in para 6.19 of the petition is that the second respondent, upon receipt of the legal notice instead of performing the obligations under the MOU, illegally locked the registered office of the company, while the police complaint is against the respondents 3 & 4. The pet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not allowing access to the voluminous records of the Company under the pretext that they are not belonging to the Company, which ultimately kept separately in the registered office under the lock and key of both parties, at the intervention of the Advocate Commissioner. The petitioners raised disputes on the modalities of taking possession of the registered office premise, which led to unnecessary complication in receiving the inventoried records by the petitioners. The petitioners, in terms of clause 16.1 were to devote their full attention to the business of the Company and develop its interest, whereas, the records found in the registered office of the Company would establish the contrary, sacrificing in the interests of the Company. 7. Shri Sudipto Sarkar, learned Senior Counsel, in his rejoinder, while reiterating plea of exit of the second respondent from the Company, on account of the oppressive acts of the respondents in the affairs of the Company and not solely under the guise of the MOU dated 14.11.2007 pointed out as to how the cases cited on behalf of the respondents are inapplicable to the facts of the present case. Accordingly, the MOU related to sale of shares of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in dealing with a section 397 petition in India. The decision in EIH Limited and others v. Mashobra Resort Limited and others (supra). cannot be of any assistance to the respondents in the light of directions of the High Court. In the present case, the respondents obtained majority holding from the petitioners, upon which the majority has been responsible for stopping the operations of the Company and thereby acted against the interest of the Company, in which case, they cannot seek acquire the shares of the petitioners at a fair value and continue to be in the management of the Company and therefore, the decisions in (a) Combust Technic (P.) Ltd., In re; ( b) Tea Brokers (P.) Ltd. and others v. Hemendra Prosad Barooah (c) Yashovardhan Saboo v. Groz-Beckert Saboo Ltd. and others and (d) M/s. Dale and Carrington Invt . (P.) Ltd. and another v. P.K. Prathapan and others ( supra) cannot go in support of the respondents. The Supreme Court in Sangramsingh P. Gaekwad and others v. Shantadevi P. Gaekwad (Dead) by Lrs and others ( supra) observed that (a)'section 210 of the English Act, theTanguage of which has been closely followed by section 397 of the Act, warrants the Court in look ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iminary issue. The grievances and the consequent reliefs claimed thereto, according to the respondents, are emanating from the MOU dated 14.11.2007, which is neither valid in the eyes of law nor concerned with the affairs of the Company and any redressal for breach of contractual obligations aiming at the exit of the respondents from.the Company, at a price of ₹ 52.50 crores, could only be subject matter of a civil suit, but not of a section 397/398 proceeding. The petitioners, apart from the purported failure on the part of the second respondent to fund the Company for its port projects, in breach of the Investment Agreement are aggrieved of (a ), depriving the Company of its rights over the Machilipatnam Port Project; (b) closure of the registered office of the Company; (c) unlawful interference in carrying on the day-today operations of the Company; (d) deliberate non-cooperation in shifting of the registered office for effective functioning of the Company; (e) freezing of operation of the bank account of the Company etc. None of these wrongful actions, claiming to be burdensome, harsh and oppressive is found flowing from the MOU dated 14.11.2007 and any relief, eve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Company; (d) non-payment of the balance dues by the respondents and (e) non-discharge of the first petitioner from his personal guarantee and non-discharge of the mortgage properties, were as a result of breach of the contractual obligations arising out of an agreement dated 24.10.2003 and the consequential reliefs were found stemming out of the aforesaid agreement. This Board in M. Thimme Gowda and others v. SPR Sugars (P.) Ltd. and others (supra) concluded that the entire grievances and reliefs claimed by the petitioners were flowing from a share purchase agreement. The charges formed part of the decision in R. Easwaran and others v. Easwar oil Industries (P.) Ltd. and others ( supra) and the consequent reliefs were pursuant to breach of the contractual obligations which arose from an agreement dated 04.10.1975. It is undoubtedly clear that the grievances and the reliefs in the case before me do not flow in entirety from the MOU dated 14.11.2007 and therefore, the facts of the present case are distinguishable from the aforesaid cases cited on behalf of the respondents. The present complaint not being wholly made as regard violation of statutory or contractual right, the de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... saged in clause 2.1. The Managing Director of the Company shall be one of the promoter directors of the Company and the second respondent would appoint the Director (finance)/Chief Financial Officer as well as Company Secretary (clause 7.3.2). The promoters and the Company are bound to keep informed the second respondent on issues, which are likely to affect the value of the second respondent's shareholding. The second respondent's consent is required at any general meeting of the shareholders inter-alia for setting up by the promoters any competing business or disposal, transfer or acquisition of any part of the business into a separate company, a subsidiary or to any other person, any transfer of shares by the promoters and their affiliates, commencement or discontinuance of any litigation, which is material in the context of the Company's business, appointment of new directors, election of a Chairman of the Board, any alteration to the rights of any class of shares etc. (clause 8.1). The promoters in terms of clause 8.4, shall maintain a minimum of 30% of the issued and paid up capital of the Company at all times during the subsistence of the Investment Agreement. Cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons of the promoter's sale notice; or (b) to buy the shares at the price set out in the promoter's sale notice. If the third party fails to purchase the ordinary to sell its ordinary shares from the second respondent, the promoters are bound to withdraw the offer to sell their shares to such third party. The second respondent is free to ell its ordinary shares in the manner prescribed in clause 17.4, in which event the promoters shall have the option to purchase the same from the second respondent. If the promoters do not purchase the shares, the second respondent is free to transfer its ordinary shares to the third party. However, he promoters do not have any right to purchase the ordinary shares of the second respondent in the event of any material breach by the Company or he promoters or any event mentioned in clause 15.2.2. The petitioners are unequivocally described through out the Investment Agreement as the promoters of the Company, while at the same time, the second respondent has been uniformly treated as an investor. The rights of the second respondent, as an Investor have been amply protected ensuring the return of its investment made in the Company, as rightly p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... behind the subject proposal for successful development of a deepwater, along side berthing, all-weather port at Subarnarekha Mouth (Kirtania) on BOOST basis", ought to have played a key role in consideration of the proposal of the Company in respect of the Subarnarekha Port Project by Government of Orissa. The cumulative impact of the petitioners' technical expertise as well as SREI's, financial strength, to my mind, resulted in awarding of the Subarnarekha Port Project in favour of the Company, as distinctly reflected in the Memorandum of Understanding entered into on 18.12.2006 between the Government of Orissa and the Company, the relevant portion of which runs thus "AND WHEREAS Creative Port Development Pvt. Ltd. have extensive BOT experience in Port Development and Joint venture partners who have strong financial background in the infrastructure sector". There cannot be any parallel views on this aspect. Maytas, NCC, SREI and SARAT collectively called "Consortium" entered into a MOU dated 08.02.2006 with Creative Infrastructure, on account of the port development experience possessed by Creative and its promoters, to develop the Machilipatnam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rengthen the Consortium, fulfilling the stipulations of Government of Andhra Praaesh. When the proposal submitted to Government of Andhra Pradesh by the Consortium led by Maytas in terms of its letter no. MIPL/RFP/01 dated 22.04.2006, did not include Creative Infrastructure, as a part of the Consortium, the former by a communication dated 08.05.2006 called for "a definite commitment from Creative Infrastructure" on account of the fact that main capability of the Consortium for port development has been claimed from Creative Infrastructure with whom only a MOU has been signed by the Consortium. SREI, therefore, in its communications dated 19.05.2006 and 15.03.2007 categorically committed that "Our share in this project would be undertaken through a Special Purpose Port Development Vehicle named Creative Port Development Company Private Limited (CPDP), wherein M/s Ramani Ramaswamy and R. Rangarajan (joint promoters of Creative Infrastructure) holds substantial stake as individual investors and prime promoters of the company. Therefore the owners M/s Ramani Ramaswamy and R. Rangarajan of M/s Creative Infrastructure would have a direct commitment in the development of Ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t dated 20.01.2007 issued by Government of Andhra Pradesh forms part and parcel of the Concession Agreement dated 21.04.2008 executed between Government of Andhra Pradesh and VAJRA. The Concession Agreement envisages that SREI would contribute 38% equity capital of VAJRA, formed for implementing the Machilipatnam Port Project. The aforesaid unequivocal commitments of Maytas, and SREI, acted upon by the petitioners and Government of Andhra Pradesh would undoubtedly show that the Company upon induction as an additional member, formed part of the Consortium, in terms of the MOU dated 08.02.2006, despite the fact that the Company is not a party to the Consortium Agreement and further that SREI's portion of equity (38%) into VAJRA the Special Purpose Company for the Machilipatnam Port Project would only be through the Company. The Managing Director of SREI in his e-mail sent on 23.01.2007 to the first petitioner acknowledged that the Machilipatnam Port Project is the project undertaken by the Company. The Board minutes dated 04.06.2007, to which the first petitioner and the third respondent are parties and the appreciation accoladed on the first petitioner by the Managing Director o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere also met as per the demand, in terms of the Email communications received by the Company in the month of June, July and September 2006. The first petitioner in his Email communications dated 05.02.2007 and 11.04.2007 called upon the third respondent and the Managing Director of SREI to arrange for the bank guarantee of ₹ 4.90 crores in favour of Government of Andhra Pradesh and strategic expenses on account of the Machilipatnam Port Project. SREI had sanctioned an amount of ₹ 14 lakhs incurred by the Company on account of the Machilipatnam Port Project, as borne out by the Email sent on 05.07.2007 by the third respondent to the Company. The third respondent in his Email sent on 04.11.2007 assured the first petitioner to furnish the bank guarantee and reimburse other expenses, upon formation of the SPV between Maytas, NCC and the Company, SREI. The exchange of the aforesaid correspondence will clinchingly evidence the association of the Company and its business interest, in implementation of the Machilipatnam Project, thereby belying the stand of the respondent, taken in the matter of the Machilipatnam Port Project. SREI valued its port projects at ₹ 5,833 mil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... well as execution of different MOUs as agreed between them. The draft Share Purchase Agreement between Maytas, NCC, SREI, SARAT and VAJRA, forwarded by Maytas to the third respondent by an Email sent on 03.11.2007 clearly indicates the decision already taken by SREI and SARAT for sale of their equity shares held in VAJRA in favour of Maytas and NCC on the terms and conditions elaborately set out therein. In this context, Form No. 2 dated 22.09.2008 filed by VAJRA with the Registrar of Companies containing details of the names of the allottees and the number of shares allotted to such persons, without the name of SREI or the Company confirms the serious doubts expressed by the petitioners, on the current interest of SREI in the Machilipatnam Port Project, which has not even remotely met by the respondents, despite the duly reposed on them save the mere allegations that SREI continues to be a part the Consortium of Machilipatnam Port Project and that SREI has not entered into any agreement with Maytas to exclude SREI from the Machilipatnam Port Project made in C.A.No.8 of 2009 after conclusion of hearing of the main petition. Against the above background, SREI in the event of retain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he petitioners, in breach of its promise, defaulted in funding the Subarnarekha Port Project, which has been forcefully repudiated. These rival contentions addressed on account of funding of the Subarnarekha Port Project as agreed in the Investment Agreement could be appreciated from the culled out facts, set out here below: SI. No DATE COMMU NICATI ON FROM TO PURPOSE 1. 20.03.2006 (Vol II Pg 35) Email Company B.K. Choudhary ofSREI Sent the estimate for the project preparation amounting to ₹ 17 lakhs. 2. 08.09.2006 (Vol II Pg 3) Email Company Third Respondent (a) Monthly report for August 2006. (b) Expense statement for July & August 2006. 3. 04.10.2006 (Vol II Pg 4) Email Company Third Respondent Utilisation statement and budget Vs actual expenses statement for the month of September 2006. 4. 31.10.2006 (Vol I Pg 162) Email Company Third Respondent The operating budget required for 6 months (Rs.50.14 lakhs) 5. 31.10.2006 (Vol I Pg 164) Email Company SREI The estimated project specific expenses for months upto December 2006 (Rs, 50 lakhs) 6. 05.12.2006 (Vol 11 Pg 5) Email Company Third Respondent The Budget Vs Actual expense statement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... am Port Project to be sanctioned after formation of SPV. 19. 04.06.2008 (Vol-OR Pg 55) Email Company Third Respondent The petitioners did not draw their salary for May 2007 because of the shortage of funds. 20. 13.06.2007 (Vol-11 Pg 10) Email Company M.D of SREI & Third Respondent Pointed out the delay in release of funds for the period from April to June 2007. 21. 05.07.2007 (Vol-11 Pg 12) Email Company Third Respondent Acknowledged receipt of ₹ 35 lakhs against the budget of ₹ 89.70 lakhs for the period from April to June 2007. 22. 30.10.2007 (Vol.1 Pg.142) Email Third Respondent Maytas Proposal of SREI to exit from the Machilipatnam Project. 23 03.11.2007 (Vol. IIA Pg. 18-34) Email Maytas Third Respondent Draft SPA for sale of SREI's interest in the Machilipatnam Port Project. 24. 04.11.2007 (Vol-I Pg 141) Email Third Respondent First Petitioner Assured to give the bank guarantee of ₹ 4.90 crores for the Machilipatnam Port Project on formation of the Special Purpose Company. 25 06.11.2007 (reflected in Vol. .IIA pg-39) Letter SREI Govt. of Orissa Withdrawal of commitment by SREI in funding through the Company. 26. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any approval by the Board of directors of the Company, raised for the first time in the present proceedings is not only belated but also unjustifiable in the light of the sequence of events recorded hereabove. SREI, by and large has been meeting the fund requirements for carrying on the port projects, while at the same time the demand on account of (a) issue of .bank guarantee of ₹ 4.90 crores for the Machilipatnam Port Project; (b) payments on account of DPR studies; (c) salaries; (d) strategic expenses, etc., which are however under dispute, has not been met towards timely implementation of the projects. The bank guarantee of ₹ 4.90 crores for the Machilipatnam Project remains unfurnished by SREI even long alter formation of VAJRA, the Special Purpose Vehicle Company, inspite of the undertaking given in the e-mail dated 04.11.2007 by the third respondent on behalf of SREI. The extract of Board minutes dated 20.01.2007, discloses the decision of the Board that 'o Performance Guarantee to be given for Subamarekha, as it is on MOV route". It is, therefore, far from doubt that the second respondent did not choose to furnish the bank guarantee in favour of the Go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... avits undertaking to perform the financial obligations in accordance with the Investment Agreement, especially when the bank guarantee obligation for the Machilipatnam Port Project and the commitments already honoured by the petitioners by offering the bank guarantee as well as meeting the working capital requirements on account of the Subarnarekha Port Project still remain without any support from the second respondent, despite the solemn undertakings made before this Bench. In view of the decision in Government of West Bengal v. Chatterjee Petrochem (Mauritius) Co. and others (supra) the CLB could consider the question of existence of legitimate expectations, if any, of the petitioners in the Company Petition for making an appropriate order in their favour, only after forming and recording affirmative opinion, regarding oppression, unfair prejudice for winding up, and facts justifying a winding up order on just and equitable ground as required by section 397(2) of-the-Act, especially when it is found that the grievances of the petitioners herein and the reliefs claimed thereto are not flowing in entirety from the MOU dated 14.11.2007. Any breach of good faith which the petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding dated 14.11.2007, bringing out the intention of the second respondent to sell its entire investments in the Company to a prospective investors/investment company to be identified by the petitioners. It is essential to observe that none of the aforesaid vital correspondence has been disowned by the respondents. The MOU contemplates the following: (a)The potential investors shall complete their due diligence by 31.01.2008. (b)The payment will be made, upon completion of the due diligence to the satisfaction of the investors, by 28.02.2008 at a consideration to be mutually agreed upon. (c)The petitioners will get the Concession Agreement signed with the Government of Orissa for the Subarnarekha Port Project within 30 days from the date of issue of Government order and take all necessary steps to take the project forward. (d)the MOU will be valid till 28.02.2008. The third respondent, as Vice President (Special Projects), SREI in his Email sent on 15.11.2007 to the petitioners, pursuant to the MOU dated 14.11.2007 agreed for a total consideration of ₹ 52.50 crores in respect of the stake sale of the second respondent's portion of investment in the Company, which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this connection, it may be observed that the third respondent is a nominee of the second respondent inducted in the Board of the Company and commands a very senior position in SREI being its Vice President (Special Projects). It is only the third respondent who had (a) _ received the original share certificates issued in favour of the second respondent, as confirmed in the e-mail dated 04.11.2006 sent by the Personal Secretary to the Joint Managing Director of the Company; (b) received from the Company the budget for funds as well as the actual expenses statement for the month of November 2006, in terms of an e-mail dated 05.12.2006; (c) witnessed the execution of the Memorandum of Understanding dated 18.12.2006 between the Government of Orissa and the Company; (d) assured in his Email dated 11.04.2007 to furnish the bank guarantee for the Mahilipatnam Port Project on formation of the Special Purpose Company; (e) approved along with other directors the Board minutes dated 11.06.2007 adopting the draft copy of the balance sheet of the Company as on 31.03.2007; (f) committed SREI's portion of the equity into the Special Purpose Company for the Machilipatnam Port Project through t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rcumstances, the CLB before arriving at any equitable conclusions can be guided by the MOU dated 14.11.2007, despite its validity and enforceability, which are being separately considered. There is no doubt that (a ) the Company or M/s Clear Water Fund, the proposed investor is not a party to the MOU, (b) the MOU concerning the transfer of shares of the second respondent in favour of the petitioners does not relate to the affairs of the Company, (c) the consideration or its break up is not crystallised in the MOU, (d) upfront payment at the time of execution of MOU remained unpaid, (e) the MOU is not supported by consideration, (f) the MOU does not enjoy the approval of either the Board of directors of the Company or the investor, and (g) suffers from other legal infirmities, as elaborately pointed out by Shri Mookherjee, learned Senior Counsel touching upon the very validity and enforceability of the MOU, which in-my considered view, has no relevance in a section 397 proceeding and it is the intention of the parties, in reaching the understanding as per the MOU that assumes utmost importance and none else and therefore, the decision in Mediator Company v. The State of West Bengal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er while emphasising in his Email dated 20.01.2008, the agreement for exit of SREI/the second respondent from the Company alone at ₹ 52.50 crores specifically conveyed to the Managing Director of SREI that "we still believe that the 49% stake in the Machilipatnam should be retained and are ready to buy at the price Maytas-NCC Combine are offering today". This would mean that the price of ₹ 52.50 crores is meant only for the stake of SREI/the second respondent held in the Company and not for any interest of SREI in the Machilipatnam Port Project. The duties and obligations cast on the Company in regard to the land requirement for development of the Subarnarekha Port Project became one of the seriously contested issues in the course of the present proceedings. The MOU dated 18.12.2006 entered into between Government of Orissa and the Company as well as the Concession Agreement dated 21.04.2008, governing the land issues contemplate that the Government of Orissa will lease the required Government land in favour of the Company for development of the Port Project and in the event of any private land which may be required will be acquired by the Company at the cost ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the Company to a standstill and interfering with the business of the Company." These charges are met by the respondents thus: "It is denied and disputed that the respondents unlawfully and illegally locked the premises at which the registered office is situated and prevented and blocked the access of the petitioners and other employees of the company thereby bringing the operation of the company to a stand still, interfering with the business of the company, as alleged or at all. The said padlock was put in by the respondents for the reasons as stated hereinabove and the respondents rely upon the same in order to avoid repetition and prolixity". It may be observed that the denial on the part of the second respondent being bald is not specific. The respondents have not either offered any explanation whatsoever or justification in locking the registered office of the Company. The police complaint which came to be lodged consequent upon closure of the registered office premises and the justification putforth by the respondents will be appropriately dealt with by the Competent Authority. The Advocate Commissioner's report would disclose the controversies erupted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re wrongfully siphoning away fund of the company and were making wrongful use of the same": . The bank account has been jointly operated, by the petitioners along with the third respondent, in which case, there can never be any scope for wrongful withdrawal of funds by the petitioners, driving the respondents 3 to 5 to adopt the extreme measure of freezing the operation of the bank account causing undue hardship and prejudice faced by the Company. In this context, the assertion of the petitioners made in their rejoinder that "...It is also important to mention, since the respondents had stopped infusing funds from July'07, hence the question of "safeguarding their funds granted for the projects of the company" as claimed by the Respondents is totally misplaced and an act of gross misrepresentation of facts" (para 39 in page 51) has been meekly met by the respondents in their sur-rejoinder "as false and untenable" (para 47 in page 72). These serious charges causing continuous prejudice and hardship have not been specifically denied by the respondents, thereby not satisfying the rules of pleading as laid in Order 8 Rule 3, 4 and 5 of the Code of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e second respondent to fund the Company, in view of the continued financial defaults, closure of the registered office of the Company and non-operation of the bank account at the instance of the respondents, affecting the very root of day-to-day functioning of the Company. At the same time, the respondents are aggrieved on account of the conduct of the petitioners in (a) not maintaining any transparency in the affairs of the Company (b) misleading and misguiding the Government officials so as to take prejudicial views about the respondents (c) not apprising the progress of the project, thereby keeping the respondents in complete darkness (d) not providing copies of the correspondence exchanged between the Government Authorities and the petitioners, (e ) not complying with the directions made by the Bench from time to time, driving the respondents to prefer an application (C.A No. 136 of 2008) praying for, inter alia, to direct the petitioners to take appropriate steps for acquisition of land for the Subarmuekha Port Project, to disclose all the correspondence made with the Government in relation to the Subarnarekha Port Project etc, and reiterated in the subsequent applications, na ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M.S.D.C. Radharamanan v. M.S.D. Chandrasekara Raja and Anr (supra). Shri Mookherjee, learned Senior Counsel, drawing support from a number of decisions urged that the second respondent being a majority shareholder and constituting majority in the Board of the Company is entitled to purchase the entire stake of the petitioners held in the Company, which has been vehemently resisted by the latter. There is no doubt that the petitioners are promoters initially holding the entire shares of the Company and by virtue of the Investment Agreement, 70% shares came to be issued at. par in favour of the second respondent for ₹ 70 lakhs. The second respondent is found to have defaulted in meeting, its financial obligations towards implementation of the Subamarekha Port Project, in breach of terms of the Investment Agreement. The petitioners had met the guarantee obligation and incurred other project development expenses by availing financial assistance from Axis Bank against security of the mortgage of the flats owned by them. The Concession Agreement for development of the Subamarekha Port Project, came to be executed on 11.01.2008, on the initiative taken by the petitioners, as agreed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... c interest are entitled, on the strength of the decision in Chander Mohan Jain v. CRM Digital Synergies P. Ltd. and Anr (supra) to acquire the whole of interest of the second respondent, which along with its nominees, failed to act in the interest of the Company, for an aggregate sum of ₹ 52.50 crores, as already found agreed or at a fair value which may be determined by an independent valuer as at 31.03.2008, which is proximate to the date of the Company Petition. The option in regard to the price for shares is /left to the choice of the second respondent. The prayers made in C.A.' No. 8 of 2009 to punish the petitioners for committing contempt of the orders dated 18.09.2008 & 03.12.2U08, on account of their failure to make available copies of the correspondence made with the Government and other Agencies, in my view, do not survive in the light of the subsequent order dated 27.01.2009, permitting the respondents "to make their respective submissions before Government of Andhra Pradesh, in regard to Machilipatnam Project", in modification of the order dated 18.09.2008, thereby enabling the respondents to meet the charges levelled against them before Government ..... X X X X Extracts X X X X X X X X Extracts X X X X
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