Montreaux Resorts P.Ltd. & Ors. vs Sonia Khosla & Ors.
2015 Latest Caselaw 6074 Del

*     IN THE HIGH COURT OF DELHI AT NEW DELHI
%                                    Date of Decision : August 19, 2015

+            Rev.Pet No.349/2015 & CM No.13559/2015 in
                        CONT.CAS(C) 165/2008

      MONTREAUX RESORTS P.LTD. & ORS.                  ..... Petitioners
             Represented by: None

                                     versus

      SONIA KHOSLA & ORS.                             ..... Respondents
               Represented by:       Mr.Deepak Khosla in person
                                     with Mr.Ajay Marwah, Advocate

CORAM:
HON'BLE MR. JUSTICE PRADEEP NANDRAJOG

PRADEEP NANDRAJOG, J.

1. The three petitioners : Montreaux Resorts Pvt. Ltd., through its Director Mr.Vinod Surah, Mr.Vikram Bakshi and Mr.Vinod Surah filed the above captioned contempt petition pleading therein that Vikram Bakshi and Vinod Surah were the Directors of Montreaux Resorts Pvt. Ltd. Violation of an order dated January 31, 2008 passed by the Company Law Board by the respondents was alleged. The respondents impleaded were Sonia Khosla and her husband Deepak Khosla.

2. It was pleaded that Deepak Khosla represented to Vikram Bakshi that he was the Chief Executive Officer of M/s.Montreaux Resorts Pvt. Ltd. and that apart from him, his wife Sonia Khosla and one Vini Ahuja were the shareholders of the company. That Deepak Khosla represented that the company had entered into contracts with various land owners in village

R.P.No.349/2015 & CM No.13559/2015

Mashobra and Chattiyan in the State of Himachal Pradesh to purchase land on which a resort-cum-real estate project could be undertaken and that Deepak Khosla's father Sh.R.P.Khosla owned 27 bigha land in said villages which could be included for the project. In a nut shell the pleading was that Deepak Khosla represented to Vikram Bakshi that money was needed to fund the development project. It was pleaded that Deepak Khosla proposed to Vikram Bakshi to bring funds and to secure himself, Vikram Bakshi would be given majority shareholding in the company Montreaux Resorts Pvt. Ltd. It was pleaded that based on the representations and assurances Vikram Bakshi entered into a memorandum of understanding with Deepak Khosla on December 21, 2005 and Deepak Khosla acted on behalf of his wife as well. `10,00,000/- was paid when the MOU was signed to Sh.R.P.Khosla. It was pleaded that on March 31, 2006 another agreement was entered into between Vikram Bakshi, Sonia Khosla, Sh.R.P.Khosla and M/s.Montreaux Resorts Pvt. Ltd. under which it was recorded that the entire shareholding of the company would be transferred to Vikram Bakshi at the agreed consideration and that Sonia Khosla would be paid 5% of the real estate sales of the lands acquired by the company. It was pleaded that as per the said agreement the Board of the company had to be re-constituted with the induction of two nominees, which may include Vikram Bakshi as a Director of the company and that Sonia Khosla was to remain as a Director in the company only till when 5% of the real estate sales was paid to her. It was pleaded that pursuant to the agreement dated March 31, 2006, Sonia Khosla transferred 51% shares in the company to Vikram Bakshi or his nominees and that two nominee directors nominated by Vikram Bakshi were appointed as Directors of the company. It was pleaded that the relevant

R.P.No.349/2015 & CM No.13559/2015

form showing change of Directors required to be submitted to the Registrar of Companies was signed by Sonia Khosla and that Deepak Khosla resigned as the Chief Executive Officer of the company and further that the registered office of the company was shifted to the office of Vikram Bakshi. It was pleaded that in terms of the agreement dated March 31, 2006 more than `5 crores were invested by Vikram Bakshi to purchase lands in the name of the company. It was pleaded that for transfer of the shares of the petitioner No.1 company to Vikram Bakshi or his nominees, Sonia Khosla and her husband received `1.94 crores. It was pleaded that on August 13, 2007 Sonia Khosla filed a petition before the Company Law Board alleging oppression and mismanagement by Vikram Bakshi, in which petition she disclosed that she was a minority shareholder holding either 3650 shares or 4900 shares of the petitioner No.1 company. She pleaded that if one took into account the additional 10000 equity shares issued by Vikram Bakshi to himself and his family members in February, 2007 the shareholding of Sonia Khosla would constitute either 18.25% or 24.05% of the issued capital. It was highlighted in the petition that even as per the averments made by Sonia Khosla before the Company Law Board it would emerge that whereas Sonia Khosla claimed to be holding 3650 shares she admitted that Vikram Bakshi and his nominees were holding 16350 shares. It was pleaded further that during the pendency of the proceedings before the Company Law Board Sonia Khosla and Deepak Khosla purportedly showed Board of Directors Meetings held on December 11, 2007 and December 18, 2007 as per which petitioners No.2 and 3 and one Vadia Prakash were shown as removed from Directors and in their place Sonia Khosla and Deepak Khosla had appointed their own Directors and had increased the share capital of the company as

R.P.No.349/2015 & CM No.13559/2015

also changed the registered office of the company. It was pleaded that when the petition filed by Sonia Khosla came up before the Company Law Board on Janaury 31, 2008, the Company Law Board found that the unilateral acts of Sonia Khosla and her husband were to overreach the Company Law Board and thus the Company Law Board directed Sonia Khosla to file an application and restore status quo ante with regard to the constitution of Board of Directors of the Company. It was pleaded that far from restoring status quo ante, Sonia Khosla issued a notice on December 21, 2008 to convene a board meeting on February 28, 2008. In the petition reference was made to the various agenda items proposed to be discussed in the board meeting scheduled for February 28, 2008 which constituted contempt of the order dated January 31, 2008 passed by the Company Law Board.

3. Considering the pleadings in the contempt petition and the documents filed therein, on March 17, 2008 notice was issued to the respondents returnable for August 01, 2008.

4. In the aforesaid backdrop facts I have been called upon to decide R.P.No.349./2015 and CM No.13559/2015, filed by Deepak Khosla.

5. In R.P.No.349/2015, Deepak Khosla sets out the primary grounds for seeking review in paragraph 2 of the petition. As pleaded a proper vakalatnama was not filed on behalf of petitioner No.1 company which amounts to a patent fraud on the Court. The fraud being a deliberate misjoinder of parties for the reason, as pleaded in the petition, a properly executed vakalatnama to represent the company would have determined whether the company had the locus standi to maintain the contempt petition. Shorn of the rhetoric, the usual trademark of the pleadings of Sh.Deepak Khosla which this Court is well accustomed to by now, the prolix review

R.P.No.349/2015 & CM No.13559/2015

petition brings to the notice of the Court as to what is the meaning of the word 'notice' issued by the Court. Copious pleadings have been made to bring home the point as to why a proper vakalatnama was not filed on behalf of petitioner No.1. In a nut shell the effect of the pleadings is to bring home the point that Vikram Bakshi and his associates were never in control of the company and thus they could not have passed any resolution authorizing any Director to act on behalf of the company to file the contempt petition and engage a counsel. It has been highlighted that the vakalatnama filed on behalf of the company is sans the requirement of law declared by this Court on August 08, 2009 in W.P.(C) No.7651/2009, which requires that any vakalatnama filed on behalf of a company, since it would bear the signatures of a living human being who would be representing the company it must make a reference and be accompanied by such document on the strength of which the signatory to the vakalatnama purports to represent the company.

6. The question which arises for consideration in the review petition is whether on the facts pleaded prayer made to the Court should be to discharge the notice issued or should the order issuing the notice be reviewed.

7. It needs to be highlighted that the applicants had filed CM No.11170/2008 making same prayer i.e. that the order issuing notice be recalled in which it was pleaded that the petitioners had obtained the notice by misrepresenting the true and correct facts. The said application was dismissed on August 08, 2008 observing that the remedy of the applicants was to file a response to the contempt petition and plead that the notice be discharged. It is true that nobody appeared on behalf of the applicants to pursues CM No.11170/2008, but if the applicant had a grievance to the said

R.P.No.349/2015 & CM No.13559/2015

application being dismissed by a reasoned order in the absence of any representation from the side of the applicants, nothing prevented the applicants to seek recall of the order dated August 08, 2008 and hearing of CM No.11170/2008 on merits. It also needs to be noted that the order dated December 15, 2011 passed by another learned Single Judge of this Court notes that the issue regarding vakalatnama filed by the counsel on behalf of petitioner No.1 company was sought to be agitated, re-agitated and further re-agitated in various civil miscellaneous applications filed by the applicants; in respect of which the learned Single Judge opined that the attempt was to somehow or the other drag on the contempt proceedings.

8. To put it pithily it would be a case where on the grounds pleaded in the review petition the right of the applicants would be to seek a discharge of the notice issued in the contempt petition and not to seek a review of the order issuing the notice. The reason is that substantive issues are the bedrock of the foundation of the claim as to why the notice issued by this Court needs to be discharged. It is trite that a vakalatnama filed by a counsel is an authorization in favour of the counsel to represent the party signing the vakalatnama, and if the vakalatnama in favour of the counsel is by a company, any defect in the vakalatnama is capable of being rectified and while doing so ex-post facto ratification can also be done.

9. I am not dealing with the merits of the contentions advanced lest any prejudice is caused to either party, and would simply highlight that the facts noted by me are to decide on the issue of whether the review petition would at all lie, or masquerading under the cloak of a review petition, the applicants effectively seek a discharge of the show cause notice issued and whether on the facts pleaded the remedy is to seek a discharge of the notice

R.P.No.349/2015 & CM No.13559/2015

issued. Since I have held that the remedy is to seek a discharge of the notice issued, I dismiss R.P.No.349/2015. Since the review petition has been dismissed on merits I need not pass any orders on CM No.13559/2015, which is disposed of as infructuous.

10. No costs.

(PRADEEP NANDRAJOG) JUDGE

AUGUST 19, 2015 mamta

R.P.No.349/2015 & CM No.13559/2015