Bombay High Court
Rajiv Sanghvi And 3 Ors vs Pradip R Kamdar And 2 Ors on 30 June, 2022
Bench: R. I. Chagla
IA-571-22-Jt.doc
Sharayu Khot.
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
INTERIM APPLICATION NO. 571 OF 2022
IN
SUIT NO. 44 OF 2021
Rajiv Sanghvi & Ors. ...Applicants/
Plaintiffs
Versus
Pradip R. Kamdar & Ors. ...Respondents/
Defendants
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Mr. Virag Tulzapurkar, Senior Counsel a/w Mr. Navroz Seervai,
Senior Counsel a/w Mr. Chirag Kamdar, Ms. Bindi Dave, Mr.
Ieshan Sinha and Mr. Aayesh Gandhi i/b. Wadia Ghandy and Co.
for the Applicants/Plaintiffs.
Mr. Ravi Kadam, Senior Counsel a/w Mr. Ashish Kamat, Mr.
Shyam Kapadia, Mr. Dhirajkumar Totala, Mr. Biswadeep
Chakravarty, Ms. Trisha Sarkar and Ms. Janhavi Patankar,
Madhur Arora i/b. AZB & Partners for the
Respondent/Defendant Nos. 1 and 2.
----------
CORAM : R.I. CHAGLA J.
SHARAYU
PANDURANG
KHOT
Reserved on : 20 April 2022
Digitally signed
by SHARAYU
PANDURANG
KHOT
Date:
2022.06.30
14:16:42
+0530 Pronounced on : 30 June 2022
1/108
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JUDGMENT :
1. By this Interim Application, the Applicants/Plaintiffs
have sought an order of temporary injunction restraining the
Defendant Nos. 1 and 2, their servants/agents or any other
person directly or indirectly acting for or on behalf of Defendant
Nos. 1 and 2 from taking any steps which would defeat the
Applicants' rights under the agreement and/or the reliefs prayed
for in the captioned Suit. Further, relief has been sought
restraining the Defendant Nos. 1 and 2, their servants/agents or
any other person directly or indirectly acting on behalf of
Defendant Nos. 1 and 2 from taking steps towards valuation of
Defendant No. 3 and/or buy-out of inter alia the Defendant
Nos.1 and 2's shareholding in Defendant No. 3. Other
consequential relief has also been sought against Defendant Nos.
1 and 2 which have been set out in the subsequent prayers viz.
prayer clauses (c) and (d).
2. The Applicants have filed the present Suit seeking
specific performance of the agreement ("Minutes of Discussion")
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dated 14th June 2019 (annexed at Exh.A to the Plaint) and
declaration that the Minutes of Discussion is valid, subsisting,
enforceable and binding.
3. The Applicants along with the Defendant Nos. 1 and
2 are Directors as well as the shareholders of the Defendant No.
3 Company. Defendant No. 3 Company is a Private Limited
Company, incorporated under the Companies Act, 1913 and
engaged in the business of operating and running automobile
dealerships having operations in the State of Maharashtra,
Andhra Pradesh and Telangana, Tamil Nadu and Karnataka and
Gujarat. The overall control of Defendant No. 3 Company is
exercised by its Board of Directors, but for administrative
convenience, Plaintiff No. 1 is in control of the operations in the
State of Andhra Pradesh, Telangana, Tamil Nadu and Karnataka
(collectively referred to as "Andhra Pradesh and Telangana
Division"); Plaintiff Nos. 2 to 4 are in control of the operations
in the State of Maharashtra ("Maharashtra Division") and
Defendant Nos. 1 and 2 are in control of the operations in the
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State of Gujarat ("Gujarat Division").
Company is as under :
Parties/ Group (%) of current
Shareholding
Andhra Pradesh Group 32.33%
(represented by Plaintiff No.1)
Maharashtra Group 37.70%
(represented by Plaintiff Nos.2 to 4)
Gujarat Group 19.31%
(represented Defendant Nos.1 to 2)
Plaintiff No.1's Aunt 6.07%
Other shareholders 4.59%
The Plaintiffs and their family members, therefore, constitute
approx. 70% of the Defendant No.3's shareholding.
5. The Defendant Nos. 1 and 2 had filed a Company
Petition No. 428 of 2018 on 19th March 2018 before the
National Company Law Tribunal ("NCLT") under Sections 241,
242 and 244 of the Companies Act, 2013, seeking to restrain the
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alleged oppressive acts of the Plaintiffs against Defendant Nos. 1
and 2. The Defendant Nos. 1 and 2 had taken out an Application
bearing MA No. 229 of 2018 on 26th March 2018 in the
Company Petition and which inter alia sought directions
restraining and prohibiting the Plaintiffs who are the
Respondents therein from interfering with, prejudicing and/or
obstructing inter alia the Defendant Nos. 1 and 2 in conducting
the Gujarat operations of the Defendant No. 3 Company. The
NCLT passed an order on 6th April 2018 directing that no
structural changes to the existing arrangement in Defendant
No.3 Company shall be made, at least until the Company
Petition is disposed of. Miscellaneous Petition was accordingly
disposed of.
6. The Plaintiffs and the Defendant Nos. 1 and 2 had
thereafter, entered into "the Minutes of Discussion" which was
duly executed by them for separation of the businesses. It is
mentioned therein that "The Minutes of Discussions and the
mechanics of the family settlement agreed to between the
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parties". Under the said Minutes of Discussion, settlement
amount was payable to the Defendant Nos. 1 and 2 referred to
as Gujarat family and the amount which is valued therein at Rs.
245 Crores. The Minutes of Discussion further contemplated a
scheme of arrangement (demerger) and the appointed date for
demerger mentioned therein is 1st April 2020. It was further
recorded in the Minutes of Discussion that other than what has
been set out in the Minutes of Discussion, no claim from Gujarat
family of any sort will be considered and the Minutes of
Discussion shall be treated as full and final settlement. It is
further recorded that the scheme of arrangement (demerger)
was likely to be implementation by 1st April 2020. After Clause
9 of the Minutes of Discussion, parties to the Minutes of
Discussion have appended their signatures. Thereafter, the
concluding words which are of importance are set out as
under :-
"The above represents the understanding agreed
to between the Gujarat family, Maharashtra family
and AP & Telangana family and is without
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prejudice to the other rights and remedies
available to the parties. The detailed
understanding and the mechanics would be
documented by way of family settlement
agreement and Scheme of Arrangement
(Demerger) to be filed with the National Company
Law Tribunal and withdrawal of the existing
Company Petition filed by the Gujarat family."
7. After recording of concluding words, the Minutes of
Discussion has again been signed by the Plaintiffs and the
Defendants. Various submissions have been made as to the
interpretation of these words, which will be gone into herein
below.
8. Thereafter, correspondence was exchanged between
the parties with regard to drawing up of the family settlement
agreement and scheme of arrangement (demerger), the letter to
be filed with the NCLT and withdrawal of the existing Company
Petition filed by the Defendants herein. The correspondence
exchanged between the Plaintiffs and the Defendants after
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execution of the Minutes of Discussion were marked as without
prejudice and certain objections have been raised by the
Defendants as to the Plaintiffs reliance upon such
correspondence. However, it is an admitted position that a draft
of family settlement agreement as well as scheme of
arrangement (demerger) were exchanged between the parties.
9. There were certain disputes between the Plaintiffs
and the Defendants with regard to the managing of the Gujarat
Division, which had faced losses and which the Plaintiffs alleged
were attributable solely to the Defendant Nos. 1 and 2's action,
rather inaction and which thus led to the degradation of the
Gujarat Division's performance. The Plaintiffs were unable to
interfere in the management of the Gujarat Division due to
order dated 6th April 2018 passed by the NCLT. Considering the
fact that the Defendant No.3 Company's financial position was
deteriorating, and according to the Plaintiffs, the Defendant
No.3 company was on brink of default in relation to facilities
advanced by financial institutions to the Gujarat Division, the
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Plaintiff Nos. 2 to 4 were constrained to file Miscellaneous
Application No. 1008 of 2020 seeking modification of the said
order dated 6th April 2018 in order that they may take and
implement decisions in respect of the Gujarat Division.
10. The Defendant Nos. 1 and 2 had also filed
Miscellaneous Application No. 1064 of 2020 inter alia seeking
appointment of an administrator of Defendant No.3 Company
and direction to the Board of Directors to forthwith disburse an
amount of Rs. 113.51 Crores to the Gujarat Division. The
Defendant No. 3 Company had partially from cash flows of the
two divisions other than Gujarat Division paid approx. Rs. 56
Crores towards repayment of the amounts due and payable by
the Gujarat Division to banks and financial institutions as on
31st August 2020. This was considering that the RBI's loan
moratorium was ending and NCLT had not heard the
Miscellaneous Application No. 1008 of 2020 filed by the
Plaintiffs. On 31st August 2020 an order came to be passed by
the NCLT in Miscellaneous Application No. 1008 of 2020
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recording that the parties to undertake one more round of
settlement talks and in the meantime, the Defendants will not
incur any further indebtedness (recording the voluntary
statement made by the Defendants' Counsel). The Advocates of
the Plaintiff Nos. 2 to 4 addressed a letter dated 3rd September
2020 to the Advocates for the Defendant Nos. 1 and 2 recording
the statement made by the learned Senior Counsel Mr.
Dwarkadas for the Defendant Nos. 1 and 2 before the NCLT. The
letter recorded that the payment of Rs. 56 Crores towards the
Gujarat Division's dues to banks and financial institutions was
made in terms of the Minutes of Discussion and pursuant to the
statement made. This was responded to by the Advocates for the
Defendant Nos.1 and 2 vide letter dated 4th September 2020
denying the contents of the letter dated 3rd September 2020
and stating that the statement of Mr. Dwarkadas had been
distorted and the aforementioned payment was to ensure that
the Defendant No. 3 Company was not declared NPA by the
Banks. Further correspondence was exchanged between the
Advocates for the Plaintiffs and the Defendants on 8th
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September and 9th September 2020 on the binding nature of
the Minutes of Discussion.
11. On 9th September 2020, the Advocates for
Defendant Nos. 1 and 2 in a letter addressed to the Plaintiffs
stated that since execution of Minutes of Discussion, the
circumstances have changed. It was stated that the Plaintiffs do
not wish to proceed with the settlement discussions for
implementation of Minutes of Discussion in its true spirit and
intent and that the Minutes of Discussion was arrived at a
depressed valuation. Nevertheless, Defendant Nos. 1 and 2 were
willing to discuss settlement terms on the basis of principles
underlying the Minutes of Discussion.
12. In view of the refusal of Defendant Nos. 1 and
2 to implement the Minutes of Discussion, the captioned Suit
was filed by the Plaintiffs on 25th January 2021 before this
Court inter alia seeking specific performance of the Minutes of
Discussion.
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13. An Affidavit dated 27th January 2021 was
filed before the NCLT recording the fact that the captioned Suit
had been filed by the Plaintiffs for specific performance of the
Minutes of Discussion.
14. On 4th February 2021, NCLT concluded the
hearing of both Company Applications and reserved orders. The
NCLT passed order dated 11th June 2021 inter alia dismissing
both the Company Application No. 1008 of 2020 as well as the
Company Application No. 1064 of 2020 stating that relief
sought for can only be granted at the final stage and observing
that the order dated 6th April 2018 does not require any
modification. The Defendant No. 3 Company was empowered to
take all necessary decisions for setting things right in the Gujarat
Division, but without disturbing the present management
pattern/directorship/shareholding of the Defendant No. 3
Company as observed in the order dated 6th April 2018.
15. Plaintiff No. 1 and Plaintiff Nos. 2 to 4 filed
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separate Appeals namely Company Appeal Nos. 76 and 78 of
2021 on 7th July 2021 before the National Company Law
Appellate Tribunal ("NCLAT") challenging the NCLT's order
dated 11th June 2021. On 20th July 2021, the NCLAT after
hearing all the sides, directed the parties to file their respective
replies and rejoinders and for the Appeals to be listed on 27th
August 2021 under the caption of "for admission (after notice)".
16. Being aggrieved by the said order dated 28th
July 2021, the Defendant Nos. 1 and 2 filed Company Appeal
Nos. 4588 and 4542 of 2021 before the Supreme Court
challenging the said order passed by the NCLAT in the Appeals.
17. The Supreme Court disposed of the Civil
Appeals inter alia directing the NCLAT to dispose of the Appeals
pending before it by 28th October 2021 i.e. before the date fixed
for the main hearing of the Company Petition.
18. The NCLAT disposed of the Appeals on 29th
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September 2021 directing the NCLT to hear the matter
expeditiously uninfluenced by the observations made in
paragraph 10(ii) and (iii) of the order dated 11th June 2021.
19. The Company Petition though listed before the
NCLT, could not be heard due to paucity of time.
20. On 1st December 2021 an 'Overview Note' is
filed by the advocates for Defendant Nos. 1 and 2 in the
Company Petition which inter alia seeks fresh valuation and exit
from Defendant No. 3 Company.
21. NCLT passed an order on 21st January 2022
directing that the Petition to be listed high on board and for
final hearing on 17th February 2022.
22. The Plaintiffs filed the present Interim
Application on 11th February 2022 inter alia seeking temporary
injunction restraining the Defendants from directly or indirectly
taking any steps towards valuation of the Defendant No. 3
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Company and/or buyout of the shareholding in the Company.
23. Mr. Virag Tulzapurkar, the learned Senior
Counsel appearing for the Applicants/Plaintiffs has made
submissions in support of the relief sought for in the present
Interim Application filed in the captioned Suit and has also filed
the written submissions on 27th April 2022.
24. Mr. Virag Tulzapurkar has submitted that it has
been stated in paragraph 3.6 of the Plaint that the Defendant
Nos. 1 and 2 have grossly been mismanaging the affairs of the
Gujarat Division as a result of which, it has been losing, and
have now lost, all dealerships and is making severe losses. As
opposed to the Gujarat Division, the Maharashtra Division,
Andhra Pradesh/Telangana Division of the Defendant No. 3
Company has consistently been making profits. He has
submitted that the Defendant Nos. 1 and 2 had filed Company
Petition No. 428 of 2018 before the NCLT alleging oppression
and mismanagement of the Plaintiffs in the business of
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Defendant No. 3. It was the Plaintiffs' contention in response to
the Petition that this was nothing but an attempt by the
Defendant Nos. 1 and 2 to scuttle efforts being made by the
Board of Directors of Defendant No. 3 Company to revive the
Gujarat Division and turn the division profitable. This Company
Petition is pending for final hearing and disposal.
25. Mr. Virag Tulzapurkar has submitted that it is
during the pendency of the Company Petition that the parties
upon holding discussions arrived at a family settlement to
separate amicably. The family settlement was arrived at and
agreed to between the parties in the meeting held on 14th June
2019 and it was reduced to writing in a document titled as
'Minutes of Discussion'. The Minutes of Discussion has been
signed by the parties thereto, namely the Plaintiff and
Defendant Nos. 1 and 2, accepting the same as a family
settlement on behalf of their respective families. He has
submitted that though the execution of the Minutes of
Discussion is not in dispute what is really disputed by the
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Defendants is its characterisation as a "family settlement".
26. Mr. Virag Tulzapurkar has made submissions
on the Minutes of Discussion/Agreement which he has
submitted is a family settlement and thus, enjoying a special
equity. He has submitted that a bare reading of the Minutes of
Discussion makes it clear that it is a family settlement. It is an
undisputed position that the parties to the Minutes of Discussion
are related to each other and are family members. The disputes
between the parties to the Minutes of Discussion have been
resolved by the execution of the Minutes of Discussion. The
mere fact that the disputes in relation to Defendant No. 3
Company was the only dispute which was to be resolved, and in
doing so the NCLT Petition was to be withdrawn, does not
detract from the Agreement being a "family settlement".
27. Mr. Virag Tulzapurkar has relied upon the
decision of the Supreme Court in Kale Vs. Dy. Director of
Consolidation1 - paragraph 9 to 24 in support of his submissions
1 (1976) 3 SCC 119
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that the Court in favour of upholding a family arrangement
instead of disturbing the same on technical or trivial grounds.
Where the courts find that the family arrangement suffers from
a legal lacuna or a formal defect the rule of estoppel is pressed
into service and is applied to shut out plea of the person who
being a party to family arrangement seeks to unsettle a settled
dispute and claims to revoke the family arrangement under
which he has himself enjoyed some material benefits.
28. He has also relied upon the decision of Hari
Shankar Singhania & Ors. Vs. Gaur Hari Singhania & Ors.2
paragraph 42 onwards in support of his contention that a family
settlement is treated differently from any other formal
commercial settlement, as such settlement in the eye of the law
ensures peace and goodwill among the family members. Such
settlements are governed by a special equity principle where the
terms are fair and bona fide, taking into account the well being
of a family. Technical considerations should give way to peace
and harmony in the enforcement of family arrangement or
2 (2006) 4 SCC 658
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settlements.
29. He has also relied upon the decision of
Shivanand Vassudev Salgaocar & Ors. Vs. Dattaraj Vassudev
Salgaoncar3 in particular, paragraphs 47 to 51, 64 to 67, 76 and
77 in support of his contention that the family settlement is
required to be given effect to and one party cannot be allowed
to scuttle the entire family arrangement. In that case, this Court
had held that it is clear from the terms of the documents and the
manner in which the parties conducted themselves that this was
a binding and concluded Family Arrangement, one capable of
specific enforcement.
30. He has also relied upon the decision of the
Dinesh Gupta & Ors. Vs. Rajesh Gupta & Ors. 4 in support of his
contention that a family settlement which settles disputes within
the family should not be lightly inferred with especially if the
settlement has already been acted upon by some members of the
3 2014 SCC OnLine Bom 1250
4 2018 SCC OnLine Del 12378
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family.
31. Mr. Virag Tulzapurkar has submitted that in
the Minutes of Discussion, it is categorically recorded that a
settlement amount is payable to the Gujarat family, comprising
of the Defendant Nos. 1 and 2 herein. The Minutes of Discussion
also records that the contents thereof represents the
understanding agreed upon between the Gujarat family,
Maharashtra family and Andhra Pradesh/Telangana family. In
the first sentence of the Minutes of Discussion, it is recorded
that the "Minutes of Discussion and its mechanics of the family
settlement agreed to between the participants...". Thus, the
parties to the Minutes of Discussion understood the Minutes of
Discussion to be a family settlement. The issues of the three
families in the Minutes of Discussion are the issues to be settled.
Thus, the Minutes of Discussion records a full and final
settlement among the three families of the issues pending and is
therefore complete.
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32. Mr. Virag Tulzapurkar has also submitted that
from a reading of Clause 8 of Minutes of Discussion wherein it is
stated that "no claim by the Gujarat family of any sort will be
considered and this shall be treated as full and final settlement "
makes it clear that the Minutes of Discussion was a full and final
settlement between the three families namely the Gujarat family,
Maharashtra family and Andhra Pradesh/Telangana family. The
concluding words of the Minutes of Discussion that it was
without prejudice to other rights and remedies available to the
parties was only reference to such other rights and remedies
available to the parties other than that recorded in the Minutes
of Discussion. The reference to detailed understanding and
mechanics documented by way of family settlement agreement
and scheme of arrangement (demerger) in the Minutes of
Discussion were not with reference to the subsequent execution
of such formal documents and thereafter the withdrawal of
existing Company Petition filed by the Defendants.
33. Mr. Virag Tulzapurkar has thereafter, referred
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to the conduct of the parties subsequent to the execution of the
Minutes of Discussion and has submitted that this demonstrates
that the parties understood and treated the Minutes of
Discussion to be a final, binding and concluded contract. He has
thereafter referred to the correspondence exchanged subsequent
to the execution of the Minutes of Discussion, which was
towards execution of the formal family settlement agreement as
well as the scheme of arrangement (demerger) in
implementation of the Minutes of Discussion. He has submitted
that the exchange of drafts of the virtually finalised formal
family settlement agreement between the parties/their
respective advocates were as per the terms of the Minutes of
Discussion and in any event a mere formality.
34. Mr. Virag Tulzapurkar has submitted that the
pleadings before the NCLT in the Miscellaneous Application No.
1008 of 2020 and the Rejoinder Affidavit filed therein which
made reference to the settlement as being " a proposal" was
obviously a reference to the formal agreements to be executed
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between the parties and to the which the Defendants had not
reverted since February 2020. He has submitted that in fact the
Plaintiffs had brought to the immediate notice of the NCLT, filing
of the captioned Suit in January 2021 with a view to alert the
NCLT of the same. He has submitted that there is no delay in
moving the present Interim Application seeking interlocutory
reliefs pending the disposal of the Suit. In any event, it is a
settled law that delay by itself, without demonstrating
corresponding prejudice caused to the other party by virtue of
such delay, cannot disentitle a party from relief.
35. Mr. Virag Tulzapurkar has submitted that the
parties have acted in furtherance and towards the
implementation of the Minutes of Discussion and have inter alia
taken the following steps :-
i. The Board of Directors unanimously approved buy-
back of shares of the shareholders at the 576th
Board Meeting held on 14th June 2019 i.e. the
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same day of executing the said Agreement. As a
result, approximately 8% out of the 12% outside
shareholders of Defendant No.3 have exited from
Defendant No.3 Company. The buy-back of shares
caused increase of Defendant Nos.1 and 2's
shareholding from approx. 17% to 19.31%.
ii. Defendant No.1, promoter director of one Kimaya
Enterprises Pvt. Ltd. addressed a letter dated 26th
November 2019 to Defendant No.3 Company's
Board, requesting issuance of the NOC to enable
Kimaya Enterprises to change the name to
Automotive Manufactures (Guj.) Pvt. Ltd.
iii. To establish a separate and independent entity, the
Board of Directors in its 582nd Board Meeting held
on 2nd December 2019 unanimously consented to
issue a No Objection Certificate for allowing
change of name of the said Kimaya Enterprises Pvt.
Ltd. to Automotive Manufacturers (Guj.) Pvt. Ltd.,
so that it could be the resulting entity in the
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proposed demerger.
iv. The Board of Directors caused payment of approx.
Rs.56 Crores, partly from the cashflows of
Maharashtra and Andhra Pradesh Divisions and
partly by selling listed investments of Defendant
No.3 Company to discharge bank/ financial
institution liabilities of the Gujarat Division of
Defendant No.3 Company.
v. Defendant No.3 refunded the Fixed Deposits
belonging to Defendant Nos.1 and 2 amongst other
shareholders by sale of liquid investments of
Defendant No.3.
vi. A funding of Rs.1.5 Crores and subsequently of
Rs.3 Crore towards payment of salaries and wages
of the employee of the Gujarat Division of
Defendant No.3 Company from the cashflows of
other two divisions.
vii. A payment of an amount of approx. Rs.3.95 Crores
towards payment of interest of Hinduja Leyland
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Finance Ltd./ Kotak Mahindra Bank Ltd. for Loan
Against Property (LAP) taken for the Gujarat
Division from the cashflows of other two divisions.
36. Mr. Virag Tulzapurkar has submitted that the
Defendant Nos. 1 and 2 have acted in furtherance of the
Minutes of Discussion by unanimously approving the buy-back
of shares, which resulted in the increase of their own
shareholding. They have only disputed one of the
aforementioned steps as being in furtherance of the Minutes of
Discussion i.e. the payment of Rs. 56 Crores in discharge of the
bank liabilities. He has submitted that this payment was in the
interest of Defendant No. 3 Company and presuming that the
payment was to prevent the Defendant No. 3 Company from
being declared as NPA, this is hardly relevant when the
payments were made in good faith and in continuation of the
discussions to finalise the formal scheme of arrangement
(demerger) and the formal family settlement agreement.
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37. Mr. Virag Tulzapurkar has relied upon the
decision of this Court in Shivanand Vassudev Salgaocar (supra)
in support of his submissions that the ordinary doctrines of
estoppel apply where although no contract has come into
existence the conduct of a party has been such that he is
estopped from denying the existence of a valid and enforceable
contract. In the present case, the conduct of the Defendant Nos.
1 and 2 is required to be viewed and from which it is apparent
that these Defendants have acted in furtherance of the Minutes
of Discussion and thus, are estopped from denying the existence
of the valid and enforceable Minutes of Discussion.
38. Mr. Virag Tulzapurkar has thereafter made
further submissions that from a plain reading of the Minutes of
Discussion, it is clear that the parties understood that it is a
concluded contract. The Minutes of Discussion was concluded in
several rounds of negotiations and was not preliminary in
nature. The parties to the Minutes of Discussion have agreed
that the three-way demerger shall take place of Defendant No. 3
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Company as advised by the consultants. An entitlement of
Defendant Nos. 1 and 2 referred to as Gujarat family in the
Minutes of Discussion was agreed upon by the parties i.e. the
Gujarat Division along with its the assets and liabilities and
monies/other assets at Rs.245 Crores. The parties had also
agreed that the Defendant No. 3 Company shall offer buy-back
of shares which would result in exit of outsider shareholders.
Parties had further agreed that the appointed date for the
demerger was 1st April 2020. Parties agreed that the settlement
contemplated in the said Minutes of Discussion shall be treated
as full and final settlement and no claims would be considered.
39. Mr. Virag Tulzapurkar has submitted that the
Minutes of Discussion merely contemplated entering into a
detailed document, as a formality, by which the terms already
agreed upon are to be put in a more formal shape. Nothing
prevented the existence of it being a binding contract. The
understanding and the mechanism documented by way of a
family settlement agreement and scheme of arrangement
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(Demerger) is not a condition so as to prevent the concluded
agreement. He has relied upon the decision of the Supreme
Court in Kollipara Sriramulu Vs. T. Aswathanarayana5 in support
of his submission that the understanding of the parties that the
final, binding and agreed terms would be put into the form of a
more formal document cannot prevent the Minutes of
Discussion from constituting a concluded, valid and binding
contract. He has also relied upon the decision of the Court in
England, namely Branca Vs. Cobarro6 and W.J. Rossiter, George
Curtis & Ors. Vs. Daniel Miller, House of Lords 7 in this context.
40. Mr. Virag Tulzapurkar has thereafter made
submissions on there being no bar, jurisdictional or otherwise to
the filing of the present Suit or grant of interim relief as sought
for by the Plaintiffs. He has submitted that there is no merit in
the challenge of the Defendants to the powers/jurisdiction of
this Court to entertain the present Suit and grant reliefs as
sought for by canvassing that the NCLT is seized of the Company
5 AIR 1968 SC 1028 - Para 3
6 [1947] K.B. 854, W. J. pgs. 856-858
7 (1878) 3 App. Cas. 1124 pages 1132, 1143, 1144, 1148 and 1149
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Petition and thus, the present Suit is therefore not maintainable.
He has submitted that there is no section in the Companies Act,
2013 (and none was cited by the Defendants) that empowers
the NCLT to grant the reliefs of specific performance as sought
for in the present Suit or to grant a 'decree' of specific
performance. He has submitted that Sections 420, 424 and 425
of the Companies Act, 2013 have been relied upon by the
Defendants to contend that the NCLT is empowered to order
specific performance. This contention is erroneous and contrary
to the settled law. He has submitted that these sections do not
confer any jurisdiction or power on the NCLT. Section 420 only
empowers the NCLT to pass orders as it thinks fit in proceedings
pending before it. The proceedings must be within NCLT's
jurisdiction prior to the power under Section 420 being
exercised. The Supreme Court in Embassy Property
Developments Pvt. Ltd. Vs. State of Karnataka 8 has clearly held
that the matters that fall within the jurisdiction of the NCLT,
under the Companies Act, 2013, lie scattered all over the
Companies Act. Therefore, Sections 420 and 424 of the
8 (2020) 13 SCC 208
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Companies Act, 2013, indicate in broad terms, merely the
procedure to be followed by the NCLT and NCLAT before
passing orders. The Defendants have not identified any section
which expressly confer on the NCLT a power to grant specific
performance.
41. Mr. Virag Tulzapurkar has further submitted
that there is no bar on the present Suit and/or Interim
Application under Section 430 of the Companies Act, 2013.
Section 430 bars jurisdiction in the courts only in respect of any
matter which the NCLT or the NCLAT is empowered under the
said Act. In the present case, the question that arises for
consideration before this Court is whether the NCLT is
empowered under the Companies Act, 2013 to decide the
question of specific performance of an agreement. It is only if
this question is answered in the affirmative that the Plaintiff can
be non suited. He has referred to the decisions of the Supreme
Court under Section 9 of the Code of Civil Procedure, 1908
("the CPC") in support of the submissions that the Civil Court
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has inherent jurisdiction to try civil disputes unless its
jurisdiction is barred expressly or by necessary implication, by
any statutory provision, and that jurisdiction is conferred on any
other tribunal or authority. He has in this context, relied upon
the decision in Dwarka Prasad Agarwal Vs. Ramesh Chander
Agarwal 9. This decision has held that the a provision seeking to
bar jurisdiction of a Civil Court requires strict interpretation.
The Court, it is well settled would normally lean in favour of
construction, which would uphold retention of jurisdiction of
the Civil Court. The burden of proof in this behalf shall be on
the party who asserts that the civil court's jurisdiction is ousted.
He has submitted that the NCLT and NCLAT are Tribunals of
limited jurisdiction as conferred by the statute and not Civil
Courts. Only a Civil Court has jurisdiction to grant specific
performance of a contract. NCLT/NCLAT are not empowered
under the Companies Act, 2013 to grant specific performance
nor does the Companies Act, 2013 confer any power on the
NCLT/NCLAT to do so. In support of his submission that
NCLT/NCLAT cannot decide the issues relating to enforcement
9 (2003) 6 SCC 220
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of contractual provisions between the parties and/or the issue as
to whether the agreement is valid, binding and subsisting which
can only be decided by a Civil Court after examining the
evidence and conducting a trial in the matter, he relied upon the
following decisions :-
(i) Chatterjee Petrochem (India) Private Limited Vs.
Haldia Petrochemicals Limited and Ors. (2011) 10
SCC 466
(ii) Macquarie SBI Infrastructures Investments Pvt.
Ltd. and Ors. Vs. K. Sadananda Shetty & Ors.
[2021] 167 SCL 743
(iii) Sekura Roads Ltd. Vs. IL&FS Transportation
Networks Ltd. & Ors. Interim Application (L)
No.21879 of 2021 in Comm. Suit (L) No.21864 of
(iv) Dhirubhai alias Dhirajlala H. Desai & Ors. Vs.
Lataben Abuwalla & Ors. 2016 SCC OnLine Bom
14089
(v) Santosh Poddar V. Kamalkumar Poddar (1992)
SCC OnLine Bom 151
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(vi) Aslam Ali V. Narbada Valley Chemical Industries
Pvt. Ltd. & Ors. (2014) 183 Comp Cas 21
(vii) Mrs. Madhu Ashok Kapur & Ors V. Mr. Rana
Kapoor & Ors. (2014) 183 Comp Cas 339
42. Mr. Virag Tulzapurkar has submitted that the
above authorities have amply clarified that the Companies Act,
2013 does not confer the NCLT/NCLAT with jurisdiction to order
or direct specific performance of a contract nor to adjudicate
upon any dispute in that regard. No section of the Companies
Act, 2013 has been pointed out that would confer jurisdiction on
the NCLT to grant specific performance. The bar under Section
430 of the Companies Act, 2013 is not attracted at all in the
instant case. The Suit is therefore clearly maintainable.
43. Mr. Virag Tulzapurkar has submitted that there
is no bar on the grant of interim relief which is in aid of the final
relief in the Suit. Since final relief of specific performance can be
granted only by this Court, the interim relief can also be granted
by this Court. He has referred to the second part of Section 430
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of the Companies Act, 2013 and has submitted that this clearly
follows from the first part. The second part of Section 430
provides that "no injunction shall be granted by any court or
other authority in respect of any action taken or to be taken in
pursuance of any power conferred by or under this Act or any
other law for the time being in force, by the Tribunal or the
Appellate Tribunal". It thus, follows that though the NCLT and/
or NCLAT does not have jurisdiction to grant the final relief it
can never be said that it still has jurisdiction to grant interim
relief. Such relief would be outside the jurisdiction of the NCLT.
44. Mr. Virag Tulzapurkar has accordingly,
submitted that the NCLT is not having jurisdiction over the
subject matter of the captioned Suit. The Plaintiffs cannot seek
such relief in the NCLT. He has accordingly, submitted that since
the Minutes of Discussion is a valid and binding family
settlement, it is required to be given effect to and accordingly,
the relief sought for in the present Interim Application to
restrain the Defendant Nos. 1 and 2 from taking any steps which
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would defeat the Applicants' rights under the valid and binding
family settlement be granted and which would include
restraining the Defendant Nos. 1 and 2 from taking any steps
towards the valuation of the Defendant No. 3 Company and/or
buy-out of inter alia of the Defendant Nos. 1 and 2's
shareholding in the Defendant No. 3 Company.
45. Mr. Ravi Kadam, learned Senior Counsel
appearing for the Defendant Nos. 1 and 2 has submitted that by
the present Interim Application taken out in the captioned Suit,
the Plaintiffs are seeking to disable the Defendant Nos. 1 and 2
from applying for and the NCLT from granting reliefs which are
exclusively within its powers and in exercise of its jurisdiction
under Sections 241 to 244 of the Companies Act, 2013. The
Applicants/Plaintiffs have filed the present Suit with an attempt
to harass and pressurize the Defendants into accepting unfair
and prejudicial terms, purportedly on the basis of the Minutes of
Discussion, which is neither a concluded nor binding agreement,
and which is in the Plaintiffs' own words, in the nature of
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without prejudice settlement discussions and/or proposals. He
has submitted that the parties to the Minutes of Discussion
were, at the material time, ad idem that the Minutes of
Discussion merely recorded an interim proposal discussed and
did not constitute a binding contract. He has submitted that
from the Miscellaneous Application No. 1008 of 2020 filed by
the Plaintiff Nos. 2 to 4 in the NCLT which was one year after
the Minutes of Discussion, no mention or reference was made to
the Minutes of Discussion being a settlement between the
parties and in fact, it was categorically asserted therein that the
parties had "failed to finalize the settlement proposal thus far ".
This is further, apparent from the response of the Plaintiff Nos. 2
to 4 to the Miscellaneous Application No. 1064 of 2020 filed by
the Defendants, wherein relief was inter alia sought of valuation
of assets and liabilities of Defendant No. 3 Company. The
Plaintiffs have in their Affidavit in Rejoinder as well as
additional Affidavit maintained the position that there was no
settlement between the parties. Clearly, the stand taken in the
captioned Suit is contrary to the Plaintiffs' consistent pleaded
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position. It is only at the advanced stage of arguments in
Miscellaneous Application No. 1064 of 2020 and Miscellaneous
Application No. 1008 of 2020 before the NCLT that Plaintiff
No.1 filed an Affidavit dated 27th January 2021 stating that the
Plaintiffs had filed the captioned Suit before this Court for
specific performance of the Minutes of Discussion. There was no
application filed/moved by the Plaintiffs before this Court
seeking to injunct Defendant Nos. 1 and 2 from seeking a
valuation before the NCLT which was sought in Miscellaneous
Application No. 1064 of 2020 on the basis that it would run
counter to the pending Suit before this Court. He has submitted
that it is only with a view to undermine the disposal of the
Company Petition in its entirety and deny the Defendants from
seeking their just entitlements before the NCLT, that the present
Interim Application has been preferred.
46. Mr. Ravi Kadam has further submitted that the
Suit is barred by Section 430 of the Companies Act, 2013 as the
NCLT is empowered to determine whether the dispute before it
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is settled by a valid and lawful compromise. He has submitted
that the Plaintiffs are obligated to file an application under
Order XXIII Rule 3 of the CPC (read with Rule 11 of the NCLT
Rules) before the NCLT based on the alleged compromise
contained in the Minutes of Discussion. Considering the fact that
the Minutes of Discussion has contemplated disposal of the
proceedings brought by the Defendant Nos. 1 and 2 before the
NCLT, an application ought to have been filed before the NCLT
in the pending Company Petition. He has submitted that the
Plaintiffs' contention that NCLT does not have power to order
specific performance of the Minutes of Discussion is
misconceived. He has submitted that under the proviso to Order
XXIII Rule 3 of the CPC, the Court or authority is expressly
empowered to decide the question of whether " an adjustment or
satisfaction has been arrived at" when one party asserts and the
other party denies a compromise / agreement.
47. Mr. Ravi Kadam has submitted that under
Section 424(1) of the Companies Act, 2013, the NCLT is 'not
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bound' by the provisions of the CPC. Thus, the NCLT has wide
powers which include but not limited to the CPC. Furthermore,
Section 424(3) of the Companies Act, 2013 specifically
empowers the NCLT to enforce its order in the same manner as
a decree made by a Court in a pending suit, which would
include the power to record and enforce a compromise under
Order XXIII Rule 3 of the CPC. Thus, these sections conferred
wide powers on the NCLT. The relief sought for in the present
Interim Application and the captioned Suit is in contravention
with the powers of the NCLT to grant reliefs in the Company
Petition under Sections 241 and 242 of the 2013 Act (as well as
its inherent powers) including to take on record and order any
alleged compromise under Order XXIII Rule 3 of the CPC.
48. Mr. Ravi Kadam has further submitted that the
Minutes of Discussion is not a concluded contract. However, if
according to the Plaintiffs, the Minutes of Discussion is a
compromise or settlement and constitutes a binding contract,
the Minutes of Discussion is not a typical family settlement
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wherein normally multiple family issues relating to family
properties, businesses, personal assets like jewelry are settled.
The present Minutes of Discussion only seeks to settle the
disputes of the Defendants on one hand and the Plaintiffs on the
other hand, as contained in the Company Petition. If the case of
the Plaintiffs that the Company Petition and disputes therein
had been settled by a valid binding compromise is to be
accepted, the Plaintiffs were and are duty-bound in law
obligated to approach the NCLT to record a compromise and for
the NCLT to pass the order in terms of the compromise under
Order XXIII Rule 3 of the CPC. The NCLT is empowered and able
and has jurisdiction to record a compromise and pass an order
in terms thereof. Further, the NCLT is empowered to determine
the question whether there is a lawful agreement/compromise
in writing and signed by the parties which effectively disposes of
the pending Company Petition before the NCLT and the Civil
Court is not entitled to do so, as its jurisdiction stands ousted by
Section 430 of the Companies Act, 2013.
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49. Mr. Ravi Kadam has relied upon decisions of
the Supreme Court to the effect that the NCLT has power to
record and order a compromise under Order XXIII Rule 3 of the
CPC. These decisions are namely State of Karnataka Vs.
Vishwabharathi House Building Coop. Society & Ors .10 and
Industrial Credit and Investment Corporation of India Ltd. Vs.
Grapco Industries Ltd. & Ors.11.
50. Mr. Ravi Kadam has thereafter submitted that
under Section 430 of the Companies Act, 2013, it is provided
that the Civil Court does not have jurisdiction in respect of any
matter which the NCLT is empowered to determine by or under
this Act or any other law for the time being in force and no
injunction shall be granted by any Court or other authority in
respect of any action taken or to be taken in pursuance of any
power conferred by or under this Act or any other law for the
time being in force, by the NCLT. From a plain reading of the
provisions under the Companies Act, 2013, it is clear that the
10 (2003) 2 SCC 412
11 (1999) 4 SCC 710
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NCLT would have exclusive right to deal with and adjudicate
upon all matters (including, valuation) for the purpose of
deciding an oppression and management case and granting all
reliefs including valuation and buyback. Section 242(2)(b) of
the 2013 Act has specifically conferred a power upon the NCLT
to direct the purchase of shares or interest of any member of the
company by other members or by the company. Once the NCLT
has the power to order a purchase of shares, and, as a
consequence, the power to direct valuation, Section 430 of the
2013 Act operates with full vigor. He has submitted that no
injunction can be granted against the NCLT carrying out a
valuation, as this would have the effect of restraining the NCLT
from exercising the powers given under the Companies Act,
2013.
51. Mr. Ravi Kadam has submitted that an attempt
on the part of the Plaintiffs' Counsel to contend that Section
10GB of the Companies Act, 1956 was pari materia with Section
430 of the 2013 Act is wholly misleading. In this context, he has
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relied upon the decision of the Supreme Court in Union of India
Vs. R. Gandhi, President, Madras Bar Association12 which had
struck down Section 10GB of the Companies Act, 1956 as
unconstitutional. He has submitted that the Plaintiffs' Counsel
has relied upon the judgments prior to the enactment of Section
430 of 2013 Act, which judgments are inapplicable apart from
being wholly inapposite. He has submitted that the present
Interim Application is an ill-conceived attempt to restrain the
Defendants from prosecuting the Company Petition filed by
them before the NCLT. This Court ought not to interfere and/or
circumscribe any of the powers of the NCLT as sought in the
Interim Application. He has placed reliance upon decisions of
the Supreme Court and this Court in support of his contention
that the Suit and Interim Application are barred under Section
430 of the 2013 Act. Following are the decisions :-
(i) Shashi Prakash Khemka (Dead) through LR Vs.
NEPC Micon (NEPC India Ltd.), (2019) 18 SCC
12 (2010) 11 SCC 1
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(ii) SAS Hospitality Pvt. Ltd. & Anr. Vs. Surya
Constructions Pvt. Ltd. & Ors. - (2019) 212 Comp
Cas 102
(iii) Shankar Assana Gaddam Vs. Achanak Associates
Realtors Pvt.Ltd. 2021 (2) Mh LJ 159
(iv) Invesco Developing Markets Fund Vs. Zee
Entertainment Enterprises Ltd., 2022 SCC OnLine
Bom 630
52. Mr. Ravi Kadam has submitted that the Courts
in the above decision have considered the bar under Section 430
of the Companies Act, 2013 that restrained the Courts from
interfering with the wide powers of the NCLT under the 2013
Act and/or granting any order of injunction which would have
the effect of preventing the NCLT from exercising such wide
powers.
53. Mr. Ravi Kadam has submitted that the
Minutes of Discussion is not a concluded contract at all. He has
referred to the clauses in the Minutes of Discussion and has
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submitted that from a plain reading of these clauses, the
document styled as a Minutes of Discussion would require a
detailed mechanism of family settlement to be arrived at which
would be subject to finalization, discussions and execution of
further documents/agreements between the parties including
the filing of a demerger scheme before the NCLT. The Minutes of
Discussion is only "an understanding" and "without prejudice to
the parties" rights. He has submitted that all the shareholders of
the 1st and 2nd Defendants' group namely, the Kamdar Group,
who are parties to the Company Petition are not signatories to
the Minutes of Discussion. Equally, they are not parties to the
Suit. In their absence, there can be no settlement of the
Company Petition qua them or the Suit. He has submitted that
the Minutes of Discussion envisaged the payment of INR 245
crores to the Kamdar Group. In Clause 1, sub-clauses (g), (h)
and (i) reference is made to the payments proposed from " the
common kitty". The Minutes of Discussion does not have any
other reference to or explanation of the term " common kitty",
making it evident that the Minutes of Discussion was not a
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binding or conclusive contract but it was at best a tentative
understanding between the parties, subject to further
discussions, negotiations and agreements which were never
concluded. He has submitted that even assuming that the
Minutes of Discussion was a concluded agreement, it was merely
an agreement to enter into an agreement, and could not by itself
have resolved all disputes between the warring family groups.
He has submitted that the Minutes of Discussion contemplated
100% of the Gujarat Division to vest with the Kamdar Group. If
this was to happen, the outside shareholders would be required
to give up their rights in the resultant company with the
demerged Gujarat Division or be bought out prior to such
demerger. This was not effected, nor were steps taken, nor was
there any agreement with such outside shareholders that would
ensure that the Gujarat Division was fully owned and controlled
by the Kamdar Group in accordance with the Minutes of
Discussion. Thus, the Minutes of Discussion could in no way
have been termed as a valid and concluding settlement contract
or a compromise of the Company Petition.
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54. Mr. Ravi Kadam has submitted that assuming
that the Minutes of Discussion is a contract, the Plaintiffs have
breached and/or repudiated the same, and are not entitled to
enforce the same. He has submitted that the Miscellaneous
Application No. 1008 of 2020 was filed by the Plaintiff Nos. 2 to
4 before the NCLT wherein they expressly contended that there
was no concluded settlement between the parties. Plaintiff Nos.2
to 4 had by Miscellaneous Application No. 1008 of 2020 sought
to wrest control over the Gujarat Division from the Defendants,
thereby clearly repudiating Clause 5 of the Minutes of
Discussion where the demerged Gujarat Division was to be
carved and transferred to the Defendants.
55. Mr. Ravi Kadam has further submitted that the
Plaintiffs had by filing the Miscellaneous Application No. 1008
of 2020 as well as challenging to the order of the NCLT rejecting
the relief sought for in the Miscellaneous Application No. 1008
of 2020 and being party to the Appeal before the Supreme Court
preferred by the Defendants had at no stage contented that the
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proceedings before the NCLT could not be proceeded with on
account of the settlement arrived at by way of Minutes of
Discussion and/or cited the captioned Suit, as an impediment to
the proceedings before the NCLT. In fact, the Plaintiffs at
proceedings before the NCLT admitted that the settlement
discussions between the parties had failed and accordingly,
proceeded with the hearing before the NCLT on that basis.
56. Mr. Ravi Kadam has submitted that there has
been other breaches and repudiation of the Minutes of
Discussion by the Plaintiffs. He has referred to the clause in the
Minutes of Discussion which had contemplated the date for
demerger of Defendant No. 3 Company and implementation and
execution of a scheme of demerger as 1st April 2020.
Admittedly, no such scheme of demerger was filed either before
1st April 2020 or otherwise. He has further drawn reference of
paragraph 4 of the Minutes of Discussion which provides that
Pune property was supposed to be given to the Defendants in
lieu of money (which was also borne out by the draft scheme).
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However, at 592nd Board meeting of the Defendant No. 3
Company held on 15th December 2021 (Agenda No. 31), it was
resolved to sell the property at the instance of the majority
Sanghvi Group, i.e., the Plaintiffs herein. This is contrary to the
draft family settlement agreement, where the Pune property was
agreed to be transferred and demerged to the Gujarat Company.
Similar provision was made under Clause 4.15 of the draft
demerger scheme. Thus, it would be entirely up to the resultant
Gujarat Company as to whether and when to sell the Pune
property, which would then trigger the threshold for the
consideration received. Thus, the Sanghvi Group effecting steps
to sell the Pune property, rather than have it demerged and
transferred to the Gujarat Division/Gujarat Company is an
explicit repudiation of the terms of the Minutes of Discussion.
57. Mr. Ravi Kadam has further submitted that the
Plaintiffs who are seeking specific performance of an agreement
must be in a position to establish their readiness and willingness
to perform to at all times. The Minutes of Discussion
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contemplated the detailed understanding and mechanics to be
documented by way of a family settlement agreement and a
scheme of arrangement to be filed with the NCLT. The family
settlement agreement was never finalized, signed and acted
upon by either of the parties. The correspondence reflects that
the parties were not ad idem on the proposed terms of the
Minutes of Discussion, let alone the draft family settlement
agreement shared by the Plaintiffs' advocates. He has submitted
that the correspondence exchanged between the parties were
relied upon by the Plaintiffs before this Court, inspite of the
same were marked "without prejudice" and exchanged during
settlement talks and discussions. In any case, the
correspondence, assuming that they can be relied upon, clearly
reflects that the parties were not ad idem and were only
attempting to arrive at a settlement, which eventually did not
fructify, as recorded in the pleadings filed before the NCLT and
the orders of the NCLT and the Supreme Court.
58. Mr. Ravi Kadam has relied upon the decisions
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of the Supreme Court in support of his contention that the
correspondence exchanged in the process of the parties seeking
to compromise the action, the evidence of the content of those
negotiations will, as a general rule, not been admissible. The
correspondence will only be protected by without prejudice
privilege if it is written for the purpose of a genuine attempt to
compromise a dispute between the parties. The protection of
privilege to "without prejudice" correspondence depends partly
on public policy, namely the need to facilitate compromise and
partly an implied agreement.
59. Mr. Ravi Kadam has relied upon the decisions
of the Supreme Court in Peacock Plywood (P) Ltd. Vs. Oriental
Insurance Co. Ltd.13 and Oberoi Constructions Pvt. Ltd. Vs. Worli
Shivshahi Co-op Hsg. Society Ltd.14 in this context.
60. Mr. Ravi Kadam has further submitted that
certain shareholders of Defendant No. 3 Company were neither
13 (2006) 12 SCC 673
14 (2008) SCC Online Bom 102
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consenting parties nor signatories to the Minutes of Discussion
and thus, the Minutes of Discussion cannot be
effected/performed without the consent of such outside
shareholders, which was never taken. The only response offered
by the Plaintiffs in their rejoinder submissions in the Company
Petition is that, the Petitioner Nos. 2 to 5 therein had given a
power of attorney dated 18th March 2018 in favour of the
Petitioner No. 1 therein which allowed him to inter alia
"compromise any of the aforesaid proceedings". This cannot
explain why though the Defendant No. 1 (Petitioner No.1 in the
Company Petition) was entitled to compromise the Company
Petition and bind the other Petitioners therein, in a Suit for
specific performance of that alleged compromise (i.e. the
Minutes of Discussion), the other Petitioners have not been
joined in the said Suit for any orders to be passed herein to be
binding upon them, including in any application for interim
relief. If it is the contention of the Plaintiffs' contention that all
that the Minutes of Discussion does is to compromise the
Company Petition, it would only strengthen the argument on
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behalf of the Defendants with regard to Order XXIII Rule 3 of
the CPC. The compromise would require to be filed before the
NCLT. If it is on the other hand, contended that the Minutes of
Discussion is a wider settlement, not just of the Company
Petition proceedings, it would be impossible for the Plaintiffs to
show how Defendant No. 1 could bind the others. The Plaintiffs
have never contended that the Defendants were acting for the
other Petitioners in the Company Petition, or for the Kamdar
Group as a whole group. Having not made such pleadings, the
Plaintiffs cannot rely on the power of attorney to paper over the
glaring deficiencies in the Suit / present Interim Application.
61. Mr. Ravi Kadam has submitted that the
Plaintiffs have despite belatedly filing the present Suit on 25th
January 2021 and the same pending adjudication, did not file
an Interim Application or move for interim relief nor previously
cited its pendency as a reason for not proceeding with the
adjudication of the Company Petition. This is despite the matter
having travelled to the NCLAT and the Supreme Court, even
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after the filing of the present Suit. The Plaintiffs have in fact,
time and again consented to the Company Petition being heard
finally, even as recently as on 21st January 2022. The present
Interim Application was filed on 11th February 2022 and sought
to be listed on 16th February 2022, exactly one day before 17th
February 2022 being the scheduled final hearing of the
Company Petition before the NCLT. The Suit was filed to derail
the hearing of Miscellaneous Application No. 1064 of 2020
albeit unsuccessfully. The present Interim Application has been
filed in a clear attempt to stall the hearing of the Company
Petition. It is obvious that the attempt is to prevent the NCLT
from passing orders for valuation and eventual buy-out, an
event that would constrain the Sanghvi Group into giving the
Kamdar Group a fair and equitable consideration for their
shareholding is what motivated the Interim Application. The
Interim Application has been taken out and moved by the
Plaintiffs being perversely conscious of the fact that Defendant
No. 2 is 99 years old and that the delay is only likely to benefit
them and defeat the Defendants' cause before the NCLT. The
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Plaintiffs were well aware of the orders passed by the NCLT as
well as the Supreme Court directing the NCLT to expedite the
hearing of the Company Petition and despite being aware of the
orders had belatedly filed, served and moved the Interim
Application exactly one day before hearing of the Petition in the
NCLT.
62. Mr. Ravi Kadam has submitted that this is not
the case of mere delay and that the Plaintiffs have abandoned
their rights and had acquiesced before the NCLT, despite the
alleged "settlement" in terms of the Minutes of Discussion. The
Plaintiffs have categorically taken a stand before the NCLT that
there was no settlement arrived at between the parties. The
Plaintiffs thus, acquiesced for the NCLT to consider the prayer
for valuation by participating in the proceedings before the
NCLT, the NCLAT and the Supreme Court without demur. The
Plaintiffs cannot fall back of their contention that the Interim
Application was moved on the premise of the "Overview Note"
dated 1st December 2021 which gave the Plaintiffs a cause of
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action. This contention is contrary to the Plaintiffs' own
submissions in the Plaint. The Overview Note had been filed by
the Defendants to comply with the order dated 22nd November
2021 passed by the NCLT directing the Defendants to file a
synopsis of dates along with the relevant orders.
63. Mr. Ravi Kadam has relied upon certain
decisions in support of his contention that the Plaintiffs'
admissions and contentions in pleadings, in particular that the
parties have failed to finalize the settlement proposal must be
taken into consideration by this Court. He has in this context
relied upon the decision of the Supreme Court in Nagindas
Ramdas v Dalpatram Ichharam alias Brijram & Ors .15and
Sangramsingh Gaekwad Vs. Shantedevi Gaekwad.16
64. Mr. Ravi Kadam has distinguished the
judgments cited by the Plaintiffs and which are set out in
Annexure 2 to the written submissions filed on behalf of the
15 (1974) 1 SCC 242
16 (2005) 11 SCC 314
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Defendants. He has distinguished the decisions relied upon by
the Plaintiffs in support of their contention that necessarily the
formal contract must be a condition / term of bargain without
which there is no concluded contract. He has submitted that in
the present case, the Minutes of Discussion was only a skeletal
framework, which did not include "vital terms" and was
incapable of implementation. In the cases relied upon by the
Plaintiffs, the agreement had been arrived at between the
parties, which contained vital terms of the contract as noted by
the Supreme Court in Kollipara Sriramulu (supra). In the
judgment of the Court of Appeal in England, namely, Branca Vs.
Cobarro (supra) relied upon by the Plaintiffs, the agreement was
styled as "agreement" albeit a "provisional agreement". The
provisional agreement was to continue until drawing up of a
formal agreement and that the parties intended that the
documents have some efficacy. In the facts of the present case,
no such term was concluded in the Minutes of Discussion. In
another decision of the House of Lords in England relied upon
by the Plaintiffs namely W.J. Rossiter, George Curtis & Ors.
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(Supra), a clear contract has been made out from the
correspondence. In the present case, Minutes of Discussion
merely recorded the tentative discussion held between the
parties and was expressly made subject to further discussions
which failed to fructify between the parties. Thus, this decision
is not applicable to the facts of the present case.
65. Mr. Ravi Kadam has thereafter, distinguished
the other decisions on family settlement relied upon by the
Plaintiffs, namely, Kale Vs. Dy. Director of Consolidation (supra),
Hari Shankar Singhania (supra), Shivanand Vassudev Salgaocar
(supra), Arun P. Goradia Vs. Manish Jaisukhalal Shah & Ors.17
and Commissioner of Wealth Tax, Mysore Vs. Her Highness
Vijayaba 18, which are the cases where there was an admitted
family settlement entered into between the parties and it was in
that context, the Supreme Court has held that the family
settlements are governed by a special equity and will be
enforced, if honestly made.
17 2009(1) Mh.L.J. 611
18 (1979)2 SCC 213
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66. Mr. Ravi Kadam has also distinguished the
decisions relied upon by the Plaintiffs in support of their
contention that the Civil Courts are not barred from considering
Suits in all cases. He has submitted that most of these decisions
are prior to the enactment of Section 430 of the Companies Act,
2013 where there is now an express bar to Civil Court's
jurisdiction where specific powers are given to the NCLT. He has
submitted that the decisions relied upon by the Plaintiffs with
regard to complicated question of fact such as issues as to the
title and fraud/forgery can only be decided by a Civil Courts are
inapplicable in the facts of the present case, as there are no
complicated questions of fact/fraud/forgery that have arisen in
the present case. He has submitted that the decisions on delay
and latches relied upon by the Plaintiffs, namely The Lindsay
Petroleum Company Vs. Prosper Armstrong Hurd19, Mademsetty
Satyanarayana Vs. G. Yelloji Rao & Ors.20 and Dehri Rohtas Light
Railway Company Limited v. District Board 21
are not in the
context of interlocutory relief where delay would certainly be a
19 (1874) LR 5 PC 221 [Page 239]
20 AIR 1965 SC 1405
21 1992 2 SCC 598
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factor while deciding the present Interim Application. He has
also distinguished the decisions relied upon by the Plaintiffs in
Perry V. Suffields, Limited 22
in support of their contention that
once there is a concluded contract, further negotiations do not
supplant it, unless they themselves culminate in a contract. He
has submitted that the Minutes of Discussion is not a concluded
contract and hence this decision is inapplicable. Further he has
distinguished the decision of the Delhi High Court in Dinesh
Gupta (supra) where the family settlement was admittedly
arrived at and where in which context it was held that it should
not be lightly interfered with, especially if acted upon. This is
not so in the present case.
67. Mr. Virag Tulzapurkar in his rejoinder
submissions has submitted that there is no merit in the
Defendants' contention that the Minutes of Discussion was not a
concluded contract and/or "an inchoate document" and "an
incomplete document" and "a tentative document" as described
by the Defendants in their oral submissions. The Minutes of
22 1916 2 Ch D 187 C.A
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Discussion was entered between the parties after several rounds
of negotiations from 2014-15 onwards and thereafter, recorded/
reduced the writing. A plain reading of Clauses 6, 7 and 8 make
it clear that the valid and enforceable contract came into
existence and which was to be treated as in full and final
settlement.
68. Mr. Virag Tulzapurkar has submitted that there
is equally no merit in the Defendants' contention that other
members of the respective families and / or other parties to the
Petition before the NCLT have not signed the Minutes of
Discussion and therefore, the Minutes of Discussion is not
enforceable. He has submitted that the Defendant Nos. 1 and 2
have not pleaded this in their case Affidavit in Reply dated 22nd
February 2022. The Defendant Nos. 1 and 2 have signed
Minutes of Discussion in respect of capacity of Gujarat family
and the Plaintiff No. 1 has signed the Minutes of Discussion in a
representative capacity of Andhra Pradesh and Telangana family
and Plaintiff Nos. 2 and 3 have signed the said Minutes of
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Discussion in a representative capacity of the Maharashtra
Family. This is clear from the Minutes of Discussion which
records the presence of the parties in the meeting. The Gujarat
family has itself considered Defendant Nos.1 and 2 as their
representatives. A comparison of the shareholding at the time of
the execution of the Minutes of Discussion would show that the
entire Gujarat family is before the Court and Minutes of
Discussion can be performed against the family as a whole. The
Defendant No. 1 is a joint shareholder with all members of the
Gujarat family. The Gujarat Group also consist of Anjana Infinity
LLP in which the partners are all members of Gujarat family.
69. Mr. Virag Tulzapurkar has further submitted
that the Petitioners in the NCLT have given a Power of Attorney
to Defendant No. 1 to represent them in the proceedings before
the NCLT. The Power of Attorney is dated 18th March 2018 and
is very wide in the language used and fully empowers Defendant
No. 1 to execute the Agreement as well as enter into a
compromise with the Plaintiffs on behalf of the Defendants
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entire Gujarat Family. The Power of Attorney continues to be
valid and subsisting. The signatories to the said Minutes of
Discussion for themselves and their family are bound by the
Minutes of Discussion and the Minutes of Discussion is
enforceable against them. The other outside shareholders need
not be parties to the Minutes of Discussion or the Suit. The Suit
seeks enforcement against the parties to the Minutes of
Discussion as represented by the respective signatories.
70. Mr. Virag Tulzapurkar has further dealt with
the Defendants' contention that the correspondence between the
Plaintiffs and Defendants is marked "without prejudice" and
therefore, cannot be relied upon to demonstrate the conduct of
the Defendants. He has in that context submitted that the
expression "without prejudice" was first used in the email dated
16th August 2020 by the Plaintiffs' advocate while discussing
the modalities for implementing the said Minutes of Discussion.
The expression was not used in the context of discussing the
said Minutes of Discussion itself. The said Minutes of Discussion
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was executed long prior to the said email dated 16th August
2020. The said Minutes of Discussion is not a without prejudice
document. He has submitted that it is a settled position of law
that the expression "without prejudice" is to be understood on
the fact situation and in the context in which it is used.
71. The parties clearly understood the said
Minutes of Discussion to be a concluded contract and were
merely discussing the modalities for implementing the same on
a "without prejudice" basis. The fact that the said Minutes of
Discussion was in fact a concluded contract is well established
from the correspondence prior to July 2020 leading upto
Defendant No. 1's email of 24th June 2020, which clearly shows
that the parties understood the said Minutes of Discussion was
concluded and "in place".
72. Mr. Virag Tulzapurkar has submitted that the
decisions relied upon by the Defendants namely Oberoi
Constructions Pvt. Ltd. (supra) itself has noted that
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correspondence marked "without prejudice" may have to be
interpreted in different situations. Further in Peacock Plywood
(P) Ltd. (supra) the Supreme Court has held that there are
circumstances in which correspondence is initiated with a view
to settlement but the parties do not intend that the
correspondence should be without prejudice. It may be that the
parties positively want any subsequent Court to see the
correspondence and always had in mind that it should be open
correspondence. He has submitted that it is a settled position of
law that the reliance on a document which is 'without prejudice'
would not render the earlier acceptance on the admissibility of
the document nugatory. In this context, he has placed reliance
upon the decision of the Supreme Court in ITC Limited Vs. Blue
Coast Hotels Limited & Ors.23
73. Mr. Virag Tulzapurkar has thereafter, dealt
with the contention of the Defendants that the Plaintiffs
themselves have repudiated the said Minutes of Discussion by
filing Miscellaneous Application No. 1008 of 2020 and referring
23 (2018) 15 SCC 99
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to the said Minutes of Discussion as the proposed settlement or
settlement proposal. He has submitted that the Miscellaneous
Application No. 1008 of 2020 filed by the Plaintiff Nos. 2 to 4
before the NCLT was not to take control over the Gujarat
Division, but to seek modification of an earlier order dated 6th
April 2018 and that the Board of Directors of Defendant No. 3
including Defendant Nos.1 and 2 to take decisions and be in
effective management of Defendant No. 3 Company in its best
interest and those of its shareholders. Even otherwise, each
division of Defendant No. 3 Company is under the overall
supervision of the Board of Directors.
74. Mr. Virag Tulzapurkar has submitted that the
Plaintiffs have not repudiated the Minutes of Discussion. He has
submitted that the words "settlement proposal", "proposal of
settlement" in the Affidavits filed in the Miscellaneous
Application No. 1008 of 2020 and Miscellaneous Application
No. 1064 of 2020 refer to the discussions and implementation of
the Minutes of Discussion and exchange of draft of formal
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documents viz. family settlement agreement and scheme of
arrangement (demerger) between the parties and respective
advocates. This is borne out from the contents of the
correspondence exchanged between the Plaintiffs and the
Defendants. This cannot be read in the context of the concluded
contract (Minutes of Discussion), as disingenuously sought to be
portrayed by the Defendants. In this context he has placed
reliance upon the decision in Perry (supra) which holds that
when once it is shown that there is a complete contract, further
negotiations between the parties cannot, without the consent of
both get rid of the contract already arrived at. He has further
referred to the decision of the Supreme Court in Udham Singh
Vs. Ram Singh24 and Gautam Sarup Vs. Leela Jetly25 in support
of his submission that it is a settled position of law that an
admission can always be explained or clarified.
75. Mr. Virag Tulzapurkar has submitted that there
is no merit in the contention of the Defendant Nos.1 and 2 that
24 (2007) 15 SCC 529
25 (2008) 7 SCC 85
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by proposing to sell the Pune property, the Plaintiffs have
repudiated the Minutes of Discussions. Clause 4 of the Minutes
of Discussion itself contemplates sale of Pune property. The draft
scheme of demerger also contemplated such sale.
76. Mr. Virag Tulzapurkar has further submitted
that there is no merit in the Defendants' contention that there is
delay in filing the captioned Suit and seeking interim relief. He
has submitted that delay by itself is no ground to deny the relief,
where, as in this case, no prejudice has been caused to
Defendant Nos.1 and 2 by any such alleged delay. The
Defendants have not even made an effort or endeavour to show
any prejudice that would be caused on account of such delay,
none has been alleged. He has submitted that the question of
delay, if at all is required to be balanced against the likelihood of
the plaintiffs ultimately succeeding in the action and where the
strength of the plaintiff prima facie is strong, the plaintiffs' delay
(assuming there is delay) in filing the action would not
disentitle the Plaintiffs to the relief. In this context, he has relied
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upon the decision of the Supreme Court in Mademsetty
Satyanarayana (supra) and A.R. Madna Gopal etc Vs. Ramnath
Publications Pvt. Ltd.26. He has further relied upon in the context
of delay in the cases of The Lindsay Petroleum Company
(supra), Dehri Rohtas Light Railway Company Limited (supra)
and Hari Shankar Singhania & Ors. (supra).
77. Mr. Virag Tulzapurkar has distinguished the
decisions relied upon by the Defendants namely in support of
their contention that the jurisdiction of this Court to entertain
the present Suit and to grant an injunction in the Interim
Application is ousted by virtue of the Companies Act, 2013
namely Industrial Credit and Investment Corp of India (supra),
State of Karnataka (supra), SAS Hospitality Pvt. Ltd. & Anr. V.
Surya Constructions Pvt. Ltd.27, Shankar Assana Gaddam (supra)
and Shashi Prakash Khemka (Dead) through LR (supra). He has
submitted that as the NCLT did not have jurisdiction over the
subject matter, the Defendants' contention that the Plaintiffs
26 2021 SCC OnLine SC 300
27 (2019) 212 Comp Cas 102
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should have urged and sought relief in that behalf in the NCLT is
untenable. In the aforementioned decisions relied upon, the
NCLT was empowered by the sections of the Companies Act to
grant relief that was sought for in the civil Suit and in that
context the Court held that the bar under Section 430 of the
Companies Act was applicable.
78. Mr. Virag Tulzapurkar has accordingly,
submitted that the relief sought for by the Plaintiffs in the
present Interim Application be granted.
79. Mr. Ravi Kadam has distinguished the
decisions relied upon by the Plaintiff in rejoinder submission. He
has distinguished the decisions of the Supreme Court in Udham
Singh (supra) and Gautam Sarup (supra) which hold that a
categorical admission may be explained or clarified by
contending that the facts of those cases are different, as in the
present case there is no ambiguity in the admission " proposed
settlement proposal", namely that the Minutes of Discussion was
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not a concluded contract. He has also distinguished the
decisions relied upon by the Plaintiffs in support of their
contention that abandonment is a positive voluntary act and
inactivity or passive attitude does not constitute abandonment.
He has submitted that in the present Suit there are positive acts
on the part of the Plaintiffs by filing Miscellaneous Application
No. 1008 of 2020 before the NCLT, dealing with the Pune
property and repeatedly referring to the Minutes of Discussion,
as a settlement proposal and representing to the NCLT that the
matter could not be settled.
80. Mr. Ravi Kadam has further submitted that the
decision of the Supreme Court in Embassy Property
Developments Pvt. Ltd. (supra), which was relied upon by the
Plaintiffs in support of the submission that Sections 420 to 424
of 2013 Act indicated only the procedure to be followed by the
NCLT does not address Defendants arguments under Order XXIII
Rule 3 of the CPC or Sections 420 or 424(1) of the Companies
Act, 2013. He has submitted that NCLT's orders are not toothless
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and the Plaintiffs could have gone before the NCLT to seek an
enforceable order. In Embassy Property Developments Pvt. Ltd.
(supra) the context was of Adjudicating Authority under the
Insolvency and Bankruptcy Code, 2016, whose role the NCLT
currently exercises. It was not in the context of far broader
powers vested in the NCLT under the Companies Act, 2013. The
Supreme Court has distinguished this judgment in the case of
Gujarat Urja Vikas Nigam Limited Vs. Amit Gupta28.
81. Mr. Ravi Kadam has distinguished the
decisions of this Court in Sekura Roads Ltd. (supra) relied upon
by the Plaintiffs in support of the contention that the NCLT has
no power to grant specific performance. He has submitted that
in this case, Section 430 of the Companies Act, 2013 did not
apply as the NCLT could not be asked to extend the application,
of long stop date in the agreement as it was outside its
jurisdiction in the present case. In the present case, the Minutes
of Discussion addressed all the disputes in the Company
Petition, assuming whilst denying that the Minutes of Discussion
28 (2021) 7 SCC 209
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is a binding contract. He has also distinguished the decision
relied upon by the Plaintiffs namely Macquarie SBI
Infrastructures Investments Pvt. Ltd. (supra), which holds that
the NCLT under Sections 241 and 242 of the 2013 Act does not
have jurisdiction to deal with the issues relating to enforcement
of contractual provisions between the parties. He has submitted
that this case is inapplicable to the facts of the present case
where the Minutes of Discussion arises out of and would dispose
off the pending Company Petition filed before the NCLT under
Sections 241 and 242 of the Companies Act, 2013, which are
matters over which the NCLT has exclusive jurisdiction under
the Companies Act, 2013.
82. Mr. Ravi Kadam has accordingly, submitted
that there is no merit in the present Interim Application seeking
relief which would come in the way of exercise of powers of the
NCLT and in particular, in view of the express bar under Section
430 of the 2013 Act, such Interim Application is not
maintainable and no relief can be granted.
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83. Having considered these submissions, it would
be necessary to consider as to whether the Minutes of Discussion
is in fact a family settlement agreement which is valid and
subsisting. I am mindful of the fact that the present Suit seeking
specific performance of the Minutes of Discussion was filed
subsequent to the Company Petition having been filed by the
Defendants before the NCLT under Section 241, 242 and 244 of
the Companies Act, 2013 which sought to restrain the alleged
oppressive acts of the Plaintiffs against Defendant Nos. 1 and 2.
I am further mindful of the fact that the said Company Petition
is at the stage of hearing and final disposal subsequent to the
orders passed by the NCLT as well as by the NCLAT and the
Supreme Court. However, in my prima facie view, a
determination of the issue as to the Minutes of Discussion being
a family settlement is an issue which arises before this Court
having jurisdiction and for considering whether interim relief is
to be granted in the Interim Application such a prima facie
determination would be necessary. I will herein below deal with
the submission of Mr. Ravi Kadam for the Defendants that there
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is an express bar under Section 430 of the Companies Act, 2013
and which would bar such Suit being determined by a Civil
Court as NCLT is empowered to determine whether the dispute
before it is settled by a valid and lawful compromise.
84. It is to be noted that the Minutes of Discussion
has admittedly been executed by the Plaintiffs and the
Defendant Nos. 1 and 2. It had been executed after rounds of
negotiations spanning a few years and the Minutes of Discussion
was arrived at in order to settle the disputes between what is
described in the Minutes of Discussion as disputes between three
families, namely the Gujarat family, Maharashtra family and
Andhra Pradesh/Telangana family. It is further recorded in the
first sentence of the Minutes of Discussion that "Minutes of
Discussion and the mechanism of the family settlement agreed
to between the participants.....". The Minutes of Discussion
thereafter, contemplates a scheme of demerger of the Defendant
No. 3 Company whereby the Defendant Nos. 1 and 2's
entitlement to the Gujarat Division along with its assets and
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liabilities and monies/ other assets have been valued at Rs. 245
Crores, based on valuation agreed by the parties to the Minutes
of Discussion, namely the Plaintiffs and the Defendant Nos. 1
and 2. The Minutes of Discussion, further records that the
parties have agreed that the Defendant No. 3 Company shall
offer buy-back of shares which would result in exit of outsider
shareholders. The parties have further agreed that the appointed
date for the demerger as 1st April 2020. What is most important
is Clause 8 of the Minutes of Discussion which records that " no
claim from the Gujarat family of any sort will be considered and
this shall be treated as full and final settlement ". It would be
necessary to advert to the concluding paragraph in the Minutes
of Discussion which comes after Clauses 1 to 9 thereof have
been executed by the Plaintiffs and Defendant Nos. 1 and 2. The
concluding paragraph which has been further executed by these
parties has been differently interpreted by Mr. Virag Tulzapurkar
and Mr. Ravi Kadam in their oral arguments on behalf of the
Plaintiffs and Defendant Nos. 1 and 2 respectively. These
concluding words are reproduced as under :-
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"The above represents the understanding agreed
to between the Gujarat family, Maharashtra family
and AP & Telangana family and is without
prejudice to the other rights and remedies
available to the parties. The detailed
understanding and the mechanics would be
documented by way of family settlement
agreement and Scheme of Arrangement
(Demerger) to be filed with the National Company
Law Tribunal and withdrawal of the existing
Company Petition filed by the Gujarat family."
85. The above concluding words in the Minutes of
Discussion make it clear that this was an understanding agreed
to between the Gujarat family, Maharashtra family and Andhra
Pradesh/Telangana family. The words "and is without prejudice
to the other rights and remedies available to the parties " are
required to be interpreted according to its plain language and
literal interpretation. The words "without prejudice" are
followed by the words "to the other rights and remedies
available to the parties" have been interpreted by Mr. Virag
Tulzapurkar as encompassing those rights and remedies other
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than the matters covered by the Minutes of Discussion without
affecting the binding nature of the Minutes of Discussion. This
interpretation is in my view a plausible interpretation and one
which requires acceptance. The contention of Mr. Ravi Kadam
on behalf of the Defendants that the words " without prejudice
to the others rights and remedies available to the parties " are to
be read as the Minutes of Discussion not being of a binding
nature would in my prima facie view be destructive of the plain
language of the words used. Further, it is clear from the other
clauses in the Minutes of Discussion, in particular, clauses 6, 7
and 8 that the Minutes of Discussion was to be given effect to
and was to be treated as a full and final settlement and that no
claim from the Gujarat family of any sort would be considered.
86. There have been further arguments canvassed
by Mr. Ravi Kadam on behalf of the Defendants that the Minutes
of Discussion can only constitute an agreement to enter into an
agreement and for which he has relied upon the words " the
detailed understanding and the mechanics would be
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documented by way of a family settlement agreement and
scheme of arrangement (demerger) to be filed with the NCLT"
and thereafter, the withdrawal of the existing Company Petition
filed by the Gujarat family. It is necessary to note that the
Minutes of Discussion has not been made conditional on the
documentation of a family settlement agreement and scheme of
arrangement (demerger).
87. The correspondence relied upon by the Mr.
Virag Tulzapurkar which are subsequent to the execution of the
Minutes of Discussion and which are from July 2019 till 9th
September 2020 and subsequent to which the captioned Suit
was filed by the Plaintiffs on 25th January 2021 shows that the
parties had taken steps to implement the Minutes of Discussion.
The parties/their respective advocates exchanged drafts of the
formal family settlement agreement as well as exchanged the
drafts of the scheme of arrangement (demerger). The Minutes of
Discussion had set out the terms which have been agreed to
between the Plaintiffs and the Defendant Nos. 1 and 2 and
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which terms were being given effect to by way of formal family
settlement agreement and the scheme of arrangement
(demerger). It has been well settled that unless the family
agreement is made "conditional" or "subject to contract", the
agreement is considered as a valid and binding and subsisting
contract between the parties, as containing the essential terms
expressly recorded in the said agreement. In this context, the
decision of the Courts in England relied upon by the Mr. Virag
Tulzapurkar would necessary be applicable. In Branca Vs.
Cobarro (supra), the Court of Appeal held as under :-
".. Down to the end of the paragraph preceding
that final paragraph there can be no question to
my mind that the document is a contract. If that
final paragraph had not been there, no question
could have been raised about it. The sole question
is whether that paragraph introduces an element
which destroys and contractual efficacy in the rest
of the documents. It is in rather an unusual form.
"This is a provisions agreement until." That the
parties contemplated and wished that there
should be what they call a "fully legalized
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agreement" drawn up by and signed is quite clear.
But the first thing to notice about these words is
that they are not words expressive of a condition
of stipulation to that effect. The familiar words
"subject to contract," and many other forms of
words that one has come across in this class or
case are words of condition. ..." [Pg.856 & 857]
"... An agreement which is only to last until it is
replaced by a formal document containing the
same terms and drawn up by solicitor could I
should have thought, be described by no more apt
word than the word 'provisional". When the word
"provisional" is linked up with the word "until",
the whole thing seems to me to fall into shape. My
reading of this document is that parties were
determined to hold themselves and one another
bound. They realized the desirability of a formal
document, as many contracting parties do, but
they were determined that there should be no
escape for either of them in that interim period
between the signing of this document and the
signature of a formal agreement, and they have
used words which are exactly apt to produce that
result and do not, in my opinion, suggest that the
fully legalized agreement is in any sense to be a
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condition to be fulfilled before the parties are
bound. The word 'until' is certainly not the right
word to import a condition or a stipulation..." [Pg.
858] (Emphasis supplied)
88. Further, in W.J. Rossiter, George Curtis & Ors.
(supra) the House of Lords has held as under :-
"... I pause there for the purpose of pointing out
to your Lordships that in these conditions there
are to be found the terms - and the detailed terms
- of a contract, such as might reasonably be
expected to be proposed with regard to sales of
plots of land of this description. There is no doubt
a stipulation that the purchaser would be required
to sign a contract embodying these conditions.
That is an obvious and natural term, because the
contemplation is that persons so offering will not
be bound by anything; it will be necessary to bind
them, and therefore they are told, beforehand,
that at the time when their offer is accepted, or
along with the acceptance of it, the matter will not
be allowed to rest in dubio, or without legal
obligation, but that they will be required to sign
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something which will bind them. But they are also
told what they will be required to sign; it will not
be a contract at the arbitrium of the vendors, not a
contract the terms of which they do not know, not
a contract the provisions of which they will see for
the first time when it is offered to them to sign,
but a contract as to which the vendors are
content, beforehand, to bind and oblige
themselves that it will assume the shape of these
stipulations, and no other shape..." [Pg.1132]
"... It has been established for far too long a time,
and by some precedents in your Lordships' house,
that if you can find the true and important
ingredients of an agreement in that which has
taken place between two parties in the course of a
correspondence, then, although the
correspondence may not set forth, in a form which
a solicitor would adopt if he were instructed to
draw an agreement in writing, that which is the
agreement between the parties, yet, if the parties
to the agreement, the thing to be sold, the price to
be paid, and all those matters, be clearly and
distinctly stated, although only by letter, an
acceptance clearly by letter will not the less
constitute an agreement in the full sense between
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the parties, merely because that letter may say, We
will have this agreement put into due form by
solicitor... Both parties may desire that it shall be
put into a formal shape by a solicitor who, in that
case, will not be able to vary the agreement which
had been completely formed with unity of purpose
with reference to the sale and purchase by the two
parties to the contract..." [Pg.1143 & Pg. 1144]
"... Thereupon, I think, with the Master of the
Rolls, that the contract was complete. Everything
essential to the completion of it appears on the
written documents - the parties, the premises, the
conditions and the price. As offer is made; those
who had full power to accept it did it, in terms, by
their fully authorized agent. The purchaser thinks
they are making a fresh condition; they answer
that they are not, and again accept it, simply and
absolutely, as he had asked them to do. I cannot
conceive that anything remained but to carry out
the bargain which was then and thus
consummated..." [Pg.1148 & Pg.1149]
(Emphasis supplied)
89. It can be seen from the case of Branca Vs.
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Cobarro (supra) that there was a provisional agreement, and it
was held that unless the parties make the provisional agreement
subject to what they call a "fully legalized agreement", the
parties are determined to hold themselves and one another
bound to the provisional agreement. The fully legalized
agreement cannot in any sense be a condition to be fulfilled
before the parties are bound. Similarly, in the decision of the
House of Lords in W.J. Rossiter, George Curtis & Ors. (supra),
the parties had in correspondence stipulated the terms of the
contract and though there was a stipulation that the purchaser
would be required to sign a contract embodying these
conditions, this was considered to be an obvious and natural
term. However, this stipulation has been held to be not in
variance of the agreement which had been completely formed
with unity of purpose with reference to the sale and purchase by
the two parties to the contract.
90. Mr. Ravi Kadam has sought to distinguish the
aforementioned decisions by submitting that these decisions
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were on the facts that arose in those cases where there was
clearly a contract arrived at between parties and only a formal
agreement was required to be executed between the parties. He
has submitted that in the present case, the Minutes of Discussion
merely records tentative discussions between the parties and
was expressly made further to discussions and negotiations
which failed to fructify between the parties. I am unable to
accept such a submission considering that in my prima facie
view, the Minutes of Discussion embodied a full and final
settlement between the parties and records that no claim from
Gujarat family of any sort will be considered. The Minutes of
Discussion is not made subject to the family settlement
agreement being executed and in my prima facie view, the
family settlement agreement and scheme of arrangement
(demerger) are merely formal documents which are required to
be executed between the parties to implement the said Minutes
of Discussion. The mere contemplation by the Minutes of
Discussion of entering into the formal family settlement
agreement and scheme of arrangement (demerger), the terms
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which have already been agreed upon in the Minutes of
Discussion and which are to be put in formal shape, does not
prevent the existence of it being a binding contract. The decision
of the Supreme Court in Kollipara Sriramulu (supra) is apposite
in the present case.
91. Mr. Ravi Kadam has contended that the
Minutes of Discussion contemplates an alleged compromise of
the disputes pending before the NCLT, namely the Company
Petition, as it requires the Defendant Nos. 1 and 2 to withdraw
the Company Petition and completely disposes of the case before
the NCLT. He has submitted that the Plaintiffs were obligated to
file an application under Order XXIII Rule 3 of the CPC (read
with Rule 11 of the NCLT Rules) before the NCLT based on the
alleged compromise contained in the Minutes of Discussion. He
has further submitted that the NCLT has the power to decide the
question of whether "an adjustment or satisfaction has been
arrived at" when one party asserts and the other party denies a
compromise/agreement. He has further relied upon the wide
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powers of NCLT including Section 424(1) of the Companies Act,
2013, which provides that the NCLT is not bound by the
provisions of the CPC.
92. In my prima facie view, the Minutes of
Discussion cannot be contemplated to be a mere compromise of
the proceedings before the NCLAT. The Minutes of Discussion is
a contract in the nature of a family settlement and it is clear
from the Minutes of Discussion that the Defendant No. 3
Company is considered to be a family run company, as the three
divisions described as families, namely Gujarat Division, the
Maharashtra Division, Andhra Pradesh/Telangana Division had
run the Defendant No. 3 Company, as a family venture. It is
clear from the Minutes of Discussion that the settlement arrived
was among these three families/divisions. The Minutes of
Discussion also records that the mechanics of the family
settlement agreed to between the participants are provided for
in the Minutes of Discussion. Thus, the Minutes of Discussion
cannot be contemplated merely as a compromise of the NCLT
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proceedings and in fact, categorically records a settlement
amount payable to the Gujarat family. The disputes in the
Minutes of Discussion which have been settled are the only
disputes among the three families. Hence, the submission of Mr.
Ravi Kadam that this is not in the nature of family settlement
deciding all disputes between the family, cannot be accepted. In
my prima facie view, the Minutes of Discussion inspite of its
nomenclature, is a full and final family settlement among the
three families of the pending issues.
93. Having arrived at the prima facie finding that
the Minutes of Discussion is a family settlement, the Supreme
Court in Kale Vs. Dy. Director of Consolidation (supra), Hari
Shankar Singhania (supra) as well as this Court in Shivanand
Vassudev Salgaocar (supra), have held that family settlements
are governed by a special equity principle where the terms are
fair and bona fide, taking into account the well being of a family.
These decisions are apposite to the Minutes of Discussion in the
present case. I am of the prima facie view that Defendant Nos. 1
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and 2 cannot resile from the family settlement by way of
Minutes of Discussion and that the Minutes of Discussion should
have been given effect to and/or implemented by entering into a
formal family settlement agreement and the scheme of
arrangement (demerger).
94. It is also necessary to take note of the fact that
steps were taken by the parties to the Minutes of Discussion for
its implementation. Out of the steps taken, the Defendants have
disputed only one step as being according to them, contrary to
the Minutes of Discussion i.e. payment of Rs. 56 Crores in
discharge of bank liabilities. I am of the view that since the
Defendant No. 3 Company was being run as a whole and the
Plaintiffs being in management of the Defendant No. 3
Company, in order to protect the interest of the Defendant No. 3
Company, any decision made in good faith and in continuation
of the discussions to finalise the scheme of arrangement and the
formal family settlement cannot be considered to be an act in
repudiation of the Minutes of Discussion. Further, the
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Defendants themselves have acted in furtherance of the Minutes
of Discussion by unanimously approving the buy-back of shares,
which resulted in the increase of their own shareholding. It has
been held by this Court in Shivanand Vassudev Salgaocar
(supra) that the ordinary doctrine of estoppel apply where
although no contract has come into existence, the conduct of a
party has been such that he is estopped from denying the
existence of a valid and enforceable contract. In the present
case, it would appear from the conduct of the Defendants that
the Defendants have acted in implementation of the Minutes of
Discussion and thus, will be estopped from denying the
existence of a valid and enforceable contract by way of Minutes
of Discussion.
95. The submission of Mr. Ravi Kadam to the effect
that there has been a repudiation by the Plaintiffs of the Minutes
of Discussion and for which he has placed reliance upon the
proceedings, namely Miscellaneous Application No. 1008 of
2020 filed by the Plaintiffs before the NCLT whereby they have
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sought modification of an earlier order dated 6th April 2018 and
in order for the Board of Directors of Defendant No. 3 Company
including the Defendant Nos. 1 and 2, to take decisions and be
in effective management of Defendant No.3 Company cannot be
accepted. The Miscellaneous Application No. 1008 of 2020
which had been filed by the Plaintiff Nos. 2 to 4 before the NCLT
cannot be considered, as an application to take control over the
Gujarat Division, but merely to take decisions as Directors in
effecting management of Defendant No. 3 Company, in its best
interest and those of its shareholders.
96. Further, it has been submitted by Mr. Ravi
Kadam that in the Affidavits filed in Miscellaneous Application
No. 1008 of 2020 and Miscellaneous Application No. 1064 of
2020 filed before the NCLT, the Plaintiffs have referred to a
'settlement proposal/proposal of settlement' and that there was
a failure to finalise the settlement proposal. These admissions
made by the Plaintiffs are required to be taken into
consideration and which shows that the Plaintiffs themselves
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considered that there was no settlement between the parties.
Reference has been made to the decisions of the Supreme Court
on admissions in pleadings which are required to be taken into
consideration by the Court. In my view, it is necessary to note
the context in which the said admissions have been made by the
Plaintiff Nos. 2 to 4, which would necessarily be with reference
to the formal documents, namely family settlement agreement
and scheme of arrangement (demerger), drafts of which
exchanged between the parties and respective advocates and
which had not been settled. This is borne out by correspondence
exchanged between the Plaintiffs and Defendant Nos. 1 and 2
subsequent to the execution of the Minutes of Discussion.
Though, the correspondence has been marked without
prejudice, this does not depart from the fact that the Minutes of
Discussion had been executed prior in point of time and was not
marked 'without prejudice' and is as held above prima facie an
agreement/family settlement between the parties. I am thus not
inclined to accept the submission of Mr. Ravi Kadam that the
Plaintiffs had admitted the Minutes of Discussion not to be a full
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and final settlement and referred to it as a settlement proposal/
proposal for settlement which had failed.
97. The decision relied upon by Mr. Virag
Tulzapurkar namely Perry (supra) which is of the English courts
has clearly held that when once it is shown that there is a
complete contract, further negotiations between the parties
cannot, without the consent of the parties get rid of the contract
already arrived at. It is settled law that an admission of a party
can always be explained.
98. Further, I do not accept the submissions on
behalf of the Defendants that the Plaintiffs repudiated the
Minutes of Discussion by proposing to sell the Pune property. In
my view, the Plaintiffs have acted in conformity with the terms
of the Minutes of Discussion and in particular, Clause 4 thereof
which contemplates sale of the Pune property and that if the
sale proceeds of the Pune property is less than Rs. 40 Crores,
Andhra Pradesh and Telangana family would compensate the
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Gujarat family for the shortfall upto maximum of Rs.20 Crores.
Further, if the sale proceeds of the Pune property is more than
Rs. 40 Crores, the amount in excess of Rs.40 Crores would be on
account of Andhra Pradesh and Telangana family.
99. Now it will be necessary to consider the
submissions of Mr. Ravi Kadam for the Defendants that there is
an express bar under Section 430 of the Companies Act to the
Civil Court entertaining the Suit, the subject matter of which the
NCLT or NCLAT is empowered to determine.
100. In this context, it would be necessary to extract
Section 430 of the Companies Act, 2013:-
"Section 430: Civil court not to have jurisdiction.
430. No civil court shall have jurisdiction to entertain
any suit or proceeding in respect of any matter
which the Tribunal or the Appellate Tribunal is
empowered to determine by or under this Act or
any other law for the time being in force and no
injunction shall be granted by any court or other
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authority in respect of any action taken or to be
taken in pursuance of any power conferred by or
under this Act or any other law for the time being
in force, by the Tribunal or the Appellate
Tribunal."
101. From reading of this section, it is clear that the
Civil Court does not have jurisdiction to entertain the Suit or
proceedings in respect of the matter which the Tribunal or
Appellate Tribunal is empowered to determine by or under the
Companies Act or any other law for the time being in force. The
second part of this section follows from the first part, namely
that no injunction shall be granted by the Court or authority in
respect of action taken or to be taken in pursuance of power
conferred by or under the Companies Act or any other law for
the time being in force, by the Tribunal or the Appellate
Tribunal. Thus, it would be necessary to determine as to
whether the NCLT is empowered to determine the subject
matter of the present Suit which is for specific performance of
the Minutes of Discussion.
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102. Mr. Ravi Kadam on behalf of the Defendants
has submitted that NCLT has wide powers to pass any orders as
has been provided in Section 420, 424 and 425 of the
Companies Act, 2013. He has submitted that in view of the
Company Petition having been filed before the NCLT for
oppression and mismanagement, prior to filing of the present
Suit, Section 242 (2)(b) of the Companies Act specifically
empowers the NCLT to direct the purchase of shares or interest
of any member of the company by other members or by the
company. He has submitted that in view of the NCLT being
empowered under the Companies Act, 2013, to order purchase
of shares and, as a consequence the power to direct valuation, it
would not be open for this Court to restrain the NCLT from
exercising such power. In my view, this submission has lost sight
of the fact that in the first part of Section 430 of the Companies
Act, the NCLT would necessarily have to be empowered to
determine the subject matter of the present Suit filed before this
Court and then only the second part, of not granting injunction
shall follow.
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103. It has been held in paragraph 31 of the
decision relied upon by Mr. Virag Tulzapurkar namely Embassy
Property Developments Pvt. Ltd. (supra) as under :-
"31. NCLT and NCLAT are constituted, not under the
IBC, 2016 but under Sections 408 and 410 of the
Companies Act, 2013. Without specifically
defining the powers and functions of the NCLT,
Section 408 of the Companies Act, 2013 simply
states that the Central Government shall
constitute a National Company Law Tribunal, to
exercise and discharge such powers and functions
as are or may be, conferred on it by or under the
Companies Act or any other law for the time being
in force. Insofar as NCLAT is concerned, Section
410 of the Companies Act merely states that the
Central Government shall constitute an Appellate
Tribunal for hearing appeals against the orders of
the Tribunal. The matters that fall within the
jurisdiction of the NCLT, under the Companies Act,
2013, lie scattered all over the Companies Act.
Therefore, Sections 420 and 424 of the Companies
Act, 2013 indicate in broad terms, merely the
procedure to be followed by the NCLT and NCLAT
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before passing orders. However, there are no
separate provisions in the Companies Act,
exclusively dealing with the jurisdiction and
powers of NCLT." (Emphasis supplied)
104. Thus, it is clear from this decision that the
Sections 420 and 424 relied upon by the Defendants in support
of their contention that the NCLT has wide powers to pass any
orders cannot be accepted. It has been held in the above
decision of the Supreme Court that these Sections indicate in
broad terms merely the procedure to be followed by
NCLT/NCLAT before passing the orders. The matters that fall
within the jurisdiction of the NCLT under the Companies Act,
2013 is scattered over the Companies Act. There has been no
attempt made on behalf of the Defendants to identify any
particular provision under the Companies Act, 2013 which
empowers the NCLT to grant specific performance. The decisions
relied upon by Mr. Ravi Kadam in support of his submissions
that the NCLT has wide powers to determine the issues and/or
to pass any orders have not held that the NCLT has power to
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grant specific performance. I cannot accept the submission of
Mr. Ravi Kadam that the above extracted paragraph in Embassy
Property Developments Pvt. Ltd. (supra), amounted to nothing
more than passing observations by the Supreme Court. In my
view, the Supreme Court after due consideration of the
provisions of the Companies Act has rendered its finding on the
jurisdiction of the NCLT, a matter directly for consideration in
that case. These observations are binding on this Court. The
decision of the Supreme Court in Gujarat Urja Vikas Nigam
Limited (supra) which has considered the decision in Embassy
Property Developments Pvt. Ltd. (supra) and observed that the
latter case dealt with the NCLT's jurisdiction on matters of
public law, does not comment and / or distinguish the ratio set
out in the extracted paragraph, namely paragraph 31 of the
judgement in Embassy Property Developments Pvt. Ltd. (supra).
Thus, the Defendants reliance on this judgment is misplaced.
105. I have considered the decisions relied upon by
Mr. Virag Tulzapurkar in support of his submission that the Civil
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Court has inherent jurisdiction to try all types of civil disputes
unless its jurisdiction is barred expressly or by necessary
implication by any statutory provision and/or jurisdiction
conferred in any other Tribunal or Authority. Having arrived at a
prima facie finding that the NCLT/NCLAT are not empowered by
any of the provisions of the Companies Act, 2013 to grant
specific performance, this well settled position of Civil Court
having inherent jurisdiction to try all types of civil disputes
would be apposite.
106. It is further of significance that the Courts have
held that the NCLT/NCLAT does not have jurisdiction to deal
with the issues relating to enforcement of contractual provisions
between the parties and they have no jurisdiction to decide a
civil Suit of specific performance.
107. The decisions relied upon by Mr. Virag
Tulzapurkar are of significance, namely Macquarie SBI
Infrastructures Investments Pvt. Ltd. and Ors. (supra) and
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Sekura Roads Ltd. (supra). These decisions are subsequent to
the enactment of Section 430 of the Companies Act. These
decisions amply clarify that the Companies Act, 2013 does not
confer the NCLT/NCLAT with jurisdiction to deal with the issues
relating to the enforcement of contractual provisions between
the parties. Further, it has been held that the NCLT / NCLAT
cannot stay the specific performance Suit, one that they cannot
in any case decide. Thus, in my prima facie view, the
NCLT/NCLAT having no jurisdiction to grant final relief of
specific performance of contract cannot grant interim relief as
such relief will be outside their jurisdiction. Further, in my
prima facie view, there would be no bar to grant of interim
relief, which is in aid of the final relief in the Suit.
108. The decision relied upon by Mr. Ravi Kadam
namely Invesco Developing Markets Fund (supra) in support of
his contention that a Civil Suit is barred under Section 430 of
the Companies Act is not applicable to the present case. As in
that case, the contention raised by the Authority before the Civil
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Court in the Suit filed could have been raised before the NCLT
as Section 98 of the Companies Act expressly conferred power
on the NCLT. In the present case, there is no such provision of
the Companies Act, which confers power on the NCLT to grant
specific performance of contract. The other decisions relied
upon by Mr. Ravi Kadam to contend that the jurisdiction of this
Court to entertain the Suit and/or to grant injunction are ousted
by virtue of Section 430 of the Companies Act, 2013 are not
applicable in the present case, as none of these decisions have
considered whether the NCLT is empowered to grant specific
performance and in fact in those cases, the NCLT was clearly
empowered by the provisions of the Companies Act to grant the
relief sought for in the civil Suit.
109. Insofar as the submissions on delay in filing of
the Suit and seeking interim relief is concerned, in my view, the
delay by itself is no ground to deny the relief. In the facts of the
present case, no prejudice has been caused to Defendant Nos. 1
and 2 by such alleged delay. There has been no attempt made by
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the Defendants to show any prejudice caused to them on
account of the delay in filing of the present Suit and seeking
interim relief. There is much substance in the submission of Mr.
Virag Tulzapurkar that the question of delay, if at all, is required
to be balanced against the likelihood of the Plaintiffs ultimately
succeeding in the action and where the strength of the Suit is
prima facie strong, the Plaintiffs' delay (assuming there is delay)
in filing the action would not disentitle the Plaintiff to the relief.
The Supreme Court in Dehri Rohtas Light Railway Company
Limited (supra) has held that the principle on which the relief to
the party on the grounds of latches or delay is denied, is that the
rights which have accrued to others by reason of the delay in
filing the petition should not be allowed to be disturbed unless
there is a reasonable explanation for the delay. In my view, there
has been no right which has accrued to the Defendants by
reason of alleged delay in filing the captioned Suit and seeking
interim relief.
110. Considering that the Minutes of Discussion
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which in my prima facie view, amounts to a family settlement
was being implemented in its true spirit and intent as well as the
fact that it was in September 2020 that the Defendant Nos. 1
and 2 in correspondence chose not to execute the formal family
settlement agreement and scheme of arrangement (demerger)
as borne out from the correspondence, the Plaintiffs had no
choice but to take steps in filing the present Suit on 25th
January 2021 seeking specific performance of the Minutes of
Discussion. The Plaintiffs, upon filing the present Suit, two days
later i.e. on 27th January 2021 filed an Affidavit placing on
record before the NCLT the Plaint filed in the captioned Suit.
The Interim Application has also been taken out and interim
relief sought in view of the Defendants filing an 'Overview Note'
in the Company Petition before the NCLT seeking their buy-out
and sell-out on a fresh valuation of shares and other assets. The
Company Petition was listed high on board for final hearing on
17th February 2022 and in view thereof, the Interim Application
was filed on 11th February 2022 and the Applicants/Plaintiffs
pressed for ad-interim/interim relief prior to considering of the
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relief sought for by the Defendant Nos. 1 and 2 by the NCLT.
Such relief sought for by the Defendants would result in
defeating the Plaintiffs' rights under the Minutes of Discussion
and/or relief prayed for in the captioned Suit. Thus, in my view,
no case has been made out on behalf of the Defendants that the
alleged delay in filing the present Suit and seeking interim relief
would disentitle the Plaintiffs from being granted the interim
relief sought.
111. Having arrived at the finding that in my prima
facie view, the Minutes of Discussion is a family settlement and
requires to be specifically performed, the relief sought for by the
Applicants/Plaintiffs to restrain the Defendant Nos. 1 and 2
from taking any steps which would defeat the Applicants' rights
under the Minutes of Discussion and/or relief prayed for in the
captioned Suit are required to be granted. This, particularly
considering the fact that the Defendants are acting contrary to
the Minutes of Discussion by seeking relief of buyout and sellout
on fresh valuation of shares and other assets before the NCLT.
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112. In view thereof, following interim order is
passed :-
(i) Defendant Nos. 1 and 2, their servants/agents or
any other person directly or indirectly acting for or
on behalf of Defendant Nos. 1 and 2 are restrained
by temporary injunction from acting in any
manner contrary to the Minutes of Discussion
and/or defeating the Applicants' rights under the
Minutes of Discussion and/or the reliefs prayed for
in the captioned Suit.
(ii) Interim Application No. 571 of 2022 is disposed of
in the above terms.
(iii) There shall be no order as to costs.
[R.I. CHAGLA J.]
