TMI Blog2018 (4) TMI 548X X X X Extracts X X X X X X X X Extracts X X X X ..... red that the terms of compromise between the parties were finally settled vide order dated 12.5.09. As a matter of fact, while considering the binding nature of the terms of compromise incorporated in the order dated 8.9.09, there was no occasion for the CLB to refer to the failure of compromise intended between the parties in terms of order dated 12.5.09 and thus, the finding arrived at by the CLB that the compromise between the parties arrived at vide order dated 8.9.09 had not attained finality and the same had failed in the same manner as the earlier compromise entered into between the parties covered by order dated 12.5.09, is ex facie erroneous and perverse. Undoubtedly, Section 634-A confers power on CLB to enforce its orders in the same manner as if it were a decree. A compromise or a consent order is also executable by the CLB in exercise of the power conferred under Section 634-A. Thus, the Respondents cannot wriggle out from the compromise arrived at and the terms thereof, which have attained finality and binding on the parties for the reasons aforementioned. Appeal succeeds, it is hereby allowed. The order impugned dated 4.11.10 passed by the Company Law Board, Ne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 20.5.09 to the Appellant. The Respondent deposited a sum of ₹ 50 lakhs in the bank account of the Appellant. The Appellant having not accepted the offered payment of ₹ 3.25 crores by the Respondent by January 31, 2010, recording that the compromise efforts have failed, the Appellant was directed to refund the money received by him and to issue a cheque of ₹ 50 lakhs to the Respondent. 4. Efforts to settle the dispute continued. With a view to break the deadlock, on 5.6.09 with the agreement of the parties; two Directors namely, Shri Jitendra Rathore and Gajendra Singh Panwar were taken as Directors of the Respondent Company. However, the deadlock continued and therefore, order dated 5.6.09 appointing two Directors was recalled and it was directed that no meeting of the Board of the Respondent Company shall be held till the petition is disposed of. Status quo was ordered on fixed assets of the Respondent Company. 5. Ultimately, on 8.9.09 parties arrived at an agreement and accordingly, following order was passed by the CLB: The parties have agreed that the petitioner will go out of the company on receipt of ₹ 285 lakhs plus the Haveli premises. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore, the Appellant filed an application under Section 634-A for enforcement of the order passed by the CLB on 8.9.09 and inter alia prayed for directions to the Respondent no. 2 to make payment of agreed sum of ₹ 285 lacs in one go and transfer Haveli premises to the Appellant. The Appellant claimed interest on the amount due to be paid @ 18% from the date of settlement till date of payment. 9. The said application was opposed by the Respondent no.2, stating that settlement arrived on 8.9.09 was subject to various conditions specified. The Respondent while reiterating its readiness to make payment in one go, submitted that the points mentioned in the proposal forms the main basis of settlement, which the Appellant herein is trying to wriggle out. 10. The CLB after consideration of the rival submissions, arrived at the finding that the Respondent had agreed to pay ₹ 2.85 crores in one go, however, when this amount to be paid remained uncertain as the Respondent sought time to indicate after consulting his banker whether he could make the payment in one go. The court observed that the very fact that on 18.9.09, the Respondent gave a proposal which was not acce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t wriggle out from the settlement arrived at and the matter was kept pending so that the Respondents may indicate the time for making payment in terms of the settlement after consulting their bankers. Learned counsel submitted that the CLB while giving liberty to the Appellant herein to respond to the proposal given by the Respondent on 18.9.09 could not have taken away the binding effect of order dated 8.9.09 and thus, the observation made by the CLB in order dated 18.9.09 regarding passing of the appropriate orders on Appellant responding to the proposal, cannot take away the binding effect and executability of order dated 8.9.09. Learned counsel submitted that the CLB unnecessarily overawed by the fact that the attempts at settlement in the matter had failed earlier also, has seriously erred in arriving at the conclusion that order dated 8.9.09 was also an attempt for settlement and was not a binding order. Learned counsel urged that bare look at the provisions of Section 634-A of the Act would reveal that the order passed by the CLB is enforceable in the same manner as if it was decree made by a court in a suit pending therein and therefore, it was not open for the CLB to go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y so as to warrant interference by this court in exercise of its appellate jurisdiction. Learned counsel submitted that the terms of the compromise cannot be accepted by the CLB without examining whether such a compromise will be in the interest of the Respondent Company and its shareholders. Learned counsel submitted that the Respondents are ready to abide by the order dated 8.9.09 subject to fulfillment of the conditions proposed as incorporated in para no.9 of the order impugned. 13. I have considered the rival submissions and perused the material on record. 14. Under section 402 of the Act, CLB has wide powers to pass such orders and give such directions as it thinks fit to achieve the object including the power to pass appropriate orders for bringing up amicable settlement of the dispute between the parties. Of course, while approving the compromise or settlement between the parties, the interest of the Company shall always be of paramount consideration. 15. Indisputably, in the instant case, the order dated 8.9.09 was a consent order passed by CLB in terms of the compromise arrived at between the parties. A bare perusal of the order reveals that the parties had agree ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the parties, which is binding upon them in terms of the order dated 8.9.09. Thus, the finding arrived at by the CLB that the proposal given by the Respondents being not acceptable to the Appellant herein, go to show that the agreement between the parties on 8.9.09 had again failed and did not attain finality, is contrary to the clear terms as also the spirit of the order dated 8.9.09 which is of binding nature. The observations of the CLB that had the order dated 8.9.09 attained finality, the petition would have been disposed of on 8.9.09 itself with appropriate directions to the Respondents to pay a sum of ₹ 2.85 crores to the Appellant herein and transfer the Haveli premises to him within a time frame, are also misconceived inasmuch as, as noticed hereinabove, the terms of the compromise regarding the payment of ₹ 2.85 crores in one go and handing over of the Haveli premises, had attained finality with the passing of the order dated 8.9.09 and the matter was kept pending inasmuch as, the Respondents sought time to indicate the time for making the payment after consultation with their bankers. 17. It is noticed that while recording the finding that the compromise a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the reference of the words appropriate orders will be passed thereafter incorporated in order dated 18.9.09, allegedly lending support to the view that after the proposal given by the Respondent no.2 being rejected by the Appellant herein, the terms recorded in the order dated 8.9.09 did not attain finality, to say the least, the view taken by the CLB amounts to doing violence to clear and categorical terms of order dated 8.9.09. Merely because, the Appellant had not accepted the proposal of the Respondents imposing further terms beyond the terms of the order dated 8.9.09, the binding effect of the other terms of the order dated 8.9.09 is not wiped out. Obviously, in terms of the order dated 8.9.09, the Respondents were only required to give a time frame after consultation with their bankers for giving effect to the binding terms of the compromise arrived at between the parties as incorporated in the said order. The order dated 18.9.09 passed by the CLB adjourning the matter for appropriate orders pending consideration of the proposal of the Respondents by the Appellant, in no manner could be construed that in case the proposal is not accepted by the Appellant, the natural conse ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
