Delhi High Court
M/S. Kidarsons Industries Pvt. ... vs M/S. Hansa Industries Pvt. Ltd. & ... on 26 April, 2013
Author: S.Ravindra Bhat
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of decision: 26.04.2013
+ FAO(OS) 369/2012
M/S. KIDARSONS INDUSTRIES PVT LTD & ORS
..... Appellants
Through : Sh. V.P. Singh, Sr. Advocate with
Sh. Anju Bhattacharya, Advocates.
Versus
M/S. HANSA INDUSTRIES PVT LTD & ORS
..... Respondents
Through : Ms. Rekha Palli, Sh. D. Verma
and Ms. Poonam Singh, Advocates.
CORAM:
HON'BLE MR. JUSTICE S. RAVINDRA BHAT
HON'BLE MS. JUSTICE DEEPA SHARMA
MR. JUSTICE S. RAVINDRA BHAT (OPEN COURT)
%
C.M. APPL.13715/2012 (for condonation of delay)
For the reasons mentioned in the application, C.M. Appl.
13715/2012 is allowed.
FAO(OS)369/2012, C.M. APPL.13715/12 & 13716/12 Page 1
FAO (OS) 369/2012 & C.M. APPL. 13716/2012 (for stay)
1. The present appeal is directed against an order of the learned
Single Judge dated 15.03.2012, disposing I.A. Nos. 14387/2010 and
11703/2011, and also directing the Registry to draw up a final decree.
2. Briefly, the facts are that parties here had engaged in two
separate proceedings - a winding-up petition in respect of the
company - M/s. Kidarsons Industries Pvt. Ltd. and another suit filed
by the latter (M/s. Kidarsons Industries Pvt. Ltd.), claiming injunction
against M/s. Hansa Industries Pvt. Ltd. on the ground that the business
and commercial activity carried-out could not be carried-out by it.
During the pendency of the proceedings, the parties apparently
entered into a settlement, on 09.06.1988. Besides other conditions
which concerned the business activities of the parties, Clause-14
enabled one of the parties, Sh. Narender Nath Nanda to certain rights.
The said condition is extracted below:
"14. Shri Narender Nath Nanda will continue to occupy
the portion of the property of the company in which he is
at present residing as deemed owner/owner, and the
value of such portion will be taken into account for
evaluating the assets of the company. The value of such
part of the property as is occupied by Shri Narender
Nath Nanda will be adjusted in the value of his share."
3. By judgment and order dated 05.02.1993, a learned Single
Judge had the occasion to deal with the entire settlement; he sought to
put a finality to the disputes by interpreting Clause 14 in a particular
manner. The defendant in the suit, M/s. Hansa Industries Pvt. Ltd.
FAO(OS)369/2012, C.M. APPL.13715/12 & 13716/12 Page 2
represented by N.N. Nanda carried the matter in appeal, FAO(OS)
39/1993, to the Division Bench of this Court. The Division Bench
affirmed findings and interpretation of the learned Single Judge, vis-à-
vis Clause 14 of the settlement. Eventually the matter was carried in
appeal by Special Leave to Supreme Court, which by its judgment and
order dated 13.10.2006 [Hansa Industries (P) Ltd. and Ors. v.
Kidarsons Industries (P) Ltd. 2006 (8) SCC 531], took into
consideration the materials on record as well as the submission of
parties and to a limited extent modified the directions of the learned
Single Judge, as affirmed by the Division Bench. The relevant extract
of the Supreme Court directions are as follows:
"21. We, therefore, allow this appeal to the extent
indicated below:-
(a) That the judgment and order of the High Court is
modified to the extent that Appellant 2, namely, Shri
Narendra Nath Nanda shall be allotted the portion of the
Golf Links house which was in his occupation on the date
of settlement, and the value thereof shall be adjusted
against his share. If something remains to be paid even
after adjustment, the appellants shall pay such amount
within a period of two months from the date of the order
of the High Court.
(b) That no deduction shall be made from the value of
the assets of the anticipated capital gains tax liability on
the hypothetical sale under the settlement. In case a
demand of capital gains tax is made by the Tax Authority
in future against the respondent Company, the aforesaid
Company shall be entitled to challenge the imposition of
such tax subject to Appellant 2 providing sufficient funds
to the respondent Company for this purpose. In any
event, the capital gains tax, if found payable, shall be the
liability of the appellants to be discharged by them. They
FAO(OS)369/2012, C.M. APPL.13715/12 & 13716/12 Page 3
shall furnish an undertaking before the High Court
accepting such liability, and shall execute a document
creating a charge on the assets allocated to them under
the settlement to discharge capital gains tax liability, if
found payable.
22. The matter is remitted to the High Court for giving
effect to the aforesaid modifications which may involve
directing the chartered accountants to make a
recalculation on the basis of the directions contained in
this judgment, and apportion the assets accordingly."
4. In light of the above order, the matter was relegated to this
Court; the Division Bench had occasion to deal with it and after
considering the order of the Supreme Court, concluded by its order
dated 10.07.2008 that, "the direction issued by the Supreme Court
remanding the matter back to the High Court for giving effect to the
directions referred to above would also necessarily imply that the
exercise has to be undertaken before the learned Single Judge."
5. After remand, in tune with the directions of the Supreme Court,
the report of a Chartered Accountant was apparently called for; the
same is on the record. This Court does not wish to discuss the merits
of the report since that appears to be the subject matter of the
application preferred by the respondent - Sh. N.N. Nanda, before the
learned Single Judge (I.A. No. 654/2008). The learned Single Judge,
by the impugned order took cue from the two applications filed by the
respondent (Sh. N.N. Nanda), complaining that the appellants had not
complied with certain directions and held, therefore, that the decree
had to be drawn.
FAO(OS)369/2012, C.M. APPL.13715/12 & 13716/12 Page 4
6. This Court has extracted directions of the Supreme Court and
also noticed the previous order of this Court to underline the fact that
the learned Single Judge had to necessarily go into the merits of the
contentions of the parties. Concededly, neither the impugned order
nor any other order of the learned Single Judge has dealt with the
report of the Chartered Accountant. Furthermore, the objections to the
report are pending. As to what is the ultimate amount to be paid by
Sh. N.N. Nanda to enable him to get portions of the Golf Links
property and as to the entitlement of other parties to various assets is
subject matter which has to be finally decided before the Judge can
record satisfaction. Before completing that process the learned Single
Judge could not have directed the Registry to draw a decree as was
done in this case.
7. In view of the above discussion, the appeal has to succeed; the
matter is remitted to the learned Single Judge for appropriate
directions to work-out the right, entitlement and interests of the
respective parties, flowing from the directions of the Supreme Court
extracted above. The learned Single Judge shall also consider the
merits of the report while making his directions in order of the
Supreme Court judgment. For the sake of completeness, Exec.
Petition No.187/2012 shall also be taken up and considered and
suitable common orders made along with pending applications in CS
(OS) 1310/1988. The appeal and its pending application have to
succeed. The parties are directed to appear before the concerned
learned Single Judge according to roster on 02.05.2013. No costs.
8. The appeal [FAO(OS) 369/2012] and pending application
FAO(OS)369/2012, C.M. APPL.13715/12 & 13716/12 Page 5
(C.M. Appl. 13716/2012) are allowed in the above terms.
S. RAVINDRA BHAT
(JUDGE)
DEEPA SHARMA
(JUDGE)
APRIL 26, 2013
'ajk'
FAO(OS)369/2012, C.M. APPL.13715/12 & 13716/12 Page 6
