Calcutta High Court
Anjanee Kumar Lakhotia vs Shri Maruti Maheshwari And Ors on 25 February, 2025
Author: Ravi Krishan Kapur
Bench: Ravi Krishan Kapur
IN THE HIGH COURT AT CALCUTTA
ORDINARY ORIGINAL CIVIL JURISDICTION
ORIGINAL SIDE
[Commercial Division]
BEFORE:
The Hon'ble Justice Ravi Krishan Kapur
AP-COM/300/2024
IA NO: GA/1/2023, GA/2/2023, GA-COM/3/2024
ANJANEE KUMAR LAKHOTIA
VS.
SHRI MARUTI MAHESHWARI AND ORS.
For the Petitioner : Mr. Abhrajit Mitra, Sr. Adv
Mr. Satadeep Bhattacharyya, Adv.
Ms. Pritha Basu, Adv.
Ms. Nailanjana Ghosh, Adv.
Mr. Debartha Chakraborty, Adv.
For the Respondent : Mr. Sabyasachi Chowdhury, Adv.
Mr. Anuj Singh, Adv.
Mr. Syed Ehteshan Muda, Adv.
Mr. Aman Agarwal, Adv.
Ms. Trinisha De, Adv.
Ms. Rupal Singh, Adv.
Ms. N. Singh, Adv
Judgment on : 25.02.2025
Ravi Krishan Kapur, J.:
1. This is an application under section 9 of the Arbitration and Conciliation
Act, 1996.
2. The disputes between the parties arise out of a Memorandum of
Understanding dated 17 March, 2013 (MOU) executed between the
respondent nos.1 and 2 herein and the petitioner. Admittedly, the
respondent no.3 is not a party eo nomine to the MOU. The petitioner seeks
restraint orders against the respondents from acting contrary to or
inconsistent with the terms of the MOU and consequentially from
transferring or dealing with any shares of a closely held family company
MBL Infrastructure Limited (the company).
3. Briefly, the members of one Maheswari family decided to resolve their
family disputes by entering into the MOU which inter-alia contemplated
transfer of the shareholding in the company between the two groups by
effecting sale of 55,62,790 shares belonging to the respondents in the
company at an aggregate price of Rs.28.50 crores. The agreement also
contemplated that the petitioner would ensure release of the personal
guarantees of the respondent nos.1 and 2 by 31 July 2013. In default, the
respondent nos.1 and 2 and their group were free to deal with their
shares in the company.
4. Salient clauses of the MOU are as follows:
1. Pursuant to the terms and conditions of this MOU and for the
considerations set out in clause 1.2 below, the details of the shares to
be transferred from each of the party of Group-1 are set out below:
Name Number of Shares
Mr. Ram Gopal Maheswari 22,48,750
Mr. Maruti Maheswari 24,500
Mr. Aditya Maheswari 50,000
Mr. Anuj Maheswari 50,000
Mrs. Sweta Maheswari 29,250
M/s. Prabhu International Vyapar Private Limited 31,60,290
TOTAL 55,62,790
1.1 The members of Group-2 agrees and acknowledges that the First and
Second Party of Group-1 have given the following personal
guarantees:
(a) the Consortium of Banker of the Company for securing the fund
based and non-fund based working capital facilities; and
(b) to the banker of AAP Infrastructure Limited, a subsidiary of the
Company for an amount of Rs.50 crores.
1.2 The Group-2 shall arrange for (i) release of the personal guarantees of
parties of Group-1 by or before June, 2013 or within 60 days of
resignation from MBL whichever is later, (ii) pay and/or cause to be
paid to the Group-1 an all-inclusive consideration of Rs.28.50 crores
for the shares as set out in clause 1 above.
The parties of Group-1 shall ensure necessary transfer of shares by
way of deeds, documents including transfer deed/gift deed etc to
ensure that the total shares as per clause no.1 are transferred for a
total consideration of Rs.28.50 crores.
The consideration may be shared/distributed between parties of
Group-1 proportionately or otherwise as mutually agreed, subject
however that the net aggregate consideration amount shall not be
higher or lower than Rs.28.50 crores.
Group 2 shall keep Group-1 indemnified by MBL so that no liability
shall accrue or arise to the First and Second Parties of Group 1 for the
personal guarantees given by them.
1.3 Schedule of payment and transfer of shares:
Date Amount payable (Rs. in
crores)
By MARCH, 31, 2013 5.00
By APRIL, 30, 2013 7.50
By MAY, 31, 2013 7.50
By JUNE, 30, 2013 5.00
By JULY, 31, 2013 3.50
1.4 Consideration shall be paid to Group-1 as per Schedule above and
thereafter the Group-1 shall transfer the share to the Demat Account
of the Group-2 and/or his nominees and/or to his order in proportion
to the amounts paid, together with all records, documents and papers
of the company.
1.5 The parties of Group-1 shall relinquish, transfer, assign and
surrender all their rights, entitlements, authorities, interests, powers
etc. whatsoever in relation to the company and/or its subsidiary
company(ies) and/or its associate/joint venture companies in favour
of the Group-2 and/or its nominees.
1.6 The parties of Group-1 shall transfer all their shareholdings in Prabhu
International Vyapar Pvt Ltd to parties of Group-2 and resign as
directors upon receipt of consideration.
2 The Second party of Group-1 shall resign as director from MBL and
MSP Infrastructures Limited - an associate Company of MBL
immediately upon receipt of Rs.15.00 crores out of the total
consideration of Rs.28.50 crores as recorded in Clause 1.2.
5.1 The parties of Group-1 jointly and severally expressly undertake that
they shall not dispose off, transfer or encumber the shares in any
way except as has been contemplated under this MOU. However,
members of Group-1 will be free to deal as per their wish with their
respective share-holding if the consideration as defined in Clause
no.2 is not cleared by 31.07.2013.
5.2 The parties of Group-1 shall transfer/pass on all benefits,
entitlements etc. (including bonus/right share entitlement and
dividends) relating to the shares to the Group-2 till 31.07.2013.
5. It is alleged on behalf of the petitioner that the petitioner has fulfilled his
obligations under the MOU and paid a sum of Rs.24,96,48,396/- against
transfer of 3858632 shares in the company. The guarantees given by the
respondent no.1 for the loan to AAP Infrastructure Limited have also been
released on 7 April, 2021 and 4 August, 2021 respectively. In such
circumstances, despite the petitioner having substantially complied with
his obligations, the respondents are unjustifiably refusing to perform their
reciprocal obligations. Accordingly, the petitioner seeks specific
performance of the MOU inter alia requiring transfer of the balance
amount of 34,08,316 equity shares (including bonus shares) of the
company upon payment of a balance sum of Rs.3.5 crores. In this
background, the present application has been filed for interim reliefs with
the ultimate aim of preserving the status quo. In support of such
contentions the petitioner relies on the decisions in Niranjan Lal Todi vs.
Nandalal Todi (2010) SCC Cal 2120, Central Bank of India vs. Kailash
Chandra Gaur MANU/KA/6263/2019, Sanjiv Prakash vs. Seema Kukreja
(2021) 9 SCC 732, Indian Oil Corporation Limited vs. Shree Ganesh
Petroleum Rejgurunagar (2022) 4 SCC 4463, Karam Kapahi vs. Lal Chand
Public Charitable Trust (2010) 8 SCC 673 and Bharat Sanchar Nigam
Limited vs. Nortel Networks India Private Limited (2021) 5 SCC 738.
6. On behalf of the respondents it is contended that, there is gross distortion
and misrepresentation of the true and correct facts of the case.
Notwithstanding, the stipulated cut off date i.e. 31 July, 2013 in the
MOU, the petitioner has deliberately and fraudulently failed to perform his
obligations. The respondent nos.1 and 2 have also subsequently sold
certain shares out of the above 55,62,790 shares in the open market at
market prices ranging from Rs.80.37 to Rs.289.50. In view of the
subsequent events, the parties through their respective companies namely
Prabhu International Vyapar Private Limited and MBL A Capital Limited
respectively had also entered into a Memorandum of Understanding dated
30 October, 2013 pertaining to sale of 17,00,000 shares which forms the
subject matter of the MOU. Hence, the MOU stood substituted. In any
event, the reliefs sought for in this application are barred by limitation.
The petitioner is not entitled to any relief under the MOU. Moreover, the
respondent no.3 has been wrongly impleaded as a party respondent to the
present application. The respondent no.3 is neither a party nor signatory
to the MOU and no reliefs can be claimed against the respondent no.3. In
view of the above, there are serious issues as to the maintainability of any
arbitral reference under the MOU.
7. Clause 13 of the MOU provides as follows:
13. Governing Law and Dispute Resolution
13.1 These presents will be governed by and construed and interpreted in
accordance with laws of India.
13.2 The parties shall endeavor to settle any dispute arising in connection
with the interpretation or performance of these presets, or otherwise in
connection with these presents, through friendly consultations and
negotiations. If so settlement can be reached through consultations between
the parties within 15 days of one party delivering a written notice of the
dispute to the other parites then such matter shall be finally settled by
binding arbitration in India in accordance with the Arbitration Act, 1996.
The arbitration shall be conducted by three (3) arbitrators. The parties of
Group- 1 and the Group -2 shall nominate one arbitrator each and the Two
(2) arbitrators shall nominate a third arbitrator. The language to be used in
the arbitral proceedings shall be English.
8. A plain reading of the MOU suggests that the respondent nos.1 and 2
alongwith the petitioner in their respective individual capacity had
contemplated sale of the shareholdings in a family company on certain
terms and conditions. The agreement stipulated a cut off date i.e. 31 July,
2013. Admittedly, the petitioner failed to honour his obligations within the
prescribed time period. In view of the subsequent events, it prima facie
appears that post 31 July 2013, the MOU had all for purposes been
abandoned by the parties and no steps were taken by either of them to
extend the same. On the contrary, the execution of the subsequent MOU
dated 31 October 2013, reflects a contrary and conflicting intention not to
be bound by the MOU and the terms and conditions of the same stood
revised and re-negotiated. The respondent nos.1 and 2 have subsequently
sold a substantial portion of their remaining shares which formed the
subject matter of the MOU in the open market at prices other than the
agreed price under the MOU. This was never objected to by the petitioner
or any member of this group. Despite the price of the shares under the
MOU being crystallized at Rs.51 per share, the respondents have sold
their shares at different prices between Rs.80.37 to Rs.289.50 per share
to third parties and also to parties related to the petitioner. Thereafter, the
parties had entered into the Memorandum of Understanding dated 30
October, 2013 signed by the petitioner as director of a group company.
9. The MOU dated 30 October 2013 contemplated sale of 17,00,000 shares
of the company (which comprised of the subject matter of the MOU) at a
price of Rs.63.75 per share. Clause 3 of the MOU dated 30 October 2013
provides as follows:
3. Consideration
3.1 Seller agrees to sell and Buyer agrees to purchase the Sale Shares at
the prevailing market price as on the date of signing of this MOU i.e.
at Rs. 63.75 per share.
3.2 The consideration for the deal is the price as per para 3.1 and release
of personal guarantees of the directors of Prabhu International
Vyapar (P) Ltd. for the fund based and non fund based working
capital facilities of MBL Infrastructures Ltd. which the Seller considers
very essential for smooth running of its business.
3.3 the consideration for sale shall become payable by the Buyer at or
before the Seller delivering the share certificates together with the
duly signed share transfer deeds in the name of the Buyer and/or
transferring the dematerialized shares in the name of the Buyer.
However the Seller shall have the right to demand the consideration
in advance from the Buyer when it is in a reasonable position to
deliver the Sale Shares.
3.4 Subject to the availability with the Seller, in case the Buyer wants to
purchase additional shares of MBL from the Seller, the price of such
additional shares shall be the market price as on the date of actual
sale of such additional shares.
10. Significantly, the MOU dated 30 October 2019 was also the subject matter
of a prior civil suit CS No.54 of 2013 with respect to the same shares
which form the subject matter of this application and had been instituted
by the group of the petitioner. The suit was withdrawn without any liberty
after the respondent no.3 had filed an application seeking directions for
enforcement of the obligations under the Memorandum of Understanding
30 October, 2013 and despite the plaintiff having enjoyed an interim order
for over eight years. Notwithstanding, letters dated April 01, 2017, April
14, 2017 May 15, 2017, September 17, 2022 and December 26, 2022
inter-alia requesting the petitioner as well MBL A Capital Limited to
purchase the subject shares in the company and complete the transaction
in terms of the MOU dated October 30, 2013, neither did the petitioner
nor the members of his group take any step to comply with the same.
Such conduct negates any readiness or willingness on the part of the
petitioner. It was only upon the withdrawal of CS No.54 of 2013 that, the
petitioner filed the present application seeking to invoke the arbitration
clause under the MOU.
11. There are serious issues as to whether the MOU had been substituted or
not in view of the parties having entered into the subsequent MOU dated
30 October 2013. Prima facie a reading of the MOU dated 30 October
2013 would reflect that the original MOU stood altered. The
correspondence exchanged between the parties also demonstrates that
after a lapse of more than 10 years i.e. on 26 December 2022 did the
petitioner attempt to revive the MOU. The question of whether the
respondent no.3 is bound by the arbitration agreement also requires
examination. In cases of family run companies, although they can be
treated as assets of a family capable of division there cannot be a selective
exercise. Admittedly, the respondent no.3 is neither a party nor a
signatory to the MOU. The subsequent facts which have transpired after
the expiry of the cut off date i.e. 30 July, 2013 suggest that the parties
had for all purposes and intent abandoned the MOU.
12. The decision in Niranjan Lal Todi and Anr. vs. Nanddlal
Todi and Ors. (2010) SCC Cal 2120 is distinguishable. The MOU referred
to had been executed between the member of the Todi family and
contemplated all the concerned companies to be bound by its terms. The
arbitration clause was wide enough to reflect the true intent of all the
parties.
13. There is no quarrel with the proposition laid down in Sanjiv Prakash vs.
Seema Kukreja and Ors. (Supra). The question of whether an agreement
stands novated or not is ultimately within the domain of the Arbitrator.
However, at this stage, this is a question which requires a prima facie
consideration in balancing the equities between the parties. The decision
in Bharat Sanchar Nigam Ltd. vs. Nortel Networks India Pvt. Ltd. (2021) 5
SCC 738 is also misplaced since in view of the glaring facts and
circumstances of this case, a prima facie view on the question of limitation
can always be taken into consideration in adjudicating upon the question
of interim reliefs. Similarly, the decision in Indian Oil Corporation Ltd. vs.
Shree Ganesh Petroleum Rajgurunagar (2022) 4 SCC 463 is of no relevance
since the disputes between the parties are yet to be referred to the Arbitral
Tribunal.
14. In view of the above, there are serious issues of maintainability of any
arbitral reference under the MOU dated 17 March 2013 which negates
any prima facie case on merits in favour of the petitioner. The balance of
convenience and irreparable injury is also against orders being passed in
favour of the petitioner. Any restraint on the sale of the shares is an
unreasonable interference with the rights of the respondents qua
shareholders. In any event, the petitioner cannot seek any restraint orders
without performing their reciprocal obligations i.e. securing the entire
consideration amount for the remaining shares which are fluctuating in
nature. The amount of Rs.24.96 crores alleged to have been paid by the
petitioner is disputed and controverted by the respondents. On behalf of
the respondents it is submitted that, only a sum of Rs.3.38 crores has
been received through open market sales after 31 July, 2013. The
inconsistent and irreconcilable stand of the petitioner and his group
insofar as the MOU is concerned also demonstrates lack of bona fides of
the petitioner.
15. In such circumstances, AP-COM 300 of 2023 alongwith GA 1 of 2023
stands dismissed. The interim order dated 20 June 2023 stands vacated.
GA 2 of 2023 filed for appointment of a Receiver and for other
consequential reliefs also stands dismissed. GA-COM 3 of 2024 for
vacating the interim order dated 20 June 2023 stands allowed. Needless
to mention all the above findings are prima facie and tentative in nature.
(RAVI KRISHAN KAPUR, J.)
