Nagesh Hosiery Exports Ltd. & Anr vs Nagesh Kumar & Ors

Company Appeal (AT) No. 223 of 2017

IN THE MATTER OF:

Nagesh Hosiery Exports Ltd. & Anr. .Appellants

Vs.

Nagesh Kumar & Ors. ...Respondents

Present: For Appellants:-Mr. Sukhbir Singh, Advocate

For Respondents:- Mr. M.L.Sharma, Ms. Renu Mehra, Mr. Nagesh Kumar and Mr. Anand, Advocates

ORDER

19.07.20 17 This appeal has been preferred by appellants against order

dated 6th June 2017 passed by National Company Law Tribunal

(hereinafter referred to as the 'Tribunal'), New Delhi in Company Petition

No. 97/2006.

From bare perusal of the impugned order and the background, it

is clear that the appellants who were the respondents all the time tried

to delay the proceeding. Earlier matter was taken up by erstwhile

Company Law Board, but the appellants/ respondents all the time

unnecessarily dragged the case for the last 11 years.

In fact, final order was passed by erstwhile Company Law Board on

11th June 2008. However, the appellants, who are the respondents never wanted to give effect to the same for about 9 years, and finally the

Tribunal passed the following order on 20th January 2017: -

"The petitioner seeks execution of the order dated

11.06.2008 passed by the erstwhile Company

Law Board. The observations of the Ld. Presiding

Officer were:

"The allegations of acts of oppression and

mismanagement of the affairs of NHEL resulting

in the depletion of its reserves remained

uncontroverted. Though it was a fit case for

winding up of NHEL, such as order would clearly

prejudice the interests of the petitiorer 1 and other

shareholders",

2. Having come to the conclusion that the acts of

the respondents were oppressive to the petitioners

herein, the Id. Presiding Officer ordained exit of

the petitioners subject to payment of a fair value

of their shares by the Respondents. At that point

of time, the petitioners held 40,940 shares being

20.47% equity in the Respondent No. 1 Company.

3. The only asset of the Respondent No. 1

Company is land measuring 13.811 sq. yds. at

Ludhiana. Upon a fair valuation being assessed, the value of each share was quantified at

Rs. 706.73 per share. This valuation however was

not acceptable to the petitioners and was

impugned before the Hon'ble High Court of Delhi

in Co. Appeal (S.B) No. 1812008. The Hon'ble High

Court of Delhi, in its order dated 05.03.2013,

while observing that the impugned order did not

spell out the consequences of non-payment, also

set aside the valuation and remanded back the

case to the Company Law Board for a fresh

assessment of the assets of the company.

Accordingly, a Local Commissioner as well as a

Chartered Accountant were appointed by the CLB.

Report in this respect is on record. While the site

plan and the report have been prepared by the

Local Commissioner, in the absence of any

cooperation from the respondents, based on

whatever record was made available by the

petitioners, the share was valued at Rs. 1624/-

by adopting a book value method for valuation for

the equity share.

4. It is submitted by the Id. Counsel for the

petitioners that other than their own equity, the

petitioners now also claim another 8.19% in the company, being 25% of the shares which have

devolved upon petitioner no. 1 upon the death of

his deceased parents and through the HUF,

increasing his stake to 28.66%.

5. The matter has been listed afw time before

this Bench and the parties were directed to be

present in person. While Respondent No. 3 has

neither paid the full cost imposed by this Bench

and the Hon'ble High Court of Delhi, nor appeared

before this Bench, his counsel Mr. H.K.Dhariwal

has vehemently opposed any claim made by the

petitioners or their entitlement in lieu of the

shareholding. Other than generally resisting the

petitioners' entitlement, no basis to oppose the

claim has been put forth. He however admits the

petitioners' shareholding in the respondent

Company. Needless to say that the respondents

have neither impugned the decision of the

Company Law Board permitting exit of the

petitioners on fair valuation of their holding, nor

the directions passed by the Hon'ble High Court of

Delhi in CO(s) No. 1812008.

6. Respondent No. 4 has also not appeared in

Court nor paid the cost imposed. A written

submissions however is on record which apart

from repudiating the petitioners' entitlement,

admits and fortifies the claim of the petitioners to

the extent of 28.66% equity in the Respondent

Company.

7. Though the shareholding of the petitioner is not

disputed by the respondents, they are neither

willing to give any money in lieu of the

shareholding to enable them exit, nor are they

willing to part with any portion of the immovable

property. Their intention is clearly to deprive the

petitioners of their entitled shares. In the event of

failure to pay the petitioners their entitlement in

terms of the valuation report, the petitioner would

be entitled to a portion of the Company's asset

being the immovable property in proportion to their

shareholding. A site plan of the Company's land

measuring 13.811 sq. yards has been placed on

record. A portion being 207 feet by 164 feet 7/1/2

inches, being 3867.08 sq. yards is demarcated

being equivalent to 28.66% share. Since the

petitioners seek execution of the previous order, the demarcated portion in Red on the site plan is

directed to be transferred in favour of the

petitioners against their shares to enable them

exit. No objection has been placed by any of the

respondents to the site plan till date.

8. Ld. Counsel for the respondents' submits that

there is building constructed on the aforesaid

property, which fact is not substantiated by the

photographs he seeks to show the Court. On the

other hand, Ld. Counsel for the petitioner has

confirmed that the apportioned area of land is

vacant with no construction thereon. It is therefore

being clarified that the petitioner shall only be

entitled to a vacant piece of land without any

construction thereon. It is also being directed that

the portion of land under petitioners possession,

other than the demarcated portion shall be

handed over to Respondent No. 1 through

Respondents 3 & 4.

9. Accordingly, the site plan, 'Exhibit A' is being

confirmed as the share of the petitioners. The

obdurate and recalcitrant attitude of the

respondent emerges large in the proceedings. it appears that they are neither willing to pay the

petitioners nor execute the conveyance deed in

their favour. The Respondents are however given

15 days'time to either pay the petitioners in terms

of valuation of their equity or execute a

conveyance deed in their favour, failing which, the

petitioners would be at liberty to approach this

forum for appointment of a Local Commissioner to

execute the conveyance deed in their favour.

10. The petitioners shall deposit their shares with

the Bench Officer which shall be surrendered to

the respondents for a consequential reduction in

the share capital.

11. To come up for compliance on 21.03.2017."

The appellants have challenged the said order before this Appellate

Tribunal but taking into consideration the relevant facts and attitude of

the appellants, the Appellate Tribunal by order dated 6th June 2017

observed and directed as follows:-

"From the record, we find that the Company

Petition was filed in the year 2006 by Respondents

Mr. Nagesh Kumar and Mrs. Renu Mehra. The

Appellants are Respondents therein. For one or other reason, the Appellants are buying time and matter is

pending for eleven years.

Under Section 422 of the Companies Act, 2013,

the petitions were required to be disposed of within

three months. However, more than ten months have

passed after constitution of the Tribunal but it has not

been disposed of in view of time taken by the

Appellants that too in the manner as noticed above.

We find that just to delay the Company Petition, the

Appellants have played a dubious role in preferring

the defective appeal without enclosing Vakalatnama,

without enclosing the copy of the impugned order and

without affidavit and asking for time from the

Tribunal on the ground that they have preferred the

appeal and same is pending. In the circumstances,

we direct the Tribunal to dispose of the Company

Petition preferably within one month without granting

unnecessary adjournment to the partiers. The

Appellants who are Respondents before the Tribunal

should not be granted time on any ground.

It would be also open to the Tribunal to decide as

to what action is to be taken against the Respondents. The appeal is dismissed with

aforesaid observation.

Let a copy of this order be forwarded to National

Company Law Tribunal, New Delhi."

After the remand of the case to Tribunal and to give effect to the

earlier order of the Tribunal, the respondents, who are the petitioners

before the Tribunal requested the Tribunal to get the order dated 20th

January 2017 implemented by appointing the Local Commissioner so as

to execute a conveyance deed on behalf of the 1St Respondent Company

in favour of the respondents/ petitioners in terms of the order dated 20th

January 2017 passed by the Tribunal. Prayer was also made to

dispensed with the requirement of depositing share certificate by the

respondents/ petitioners with the Bench Officer and to direct cancellation

of the shareholding of the respondents /petitioners with the

consequential reduction in the equity share of the company. The

Tribunal taking into consideration all the relevant facts and the earlier

orders passed by Company Law Board appointed one Shri Amit Bhagat,

Advocate, as the Local Commissioner get a conveyance deed executed on

behalf of 1st respondent company after physically ascertaining the

measurement as given in the draft conveyance deed within a period of

one month from the date of the order.

Learned counsel for the appellants submits that already

conveyance deed has been executed in favour of the respondent but the

same has been disputed by the respondents. There is nothing on record to suggest that any conveyance deed was executed by the company in

favour of the Respondents/ Petitioners.

In the circumstances, we find no ground to interfere with the

impugned order and dismiss the appeal with cost of Rs. 1,00,000/- (Rs.

One Lac only) to be paid by appellants in favour of 1st and 2nd

respondents/ petitioners within 45 days.

(Justice S.J. Mukhopadhaya) Chairperson

(Balvinder Singh) Member(Technical) sm