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TMI Blog2021 (8) TMI 840X X X X Extracts X X X X X X X X Extracts X X X X ..... in to supply to the Petitioner herein forthwith all the records of the Respondent No. 1 Company including but not limited to: the minutes of all meetings held since after 4.6.2015 and all resolutions passed by the Board or by shareholders meetings since that date; the members' register; the balance sheets and profit and loss accounts of the Company prepared since 4.6.2015; copies of all contracts entered into by Respondent no. 1 since 4.6.2015; copies of all appointments made of Respondent No. 1 since 4.6.2015; copies of all notices of any proceedings before any Court/Tribunal or authority against the Respondent No. 1 Company or in which Respondent No. 1 Company may have any interest: (ii) Pass an order directing Respondent No. 1 to maintain a status quo as to its shareholding as on date; (iii) Pass an order directing Respondent No. 1 not to hold any meeting of the Board without notice to Respondent No. 5 herein; (iv) Pass an order directing Respondent No. 1 not to hold any meeting of shareholders without notice to Petitioner herein; (v) Pass an order forthwith directing Respondent No. 1 not to instruct any lawyers in respect of any proceedings (including but not limi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of respondent No. 2 towards first instalment. At this stage, respondent No. 2 requested the petitioner to keep the transaction with respect to 16,667 equity shares in abeyance. On 26.12.2015, it has come to the knowledge of the petitioner that respondent No. 3 was appointed as a Director in respondent No. 1. On 01.04.2016, respondent No. 2 unilaterally terminated the SPA and MOU by addressing a letter to the petitioner on a specious ground that the petitioner has breached the SPA by not taking steps to reduce the corporate guarantee. On 16.04.2016 and 26.04.2016, the petitioner wrote letters to respondent No. 2 reminding him of his obligations and investments made by the petitioner. On 26.04.2016, the respondent No. 2 addressed a letter to the petitioner reiterating his contention that the SPA and MOU has been terminated by him. On 14.05.2016, petitioner wrote to the respondent No. 2 denying the allegations and reiterated its claim. 4. It is submitted that in view of the grave acts of oppression and mismanagement on the part of the respondent No. 2, the petitioner filed the instant CP, seeking the reliefs as mentioned above. 5. The respondent No. 1 i.e. M/s Authentic Restaurants ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interim order. The respondent No. 2 further submits that in view of termination of SPA and MOU, the transfer of 33,333 shares in favour of the petitioner and appointing its nominee i.e. respondent No. 5 as Director of the respondent No. 1 has no validity and the petitioner cannot rely on the same for any purpose. 7. It is submitted that the disputes raised by the petitioner in the instant CP pertains to the SPA dated 27.05.2015 and the same are in the nature of contractual disputes and hence, do not come within the ambit of Section 241(1) of the Companies Act, 2013 and therefore, the petition is liable to be dismissed. 8. Heard Mr. Sandeep Bajaj, the learned counsel for the petitioner, Mr. Vaibhav Sharma, the learned counsel for the respondent No. 1-M/s Authentic Restaurants Pvt. Ltd. and Mr. Anand Chhibbar, the learned senior counsel for the respondent No. 2-Mr. Amit Arora and perused the pleadings on record. 9. In the backdrop of the above submissions, the issues that fell for our consideration are:- (i) Whether the SPA dated 27.05.2015 executed between the parties contained any conditions precedent and if so, whether the petitioner failed to fulfil the same and thereby canno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ata, the shares are free from any encumbrances, pledge, claim, charge or lien whatsoever. The purchasers of the third part have to their entire satisfaction got the due diligence regarding the business of TFS Chennai and TFS Kolkata carried out, thus any such subsequent discovery of any charge, lien, encumbrance, liability, pledge or claim shall in no way effect this agreement in any manner and Seller shall entail no liability of any kind whatsoever in future through the second party i.e Authentic Restaurants Private Ltd which would have the purchasers also as its shareholders as a consequence of the execution of the present agreement be made liable for the same. (l) The purchasers agree to satisfy all the condition precedent as mentioned in the present agreement and understands that the implementation of the present agreement shall not take place unless the performance of the conditions precedent as more particularly described in clause 3 of the present Agreement. xx xx 3. Condition Precedent In addition to the terms and conditions of the payment of consideration to the seller as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bsp; xx APPENDIX II Payment of consideration by the 2nd Purchaser Buddy (Mumbai) Duty Free Services Pvt Ltd 1. The amount of Rs. 5,00,000,00/- out of the total consideration shall be paid at the time of signing of the present agreement to the Sellers by the Purchaser No.2 herein and shall be non refundable. 2. This payment shall operate as a condition precedent for the performance of the terms and conditions of the present agreement. xx xx APPENDIX III The purchasers shall provide 2 (two) post dated cheques in favour of the Seller amounting to Rs. 9,00,000,000/- (Rupees Nine Crores Only) each (being 1/3rd part of each party) as a security deposit with a covering letter at the time of the signing the present Agreement. The said bank/corporate guarantee shall be reduced on pro rata basis within a period of six months and thereafter the aforementioned post dated cheques shall be cancelled and duly returned to the purchasers. However, it is clarified that in case the Corporate Guarantee is revo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nbsp; xx Appendix I Payment of the consideration by the Transferee in the following manner: 1. The amount of Rs. 1,00,00,000/- ( one crore only) to be paid on or before 5th January, 2016 2. Balance payment of Rs. 1,50,00,000/- (one crore fifty lacs only) to be paid on or before 29th February, 2016." 11. It is the admitted case of the petitioner that though it has belatedly paid the part sale consideration of Rs.5 Crores for the purchase of 33,333 equity shares in respondent No. 1 company but it failed to reduce the value of the Buddy Retail Corporate Guarantee of Rs.9 Crores. However, the petitioner submits that the reduction of the value of the corporate guarantee of Rs.9 Crores was not a condition precedent as per Annexure P-5 SPA dated 27.05.2015. It is also the case of the petitioner that even if the requirement of reduction of the value of the Buddy Retail Corporate Guarantee of Rs.9 crores was a condition precedent, but the respondent No. 2 by virtue of the Annexure P-10 MOU dated 06.07.2015 waived the same and hence, cannot raise any objection with regard to the reduction of the corporate guarantee. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said suit was originally decreed, ex parte, but later on in an appeal filed by petitioner, the decree was set aside and suit was restored and the revision filed by respondent No. 2 is pending). On the other hand, the petitioner, admittedly has not challenged the termination letter dated 01.04.2016 till date. In view of our finding, as observed above, that the petitioner failed to fulfil the conditions precedent of the SPA, even in the absence of the termination letter dated 01.04.2016; all actions, taken place, including issuance of the share certificate, between the parties, in pursuance to the SPA dated 27.05.2015 are invalid and non est in the eye of law. Therefore, the petitioner cannot be treated as a shareholder of the respondent No. 1 company as on the date of filing of the CP. Once the petitioner is not a shareholder of the respondent No. 1 company, the instant CP filed under Section 241 and 242 of the Companies Act, 2013 is not maintainable. 15. When it is found that the petitioner has not fulfilled the conditions precedent for purchase of the shares for which the share certificate was issued, and the SPA which was the basis for issuance of the said share certificate ..... X X X X Extracts X X X X X X X X Extracts X X X X
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