Delhi High Court
Deepak Beri vs Atul Beri on 24 December, 2020
Via Video Conferencing
$~
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Reserved on: 23.10.2020
Date of Decision: 24.12.2020
+ O.M.P.(I)(COMM) 326/2016, CCP(O) 66/2016, I.A.
12815/2016, I.A. 13/2017, I.A. 786/2017, I.A. 1329/2017,
I.A. 3226/2017, I.A.3751/2017, I.A. 3345/2018, I.A.
3975/2018, I.A. 3982/2018, I.A. 3983/2018, I.A. 4707/2018,
I.A. 4708/2018, I.A. 5293/2018, I.A.16583/2018, I.A.
4728/2019
DEEPAK BERI .... .Petitioner
Through: Mr. Sandeep Sethi, Sr.
Advocate with Mr.Akshay
Makhija, Mr.Saurabh Seth,
Ms.Sumeera Seth and
Mr.Siddhanth Kumar, Advs.
Versus
ATUL BERI & ANR. .......Respondents
Through: Mr. Arun Kathpalia, Sr. Adv.
with Mr.Jayant Mehta,
Mr.Samar Singh Kachwaha,
Mr.Raghavendra Bajaj, Ms.
Shivangi Nanda, Mr. Agnish
Aditya and Ms.Anu
Srivastava, Advs. for R-1
Ms.Priya Kumar, Mr.Adhish
Srivastava, Mr.Tejas
Chhabra & Mr.Kunal
Dhawan, Advs. for R-2.
WITH
OMP(I)(COMM)326-2016 & connect. matters
DigitallySigned
By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
+ O.M.P.(I)(COMM) 72/2017 & I.A. 2752/2017
ATUL BERI .......Petitioner
Through: Mr. Arun Kathpalia, Sr. Adv.
with Mr.Jayant Mehta,
Mr.Samar Singh Kachwaha,
Mr.Raghavendra Bajaj, Ms.
Shivangi Nanda, Mr. Agnish
Aditya and Ms.Anu
Srivastava, Advs.
Versus
DEEPAK BERI & ORS ......Respondents
Through: Mr. Sandeep Sethi, Sr.
Advocate with Mr.Akshay
Makhija, Mr.Saurabh Seth,
Ms.Sumeera Seth and
Mr.Siddhanth Kumar, Advs.
for R-1
Ms.Priya Kumar, Mr.Adhish
Srivastava, Mr.Tejas
Chhabra & Mr.Kunal
Dhawan, Advs. for R-2.
WITH
+ O.M.P.(I)(COMM) 396/2018, I.A. 9515/2019, I.A.
10747/2019, I.A.11914/2019, I.A. 11915/2019
ATUL BERI ........Petitioner
Through: Mr. Arun Kathpalia, Sr. Adv.
with Mr.Jayant Mehta,
Mr.Samar Singh Kachwaha,
Mr.Raghavendra Bajaj, Ms.
Shivangi Nanda, Mr. Agnish
Aditya and Ms.Anu
Srivastava, Advs.
Versus
OMP(I)(COMM)326-2016 & connect. matters
DigitallySigned
By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
DEEPAK BERI & ORS. .......Respondents
Through: Mr. Sandeep Sethi, Sr.
Advocate with Mr.Akshay
Makhija, Mr.Saurabh Seth,
Ms.Sumeera Seth and
Mr.Siddhanth Kumar, Advs.
for R-1
Ms.Priya Kumar, Mr.Adhish
Srivastava, Mr.Tejas
Chhabra & Mr.Kunal
Dhawan, Advs. for R-2.
WITH
+ I.A. 10911/2018, I.A. 13916/2018, I.A. 13917/2018, I.A.
16532/2018, I.A. 16971/2018, I.A. 16972/2018, E.A.
562/2019, E.A. 563/2019, I.A. 2074/2019, I.A. 3600/2019,
I.A. 7325/2019, I.A. 8455/2019, I.A. 9977/2019, E.A.
25/2020,E.A. 26/2020, E.A. 418/2020, E.A.419/2020, E.A.
430/2020, E.A. 533/2020, E.A. 534/2020, E.A. 543/2020,
E.A. 544/2020 IN O.M.P(ENF)(COMM) 187/2018
DEEPAK BERI ........Petitioner
Through: Mr. Sandeep Sethi, Sr.
Advocate with Mr.Akshay
Makhija, Mr.Saurabh Seth,
Ms.Sumeera Seth and
Mr.Siddhanth Kumar, Advs.
Versus
ATUL BERI .......Respondents
Through: Mr. Arun Kathpalia, Sr. Adv.
with Mr.Jayant Mehta,
Mr.Samar Singh Kachwaha,
Mr.Raghavendra Bajaj, Ms.
Shivangi Nanda, Mr. Agnish
Aditya and Ms.Anu
Srivastava, Advs.
OMP(I)(COMM)326-2016 & connect. matters
DigitallySigned
By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
WITH
+O.M.P.(ENF.)(COMM) 117/2019, CCP(O) 71/2019, E.A.
910/2019, E.A. 911/2019, I.A. 9592/2019, E.A. 305/2020,
E.A.306/2020
ATUL BERI ......Petitioner
Through: Mr. Arun Kathpalia, Sr. Adv.
with Mr.Jayant Mehta,
Mr.Samar Singh Kachwaha,
Mr.Raghavendra Bajaj, Ms.
Shivangi Nanda, Mr. Agnish
Aditya and Ms.Anu
Srivastava, Advs.
Versus
DEEPAK BERI & ORS .....Respondents
Through: Mr. Sandeep Sethi, Sr.
Advocate with Mr.Akshay
Makhija and Mr.Saurabh
Seth, Ms.Sumeera Seth, and
Mr.Siddhanth Kumar, Advs.
for R-1
Ms.Priya Kumar, Mr.Adhish
Srivastava, Mr.Tejas
Chhabra & Mr.Kunal
Dhawan, Advs. for R-2.
CORAM:
HON'BLE MS. JUSTICE REKHA PALLI
REKHA PALLI, J
1. The present decision deals with five petitions filed before this Court;
two execution petitions seeking enforcement of the Arbitral Award dated
02.08.2016 along with three petitions filed under Section 9 of the
Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Act').
OMP(I)(COMM)326-2016 & connect. matters
DigitallySigned
By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
2. For the sake of convenience, the parties will hereinafter be referred to
by their names. The facts in brief, relevant to the purpose of the present
decision, are as follows:
i. The parties to these petitions are two brothers, Mr. Deepak Beri
and Mr. Atul Beri, and their aged father, Mr. S.K. Beri; the brothers
are feuding about the division of business assets belonging to the
Beri family. In the early 1950's, Mr. S.K. Beri set up various
companies engaged in the industry of manufacture and sale of
industrial knives in the country and his business comprised of two
incorporated companies, the flagship concern M/s DB Engineering
Pvt. Ltd, ('DBEPL') and M/s Banaras Marbles & Granite Ltd.
('BMGL'), as also two partnership firms, namely S.K. Beri & Bros.
('SKB') and DB Company ('DBC'). All the four entities are closely
held family concerns and do not have any outside shareholder. These
businesses thrived with the passage of time and Mr. S.K. Beri, in the
year 1982, inducted his two sons to join him with the fond hope that
the business empire would grow and expand with their participation.
The businesses were operating from the following premises:
(i) A-119, Okhla Phase-II, Delhi;
(ii) B-113, 114, 115, 131, 132, Sector 6, Noida,
Uttar Pradesh;
(iii) F-61, Sector 11, Noida, Uttar Pradesh;
(iv) C-27, Sector 59, Noida, Uttar Pradesh;
(v) A-32, Sector 64, Noida, Uttar Pradesh;
(vi) B-1, Sector 68, Noida, Uttar Pradesh;
(vii) C-57, Phase-II, Noida, Uttar Pradesh; and
(viii) Plot at C-12, Ecotech-11, Greater Noida,
Uttar Pradesh
OMP(I)(COMM)326-2016 & connect. matters
DigitallySigned
By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
ii. However, Mr. S.K. Beri found his hopes of a united family
concern dashed in the light of growing differences and acrimony
between his sons, each of whom accused the other of siphoning off
funds from the family businesses for their personal greed. Against
this backdrop of growing familial conflict, Mr. SK Beri, in the year
2014, began contemplating the idea of dividing the businesses
between the brothers in order to achieve a quietus in these disputes.
As a result, on 20.01.2016, Mr. S.K. Beri, Mr. Deepak Beri and Mr.
Atul Beri entered into a mediation-cum-arbitration agreement
whereunder a Chartered Accountant, Mr. Manoj Nagrath, was
appointed as the mediator/arbitrator to resolve the disputes between
them.
iii. In terms of the mediation-cum-arbitration agreement, Mr.
Nagrath was firstly required to endeavour resolving the disputes by
way of mediation which, at that stage, had appeared to be successful
and fruitful, culminating in three separate agreements. The first
agreement was the Memorandum of Understanding (MoU) executed
on 17.02.2016 and signed by the two brothers and their father, which
contemplated the division of the businesses. This was followed by a
second agreement executed on 14.03.2016 or the 'Minutes of
Meeting' which was signed between the father and the arbitrator,
Mr. Nagrath; these Minutes set out the detailed mode of division of
the businesses and while the document was not signed by the two
brothers, it was accepted by them. The last document is the Deed of
Arrangement dated 30.04.2016 signed between the two brothers and
their father and, collectively, these three agreements shall be referred
OMP(I)(COMM)326-2016 & connect. matters
DigitallySigned
By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
to as the 'family settlement' agreements. Although a detailed
reference to the terms of these family settlement agreements will be
made later, it may be useful to sum up the manner in which the
parties agreed to divide ownership of the businesses:
A. The two incorporated companies, M/s DB Engineering Pvt.
Ltd, ('DBEPL') and M/s Banaras Marbles & Granite Ltd.
('BMGL'),were allocated to Mr. Atul Beri, to the exclusion of
Mr. Deepak Beri,
B. The two partnership entities, S.K. Beri & Bros. ('SKB') and
DB Company ('DBC'), were allocated to Mr Deepak Beri, to
the exclusion of Mr. Atul Beri.
C. Mr. S.K. Beri, their father, retained 50% ownership in all the
four business entities.
iv. Since DBEPL, falling in the share of Mr. Atul Beri, was the
flagship company of the family business and had more assets than any
of the three other business entities, the parties agreed that certain
assets belonging to DBEPL, which included three of its six
immovable properties, would be allocated in the name of Mr. Deepak
Beri. This is how the properties came to be divided between the
brothers:
S. Property Allocated to Corresponding
No. Clause
1 B-113, 114, 115, 131, 132, - Clause 2 of the
Sector 6, Noida owned by MoU.
DBC to remain with Mr.
Deepak Beri
2 C-27, Sector 59, Noida Mr. Deepak Beri Clauses 2 and 16
belonging to DBEPL* for the operations of the MoU.
of his concern
OMP(I)(COMM)326-2016 & connect. matters
DigitallySigned
By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
SKB.
3 A-32, Sector 64, Noida, Mr. Deepak Beri Clause 2 and 16
belonging to DBEPL for the operations of the MoU.
of his concern
SKB.
4 A-119, Okhla Phase-II, - Clause 2 of the
belonging to SKB to remain MoU.
with Mr. Deepak Beri
5 B-1, Sector 68, Noida - Clause 4 of the
belonging to DBEPL to MoU.
remain with Mr. Atul Beri.
6 F-61, Sector 11, Noida - Clause 4 of the
belonging to DBEPL to MoU
remain with Mr. Atul Beri.
7 C-57, Phase-II, Noida - Clause 4 of the
belonging to BMGL to MoU
remain with Mr. Atul Beri*
8 Plot at C-12, Ecotech-11, Mr. Atul Beri for Clause 4 of the
Greater Noida the use of his MoU
concern BMGL
* Since the unit at these premises was to be made functional, Mr. Atul Beri
had to be paid a sum of INR 7.50 crores in tranches for that purpose under
Clause 5 of the MoU. He was also to be paid a sum of INR 1 crore under
Clause 15 of the MoU to compensate for the difference in valuation of the
assets allocated to him and his brother.
v. In the light of these agreements, Mr. Nagrath proceeded to
issue certain directions by way of an award dated 02.08.2016
incorporating all the three settlement agreements, along with some
additional directions which he felt were essential to effect the terms
and conditions of the family settlement.
OMP(I)(COMM)326-2016 & connect. matters
DigitallySigned
By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
vi. A week later, on 10.08.2016, Mr. Deepak Beri instituted a
petition under Section 9 of the Act, being OMP(I) COMM 326/16
(captioned herein) before this Court seeking inter alia directions to
restrain his brother and father from derogating the terms of the
agreements and to take all necessary steps to ensure smooth
functioning of all the units. This Section 9 petition filed in 2016 also
sought appointment of a receiver to take charge of the account
books of the four business entities, their stock registers, their email
services and their domain names etc., as also the record of orders
placed on them, along with details of any unsold stock lying in the
concerned premises. In August 2016 itself, when this petition was
pending consideration, Mr. S.K. Beri and Mr. Atul Beri assailed the
award dated 02.08.2016 by preferring petitions under Section 34 of
the Act, being OMP(COMM) 382/2016 and 396/2016. Thereafter,
on 09.02.2017, Mr. Atul Beri also filed a petition under Section 9 of
the Act, being OMP (I) COMM 72/17 (captioned herein) seeking
inter alia a direction to Mr. Deepak Beri to refrain from diverting
any business, customers, receipts stock manpower material etc. of
any of the four business entities to any other private concern. In this
petition, for the very first time, a specific reference was made to M/s
Marvel Engineering and Trade Pvt. Ltd. and M/s DB Engineering
solutions LLP, allegedly run by Mr. Deepak Beri and his family
members, insofar as a direction was sought to restrain them from
carrying on business in these names.
vii. In the meanwhile, when the Section 34 petitions were taken up
by this Court, Mr. S.K. Beri contended that although he was not a
party to the arbitration proceedings, the award included certain
OMP(I)(COMM)326-2016 & connect. matters
DigitallySigned
By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
directions against him which were wholly unwarranted and
surpassed the terms of the settlement agreements executed between
the parties. Similarly, Mr. Atul Beri opposed the award as well by
challenging the decision of the learned Arbitrator to issue directions
which travelled beyond the parameters of the family settlement
agreements and did not follow a due process of law. On 31.05.2018,
a Coordinate bench of this Court partly allowed the two Section 34
petitions by upholding the award insofar as it adhered to the family
settlement agreements. The Court, after observing that these family
settlement agreements had been voluntarily entered into between
Mr. S.K. Beri, Mr. Deepak Beri and Mr. Atul Beri, proceeded to set
aside all directions issued by the learned Arbitrator which exceeded
the terms of the agreements. Since the judgment dated 31.05.2018
was not assailed by any of the parties, it has attained finality as on
date and the award stands modified to such extent as directed.
viii. Shortly after the award attained finality in its modified form, on
08.08.2018, Mr. Deepak Beri filed the captioned enforcement
petition OMP(Enf)(Comm) 187/2018 wherein, besides praying for
appointment of an Observer to effect implementation of the
remaining terms of the settlement agreement, he sought appointment
Receiver to take complete charge of all aspects of the businesses
which fell in his brother Atul's share, viz. DBEPL and BMGL, and
a forensic audit into the funds and assets thereof. A further prayer
was sought to restrain Mr. Atul Beri and Mr. SK Beri from acting in
contravention of the three settlement agreements. A month later,
Mr. Atul Beri preferred a Section 9 petition on 27.09.2018, being
OMP(I) COMM 396/18 (captioned herein), primarily seeking
OMP(I)(COMM)326-2016 & connect. matters
DigitallySigned
By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
injunctions against Mr. Deepak Beri from acting on behalf of
DBEPL and BMGL, the companies which fell in his share, as also
against certain employees, who were allegedly employed by Mr.
Deepak Beri, from claiming any wages from and/or initiating any
legal proceedings against Mr. Atul Beri's DBEPL before any Court
or Tribunal on the ground of non-payment of salaries. Finally, on
16.07.2019, Mr. Atul Beri also moved his own enforcement petition
OMP(Enf)(Comm) seeking enforcement of the award dated
02.08.2016, as modified by the judgment dated 31.05.2018. Thus, in
these proceedings, both parties are seeking execution of the award
as it stands modified by way of the judgment dated 31.05.2018
which only calls for enforcement of the terms of the three settlement
agreements.
ix. These two enforcement petitions under Section 36 of the Act,
along with the three Section 9 petitions, have remained pending
before this Court for the last several years, during the course
whereof certain interim orders have been passed from time to time.
One of these interim directions were issued on 03.01.2017 by this
Court, in response to the grievance of Mr. Deepak Beri that while
the enforcement was still pending adjudication, Mr. Atul Beri had
opened new bank accounts in the names of DBEPL without
informing him in his capacity as a Director thereof and had also
proceeded to transfer some amounts to his personal accounts and
those of his son. Accordingly, this Court appointed a Court
Commissioner and a Chartered Accountant to inspect and file a
report on all the premises owned by the four family concerns as also
the LLP privately owned by Mr. Deepak Beri. The Court
OMP(I)(COMM)326-2016 & connect. matters
DigitallySigned
By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
Commissioner initially filed interim reports on 17.01.2017,
14.04.2017, 25.04.201, which were followed by a comprehensive
final report filed on 15.05.2017, setting out the status of inter alia
accounts, records pertaining to statutory liabilities, inventory of
pending orders, stocks, plants & machineries, raw materials,
employees in the different businesses and the premises as well. The
data in this report was to include a separate list of machines which
were earmarked to be transferred to the other units/entities in terms
of the settlement agreements. Notwithstanding the submission of
these reports, the matter remained pending and on 01.11.2018, this
Court once again observed that the best way to proceed further in
the matter was to ensure division of assets in terms of the award.
Apparently, barring the inspections carried out in the years 2017 and
2018, the premises of these four business entities have never been
inspected. Therefore, today, the parties remain at the same position
as they were at the time of filing of these enforcement petitions.
3. In support of his case that the separation of the assets and businesses
is yet to take place in terms of the settlement agreements, learned senior
counsel for Mr. Deepak Beri, Mr. Sandeep Sethi has made the following
submissions -
i. With passage of time, Mr. Deepak Beri realised that Mr. Atul
Beri was siphoning off assets of the family businesses. This led to
friction between the brothers and they could no longer carry on the
family businesses together. As a result, they were constrained to
contemplate partition of the family concerns and, to that effect,
executed the arbitration agreement on 20.01.2016. This brought in
Mr. Nagrath to mediate the disputes between them, which led to the
OMP(I)(COMM)326-2016 & connect. matters
DigitallySigned
By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
execution of the three agreements forming the family settlement
today. These three agreements, undoubtedly, contemplated division
of the assets, which division was then to be followed by a complete
separation, to be effected as per the steps postulated in the
agreements and preceded the separation. These agreements also
display that the intent of the parties was to pool the assets of the
family business and then divide them equally between the two
brothers, while the father remained equal shareholder/partner in all
the business entities. When the parties were drawing up the MoU
and minutes of meeting on 17.02.2016 and 14.03.2016
respectively, they fixed dates for effecting various steps towards
separation including preparation of inventory of raw material, stock
and machinery, division of employees and logos etc., as they were
hopeful that by the time the final document, i.e., the deed was
executed on 30.04.2016, the division would have taken place and a
smooth separation would thereafter follow. Unfortunately, by the
time the Deed was signed on 30.04.2016, the parties had realised
that it was not possible to adhere to the dates agreed upon, which
then inspired the final clause (34) in the Deed which states that this
date was variable. However, the parties were always ad idem that
till division takes place according to the various steps envisaged in
the three agreements, there was no question of any separation
between them. This common intent of the parties can be easily
gleaned from the language of the three settlement agreements.
Further, in the light of the decisions in Bhavan Vaja & Ors. Vs.
Solanki Hanuji Khodaji Mansang & Anr. (1973) 2 SCC 40 and
Deep Chand & Ors. Vs. Mohan Lal (2000) 6 SCC 259, it is settled
OMP(I)(COMM)326-2016 & connect. matters
DigitallySigned
By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
that this Court, as an executing court, has to consider the true effect
of the three agreements in the light of all surrounding
circumstances rather than arriving upon its decision on mere
technicalities. Moreover, considering the decisions in Kale & Ors.
Vs. Deputy Director of Consolidation & Ors. (1976) 3 SCC 119
and Hari Shankar Singhania Vs. Gaur Hari Singhania & Ors.
(2006) 4 SCC 658, one has to bear in mind that these agreements
are essentially family settlements which are placed on a far
different footing than commercial agreements. Thus, rather than
adopting a hypertechnical consideration while regarding them,
these agreements and the terms thereof should be given effect to in
letter as well as spirit. On doing so, it would become apparent that
the parties had agreed to first divide and separate the businesses,
following which they would recognise and appoint a date of
separation. Thus, they had always intended to undertake physical
division of the businesses first and follow it up by agreeing upon a
Date of Separation. This implies that despite the date of 30.06.2016
being mentioned in all the three settlement agreements, this was
purely a tentative date. The prayer of Mr. Atul Beri seeking for a
declaration from this Court that the Date of Separation had been set
out as 30.06.2016 under the agreements is in blatant contravention
of the terms of the settlement agreed upon between the parties. The
settlement agreements contemplate a separation in presenti and not
in relation back to a purportedly agreed Date of Separation. If this
Court were to adopt the interpretation supported by Mr. Atul Beri
and hold that the agreements contemplate a Date of Separation to
be fixed first, which would then be followed by distribution and
OMP(I)(COMM)326-2016 & connect. matters
DigitallySigned
By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
separation of assets with reference to an earlier date, the same
would be at divergence with the settlement sought to be enforced in
these proceedings.
ii. Contrary to the submissions of Mr Atul Beri and Mr. S.K. Beri,
no division has taken place since the parties have not even
completed the major steps required to be taken towards separation.
The three agreements are self-explanatory in that each of them
requires the parties to complete certain steps by certain dates, all of
which are much prior to 30.06.2016. However, since a majority of
these steps have not been effected, there is no question of a Date of
Separation coming into play. Even an affidavit filed by Mr. Atul
Beri in the Section 9 petition state that most of the steps required to
be taken for the division have not yet taken place and, thus, even he
has admitted that no separation has taken place. The fact that no
separation has taken place is also evident from the various orders
passed by this Court during the hearing of the present petitions. To
begin with, on 15.12.2016, not only had the Court asked the parties
to suggest steps which were yet to be carried out to effectuate the
division, but it had also appointed a Court Commissioner and
Chartered Accountant on 03.01.2017 in order to prepare a complete
inventory of the raw materials, stocks, employees, logos, etc;
however, in none of these orders did the Court direct any of the
processes to be effected keeping in mind the Date of Separation as
30.06.2016, yet Mr. Atul Beri did not assail these orders on that
ground. Next, the report eventually filed by the Court
Commissioner on 15.05.2017 shows that Mr. Atul Beri had tried to
obstruct the Court Commissioner and, clandestinely, shifted goods
OMP(I)(COMM)326-2016 & connect. matters
DigitallySigned
By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
and machinery for his benefit from one business premises to
another. That apart, this report also happened to be the most
comprehensive exercise with respect to the businesses in question
and also showed that the division is yet to take place. In fact, when
the parties were unsuccessful in their original intent to separate by
30.06.2016, they were hit by a deluge of litigations instituted by
Mr. Atul Beri before this Court against the award dated 02.08.2016
[OMP(COMM.) 396/2016], which further delayed implementation
of the award and the formal partition of the family businesses. As
on date, post-award, Mr. Deepak Beri has only received 10% of the
assets falling in his share under the settlement while Mr. Atul Beri
has been using the remaining assets, which has caused irreparable
loss to Mr. Deepak Beri. Thus, if this Court were to pay heed to the
steps effected by the parties so far, it would be evident that Mr.
Deepak Beri has not even received his half of the share in the
family businesses. Any claims of Mr. Atul Beri to the effect that
most of the steps towards separation have been carried out are
completely baseless, unsubstantiated and devoid of material proof.
To make matters worse, over the past four years, Mr. Atul Beri has
made huge profits by using the assets, more particularly, the
machinery and premises which were to come to Mr. Deepak Beri's
share and moved some of this machinery to his personal entities.
Owing to the unrestrained scheming of Mr. Atul Beri, Mr. Deepak
Beri has suffered an estimated loss in profits/business to an
approximate tune of Rs.64 crores, which ought to be recovered
from Mr. Atul Beri after directing him to hand over 50% of family
assets to Mr Deepak Beri in accordance with the family settlement
OMP(I)(COMM)326-2016 & connect. matters
DigitallySigned
By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
arrangement, the value whereof should be approximately Rs.130
crores. Having wrongfully continued to hold on and profit from
assets of the family businesses which were never his and deprived
Mr. Deepak Beri of his share thereto for the last four years, it is not
open for Mr. Atul Beri to now contend that the division has already
taken place from a backdated Date of Separation. Rather, the award
ought to be executed immediately since Mr. Atul Beri is continuing
to enjoy the assets which fell in the share of Mr. Deepak Beri as per
the terms of the three family settlements. For all these reasons, this
Court must appoint a Court Commissioner in order to freshly
ascertain the status of assets of the family concerns and draft a plan
to divide them in terms of the agreements between the parties.
Considering the large scale siphoning off of funds and assets by
Mr. Atul Beri, it is further prayed that this Court be pleased to
direct a forensic audit to be conducted into the finances and assets
of the family businesses, as they existed on 30.06.2016.
4. On the other hand, Mr.Arun Kathpalia, learned senior counsel
appearing for Mr. Atul Beri has made the following submissions:
i. A cumulative reading of the three settlement agreements shows
that the process of separation which began with the MoU on
17.02.2016 was to end on 30.06.2016 with a final separation of all
business, whereafter the businesses would retain independent
existence. The very first document, i.e., the MoU refers to the date
of separation as 30.06.2016 during the course of the document.
Although the Minutes contemplated a separation by March-April
2016, when this could not come to pass, the Deed stepped in to
provide the last date of separation as 30.06.2016. This date of
OMP(I)(COMM)326-2016 & connect. matters
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By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
30.06.2016 has been referred to as a 'fixed' date of separation in
the Deed, which meant that it could never be changed, except at the
instance of the arbitrator, Mr. Nagrath. Based on these terms, when
the award was finally passed on 02.08.2016 by the learned
Arbitrator, he also did not bother to change the date of separation in
his award, which meant that the date had become binding on the
parties with immediate effect. By relying on the decision in M/s
Creative Travels Pvt. Ltd. Vs. Joginder Singh Palta 1994 (28)
DRJ (DB), it is submitted that the consent of the parties on the
aspect of this date of separation, as gleaned from the settlement
agreements, assumes primacy and cements its binding nature. That
was only strengthened further by the award passed by the learned
Arbitrator. Therefore, at this stage, when the parties are merely
seeking enforcement of the family settlement agreements, this
Court cannot deviate from the general consensus of the parties
contained in those agreements. Reliance has been placed on the
decisions in C.F. Angadi Vs. Y.S. Hirannayya (1972) 1 SCC 1914,
Gurdev Singh Vs. Narain Singh (2007) 14 SCC 173, Deepa
Bhargava Vs. Mahesh Bhargava (2009) 2 SCC 294, and State of
Punjab vs. Krishan Dayal Sharma (2011) 11 SCC 212, to submit
that once the deed of arrangement clearly demarcated 30.06.2016
as the date of separation, or any other date to be decided by the
learned Arbitrator, an executing Court cannot embark on the
process of fixing a new cut-off date. In fact, as per an express
stipulation contained in the Deed, the only way for the parties to
alter this date was by approaching the learned Arbitrator who was
the only entity empowered under the settlement agreement to make
OMP(I)(COMM)326-2016 & connect. matters
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Signing Date:25.12.2020
09:21:00
a 'decision' and set down further terms and conditions on this
aspect. Thus, it was incumbent upon Mr. Deepak Beri, who was
under the purported belief that separation had not taken place, to
approach the learned Arbitrator at any time before the award was
passed on 02.08.2016 to have a date of separation fixed. In the
alternative, when this Court was dealing with the Section 34
petitions, Mr. Deepak Beri ought to have sought remittance of the
award to the learned Arbitrator for fixing of a fresh cut-off date by
moving an appropriate application under Section 34(4) of the Act.
However, Mr. Deepak Beri neither moved an application seeking
change of date before the learned arbitrator before or after the
passing of the award nor has he challenged the award on this
ground till date. By placing reliance on the decision in Barkat Ali
& Anr. Vs. Badrinarain (Dead) by LRs (2008) 4 SCC 615), it is
submitted that since Mr. Deepak Beri had made no such plea either
before the learned Arbitrator or before the Court, he cannot now
deny that that the separation did not take place on 30.06.2016 or
that the date of separation was not sacrosanct. Be that as it may, it
is a fact that Mr. Deepak Beri has categorically admitted in
Paragraph 7 of his Section 9 petition OMP(I)(COMM)326/2016
filed before this Court that as per the memorandum of
understanding, the date of separation was to be 30.06.2016.
Rather, all pleadings of Mr. Deepak Beri reveal that even as per his
understanding, the date of separation was 30.06.2016. This, in
itself, is further proof of the fact that the Date of Separation was
always 30.06.2016.
OMP(I)(COMM)326-2016 & connect. matters
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Signing Date:25.12.2020
09:21:00
ii. Not only did the parties agree upon 30.06.2016 as the date of
separation but they also effectively separated on this date, albeit
they left a few minor steps to complete the process. The brothers'
reason for executing the memorandum of understanding on
17.02.2016 was to facilitate a peaceful separation of the businesses
by envisaging seamless division of the following major business
components:
A. immovable and movable assets, including plant,
machineries and the eight premises.
B. employees
C. customers/orders
D. intellectual property, including software and logos
Thus, on 17.02.2016 itself, they were conscious that the businesses
sought to be divided were live businesses with various long
standing customers and, therefore, the separation had to be carried
out delicately to ensure that no harm would be caused to any of the
concerns. On 14.03.2016 when the minutes of the meeting were
recorded, it was resolved to divide the plants, machineries, staff,
logos, and pending orders amongst the two brothers. It was also
resolved to send a common e-mail to all customers about the
impending separation, which was carried out. Ultimately, they were
hoping that all these steps and efforts they were taking would result
in a peaceful separation by 30.04.2016. When this did not come to
pass, they executed the Deed on 30.04.2016 which exclusively
catered to the transition period, i.e., the short intervening period of
two months between 01.05.2016 and 30.06.2016. They were
hoping to spend this period finalising and completing the steps
OMP(I)(COMM)326-2016 & connect. matters
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Signing Date:25.12.2020
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required for eventual separation and had placed an embargo on
themselves from engaging in negative marketing with respect to
any business entity falling in the share of either brother or inform
the clients of the impending separation at that stage. Both brothers
were given independence in operation during this period insofar as
the orders and marketing was concerned, however since they were
sharing the available raw material till 30.06.2016, they were
obligated to share all documents in this respect and maintain
transparency in their records with respect to the orders received
from the period between 01.05.2016 and 30.06.2016. To further
their independent operations, the brothers also divided all serving
employees between them w.e.f. 01.05.2016. Pursuant to
30.06.2016, since both brothers have been carrying out their
businesses not only independently, but also in competition with
each other, the separation can be regarded as already having taken
place. However, the following minor steps in this regard have been
left incomplete on account of the non-cooperation of Mr. Deepak
Beri:
(i) Formal documentation has not been completed
(ii) Small component of assets which are left to be
divided
(iii) Account statements have not been drawn up.
Thus, merely because some minor steps remained incomplete or
because Mr. Deepak Beri had refused to comply with his
obligations under the settlement, cannot be a ground to deny the
established fact that the parties had agreed to treat 30.06.2016 as
the official date of separation.
OMP(I)(COMM)326-2016 & connect. matters
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By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
iii. In furtherance of the aforesaid contention, it is submitted that
the separation was not only envisaged, but has also been mostly
effected with a few minor steps remaining in the process to
conclude their settlement. The brothers have indeed been operating
their businesses independently of each other, in accordance with
the three agreements, which is evident from the following facts:
A. Being a practice which began during the transition period, the
brothers have not had visibility with respect to each others'
businesses and have been handling clients and
executing/seeking orders independently of each other. After
crossing the mark of 30.06.2016, their businesses have gone
their separate ways, are no longer transparent to each other and,
rather, are in competition as on date. Even the sales and
marketing teams of the business entities stood divided between
the brothers and operate separately as on date.
B. An important stipulation under the settlement was that Mr.
Deepak Beri was prohibited from using the brand 'Atlas
Knives' for a period of two years from the date of separation,
which he did and has now admittedly begun using the brand
once again, which is tacit proof of the separation.
C. The white collar employees were divided in accordance with
the terms of the settlement by giving them an option to choose
whether they wanted to work for Mr. Atul Beri or Mr. Deepak
Beri. Consequently, the employees stood divided and were sent
to work in the entities run by the brother of their choice. This is
evident from the fact that erstwhile DBEPL employees, who
opted to work in the businesses falling in the share of Mr.
OMP(I)(COMM)326-2016 & connect. matters
DigitallySigned
By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
Deepak Beri, viz. Mr. Rohit Bakshi, Mr. Raman Raina and five
other persons, have been sending email correspondences on
behalf of M/s. Marvel Interiors and Traders Pvt. Ltd., an
independent business entity run by Mr. Deepak Beri.
D. Although the settlement granted Mr. Atul Beri a sum of Rs.7.5
crores to set up a functional unit in BMGL, this amount has not
been paid and, therefore, even though the premises at Sector-64
which were to go to the share of Mr. Deepak Beri has not been
handed over to him, he has been carrying out independent
business in other three premises i.e. A-99, Okhla Industrial
Area, Sector-6, Noida, Section-59, Noida. Mr. Deepak Beri is
not only carrying out the business of SKB and DBC, but he is
also heading the businesses being run by his son in the very
same premises.
E. Further, from a reading of clauses 1, 3, 4, 5, 7 to 9, 13 to 17, 19
to 28, 34, 35 and 38 of the MoU, it is evident that the parties
had envisaged that in the transition period preceding
30.06.2016, all transactions carried out by any of the family
businesses were to be recorded in the books of accounts of the
concerned entity with the approval of all the four parties i.e. the
two brothers, their father and the Arbitrator. It is also evident
that the parties agreed to share all expenses, profits and assets
till they were jointly conducting the businesses, whereafter they
would carry out the businesses separately. Today, the brothers
neither share the expenses of their respective businesses nor
record the transactions in the arrangement as set out by them.
OMP(I)(COMM)326-2016 & connect. matters
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By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
Thus, since most of the steps towards separation as set down by the
agreements have been effected, the separation is in effect for all
intent and purposes. In this regard, reliance has been placed on the
decisions in Re: Cumana Ltd.[1986] BCLC 430, Scottish
Wholesale Cooperative Society Vs. Meyer & Anr. [1959]A.C.324.
Even though, the assets stand largely divided, there is one major
step which still needs to be carried out as on date, i.e., for the
parties to draw up accounts as on 30.06.2016. Mr. Atul Beri has
prayed for the appointment of a Court Receiver to draw up the
accounts of all the business entities as they existed on 30.06.2016,
by using the admitted accounts available with the parties for the
FYs 2015-16 as also the four reports of the Court Commissioner.
5. Ms. Priya Kumar learned counsel appearing on behalf of Mr. S.K.
Beri, while adopting the arguments made by Mr. Kathpalia, has also made
submissions which are best summarised in the following manner:
i. At the time of executing the three documents of separation, Mr.
S.K. Beri had hoped that the division of assets would be smooth,
rather than bitter, which is what it is today amidst the slew of
litigations between the parties. The memorandum of
understanding entered into between the brothers on 17.02.2016
laid the foundation as to how the separation was to be carried out.
Once this foundation was laid, the parties acted in accordance
therewith, but there was always an emphatic and unanimous
agreement upon the fact that 30.06.2016 would be considered as
the cut-off date for separation. It is a matter of record that the
parties have effected most of the steps in terms of the settlement
agreement. This is especially true for Mr. Deepak Beri who has,
OMP(I)(COMM)326-2016 & connect. matters
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By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
in the last four years, engaged in transferring the flow of business
from SKB and DBC to businesses being run by his own family
members, the basis of which transfer lies in the separation itself.
In fact, it is a matter of record that the premises of SKB and DBC
are being used by him and his son to run their private ventures. It
would be deeply egregious to permit Mr. Deepak Beri to continue
denying the separation when has actively enriched himself in the
last few years on the grounds of this separation. His prayer to
move the cut-off date forward had been made with the malafide
intent to pool the resources of the family concerns as they stand
today, to ease off the liabilities accumulated by his privately run
businesses since 30.06.2016. Were the cut-off date to be moved
from 30.06.2016, it would further dilute the value of the assets as
they stood on that date owing to the liabilities accumulated by the
parties since then, in their private capacity. In this regard, reliance
has also been placed on the decision dated 13.02.2020 passed by
the Supreme Court in Vijay Karia & Ors. Vs. Prysmian Cavi E
Sistemi SRL & Ors. (C.A. No. 1544/2020) in support of the plea
that the Court cannot overstep the confines of the award; any
shifting of the cut-off date from 30.06.2016 would amount to
adding or subtracting from the award, which cannot be done by
an executing court.
ii. If Mr. Deepak Beri did have any grievance regarding the date of
separation, he was required to, and would have most definitely,
raised this issue before the learned Arbitrator after the award had
been pronounced to seek a change in this date. He neither
approached the learned arbitrator, nor adopted this plea before the
OMP(I)(COMM)326-2016 & connect. matters
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By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
Court dealing with the Section 34 petition that the Date of
Separation was not 30.06.2016. It also cannot be ignored that
previously, in the Section 34 petition instituted by Mr. S.K. Beri
he had contended that the three settlement agreements were not
conclusive, but his argument was rejected in favour of Mr.
Deepak Beri's submission that every aspect of the separation
stood finalised by these agreements. A necessary corollary thereof
is that Mr. Deepak Beri found these agreements to be conclusive
even on the aspect of the fixed date of separation. Thus, having
taken recourse in this stance in the past to obtain an order in his
favour, Mr. Deepak Beri is now estopped from denying that the
date of separation was not 30.06.2016 since the division of assets
is yet to take place. Mr. Deepak Beri's prayer for fresh fixing of
the cut-off date is anyway unsustainable considering all the steps
which have been effected so far as also the legal position,
summarised in the decision of the Supreme Court in Marshall
Sons & Co. (India) Ltd. Vs. Income Tax Officer (1997) 2 SCC
302, that cut-off dates in cases involving accounting and division
of businesses, are always a date in the past.
6. I have heard learned counsel for the parties and perused the record.
Before dealing with the rival contentions of the parties and the issues which
arise for consideration, it would be apposite to first note the following
aspects on which the parties are ad idem.
i. Disputes had begun cropping up between the parties which
resulted in their decision to separate the businesses. For that
purpose, the parties appointed an arbitrator on 20.01.2016, under
whose initiative, the three agreements, namely the MoU dated
OMP(I)(COMM)326-2016 & connect. matters
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Signing Date:25.12.2020
09:21:00
17.02.2016, the Minutes dated 14.03.2016 and the Deed dated
30.04.2016 were executed by them, all for the purpose of
finalizing the division of businesses.
ii. Pursuant to these agreements, the parties have taken steps
towards separation, although separation has not been fully
effected.
iii. Neither of the parties ever approached the learned arbitrator,
either before he passed the award on 02.08.2016 or thereafter, or
the Section 34 Court with any requests for clarification with
respect to the Date of Separation.
7. Against this admitted position, I now proceed to note the issues on
which the parties are at divergence today. The parties primarily disagree on
whether the date of separation was agreed between the parties and fixed as
30.06.2016 and what are the consequences of such an agreement. In fact, in
the light of the position adopted by both sides that complete separation has
not taken place in terms of the settlement agreements and this Court has
been approached by both sides by way of the enforcement petitions to get
the separation enforced as agreed between the parties, this issue is pivotal in
order to proceed any further in these execution proceedings. In fact, even
during the course of making their extensive arguments, both sides, including
Mr. S.K. Beri, insisted that the issue revolving around the Date of
Separation ought be decided first, before any directions pertaining to the
separation of businesses are passed.
8. The question, therefore, which needs to be determined before any
directions are passed is whether there is already a pre-determined date of
separation in these settlement agreement and if yes, what is it? In the
OMP(I)(COMM)326-2016 & connect. matters
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Signing Date:25.12.2020
09:21:00
alternative, if these agreements have not fixed any such date, what should
the date be?
9. Before delving into the questions raised in these petitions, I consider
it appropriate to briefly revisit the powers of an executing court from the
plethora of judgments placed on record by the parties on this aspect.
(i) In Brakewel Automotive Components (India) (P) Ltd. v. P.R.
Selvam Alagappan (2017) 5 SCC 371, this Court held as under:
"20. It is no longer res integra that an executing court can neither
travel behind the decree nor sit in appeal over the same or pass any
order jeopardising the rights of the parties thereunder. It is only in the
limited cases where the decree is by a court lacking inherent
jurisdiction or is a nullity that the same is rendered non est and is thus
unexecutable. An erroneous decree cannot be equalled with one which
is a nullity. There are no intervening developments as well to render
the decree unexecutable.
21. As it is, Section 47 of the Code mandates determination by an
executing court, questions arising between the parties or their
representatives relating to the execution, discharge or satisfaction of
the decree and does not contemplate any adjudication beyond the
same. A decree of court of law being sacrosanct in nature, the
execution thereof ought not to be thwarted on mere asking and on
untenable and purported grounds having no bearing on the validity or
the executability thereof." (emphasis supplied)
(ii) In Deepa Bhargava Vs. Mahesh Bhargava (2009) 2 SCC
294, the Hon'ble Supreme Court held as under:
"9. There is no doubt or dispute as regards interpretation or
application of the said consent terms. It is also not in dispute that the
respondent judgment-debtors did not act in terms thereof. An
executing court, it is well known, cannot go behind the decree. It has
no jurisdiction to modify a decree. It must execute the decree as it is. A
default clause contained in a compromise decree even otherwise
would not be considered to be penal in nature so as to attract the
provisions of Section 74 of the Contract Act." (emphasis supplied)
10. Thus, to put it simply, an executing court has a very limited function
of ensuring that the decree sought to be enforced is executed as it exists. In
OMP(I)(COMM)326-2016 & connect. matters
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Signing Date:25.12.2020
09:21:00
the present case, the modified award forming the subject matter of these
proceedings comprises of the three family settlement agreements. All parties
herein are ad idem that the terms of these agreements are binding and,
therefore, the directions of this Court have to necessarily be within the
parameters of their mutual intent set out in these agreements. This gives rise
to the question, did the parties envisage a date of separation at the time of
their initial talks and incorporate the same in the settlement agreements?
Reading this with the fact that both sides have adopted varying
interpretations of the three agreements re. the cut-off date, it is necessary for
this Court to first determine the date, if any, agreed upon by the parties in
the agreements executed between them. If they did, the directions which are
to be issued shall depend entirely on this date of separation emerging from
these documents. For this reason, it is incumbent for this Court to refer to
the terms of these agreements in some detail. Only thereafter can I
contemplate issuing any consequential directions to carry out complete
separation of the businesses and assets, which both sides agree has not taken
place.
11. To begin with, the settlement between the parties was initiated under
the canopy of the Memorandum of Understanding executed on 17.02.2016.
Memorandum dated 17.02.2016
"1. Deepak Beri is going to carry on the business under the
name and style of D.B. Engineering Company (DBC) or any
other name, which he may so decide, other than Atlas
Knives, for a period of two years from the date of separation
given hereunder in this MOU.
xxx
OMP(I)(COMM)326-2016 & connect. matters
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Signing Date:25.12.2020
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3. Atul Beri is going to carry on the business in the name
of D.B. Engineering Pvt. Ltd. (DBE), Banaras Marbles and
Granites Ltd., or any other name, which he may so decide.
xxx
5. In addition to the above, Atul Beri will get a sum of
Rs. 7.5 Crore towards construction and getting the unit
functional situated at Phase II, Noida, which would be paid
to Atul Beri in tranches in consultation with SKB and MN
and they would decide as to how much money would be
given to Atul out of Rs. 7.5 crore each time subject to its
entire disbursement by the date of separation.
xxx
7. Deepak Beri and Atul Beri will share all the statutory and
other liabilities of DBE and all other companies/entities in
which the joint business had been carried on-till the date the
business is being carried on jointly equally and similarly the
profits would also be shared equally. The assets at any
location of the business and in any entity would also be the
property of the Parties till the date of division.
8. Deepak Beri and Atul Beri will also equally share the
following:
a. All intangible assets.
b. All tangible assets including plant and machinery
and inventory and consumables lying at all units.
xxx
16. That prior to 30th June 2016 which is taken to be the
effective date of separation, Sector 59 and Sector 64 will
need to be transferred to DBC or any other entity in which
Deepak would carry on the business subject to the fact that
in such an entity, Deepak Beri & Atul Beri will hold equal
share. At the time of separation on or before 30th June
OMP(I)(COMM)326-2016 & connect. matters
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Signing Date:25.12.2020
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2016, shares held by Atul Beri in this entity shall be
transferred to Deepak. This transfer of properties to
Deepak shall be done at the earliest possible date so that
Deepak can proceed with the Bank limits, which he would
have to take afresh.
17. That on the date of separation, all the business entities
would be transferred between Deepak and Atul as decided in
this MoU and for this purpose they shall execute all such
documents then or if need arises thereafter to give effect to
the transfer.
xxx
19. That from this date to the date of separation, all the
transactions will be recorded in the books of account with
the approval of both Deepak Beri & Atul Beri. SKB and MN
taking the cut off date as March 31, 2016, would map the
Debtors and the Creditors till the date of separation.
xxx
24. The employees of DBE will be given an option to remain
in DBE or to move to DBC and their decision will be final.
In case Deepak Beri and Atul Beri jointly wish to terminate
the employment of certain employees of DBE, DBC, SKB &
Bros. they will do so at the earliest, not later than the end of
this month.
25. The compensation payable to the employees who move
from DBE, SKB & Bros. to DBC will be paid by DBE.
Similarly, the compensation due to the employees retained in
DBE will be determined and adjusted as a liability accruing
in DBE to be shared by both Deepak and Atul.
OMP(I)(COMM)326-2016 & connect. matters
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By:MANJU BHATT
Signing Date:25.12.2020
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26. The issue of transfer of employees has to be handed
sensitively so that they continue to carry on their
employment with DBE and/or DBE. In case there is a
possibility to transfer the employment to DBC without any
compensation on undertaking/other documentation given by
DBC, they will take care to pay the compensation and
employees agreeing to this arrangement, then in such a case
this method will be followed subject to that it is legally
compliant in all respects.
27. All intangible assets i.e. computer software etc., will be
divided equally between the two, Deepak and Atul, and it
there is any cost attached to the transfer of the same to
Deepak or to Atul, then it will be paid by DBE.
xxx
34. That post signing/initialing this document, the nitti
gritties of this broad understanding would be worked out so
that the division of business can effectively take place by 30th
June 2016 or any other date as may be decided mutually by
the two in consultation with Mr. S.K. Beri and Mr. Manoj
Nagrath."
12. The Memorandum dated 17.02.2016 which was the first document
executed between the parties pursuant to the mediation/arbitration
agreement executed on 20.01.2016 contemplated the division and clearly
specified which businesses and assets were to fall in the share of which
brother. The said Memorandum served to facilitate a peaceful separation of
the businesses by envisaging seamless division of the broad business
components, viz., (i) Employees (ii) customers/orders, (iii) intellectual
properties including logos and software.
OMP(I)(COMM)326-2016 & connect. matters
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09:21:00
13. It also emerges that the parties, being conscious that they were
seeking to separate businesses which were live, did not wish to separate the
businesses abruptly since that would have risked incurring significant harm
to these entities. Therefore, while broadly crystallising the steps for
separation in the Memorandum, the parties set down 30.06.2016 as the
tentative date of separation to provide the parties a transition period for
completing the separation. For this reason, it was also agreed that neither of
the brothers would engage in any negative marketing with respect to the
businesses falling in the share of the other brother nor would either party
inform their clientele of the impending separation at that stage. However,
this Memorandum clearly indicates that the parties had, on 17.02.2016
itself, desired to effect the separation by 30.06.2016, unless the date was
changed in consultation with Mr. S.K. Beri and the learned arbitrator.
14. Now coming to the second document, i.e. the Minutes of Meeting
dated 14.03.2016, which reads as under:
Minutes dated 14.03.2016
"Name
As decided in the MoU, Deepak can use DB Engineering Solutions LLP as an
entity to carry on his business and he shall not use the name Atlas Knives as
the company name, LLP name, Partnership Firm, Proprietorship Firm,
Proprietorship concern or in any manner and also the Domain Name Atlas
Knives. This instruction of not using Atlas Knives would be for a period of
two years from the date of separation.
Plant & Machinery
1. List of Plant & Machinery to be compiled. Deepak & Atul would take
the responsibility of making the list of their respective units and the
task to be finished by 16th March, 2016.
2. Verification of the item of Plant & Machinery to be done by Deepak
and Atul by 17th and 18th March, 2016 positively. Deepak and Atul to
sit with SKB and MN on 19.02.2016 and finalise the distribution of
the plan and machinery.
OMP(I)(COMM)326-2016 & connect. matters
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Signing Date:25.12.2020
09:21:00
3. The modus operandi would be that two sets as similar as possible
would be made by Deepak (other than the unique items) and they
would be decided by lots/toss.
4. The unique list will be discussed between the two and finalized in all
respects on 19.03.2016. Value to be determined by each one and
highest bidder will take it.
5. Date of dismantling of P & M and commencement of physical transfer
of the same is 21.03.2016 onwards. 21st to 25th AB to take out P & M
and DB from 26th to 31st. The date can be reasonably extended in
case it is practically not possible to do so.
Staff
1. List of staff and workers to be finalized by 16.3.2016.
2. Deepak & Atul to jointly identify the Employees whom none
wants on 17.3.2016.
3. Staff at each location would be given and option to opt for
either Deepak or Atul for which they would be called one by
one and made to sign in the Register in front of representative
of MN. This would be done on 18 & 19.3.2016. Workers
would remain in same factory where they are now working
and if they wish to go the other, they would be allowed to go.
4. Compensation to be immediately calculated after the above
exercise is over and to be paid to the Employees, to the extent
possible by 31.3.2016.
5. All the Employees who are to be transferred within different
units would be done at the date of separation.
Logo
1. Logos to be divided as per MoU on 16th of March, 2016.
Orders
1. List of Orders in hand to be made available on 15th March 2016.
Customer whose orders can be changed from one entity to another
to be ascertained by Deepak.
2. The distribution would be made in such a way that each party gets
approximately equal orders.
3. In case of the difference being there, 20% of the value of the Order
to be considered as profits and distributed between Deepak & Atul.
The share of the said money would be paid upon execution of the
Order by the respective entity.
4. Customers to be informed on a date decided by SKB/MN regarding
the split by way of a common mail to be approved by MN.
xxx
OMP(I)(COMM)326-2016 & connect. matters
DigitallySigned
By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
Miscellaneous
1. The endeavour of both Deepak & Atul would be to effect the
separation by 31.3.2016 and if it is not possible to do the same due
to any reason, the separation has to take place at the earliest
possible date but not later than 30.04.2016 and for this purpose,
both Deepak & Atul would work positively to achieve the target
date. The process of transfer of Ownership, drafting of documents,
minutes, deeds etc. shall commence immediately and both Deepak &
Atul shall give their full support so that the documentation is
completed at the earliest.
2. Specific audits of stocks, consumables and other related issues
would be carried out by the team of MN with immediate effect.
3. No material/goods would be withheld by either Deepak or Atul in
their respective premises and the same would be cleared from time
to time, so that the businesses do not suffer during this intervening
period in any respect.
4. The net current assets available in DBE after the DOF has to be
distributed equally between the two after clearing of the liabilities.
A mechanism will be drawn by SKB & MN to ensure that the money
is available for distribution.
5. D&A would make all efforts to get their statutory audits for the year
ended 31.3.2016 finalised by 30.4.2016. Potential past liabilities
upto the date of DOS would be determined with the assistance of
both.
6. A lump sum amount of Rs. 40,00,000/- would be payable to Atul
towards shifting of Plant & Machinery, taking on rent new premises
etc. This amount has to be paid by DB."
15. These Minutes show that, by that time, the brothers had come to the
realisation that in order to fully effectuate the separation it was necessary to
lay down the roadmap for it by specifically setting down the steps required
to be taken. In fact, this document shows that on 14.03.2016, since the
parties had already started taking steps towards separation, they were
hopeful that the separation may take place even prior to 30.06.2016, for
which reason they were intending to prepare the list of plants and machinery
by 16.03.2016, subject to the verification thereof by each brother. As noted
OMP(I)(COMM)326-2016 & connect. matters
DigitallySigned
By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
previously, the Minutes provided that the customers would be informed
about the split by way of a common e-mail, approved by the learned
Arbitrator. Moreover, the staff were to be permitted to exercise their options
as to which brother's business they wanted to continue their employment in,
while the logos were also to be separated. Notably, the Minutes provided
that the parties would endeavour to get their statutory audits for the FY
ending on 31.03.2016 by 30.04.2016.
16. Finally, the Deed of Arrangement executed on 30.04.2016 was the
third and final document which was executed by the parties and the relevant
clauses thereof read as under:
Deed of Arrangement dated 30.04.2016
"This deed of arrangement is being made amongst Mr. Deepak Beri
(DB), Mr. Atul Beri (AB), and Mr. S.K. Beri (SKB) is to give effect to the
understanding reached by the parties in terms of MoU entered into by
them on February 17, 2016 relating to the division of business of DBE
and SKB.
That it is agreed amongst all that the entire division exercise will be
executed in terms of the MoU and this interim arrangement as agreed
upon to facilitate the final division.
xxx
That to manage the period from the date of this arrangement to the Date
of Separation (DoS) which is June 30, 2016, it has been agreed that DB,
AB and/or any of their family members (except SKB) shall not visit any of
the premises where the production of the companies is being carried on
and the meetings, if any, amongst the parties shall be held at the place
and time decided by MN.
xxx
Orders
Existing Orders as on 30th April, 2016
All orders in DBE or SKB as on April 30, 2016 shall be kept as it is.
Since it takes approximately 2 months for processing of orders, therefore,
by June 14, 2016 such orders will be in either of the following phases:
o Finished stock;
o Debtor;
OMP(I)(COMM)326-2016 & connect. matters
DigitallySigned
By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
o Cash;
o WIP, pending final processing
o Existing orders shall be processed before new orders as per
FIFO method.
o Pending orders will be distributed as per the MoU as on DoS or
any other prior date as decided by MN.
xxx
Staff
Increment due in April 2016 is to be maintained at 8% p.a. as an interim
increment and to be paid prior to the DoS out of the common funds.
List of Employees/Workers
List of employees/workers (unit wise) to be taken as on April 30, 2016
which will be updated on daily basis in case of any change with complete
details.
Intimation to Employees/Workers
Employees/workers (if required) will be intimated about the new date of
separation. Till that date no employee/worker will be retrenched unless
the employee/worker wants to leave voluntarily.
White Collar Employees (i.e. Employees)
White Collar employees at each location will be given an option to opt to
work either with DBE or SKB, for which they will be called one by one
and made to sign the register in front of MN. Said option will be
executed on May 31, 2016. However physical movement of such
employees will take place on/after DoS.
xxx
If an employee/worker wants to voluntarily leave prior to the DoS, such
employee worker shall not be re-appointed by AB/DB up to a period of 6
months from the DoS. Any violation of the same on the part of AB or DB
will attract a penalty amounting to 5 times the actual CTC in which such
employee/staff is re-appointed, payable to DB or AB respectively.
Compensation policy i.e. Full and Final settlement of employees/workers
will be decided by MN considering the trend of previous two years i.e.,
2013-14 and 2014-15.
xxx
Raw Material
Purchase Orders
Any order of raw material, tools or consumables has to be placed post
discussion and on prior approval of respective Plant heads. Such plant
OMP(I)(COMM)326-2016 & connect. matters
DigitallySigned
By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
heads shall be nominated by AB/DB as on April 30, 2016 and intimated
to MN. If there is any conflict regarding this, then decision of MN will
prevail.
A weekly update shall be given to AB/DB by respective plant heads.
Maintenance of Records
Proper records for in, out, scrap generated, consumption and closing
stock of raw material shall be maintained for the period from May 01,
2016 through June 30, 2016.
The above mentioned records shall be circulated to AB, DB and MN on
weekly basis.
Stock of Raw Material/WIP/Finished Products
Physical stock taking and its distributions to be done for all units, as will
be decided by MN in consultation with AB and DB on the date of its
physical movement.
Work in progress to be distributed as per the MoU.
Physical shifting of stock shall commence after June 15, 2016.
Production
Production to be done upto June 15, 2016.
Entire DBE & SKB shall be run as a single unit in terms of production.
The production will be carried out in full swing and no material will be
held at one premise without any justified reason. In case production is
withheld for any reason, MN shall be intimated immediately.
xxx
Books of Accounts
All sales, purchases and expenses will be recorded in the books of
accounts at Okhla and a representative of AB will assist the staff at
Okhla for the same.
Random weekly checks may be conducted by MN in order to validate the
BNG and its rehabilitee(sic).
Balance sheet of DBE and SKB as on June 30, 2016 to be finalized by
July 15, 2016 by the staff of DBE and SKB Group.
The representative appointed by AB and DB in the field of Accounts and
Finance shall be responsible for maintaining and delivering books of
accounts to MN including the financial statements, statutory records for
past 8 years i.e. from F.Y. 2007-08 to F.Y. 2015-16 and other Legal and
Secretarial records, since the date of Incorporation.
xxx
Independent Manufacturing and Purchases
All purchases, sales and manufacturing to be restricted to SKB and DBE
only. No private entity shall undertake any business activity.
OMP(I)(COMM)326-2016 & connect. matters
DigitallySigned
By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
Only commonly owned machinery to be run.
Expenses of privately (independently) owned machinery and labour
charges on such machinery, not to be shared among DBE and SKB.
Plant and Machinery
Key Machinery
List of Key Machinery to be provided by the respective plant heads of AB
and DB by May 01, 2016 and division of the aforementioned key
machinery to be done by MN based on written down value as on March
31, 2016.
Other Machinery
List of Plant and Machinery to be compiled. AB and DB to take the
responsibility of making the list of their respective units by April 30,
2016.
Distribution of Plant and Machinery on paper to be finalized by MN upto
May 31, 2016 and physical distribution to commence after June 15,
2016.
The modus operandi would be that the two sets are as similar as
possible.
xxx
Miscellaneous
Endeavour of both AB and DB would be to effect the separation by June
30, 2016 and if it is not possible to do the same due to any reason, the
separation has to take place at the date and conditions as decided by
MN. The process of transfer of ownership, drafting of documents,
minutes, deeds etc, shall commence immediately and both AB and DB
shall give their full support so that the documentation is completed at the
earliest.
Specific audit of stocks, consumables, raw material and other expenses
related issues would be carried out by the team of MN with immediate
effect and that has to be completed by May 15, 2016. Appropriate
adjustments will be made in the account of AB and DB before DoS.
Expenses incurred by AB on C-1 will be paid to him after complete due
diligence and specific approval of MN only.
AB and DB would make all efforts to get their statutory audits for the
year ended March 31, 2016 be finalized by June 30, 2016. Potential past
liabilities upto the DoS would be determined with assistance of both AB
and DB."
OMP(I)(COMM)326-2016 & connect. matters
DigitallySigned
By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
17. This Deed is generally distinguishable from the other two documents
since it reflects their acceptance of the fact that they were fast approaching
complete separation and is posed as a record of the arrangement which they
had finally arrived upon. It is the last and final document executed between
the parties towards separation of businesses and begins by requiring them to
follow the terms therein as also in the MoU, in letter and in spirit. It
explicitly refers to the date of 30.06.2016 as the final date of separation and
then goes on to mention this date close to 7-8 times in its body. It is clear
that the parties were seeking to take care of any unfinished business by
ensuring completion of all pending orders, resolving to determine potential
past liabilities up to 30.06.2016 and furnishing books of account to the
learned arbitrator, including financial statements and statutory records, for
the eight preceding years, i.e., from FY-2007-08 till F.Y.2015-16. This
document also sets aside a period, which began with its execution and ended
on 30.06.2016 and is now known as a 'transition period' for all practical
purposes, to help the parties ease into their independent commercial
identities. During the transition period, the delivery time for completion of
orders stood extended and, in the spirit of encouraging complete
transparency in the process, (i) the two brothers and their respective families
were proscribed from visiting the premises of any production units of the
businesses, (ii) it was decided that the books of accounts of the businesses
belonging to each other were subject to inspection by the learned arbitrator,
(iii) all parties were encouraged to share complete details of any hidden
orders of DBEPL and SKB, (iv) they were stripped of the power to
introduce any changes in the BNG system (which was the common software
used to record the orders placed), without the approval of the learned
Arbitrator, and (v) the two brothers were to be given all updates on the raw
OMP(I)(COMM)326-2016 & connect. matters
DigitallySigned
By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
materials purchased. All production could be carried on unhindered only till
15.06.2016, whereafter the physical shifting of the stock, viz. raw material,
work in progress and finished goods, was to be effected on a date fixed by
the learned Arbitrator. The Deed ended with the Miscellaneous clause
which generally addressed any major steps which were yet to be taken by
inter alia resolving to take care of any pending specific audits by
15.05.2016 and statutory audit by 30.06.2016.
18. Reverting to the submissions made at the Bar, as per Mr. Atul Beri
and Mr. S.K. Beri, the parties had mutually agreed to fix the date of
separation as 30.06.2016, which was not only reflected in the three
documents executed by them but also the manner in which they conducted
their business and themselves pursuant thereto. On the other hand, Mr.
Deepak Beri has contended that the date of separation should be reckoned
by the Court as on date, rather than myopically relying on the tentative date
of separation set out in the documents executed by the parties. Mr. Deepak
Beri has taken the unrelenting position that he never consented to
30.06.2016 as the official date of separation and, in actuality, that date was
an effective date envisaged by the parties to finalise the division, but since
most of the steps under the settlement remained ineffectual on that date, it
was automatically rendered null and void and thus, never crystallised into a
final date of separation.
19. As can be observed from the terms of these agreements, prima facie,
this date of 30.06.2016 found mention in the very first document executed
between the parties in February 2016, when the parties had just embarked
on their journey of partition. Evidently, this was not a date which was
suddenly conceived on 30.04.2016 at the time of executing the Deed, which
was the final settlement agreement rather, it was the farthest deadline
OMP(I)(COMM)326-2016 & connect. matters
DigitallySigned
By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
present within the initially executed document of the MoU for effecting one
of the steps towards final separation of the businesses. Undoubtedly, the
MoU was referring to this date as the 'effective date' of separation, just as
Mr. Deepak Beri is contending. Therefore, notwithstanding the fact that the
Minutes recorded on 14.03.2016 reflect the parties' hope to conclude the
separation before 30.06.2016, it is evident that from the very get go, the date
of 30.06.2016 appeared to, in spirit, capture their desire to finish this entire
saga of partitioning the businesses by the end of June 2016. This, of course,
on its own is not conclusive of anything and must be appreciated in the
context of the steps taken by the parties towards division.
20. The parties had also made exhaustive submissions on whether or not
they had taken steps to separate prior to 30.06.2016 and, while they agreed
that certain steps had already been taken to effect the separation, they
differed on how much separation had truly been effected. As per Mr. Atul
Beri, a majority or 90% of the steps have already taken place, whereas Mr
Deepak Beri is seeking to contend that a majority of the steps for effecting
the separation remain pending as on date. To achieve any clarity on this
aspect, it may be useful to note the steps towards separation which both
sides have admitted to taking thus far. The steps admitted by Mr. Deepak
Beri, as extracted from paragraph 48 of his enforcement petition
[OMP(Enf)(Comm) 187/2018], have been reproduced in entirety as Table I
in the Addendum to this decision. The steps admitted by Mr. Atul Beri have
been reproduced in entirety as Table II in the Addendum, extracted from his
enforcement petition OMP(Enf)(Comm) 117/2019 as also the written
submissions filed by him in November 2019. To avoid prolixity, the
relevant extracts of the steps towards separation which have been admittedly
effected, are being culled out hereinbelow in a tabular form:
OMP(I)(COMM)326-2016 & connect. matters
DigitallySigned
By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
S. No. Description As per Mr. Atul Beri As per Mr. Deepak Beri
Names in Done. Done.
which each
party carries
their Have been carrying out Have been carrying out
businesses business in the name of business in the name of
M/s DBEPL and M/s DBEC, SKB or any
BMGL other name.
Properties to Done. Done.
be received
by AB
Currently in possession
of the properties
situated in Sector 68,
Sector 11, NOIDA and
that owned by BMGL
in Phase-II, NOIDA.
Properties to Done, except: Done.
be received
by DB.
- Sector 64 has not Currently in possession of
been handed over, Sector 6, 59 and A-119
since compensation Okhla properties.
of INR 7.50 crores However, DB is yet to
has not been given receive possession of
yet. Sector 64, NOIDA, which
- Title transference of
is being illegally retained
property situated at
by AB.
C-27, Sector 59,
Noida belonging to
DBEPL and in
possession of In addition, the transfer of
Deepak Beri yet to title of the other premises
be effected. is also pending. Bank has
ordered release of
hypothecated documents
of Sector 59 and Sector 64,
OMP(I)(COMM)326-2016 & connect. matters
DigitallySigned
By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
which only needs to be
collected from the bank by
signing the register by all
three parties.
Division and Done. Done.
transfer of
Employees
under Clause As per MoM dated The division of employees
24, MOU 14.03.2016, employees in terms of the agreed
have exercised their documents has already
option of choosing taken place, and the
which brother they employees who have opted
wish to work for. This by DB and AB were
was done in identified and a list was
March/April 2016. circulated on 07.07.2016.
This was completed
with effect from
Further, in terms of the
07.07.2016.
agreed documents, an 8%
increment has been given
to the employees, which is
However, the
an admitted fact.
employees working at
the units of DBEPL,
under the control of
Deepak, need to be
formally transferred to
SKB.
Division of Done w.e.f. Done.
logos under 23.03.2016.
Clause 9,
MOU This is done by a Coin
Logos of the business Toss on 23.03.2016 duly
entities were divided recorded and signed by
amongst the parties on nominees of AB and DB in
23.03.2016 and parties the presence of the Ld.
have since then, been Arbitrator and SKB, who
OMP(I)(COMM)326-2016 & connect. matters
DigitallySigned
By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
using their respective also signed the said paper.
logos, in furtherance of
their independent
business activities.
Accounting Done for Mr. Deepak Done.
Software Beri.
SKB (the concern falling
Ever since Mr. Deepak to the share of DB)
Beri caused SKB to purchased its own ERP
purchase ERB software Software so as to facilitate
to keep its accounting the division process.
separated from
DBEPL. Thus, the
accounting softwares A sum of Rs. 9,73,248/-
are separate. was spent by SK Beri &
Bros towards the same.
The underlying objective
was to have separate and
distinct ERP Softwares
between DBEPL and SKB,
as part of the division.
Division of Done. Done.
servers,
Email IDs,
domain Separate servers have In pursuance of the
names, and been purchased by division process, separate
websites SKB, so as to de-link servers have been
itself from DBEPL. purchased by SKB so as to
The two entities now de-link itself from DBEPL.
have separate email
id's, domain names and
websites, so as to As part of the division
function independently process, SKB have also
OMP(I)(COMM)326-2016 & connect. matters
DigitallySigned
By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
from each other. created new email ID's
with the domain
'skberi.com' and has
engaged technicians to
develop its independent
website.
DB and his staff were
earlier using the domain
name "atlasknives.com",
which were disabled at the
instance of AB. This fact
also shows implementation
of the division process.
Intimation to Done. Done.
Customers
Customers were As agreed, the parties have
intimated about the jointly sent various letters
division in around the to customers regarding the
first week of May division between the AB
2016, and thus Group and the DB Group.
customers have taken
their business to an
entity controlled by
Atul or Deepak,
depending on which
brother they wanted to
continue business
relations with
Pertinently, as per
clause 38 of the MoU,
this step was to take
place only after the
effective date of
OMP(I)(COMM)326-2016 & connect. matters
DigitallySigned
By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
separation.
Working Done. Done.
Capital
Sanctions
As part of the agreed
documents, more
Fresh working capital
particularly in terms of
sanctions have been
Clause 32 of the MOU,
applied for and
DB applied for Working
obtained by Deepak
Capital loan and sanction
Beri, in the name of
of Credit Facilities in the
SKB. As of date, the
SKB with Canara Bank,
two businesses have
Okhla Branch in
been sanctioned loans
April2016.
separately and, thus,
have separate liabilities
in this respect.
On the basis of the
aforesaid application, the
Credit Facilities were
approved by Canara
Bank vide its letter dated
04.06.2016.
DB was also authorized by
DBEPL vide its letter
dated 03.06.2016 (signed
by SKB, AB, DB and
Ramesh Beri) to collect the
original property papers
for the premises which
were to fall to DB's share.
The term loan availed by
DBEPL has paid off in full
under the orders of this
OMP(I)(COMM)326-2016 & connect. matters
DigitallySigned
By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
Hon'ble Court dated 22nd
March, 2018 and the
original documents of all
properties are currently
deposited with the
Registrar General, Delhi
High Court in terms of the
aforesaid order.
Telephone Done. Done.
connections
Separate telephone As part of the division, an
connections have been application was made on
obtained w.e.f 17.06.2016 to Airtel for
07.06.2016, so that transferring telephone
entities controlled by connections in the name of
Deepak and Atul have SKB from DBEPL.
separate telephones.
Division of Done. Pursuant to the division
Orders process, orders were
booked in SKB, which was
From February, 2016, hitherto done in the name
orders which would of DBEPL. A perusal of
have earlier been the Monthly Sales Order
booked in the name of details shows a sudden
DBEPL, were being jump in the value of orders
booked (by Deepak in SKB for the months of
Beri) in the name of February, March, April,
SKB. He has thereafter May, June and July 2016.
stopped booking orders
in SKB and started
booking them in other
entities to defeat the
interest of the father
who continues to retain
his share in SKB after
OMP(I)(COMM)326-2016 & connect. matters
DigitallySigned
By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
30.06.2018.
Deployment Done with effect from Done.
of Security May 2016.
Services
under Clause In terms of the agreed
21, MOU documents, the parties
were to employ ·security
services for the respective
units. Acting upon the
understanding, the services
of G4S Secure Solutions
(India) P. Ltd. were
availed by DBEPL.
Application Done. Done.
of Licences/
Permits
DBC has applied for EEPC
and other licenses for the
purposes of export in the
name of SKB, post the
division process. Similarly,
license for import has also
been applied for.
21. A cumulative reading of the stand taken by both brothers, as noted
hereinabove, makes it clear that the business entities falling under the shares
of Messrs. Atul and Deepak Beri are operating in separate names under
identities which are distinct from each other. Mr. Atul Beri has admitted to
the position that he has been carrying on business in the names of DBEPL
and BMGL with effect from 30.06.2016. Similarly, even though Mr.
Deepak Beri is aggrieved by the fact that he is being denied access to the
business of DBEPL, he has also admitted that he has been carrying on
OMP(I)(COMM)326-2016 & connect. matters
DigitallySigned
By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
business in the name of DBC and SKB, apart from his own privately run
family businesses from 30.06.2016. Neither brother uses the identity of the
businesses falling in the share of the other. In a similar vein, they have also
been allocated completely different logos for their respective business w.e.f.
23.03.2016. These businesses are operating on separate premises as on date,
though the title deeds of some of these properties are yet to be executed in
the names of the persons entitled thereto under the settlement agreements.
That being said, it is admitted that the premises at Sector-64, falling in the
share of Mr. Deepak Beri, has not been transferred to him. In this regard,
Mr. Atul Beri has sought to contend that he has withheld transferring these
premises to his brother since the latter has not only failed to resign from the
directorship and transfer shareholding of the companies falling in Atul's
share, but he has also failed to pay the amounts due to Atul under Clause 15
of the MoU, namely a sum of INR 7.50 crores towards cost of construction
of a functional unit for BMGL in Phase-II, NOIDA and an additional sum of
INR 1 crore to make up the difference in value of the properties falling in
his share. As per Mr. Deepak Beri, this amount stands paid to Mr. Atul Beri
who, in turn, denies such payment vehemently. Rather, Mr. Atul Beri claims
that he is due a further sum of INR 9.30 crores under Clauses 4, 5, 14 (a) of
MoU, r/w clause 6 (under miscellaneous) of the MoM dated 14.03.2016.
This is one of the primary disputes arising out of the steps for separation of
properties. At the same time, it is admitted that Mr. Deepak Beri has been
carrying out independent business in the other three premises situated at A-
99, Okhla Industrial Area, Sector-6, Noida and Section-59, Noida. In fact,
Mr.Deepak Beri is not only carrying out the businesses of SKB and DBC,
but has also admittedly permitted his son to run other businesses of like
nature in these very premises. Thus, barring this aspect of the Sector 64
OMP(I)(COMM)326-2016 & connect. matters
DigitallySigned
By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
property and outstanding payments claimed by both brothers, the parties
have in unison stated that they are in possession of the premises accruing to
each of them under the settlement agreements. They have engaged different
security services to guard their premises as well.
22. Furthermore, even as per the recorded averments of Mr. Deepak Beri
in his enforcement petition, both the brothers divided their white collar
employees, based on their preferences, and gave them increments as well
pursuant to these agreements. At this stage, it is pertinent to note that Mr.
Deepak Beri had sought to contend at the time of arguments that even
though the list of employees who were to go to the share of each brother
stood finalised on 16.03.2016, no further steps were taken in this direction.
He sought to contend that this implied that no division of employees had
taken place in the manner intended. However, in the light of his admission
in the enforcement petition, there is no reason to disbelieve the versions of
Mr. Atul Beri and Mr. S.K. Beri that each brother (Atul/Deepak) has had his
independent sets of employees, working only for him and from units
controlled exclusively by him. It, however, is undisputed that the sales and
marketing teams of the business entities were divided between the brothers
and operate separately as on date. Even the accounting software, telephone
connections, servers, email IDs, domain names and websites used by the
brothers are separate and, thus, there is no jointness even in these minute
aspects. In terms of the settlement agreements, they even sent
correspondences to their clients about their separation and distinct business
identities and each business entities have been handling their respective
clients, completely independent of each other, ever since then.
23. With respect to the orders being placed by clients w.e.f 01.07.2016,
the same are recorded separately for the businesses falling under the shares
OMP(I)(COMM)326-2016 & connect. matters
DigitallySigned
By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
of Mr. Atul Beri and Mr. Deepak Beri. Mr. Atul Beri has contended this to
be the position since February, 2016, however Mr. Deepak Beri denies this,
even though he has accepted that the orders for SKB have been recorded
separately by him since February 2016 and the numbers thereafter appear to
have increased. However, the parties are ad idem that certainly with effect
from 01.05.2016, there has been absolutely no transparency between them
with respect to the orders received by the business concerns falling in their
share. Further, from a reading of clauses 1, 3, 4, 5, 7 to 9, 13 to 17, 19 to 28,
34, 35 and 38 of the MoU, it is evident that the parties had envisaged that in
the transition period preceding 30.06.2016, all transactions carried out by
any of the family businesses were to be recorded in the books of accounts of
the concerned entity with the approval of all the four parties i.e. the two
brothers, their father and the Arbitrator. It is also evident that the parties
agreed to share all expenses, profits and assets till they were jointly
conducting the businesses, whereafter they would carry out the businesses
separately. Today, the brothers neither share the expenses of their respective
businesses nor record the transactions in the arrangement as set out by them.
Finally, with effect from 30.06.2016, both the brothers have been taking
business loans and applying for licenses and permits independently. There is
no overlap or joint operations in these aspects for over four years.
24. Against this background, one may consider the steps which are
admittedly left to be taken as on date. Mr. Atul Beri has produced a table in
paragraph 30 of his enforcement petition enumerating the steps to be taken
to completely discharge all obligations of the parties under the settlement
agreements. Similarly, Mr Deepak Beri had submitted a tabulation of the
steps left to be taken, in his reply to Mr. Atul Beri's enforcement petition
[OMP(Enf)(Comm)117/2019]. Although, in his post-hearing written
OMP(I)(COMM)326-2016 & connect. matters
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By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
submissions, Mr. Deepak Beri has submitted comprehensive tabular
representations which cull out additional steps which he claims are left to be
taken against each step contemplated in the Memorandum, Minutes and the
Deed, the same are not being referred to at this stage since they are not only
at some variance with his own broad stance in his enforcement petition, but
also because Messrs. Atul and S.K. Beri did not have an opportunity to
rebut the same. For the sake of convenience, the chart produced by Mr. Atul
Beri is reproduced as Table III in the Addendum whereas the chart produced
by Mr. Deepak Beri is reproduced as Table IV in the Addendum. However,
the gist of their respective positions may be summed up as follows:
i. Both Messrs. Deepak and Atul Beri need to formally transfer
their shareholding and ownership interests and that of their
family's from the businesses falling in the share of the brother.
Consequently, Mr. Deepak Beri needs to resign as Director of
DBEPL and BMGL and transfer his and his family's share
certificates therein to Mr. Atul Beri. Mr. Atul Beri, in turn,
needs to do the same in SKB and DBC, in favour of Mr.
Deepak Beri.
ii. The brothers need to transfer the title to the properties in the
names of the person in whose share the same falls as per the
settlement agreements.
iii. All documents pertaining to DBEPL and BMGL in the
possession of Mr. Deepak Beri and those pertaining to SKB
and DBC in the possession of Mr. Atul Beri, including but not
limited to Customs shipping bills, Customs certified invoices,
import/export books, DGFT licenses, need to be returned to the
rightful owner of the respective businesses.
OMP(I)(COMM)326-2016 & connect. matters
DigitallySigned
By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
iv. The orders as they stood on 30.06.2016 have not been
completely divided between the parties in terms of the
settlement.
v. The parties are yet to share the profits and liabilities of the
business entities as they stood on 30.06.2016. Furthermore,
accounting and auditing exercises have only been conducted
partially.
vi. The division of stocks, plant and machinery was not fully
effected as they stood before 01.07.2016.
25. When one considers the steps which are left to be taken, viz. the
numerous steps that have been completed so far, one can begin saying with
some certainty that the parties in most respects were operating distinctly
from each other. Their businesses have been, in spirit, divorced from each
other and do not share any jointness. Undisputedly, the original intent of the
parties was a more complete form of this separation, rather than the partial,
unfinished shape that it has assumed today. This tangled state of affairs is
solely attributable to the parties' contradictory stands with respect to the
date of separation.
26. In the light of this position, this Court must assess whether the
agreements signed between the parties actually culled out a separation date
and whether this date was expressly stipulated as 30.06.2016. In this regard,
reference may be made to Paragraph 20 of the decision rendered by the
Hon'ble Supreme Court in Bhavan Vaja (supra) which reads as under:
"20. It is true that an executing court cannot go behind the decree under
execution. But that does not mean that it has no duty to find out the true
effect of that decree. For construing a decree it can and in appropriate
cases, it ought to take into consideration the pleadings as well as the
proceedings leading up to the decree. In order to find out the meaning of
the words employed in a decree the court, often has to ascertain the
OMP(I)(COMM)326-2016 & connect. matters
DigitallySigned
By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
circumstances under which those words came to be used. That is the
plain duty of the execution court and if that court fails to discharge that
duty it has plainly failed to exercise the jurisdiction vested in it. Evidently
the execution court in this case thought that its jurisdiction began &
ended with merely looking at the decree as it was finally drafted. Despite
the fact that the pleadings as well as the earlier judgments rendered by
the Board as well as by the appellate court had been placed before it, the
execution court does not appear to have considered those documents. If
one reads the order of that court, it is clear that it failed to construe the
decree though it purported to have construed the decree. In its order
there is no reference to the documents to which we have made reference
earlier. It appears to have been unduly influenced by the words of the
decree under execution. The appellate court fell into the same error.
When the matter was taken up in revision to the High Court, the High
Court declined to go into the question of the construction of the decree
on the ground that a wrong construction of a decree merely raises a
question of law and it involves no question of jurisdiction to bring the
case within Section 115, Civil Procedure Code. As seen earlier in this
case the executing court and the appellate court had not construed the
decree at all. They had not even referred to the relevant documents. They
had merely gone by the words used in the decree under execution. It is
clear that they had failed to construe the decree. Their omission to
construe the decree is really an omission to exercise the jurisdiction
vested in them."
27. Evidently, it is not enough in every case for an executing court to
simply read and interpret the words of a decree, especially in a case such as
this where the execution pertains to a settlement bearing clauses which are
being differently interpreted. In fact, in such cases the Court is called upon
to pay due regard to the surrounding circumstances as well as the letter of
the decree in order to truly deliver justice in its powers of execution,. While
bearing in mind these principles which sculpt the powers of an executing
court, I revert to the facts of the present case. As observed previously, the
MoU deemed 30.06.2016 as an 'effective date of separation', which implied
that the date was not set in stone at the time and was envisaged as a mere
distant deadline to the parties, to provide them with a general sense of when
they were expected to conclude the process of partition. The Minutes
OMP(I)(COMM)326-2016 & connect. matters
DigitallySigned
By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
recorded on 14.03.2016 do not materially digress from this position, rather it
appears to capture the optimism of the parties in their perception of the pace
at which the partition was proceeding and their collective belief that they
might actually be able to pull the partition off before June 2016. The Deed
executed more than a month later on 30.04.2016 signals that the optimism
contained in the Minutes began wearing off in the days after it was
executed. It becomes apparent that the reality of partition and the numerous
nitty-gritty of it had become obvious to the parties and the learned arbitrator,
who had finally accepted that the partition was going to be a tedious and
mammoth task, incapable of being effected within the short period of time
envisaged in the Minutes. Nevertheless, since most steps were either already
underway or stood completed, the parties mutually agreed to follow through
with the partition by agreeing upon a deadline and, in that context, agreed
upon the following stipulation in the Deed:
" That to manage the period from the date of this arrangement to
the Date of Separation (DoS) which is June 30, 2016, it has been
agreed that DB, AB and/or any of their family members (except
SKB) shall not visit any of the premises where the production of
the companies is being carried on and the meetings, if any,
amongst the parties shall be held at the place and time decided by
MN." (emphasis supplied)
28. In my view, this is the turning point of the agreements and the point
wherein lies the answer to the primary question raised in these enforcement
proceedings. The parties explicitly referred to 30.06.2016 as the Date of
Separation. Following this stipulation, the Deed went on to cement the
importance of 30.06.2016 as the date of separation, by mentioning it as a
deadline for several other steps thereunder. While the CTC of the employees
and workers on transfer was to be determined as it stood on 30.06.2016, the
record of all in, out, scrap generated, consumption and closing stock of raw
OMP(I)(COMM)326-2016 & connect. matters
DigitallySigned
By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
material was to be mandatorily maintained from 01.05.2016 till 30.06.2016.
All production at the manufacturing units of the family concerns was to be
carried out together till 15.06.2016 whereafter the physical shifting of the
stocks, plants and machinery was to take place on a date fixed by the
learned Arbitrator. In fact, even the balance sheets of DBEPL and SKB
were to be finalised as they stood on 30.06.2016 and the funds transferrable
to Mr. Deepak Beri, in case he failed to acquire the requisite working capital
loan by 30.06.2016, were to be apportioned out of the funds available with
the family businesses as on 30.06.2016. In closing, the Deed incorporated
the Miscellaneous clause which not only sought to tie any loose ends in the
separation process by mandating that all auditing exercise of stocks be
completed by 15.05.2016 and all statutory audit for the financial year ending
on 31.03.2016 be finalised by 30.06.2016, it also stated:
"Endeavour of both AB and DB would be to effect the separation by June
30, 2016 and if it is not possible to do the same due to any reason, the
separation has to take place at the date and conditions as decided by
MN."
29. Therefore, notwithstanding the fact that the tenor of all the
agreements regarded 30.06.2016 as a deadline of sorts, the Deed finally and
unambiguously set down that the date of separation was going to be, after
all, 30.06.2016. Considering all the steps that the parties were concurrently
taking to make this happen, it appears quite obvious that the parties intended
to and did, ultimately, demarcate 30.06.2016 as the date of separation of the
businesses.
30. Now, it is apparent that Mr. Deepak Beri has argued vehemently
against this position since he believes that 30.06.2016 was merely a
tentative date of separation, as reflected in Clauses 16 and 34 of the MoU,
OMP(I)(COMM)326-2016 & connect. matters
DigitallySigned
By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
rather than a final date of separation set in stone. He is of the opinion that
the date was proposed, not ultimately accepted. The crux of his contention
is that the settlement agreements envisaged a certain order in which the
partition was to be carried out, first the parties would effectuate all the steps
set out in the three agreements, and once all of them were complete, they
would pronounce an appropriate date of separation which would be
backdated. Thus, he has urged that the steps and their completion were to
compulsorily precede any fixing of date of separation, and the entire
exercise of first pronouncing a date of separation is contrary to the tenor of
the agreements. I have carefully considered this aspect vehemently urged by
Mr. Deepak Beri and find that there is absolutely no stipulation in the
agreements which backs this interpretation. In fact, neither the language of
the agreements nor the circumstances surrounding the execution thereof
support this line of argument. Rather, the tenor of the agreements appears to
be starkly in favour of finalising a date of separation and correspondingly
working towards it at the earliest possible date, rather than waiting for the
parties to follow through with the steps as a preliminary requirement of
finalising the partition date. Express stipulation in the Deed to the effect that
the auditing of stocks, consumables and related issues were to be concluded
by 15.05.2016, the statutory audits were to be carried out by 30.06.2016,
and that Mr. Deepak Beri was granted time till 30.06.2016 to arrange for
working capital on his own as also fixing of travelling budget of sales
personnel only till June 2016 show that 30.06.2016 was to act as a point of
reference, a cut-off date. Ultimately, as mentioned above, this Court cannot
step out of the confines of the settlement and render a finding on fiction, and
this submission of Mr. Deepak Beri that the completion of steps would
OMP(I)(COMM)326-2016 & connect. matters
DigitallySigned
By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
precede fixing of a date of Separation does not appear to be based on a
proper interpretation of the settlement at all.
31. Mr. Deepak Beri has also sought to place reliance on several orders
passed by this Court in order to contend that this Court had taken judicial
cognisance of the position that the Date of Separation was not 30.06.2016.
He has further urged that since Mr. Atul Beri failed to object to this
conclusion in each of these orders at the relevant time, he has tacitly
consented to the position that separation has not taken place. He has urged
that in the order dated 15.12.2016, this Court had signified its intent to
appoint an Escrow Agent to implement the steps towards separation, but Mr.
Atul Beri did not agitate at that time that any court-monitored separation
ought to be carried out by keeping 30.06.2016 in mind as the Date of
Separation. He has contended that the next order passed on 03.01.2017
directed a physical audit of the stock, plant and machinery, receivables,
books of accounts, statutory and other records as on that date, which was
again never assailed by Mr. Atul Beri who has been presently urging that all
like audits should be carried out as on the date of 30.06.2016. Finally, by
placing reliance on the order dated 01.11.2018, he contends that even then
the Court was trying to find a way for the parties to move forward, which
implied that separation had not taken place. I have carefully taken this point
into consideration and perused the orders which Mr. Deepak Beri has sought
to rely on. To begin with, there is no quarrel with the position that complete
separation has not taken place. In fact, paragraphs 2,3 and 8 of the order
dated 01.11.2018, on which such heavy reliance has been placed, only
records that the assets must be divided in accordance with the award and,
clearly, this order neither makes any mention of the date of separation nor
does it proceed on the assumption that no such date has been fixed. Even the
OMP(I)(COMM)326-2016 & connect. matters
DigitallySigned
By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
order dated 03.01.2017 does not contain any determinative finding on the
issue which is being dealt with by this Court, i.e. the stipulation of a cut-off
date. Rather, all the orders sought to be relied upon show an earnest attempt
of the Court to arrive upon some interim arrangement till these enforcement
petitions were finally decided.
32. In view of my discussion thus far, while I am already of the
considered opinion that Mr. Deepak Beri's contention that 30.06.2016 was
not the Date of Separation is not tenable, there is another reason to reject
this plea. A glimpse at the extract from the Deed reproduced in paragraph
25 above shows that if either of the parties wanted to change the date of
separation, which had been fixed as 30.06.2016, a mechanism had been
provided therein to address the dispute by designating the learned Arbitrator
as the final deciding authority. In the light of this provision and the fact that
the learned Arbitrator had not altered the date of 30.06.2016 in his award or
fixed another date of Separation, it is manifest that the date of 30.06.2016 is
the final date of separation. In any event, it was also open to Mr. Deepak
Beri to move an application before the learned Arbitrator to seek a change
or clarification of this date which, as per the admitted position, he did not
elect to do. In fact, as has been brought to the notice of this Court by his
father and brother, even when their Section 34 petitions against the Award
was being considered, Mr. Deepak Beri did not claim a change in the date of
separation. Furthermore, it is also interesting to note that Mr. Deepak Beri
has previously, in the Section 9 petition filed by him in August 2016, stated
in no uncertain terms that the date of separation stipulated in the settlement
agreements was 30.06.2016. An extract of this paragraph reads as under:
"That a perusal of the aforesaid MOU shows that detailed terms were
agreed upon between the parties as to the division of the assets. In fact, it
was also agreed in the aforesaid MOU that the effective date of separation
OMP(I)(COMM)326-2016 & connect. matters
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By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
would be June 30, 2016 and in the interim a working arrangement would
be put in place, as detailed in the MOU."
33. Thus, any attempt by Mr. Deepak Beri to feign innocence of the Date
of Separation or the factum of having agreed to it in the settlement
agreements executed by him, cannot hold ground. I am fortified in this view
since the same adheres to the dicta of the Hon'ble Supreme Court in Hari
Shankar Singhania (supra) and Kale (supra), relied upon Mr. Deepak Beri,
insofar as it is the best course to effectuate the settlement agreements and
fulfil the intentions of the family. Both the brothers are admittedly in favour
of ending this dispute once and for all and ultimately want this Court to
adopt an interpretation which is not only correct in law but also unhindered
by technical objections. This is obvious from the prayers in these
enforcement petitions, Mr. Deepak Beri has prayed for the following reliefs:
"a. Order(s) enforcing the Award dated 02.08.2016 passed by
the Arbitrator;
b. Appointment of an Observer to oversee the implementation
of the division process using the aid and assistance of such
persons as may be deemed fit;
c. Restraining the parties from acting contrary to the Award
and the settlement document;
d. Conducting a special / forensic audit for the family concerns
to examine the extent of siphoning by Mr. Atul Beri; and
e. Appointment of a receiver to take charge of all assets and
take over the affairs of the family concerns during the
pendency of the division process."
34. On the other hand, Mr. Atul Beri has prayed for the following reliefs
in his enforcement petition:
"i) Pass an order enforcing the Award dated 02.08.2016, to the
extent upheld by judgment of this Hon'ble Court dated
31.05.2018, in O.M.P. (Comm.) 396/2016 and O.M.P.
(Comm.) 382/2016, taking into account details of the
remaining steps required to be taken for such enforcement,
as detailed by the Petitioner/ Award Holder hereinabove;
OMP(I)(COMM)326-2016 & connect. matters
DigitallySigned
By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
(ii) Pass an order restraining the Judgment Debtors or any other
person from acting contrary to the terms of the Award dated
02.08.2016.
(iii) Pass any other such order as this Hon'ble Court may deem fit
and proper in the facts and circumstances of the case."
35. Thus, the reliefs sought in the petitions preferred by the brothers also
show their common intent to ensure that the family businesses, which are as
a matter of fact operating independently from each other, are formally and
completely separated in law. These parties have been in litigation for over
four years now, which has not done any favour to the bitterness and
acrimony between them which was the very reason for beginning the
process of partition in the first place. Their well-intended decision to
appoint Mr. Nagrath to mediate and arbitrate their disputes and execute the
three settlement agreements together may have resulted in an immediate
backfiring due to a few differences in their opinions, which is expected in
intimate familial disputes, but the same cannot be permitted to mushroom
any further into even more complicated cycles of litigation. When the
parties have made their mutual wish to achieve a quietus in this matter
known, there is no reason for their disputes to languish any further before
this Court without resolution. For this reason, it was always a matter of the
utmost importance to ensure that both parties are duly heard and all their
pleadings are thoroughly perused to mete justice to everyone concerned.
Thus, even though the agreements, especially the Deed dated 30.04.2016,
had clearly set out a date of separation, this Court felt the necessity to go
further and examine the steps that the parties had taken during the period of
executing these agreements and thereafter. Considering that a number of
major steps towards separation stood accomplished, barring those which
were dependent on certain accounting and auditing exercises, and the
OMP(I)(COMM)326-2016 & connect. matters
DigitallySigned
By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
brothers have continued to operate their businesses separately and
independently of each other since 30.06.2016, I have no hesitation in
holding that the date of separation of businesses of the family concerns of
the Beri family among Messrs. Atul and Deepak Beri, as per the settlement
agreements executed by them on 17.02.2016, 14.03.2016 and 30.04.2016,
was 30.06.2016.
36. Thus, it is clear that after 01.07.2016, neither does Mr. Deepak Beri
have any right or access to DBEPL and BMGL nor does Mr. Atul Beri have
any right or access to DBC and SKB. For this reason, the prayers made by
both Messrs Atul and Deepak Beri in their Section 9 petitions seeking right
of access to the premises or records of, inter alia books of accounts, bank
accounts, stock registers of raw materials, plant & machinery, ERP software
systems, e-mail addresses, domain names, tax records, etc., of the
businesses which are not falling in their share cannot be granted.
37. In the light of this conclusion, it is now time to chart a course for the
future by determining how the assets need to be partitioned with reference
to the Date of Separation being 30.06.2016. Since it is the common case of
the parties that complete separation had not taken place by 30.06.2016 and
some steps still need to be taken, they have placed voluminous pleadings on
record to suggest further steps which are required to be taken to complete
the remaining steps of separation as also to substantiate their claims of the
outstanding sums accruing to them. With respect to the latter, they are ad
idem that the accounts for all the businesses as on 30.06.2016, which were
required to be drawn up, were not. However, they also agree that accounts
for the years till 31.03.2015 are available with them, as also the Local
Commissioner's report on this aspect till 15.05.2017 which records the
position of the assets, salaries, etc, as on that date. Thus, in my view, there is
OMP(I)(COMM)326-2016 & connect. matters
DigitallySigned
By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
considerable material available today to draw out the relevant accounting
records for 30.06.2016.
38. As can be seen from the tables reproduced in the Addendum, which
are a small fraction of the suggestions received from Deepak Beri, Atul Beri
and Mr. S.K. Beri, there are a few nitty-gritty left to be taken care of, not to
mention the significant aspect of drawing up the accounts. However, having
regard to the nature and complexity of the accounts which need to be drawn
up and the steps left to be taken to seal the separation by using 30.06.2016
as the Date of Separation, I am of the view that it would be necessary to
appoint a Court Commissioner and a Chartered Accountant, to assist him,
and obtain a report from them before proceeding to issue any further
directions.
39. The Court Commissioner shall call for and examine the records of all
the four businesses pertaining to (i) statutory liabilities and profits, (ii)
tangible assets including employee transfers, raw materials, plants and
machinery, consumables as existing on 30.06.2016, (iii) intangible assets
including software, salaries, bank liabilities, pending orders as they stood on
30.06.2016. While dealing with these aspects, the Court Commissioner shall
take into consideration the list of plants and machineries prepared by the
learned Arbitrator on 10.06.2016 and the four reports furnished by the
previous Court Commissioner appointed by this Court on 03.01.2017. Once
this exercise is complete, the Court Commissioner shall reconcile the data
pertaining to the tangible and intangible assets, as they existed on
30.06.2016 with the help of the Chartered Accountant, and furnish a
detailed report bearing their valuation of the intangible and tangible assets
which stand divided thus far. While doing so, the Court Commissioner shall
include the following aspects:
OMP(I)(COMM)326-2016 & connect. matters
DigitallySigned
By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
i. The quantum of amount spent by either parties in pursuance of
court orders or otherwise, as payments to each other or to
discharge the liabilities of the businesses which were not
falling in their share, including all payments made towards
disbursement of salaries, increments, statutory dues, etc.
ii. The valuation of the machineries which stood transferred to
both the parties on 30.06.2016.
iii. The steps which are left to be taken, after obtaining due
suggestions from both the parties in this regard.
iv. Whether there is any need to conduct a forensic audit in this
matter or whether the existing records are sufficient to
determine the value of all assets belonging to DBEPL, BMGL,
DBC and SKB, as they stood on 30.06.2016. On this aspect, the
Court Commissioner shall rely on the professional and
technical expertise of the Chartered Accountant, who will give
his specific recommendations thereon.
40. Accordingly, Mr. Sudhanshu Batra, Sr. Adv. (+91 9811035392) is
appointed as the Court Commissioner. Further, Ravi Rajan & Co. LLP (+91
9810033815) with its office at 505A, 5th floor, Rectangle 1, 4D Saket
District Centre, Saket, New Delhi 110017 is appointed as the Chartered
Accountant. The Court Commissioner will furnish his report, along with the
report of the Chartered Accountant, before this Court by 10.03.2021.
Copies thereof shall also be provided to all parties herein. The Court
Commissioner and the Chartered Accountant shall be paid sums of INR 7.5
lakh each, to be borne equally by Messrs. Deepak and Atul Beri. This
remuneration may be subject to revision, if found necessary, at a later stage.
It will be open for the Court Commissioner and the Chartered Accountant to
OMP(I)(COMM)326-2016 & connect. matters
DigitallySigned
By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
call for any other details from the parties, as required. The payment of fee to
the Court Commissioner and Chartered Accountant as also the submission
of documents to them to be effected within a period of two weeks.
41. Before I conclude, I must observe that even though some of the reliefs
sought in the Section 9 petitions have been rendered infructuous, as
mentioned previously, there are a few important issues raised therein which
can be decided only once the reports of the Court Commissioner and
Chartered Accountant are received by this Court. One of these issues
pertains to the transfer of property situated at Sector-64, Noida to Mr.
Deepak Beri, who is its rightful owner under the settlement, and
compensation due to him, if any, on account of being deprived of its
possession since 01.07.2016. Similarly, for the time being, this Court is not
inclined to pass any directions regarding the conduct of forensic audit of the
family concerns as on 30.06.2016. In the light of the discussion thus far, it
would be appropriate to pass comprehensive directions in respect of all the
remaining steps towards separation, only after receiving the detailed report
from the Court Commissioner and the Chartered Accountant.
42. Once the report, as sought hereinabove, is filed before this Court by
10.03.2021, the matter shall be listed for further directions on 21.03.2021.
REKHA PALLI, J.
DECEMBER 24, 2020
OMP(I)(COMM)326-2016 & connect. matters
DigitallySigned
By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
ADDENDUM
TABLE I: Steps admitted to having been taken by Mr. Deepak Beri in
paragraph 48 of OMP(Enf)(Comm) 187/2018.
S.No. Agreement between the How acted upon
parties
1. Shri Deepak Beri (DB) to The parties have accepted the
carry on business in the respective names in which they are to
name of M/s DB carry on future business.
Engineering Co. (DBEC) or
any other name. Shri Atul
Beri (AB) to carry on
business in the name of M/s
DB Engineering Pvt. Ltd.
(DBE) and M/s Benaras
Marble & Granite Ltd.
(BMG)
2. DB to get the premises DB is in possession of Sector 6, 59
situated in Sectors 6, 59 and A-119 Okhla properties. However,
and 64, NOIDA (U.P.) DB is yet to receive possession of
owned by DBC, DBE and premises in Sector 64, NOIDA, which
property No.A-119, Okhla is being illegally retained by AB.
which is owned by M/s S.
In addition, the transfer of title of the
K. Beri& Bros. (SKB&B)
other premises is also pending. Bank
has ordered release of hypothecated
documents of Sector 59 and Sector 64,
which only needs to be collected from
the bank by signing the register by all
three parties.
3. AB to get property situated Admittedly, AB is in exclusive
in Sector 68, Sector 11, possession of these three properties.
NOIDA as well as property
OMP(I)(COMM)326-2016 & connect. matters
DigitallySigned
By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
owned by BMG in Phase-
II, NOIDA
4. AB was to be paid Rs. 7.50 These amounts stand already paid to
crores towards cost of AB by transferring a total amount of
construction of a functional Rs. 11,32,00,000/- (Rupees Eleven
unit in Phase-II, NOIDA Crores Thirty Two Lacs only) from
and an additional 1 crore in the account of DBE to BMG.
terms of Clauses 15 of the
The aforesaid amounts have been
MOU
utilized by AB for construction of the
unit at Phase-II, NOIDA. This fact
can be clearly ascertained from the
email of AB to the Ld. Arbitrator
dated 29.02.2016 wherein he
requested for release of Rs. 2.5 crores
for payment to the Building
contractor. Pertinently, on the same
day payment of Rs. 2.5 crores was
made to BMG by DBE vide Cheque
No. 858576.
On the strength of the payments made,
AB has been able to construct an
entire unit on a barren land.
5. Division of Logos This is done by a Coin Toss on
23.03.2016 duly recorded and signed
by nominees of AB and DB in the
presence of the Ld. Arbitrator and
SKB, who also signed the said paper.
6. Division of ERP Systems SK Beri& Bros (the concern falling to
the share of DB) purchased its own
ERP Software so as to facilitate the
division process.
A sum of Rs. 9,73,248/- was spent by
SK Beri& Bros towards the same.
The underlying objective was to have
OMP(I)(COMM)326-2016 & connect. matters
DigitallySigned
By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
separate and distinct ERP Softwares
between DBE and SK Beri& Bros, as
part of the division.
7. Employees The division of employees in terms of
the agreed documents has already
taken place, and the employees who
have opted by DB and AB were
identified and a list was circulated on
07.07.2016.
Further, in terms of the agreed
documents, an 8% increment has been
given to the employees, which is an
admitted fact.
8. Servers Emails & Website In pursuance of the division process,
separate servers have been purchased
by SK Beri & Bros so as to de-link
itself from DBE.
As part of the division process, SK
Beri & Bros have also created new
email ID's with the domain
'skberi.com' and has engaged
technicians to develop its independent
website.
DB and his staff were earlier using the
domain name "atlasknives.com",
which were disabled at the instance of
AB. This fact also shows
implementation of the division
process.
9. Copying & Scanning of With a view to facilitate the division,
Books of Accounts it was agreed that records / data would
be retained by DB and AB. As part of
the said understanding, the records of
DBE were digitalized and retained.
OMP(I)(COMM)326-2016 & connect. matters
DigitallySigned
By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
10. Intimation of Customers As agreed, the parties have jointly sent
various letters to customers regarding
the division between the AB Group
and the DB Group.
It may be pertinent to mention here
that AB has also been writing emails
to customers claiming that the division
process has taken place.
11. Working Capital and Bank As part of the agreed documents, more
Limits particularly in terms of Clause 32 of
the MOU, DB applied for Working
Capital loan and sanction of Credit
Facilities in the SK Beri& Bros with
Canara Bank, Okhla Branch in
April2016.
On the basis of the aforesaid
application, the Credit Facilities were
approved by Canara Bank vide its
letter dated 04.06.2016.
DB was also authorized by DBE vide
its letter dated 03.06.2016 (signed by
SKB, AB, DB and Ramesh Beri) to
collect the original property papers for
the premises which were to fall to
DB's share.
The term loan availed by DBE has
paid off in full under the orders of this
Hon'ble Court dated 22nd March,
2018 and the original documents of all
properties are currently deposited with
the Registrar General, Delhi High
Court in terms of the aforesaid order.
12. Telephone Connections As part of the division, an application
was made on 17.06.2016 to Airtel for
OMP(I)(COMM)326-2016 & connect. matters
DigitallySigned
By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
transferring telephone connections in
the name of SK Beri & Bros from
DBE.
13. Booking of Orders Pursuant to the division process,
orders were booked in SK Beri &
Bros, which was hitherto done in the
name of DBE. A perusal of the
Monthly Sales Order details shows a
sudden jump in the value of orders in
SK Beri & Bros for the months of
February, March, April, May, June
and July 2016.
14. Deployment of Security In terms of the agreed documents, the
Services parties were to employ ·security
services for the respective units.
Acting upon the understanding, the
services of G4S Secure Solutions
(India) P. Ltd. were availed by DBE.
15. Application of Licences/ DB has applied for EEPC and other
Permits licenses for the purposes of export in
the name of SK Beri& Bros, post the
division process. Similarly, license for
import has also been applied for.
OMP(I)(COMM)326-2016 & connect. matters
DigitallySigned
By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
TABLE II: Steps admitted to having been taken by Mr. Atul Beri in his
OMP(Enf)(Comm) 117/2019 as also his written submissions filed in
November 2019.
Sr. Obligation Clause Mode/Status of
No. No. implementation & comments
MOU dated 17.02.2016
1. Property at B-113, 114, 2 This plot has been in the
115, 131, 132, Sector 6, exclusive possession of
Noida (Owned by DBC, Deepak Beri and he is running
to go to Deepak Beri). his LLP from here.
Plot is owned by DBC, which
is a 50-50 partnership between
Deepak Beri and Anuja Beri
(Atul's wife).
Anuja may resign from DBC,
leaving the firm and property
to go to the share of Deepak.
2. Property at C-27, Sector 2&16 Property has been in the
59 Noida, (belonging to exclusive possession of
DBEPL, to go to Deepak Beri. DBEPL used to
Deepak Beri/SK Beri & run its Heat treatment plant
Bros) from here. This was the
mother unit to all other units.
Deepak's exclusive possession
of this property has severely
hurt the family business.
Atul shall cause DBEPL to
execute the requisite transfer
documents, to transfer this
property to SKB,
simultaneously with Deepak
OMP(I)(COMM)326-2016 & connect. matters
DigitallySigned
By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
(and his wife/children)
transferring their shareholding
in DBEPL and BMGL to Atul,
and resigning his Directorship
in these Companies.
3. Property at A-32, Sector 2&16 Atul shall cause DBEPL to
64, Noida (belonging to handover possession and
DBEPL, to go to execute the requisite transfer
Deepak Beri/ SK Beri & documents, in favour of SKB,
Bros) simultaneously with Deepak
(and his wife/children)
transferring their shareholding
in DBEPL and BMGL to Atul,
and resigning his Dictatorship
in these Companies.
4. Property at A-119, 2 This property is in possession
Okhla Phase-II of Deepak Beri. He is
(belonging to SKB, to supposedly running S.K Beri
remain with and Bros from the same, but
SKB/Deepak) actually he is clandestinely
running his LLP.
Since SKB goes to Deepak
Beri, no transfer documents
are required to be executed.
5. Property at B-1, Sector 4 In possession of DBEPL. No
68, Noida (belonging to execution of title documents
DBEPL, to go to Atul) required.
As per the MoU, One-Time
Lease Rent was to be borne by
DBE and AB-50/50. This has
not happened, and has to be
accounted for, while
computing final adjustment of
accounts.
OMP(I)(COMM)326-2016 & connect. matters
DigitallySigned
By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
6. Property at F-61, Sector 4 In possession of DBEPL/Atul.
11, Noida (belonging to No execution of title
DBEPL, to go to Atul) documents required.
7. Property at C-57, Phase 4 In possession of BMG/Atul.
II, Noida (belonging to No execution of title
BMG, to go to Atul) documents required.
Deepak to resign as Director
from BMG and hand over
shareholding.
8. Plot at C-12 Ecotech-11, 4 Possession awaited by
Greater Noida, to go to DBEPL. Deepak Beri be
Atul directed to handover requisite
documents of allotment.
9. Rs. 7.5 Cr. to be paid to 5&14a Not done/pending.
Atul Beri for Phase II
Has to be accounted for, while
BMG Unit.
computing final adjustment of
accounts.
10. Transfer charges 6&14b Will be paid by DBEPL at the
payable by DBEPL. time of execution of title
documents.
11. Refund of electricity 6 When DBEPL receives this
security deposit for from UPPCL, it will be shared
Sector 59 and 64. between Deepak and Atul (50-
50).
12. Equal sharing of 7 Has to be accounted for, while
statutory liabilities/profit computing final adjustment of
(till date of division i.e. accounts.
30.06.2016)
13. Division of tangible 8 For machinery, there was a list
assets including Plant prepared by Mr. Nagrath dated
and machinery, 10.06.2016, as per MoM dated
Inventory, and 14.03.2016.
OMP(I)(COMM)326-2016 & connect. matters
DigitallySigned
By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
Consumables Division and physical shifting
of machinery as per the
Nagrath list started
immediately and continued till
about 30.06.2016 but could
not be completed because
Deepak Beri did not co-
operate and started raising
disputes.
Division of machinery can
continue and be completed as
per the Nagrath List.
Some Inventory and
consumable have been
consumed with passage of
time, they can be divided
physically to the extent
possible and if required their
value as on 30.06.2016 can be
divided, as per the statutory
records.
14. Software 27 New accounting software has
been purchased by Deepak
Beri using common funds
(from SKB, prior to
30.06.2016).
Atul Beri also need to buy new
software from common funds,
since the old licenses have
expired. The cost of new
licenses may be accounted for
while computing final
adjustment of accounts.
15. Division of logo 9 Done & implemented (on
OMP(I)(COMM)326-2016 & connect. matters
DigitallySigned
By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
23.03.2016)
16. Separation of original 10 Pending, as in Deepak's
data and documents control.
Deepak claims to have
digitized the record, for which
money from common funds
was used. The same needs to
be supplied to Atul.
17. Transfer of domain 11 Pending as in Deepak's
www.atlasknives.com control.
Deepak be directed to transfer
the domain name to Atul.
18. Bank Liabilities 14c All liabilities cleared from
DBE. Extra interest paid by
DBE may be accounted for,
while computing final
adjustment of accounts.
19. Change in constitution 14d The same will be taken into
of companies/cost account while computing final
adjustment of accounts.
20. Rs. 1 Cr. to AB for 15 Not done.
getting lesser properties
May be accounted for, while
computing final adjustment of
accounts.
21. Documents for effecting 16 Pending, can be done at the
separation time Deepak and Atul exit
from each other's entities.
22. Transfer of Ever Sharp 18 Pending, to be done by
Knives to the highest executing Court.
bidder and closure of IE.
23. New Security 21 Done, with effect from May
OMP(I)(COMM)326-2016 & connect. matters
DigitallySigned
By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
2016.
24. Accounts and I.T 22 Deepak has been refusing to
Department at Okhla. share.
Access to be shared with May be directed to do so.
AB by DB
25. Employee transfer 24 As per MoM of 14.03.2016,
employees have exercised
their option of choosing which
brother they wish to work for.
This was done in March/April
2016.
However, from 30.06.2016 to
28.02.2018, workers who had
chosen to be with Deepak
Beri, but remained on the
official rolls of DBE, were
paid by DBE. Deepak has to
compensate DBE for the same.
This may be accounted for
while computing final
adjustment of accounts.
26. Compensation to 25 Full and final settlement upto
employees 30.06.2016, may be accounted
for, while computing final
adjustment of accounts.
27. Division of Net Current 31 The Net current assets of
Assets DBEPL as on 30.06.2016
were Rs. 13.35 Crores
(share of S.K Beri @
40%).
The Net current assets of
BMGL as on 30.06.2016
were Rs (-) 19..5 (share of
S.K Beri @ 33%).
OMP(I)(COMM)326-2016 & connect. matters
DigitallySigned
By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
The Net current assets of
SKB as on 30.06.2016
were Rs. 19.10 crores
(share of S.K Beri @
50%).
The Net current assets of
DBC as on 30.06.2016
were Rs. 0.15 crores (no
share of S.K Beri).
Thus, total NCA of the
entities stood at Rs. 13.45
crores, after exclusing Mr.
S.K Beri's share of Rs.
8.57 Crores, as on
30.06.2016, the same
stood at Rs. 4.88 crores.
Thus, Atul and Deepak's
share in the NCA is Rs.
2.441 crores each.
Deepak has to bring back
a sum of Rs. 13.4 crores,
representing the salaries
and other dues paid for
his employees (working at
his units), and other
statutory dues pertaining
to his units, paid post
30.06.2016, by DBEPL.
Thus, from division of
NCA, the sum receivable
by Atul is Rs. 1.22 crores
and the sum payable by
Deepak is (Rs. 13.40-
1.22) = Rs.12.18 crores.
28. Division of loans 32 Not required since loans paid
off. Extra interest has to be
accounted for, while
computing final adjustment of
OMP(I)(COMM)326-2016 & connect. matters
DigitallySigned
By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
accounts.
29. SKB to give his portion 33 No comments on behalf of
ultimately Atul Beri.
30. Proposed family 34 Parents alone can decide.
settlement to be made as
per parents wishes
MOM dated 14.03.2016
31. Plant and Machinery 5 Division of machinery can
Division take place as per the Nagrath
List.
32. Compensation for 4 See above.
Employees
33. Logos 1 Done
34. Order Division Done
35. Stock Division of stocks as on
30.06.2016 can be done as per
statutory records.
OMP(I)(COMM)326-2016 & connect. matters
DigitallySigned
By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
TABLE III: The table produced by Mr. Atul Beri in paragraph 30 of
OMP(Enf)(Comm.) 117/2019 filed by him, which states the remaining
steps to be taken towards separation, according to him:
Step Suggested Steps
No.
1. Mutual transfer of shareholding and ownership interests/ resignation
from Directorship.
• Share certificates of Deepak and his family in DBEPL and BMGL
to be transferred to Atul.
• Deepak to resign as Director of DBEPL and BMGL
• Atul and his family to transfer their ownership interests in SKB and
DBC to Deepak.
2. @Clause 7, 8, 13 & 31 of the MOU: Equal sharing of profits and
liabilities till 30.06.2016, Division of tangible assets including Plant
and machinery, Inventory, and Consumables and Division of Net
Current Assets (NCA), as on 30.06.2016.
• The Net current assets of DBEPL as on 30.06.2016 were Rs. 13.35
Crores (share of S.K [email protected] 40%).
• The Net current assets of BMGL as on 30.06.2016 were Rs. (-)
19.15 (share of S.K [email protected] 33%).
• The Net current assets of SKB as on 30.06.2016 were Rs. 19.10
crores (share of S.K [email protected] 50%).
• The Net current assets of DBC as on 30.06.2016 were Rs. 0.15
crores (no share of S.K Beri).
• Thus, total NCA of the entities stood at Rs. 13.45 crores, after
excluding Mr. S.K. Beri's share of Rs 8.57 Crores, as on 30.06.2016,
the same stood at Rs. 4.88 crores.
• Thus, Atul and Deepak's share in the NCA is Rs. 2.441 crores each.
• Deepak has to bring back a sum of Rs. 13.4 crores, representing the
OMP(I)(COMM)326-2016 & connect. matters
DigitallySigned
By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
salaries and other dues paid for his employees (working at his units),
and other statutory dues pertaining to his units, paid post 30.06.2016,
by DBEPL.
• Thus, from division of NCA, the sum receivable by Atul is Rs. 1.22
crores and the sum payable by Deepak is (Rs. 13 .40-1.22) =Rs.
12.18 crores.
The financial documents of the companies concerned, and the
relevant calculation sheets in this regard are being filed with the List
of Documents.
• In so far as machinery is concerned, there was a list prepared by
Mr. Nagrath dated 10.06.2016, as per the MoM dated 14.03.2016.
Division and physical shifting of machinery as per the Nagrath list
started immediately and continued till about 30.06.2016, but could
not be completed because Deepak did not co-operate and started
raising disputes.
• Division of machinery can continue and be completed as per the
Nagrath List.
3. @Clause 27, MOU: Software
• New accounting software has been purchased by Deepak using
common funds (from SKB, prior to 30.06.2016).
• Atul also needs to buy new software from common funds, since
the old licenses have expired. The cost of new licenses may be
accounted for while computing final adjustment of accounts.
4. @Clause 9, MOU: Division of logo
• Done and implemented, w.e.f. 23.03.2016.
5. @Clause 10, MOU: Separation of original data and documents
• Deepak claims to have digitized the record, for which money from
common funds was used. The same needs to be supplied to Atul.
6. @Clause 11, MOU: Transfer of domain www.atlasknives.com
• Deepak be directed to transfer the domain name to Atul.
OMP(I)(COMM)326-2016 & connect. matters
DigitallySigned
By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
7. @Clause 14c), MOU: Bank Liabilities
• All liabilities cleared for DBEPL. Extra interest paid by DBEPL,
may be accounted for, while computing final adjustment of accounts.
8. @Clause 14d, MOU: Change in constitution of companies/cost
• The same will be taken into account while computing final
adjustment of accounts.
9. @Clause 15, MOU: Rs. 1 Cr. To AB for getting lesser properties.
• Yet to be done.
10. @Clause 16, MOU:Deepak to hand-over all documents pertaining to
DBEPL in his possession, including but not limited to Customs
shipping bills, Customs certified invoices, import/export books,
DGFT licenses (90 in number).
11. @Clause 18, MOU: Transfer of Ever Sharp Knives to the highest
bidder and closure of IE Trading.
• Pending, to be done by the executing Court.
12. @Clause 21, MOU: New Security
• Done, with effect from May 2016.
13. @Clause 22, MOU: Accounts and I.T Department at Okhla.
• Access to be shared with Atul by Deepak, but Deepak has been
refusing to do so.
• Deepak may be directed to share access.
14. @Clause 24, MOU: Transfer of Employees
• The employees working at the units of DBEPL, under the control
of Deepak, to be transferred to SKB.
• As admitted by Deepak in para 48(7) of his Execution Petition,
division of employees between Deepak and Atul took place in
February 2016.
• Thereafter, Deepak's employees have been working exclusively at
the units under his control, which admittedly contribute no revenue
OMP(I)(COMM)326-2016 & connect. matters
DigitallySigned
By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
to DBEPL.
• Thus, only a formal transfer of employees from one entity to the
other is pending, which should be done as there can be no dispute
that the employees working at Deepak's units have to move to SKB.
• Deepak has to compensate DBEPL for the salaries, PF dues and
other charges paid for his employees and/or Units, post 30.06.2016.
As on date, the amount payable by Deepak under this head is Rs.
13.4 crores (approx.).
15. @Clause 25, MOU: Compensation to Employees
• May be accounted for, while computing final adjustment of
accounts.1
16. @Clause 32, MOU: Division of loans
• Not required since loans paid off. Extra interest has to be
accounted for, while computing final adjustment of accounts.
17. Withdrawal of complaints and Indemnity by Deepak.
• Deepak has filed complaints against DBEPL before various
authorities, including Income Tax, GST, PF, TDS, SFIO related
complaints.
• Deepak must withdraw all such complaints and undertake not to
file further complaints.
• Deepak must provide an indemnity to Atul that he shall share in
any tax or other statutory liability, if imposed prior to the cut-off
date.
• All liabilities have to be shared prior to the cut-off date.
Thus, if any tax or statutory liability is imposed prior to the cut-off
date, especially as a result of complaints initiated by Deepak, he
must bear his share of the same.
18. Deepak to give details of all liabilities created by him, in the name of
DBEPL, post 30.06.2016, and discharge the same
• Deepak has been in possession of DBEPL's Unit at C-27, Sector 59
OMP(I)(COMM)326-2016 & connect. matters
DigitallySigned
By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
Noida.
• He must give details of all liabilities created in the name of
DBEPL, with respect to this unit, since 30.06.2016, discharge the
same, and indemnify against any claims raised upon DBEPL,
pertaining to this unit.
19. Clauses 4, 5, 14 (a) of MoU, r/w clause 6 (under miscellaneous) of
the MoMdt. 14.03.2016:Rs. 9.30 Cr. To be paid to AtulBeri.
Not done /pending.
Has to be accounted for, while computing final adjustment of
accounts, or at the time of exchange of properties, whichever
happens first.
20. Exchange of properties: -
Property/Company Mode of Implementation
@Clause 2, MOU:Property at •This plot has been in the
B-113, 114, 115, 131, 132, exclusive possession of Deepak
Sector 6, Noida, (Owned by Beri and he is running his
DBC, to go to Deepak Beri). private LLP from here.
•This plot is owned by DBC,
which is a 50-50 partnership
between Deepak Beri and Anuja
Beri (Atul's wife). Anuja may
resign from DBC, leaving the
firm and property to go to the
share of Deepak.
@Clause 2 & 16, MOU: • Property has been in the
Property at C-27, Sector 59 exclusive possession of Deepak
Noida, (belonging to DBEPL, to Beri. DBEPL used to run its
go to Deepak Beri/SK Beri & heat treatment plant from here.
Bros) This was the mother unit to all
other units. Deepak's exclusive
possession of this property has
severely hurt the family
OMP(I)(COMM)326-2016 & connect. matters
DigitallySigned
By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
businesses.
• Atul shall cause DBEPL to
execute the requisite transfer
documents, to transfer this
property to SKB,
simultaneously with Deepak
(and his wife/children)
transferring their shareholding
in DBEPL and BMG to Atul,
and resigning his Directorship
in these Companies.
@Clause 2 & 16, MOU: • Out of the Units in Atul's
Property at A-32, Sector 64, possession at the time of
Noida, (belonging to DBEPL, to execution of the agreements, the
be given to Deepak Beri /S.K Unit @ Sector 64 Noida, had to
Beri & Bros). be handed over to Deepak as per
the MOU.
• Correspondingly, as per
Clauses 4, 5, 14 (a) of MoU, r/w
clause 6 (under miscellaneous)
of the MoM dt. 14.03.2016,
Atul is to receive a total sum of
Rs. 9.30 crores.
• The crystallised monetary
sum(s) receivable by Atul were
provided for (a) in view of the
difference in property values,
and (b) to compensate him,
since he was losing, and Deepak
was gaining an additional unit.
• Accordingly, possession
and/or title of this unit can be
handed over to Deepak, upon
Atul receiving the sum of Rs.
9.30 crores, as per Clauses 4, 5,
OMP(I)(COMM)326-2016 & connect. matters
DigitallySigned
By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
14 (a) of MoU, r/w clause 6
(under miscellaneous) of the
MoM dt. 14.03.2016, as
compensation
@Clause 2, MOU: Property at Since SKB goes to Deepak Beri,
A-119, Okhla Phase-II, no transfer documents are
belonging to SKB to remain required to be executed.
with SKB/Deepak.
@Clause 4, MOU: Property at In possession of DBEPL. No
B-1, Sector 68, Noida execution of title documents
(belonging to DBE, to go to required.
Atul)
However, as per the MoU, One-
Time Lease Rent was to be done
by Deepak and Atul- 50-50.
This has not happened, and has
to be accounted for, while
computing final adjustment of
accounts.
@Clause 4, MOU: Property at In possession of DBEPL/Atul.
F-61, Sector 11, Noida No execution of title documents
(belonging to DBE, to go to required.
Atul)
@Clause 4, MOU: Plot at C-57, In possession of BMG/Atul. No
Phase II, Noida (belonging to execution of title documents
BMG, to go to Atul) required.
Deepak to resign as Director
from BMG and hand over
shareholding.
@Clause 4, MOU: Plot at C-12, Possession awaited by DBEPL.
Ecotech-11 Greater Noida, to go
Deepak Beri be directed to
to Atul.
handover requisite documents
of allotment.
OMP(I)(COMM)326-2016 & connect. matters
DigitallySigned
By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
21. @Clause 6, MOU: Refund of electricity security deposit for Sector
59 and 64.
When DBEPL receives this from UPPCL, it will be shared between
Deepak and Atul (50-50)/
22. Ad hoc loan of Rs. 40,00,000/-, by DBEPL to SK Beri and Brothers
in terms of Order dated 1.11.2018 needs to be returned to DBEPL.
OMP(I)(COMM)326-2016 & connect. matters
DigitallySigned
By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
TABLE IV: The table produced by Mr. Deepak Beri in his reply to
OMP(Enf)(Comm) 117/2019, which states the remaining steps to be taken
towards separation, according to him:
Status as on 24.07.2018
S.No. DOA Person Required Implementation
Required Steps/Action
1. Existing Auditor/Receiver List out all orders Distribute orders
Order that are equally or share
available/pending percentage of
2. Additional Auditor/Receiver
in value profit.
Orders
3. Hidden Auditor/Receiver
Orders
4. Payment to Auditor/Receiver Over 20 Cr. Calculate
Vendors Already paid by liability and then
both, now share equally.
therefore get Pay if Bank
forensic audit Balance
done, list out available after
those that are splitting or
correct on date. account for in
the current
assets and
liabilities.
5. Staff (No Auditor/Receiver Make list of all Pay from DBE
retrenchment, those leaving account.
no soliciting, DBE, make full
full and final and final
OMP(I)(COMM)326-2016 & connect. matters
DigitallySigned
By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
payment and settlement upto
clear) date.
6. Raw Material Auditor Receiver Forensic audit to Distribute final
POs to be be done since figure equally.
signed by this step was not Compensate
both parties followed. each other for
then entered. difference, if
any.
7. WIP, RM, Auditor/Receiver Forensic Audit to Distribute final
Finished be done to arrive figure equally.
Goods at correct figure.
8. Production to Receiver Receiver takes All audit and
be caried out over and fixes up paper work to be
a date till completed and
separation. then distribute
equally.
9. Managing Receiver Receiver takes Handover to
Plant/all over, appoint individual
departments new Security Co. Group on fixed
were to be date.
done with
intimation by
MN also
10. Security Receiver Receiver takes Hands over to
Independent over, appoints individual group
Security to new Security Co. on DOS.
be appointed
and no
movement
without
approval.
11. Books of Auditor/Receiver Get forensic Divide the final
Account audit done along equally.
Everything to with regular
OMP(I)(COMM)326-2016 & connect. matters
DigitallySigned
By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
be recorded Audit and
and checked finalise accounts
Balance sheet
to be made
given books
of last 3
years to
Auditor.
12. IT Separate, Auditor/Receiver List out all that is Distribute
B & G and there make 2 equally by Toss.
other equal list.
software
13. Travelling
14. Independent Auditor/Receiver List out all the Hand them back
Unit independent on DOS.
units. Clear them
running not
or take them
allowed within the
company till
DOS.
15. P&M List to Auditor/Receiver Appoint Distribute
be Chartered equally by Toss.
Engineer to value
made and
machine as per
distributed. CC list and make
2 equal lists.
16. Intangible Auditor/Receiver List out all that is Then distribute
Mainly owned by the equally by Toss.
software company after
Forensic Audi
available, make 2
equal lists.
17. Working Approach
Capital Bankers
OMP(I)(COMM)326-2016 & connect. matters
DigitallySigned
By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
independently.
18. The Receiver Fix up future Handover to
30.06.2016 date of DOS, all each group.
was the DOS accounts upto
or any other DOS to be made,
date as per documents made
MN, all of ownership
documents to transfer assets
be made by and liabilities.
DOS. Keep with
Escrow
19. Specific Auditor/Receiver Appoint Forensic Adjust whatever
Audit and Auditor for this. is the difference
adjust in in each
DB/AB unit/group.
Account
20. Expenses of Auditor/Receiver Not required
C1 since the date
31.03.2016 did
not work out.
21. Efforts to Auditor/Receiver Fix new date for Sign Balance
finalise finalisation of Sheet and file
account by Forensic Audit as with different
30.06.2016 well as Statutory Authorities.
and all Audit.
accounts to
be finalized
by then.
Terms of the MOU
S.No MOU Person Required Implementation
OMP(I)(COMM)326-2016 & connect. matters
DigitallySigned
By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
. Required
1-2 What Deepak will Auditor/ Handover Transfer
get Receiver possession properties in the
of 64 to correct name and
Deepak keep it escrow
with share
transfer
certificate from
Deepak.
Handover on
DOS.
3-4 What Atul will Receiver Pay Handover/exchan
get onetime ge documents
lease rent when everything
for 68 is complete and
approved by
Court on DOS
until then in
Escrow.
5. Atul to get 7.5 Cr. Auditor/ Audit Pay or get back
Receiver Accounts as the case may
be anything
above 7.5 Cr.
include Cash
Payment of 2.5
Cr.
6. Transfer of 59/64 Receiver Handover Transfer
to Deepak possession properties in the
to Deepak Correct name and
get all exchange on
ownership DOS.
documents
made and
kept in
OMP(I)(COMM)326-2016 & connect. matters
DigitallySigned
By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
Escrow.
7. Statutory assets Auditor/ Get Pay all the dues
and liabilities to Receiver forensic of all companies
be equal audit done and file all
and returns.
complete
account
upto DOS.
8. All tangible and Auditor/ Get Divide by Toss
intangible assets Receiver forensic and handover the
to be divided audit done each person at his
also units.
chartered
engineers
to make 2
equal lists.
9. Atlas logo to be Auditor/ Get Board Handover to
divided Receiver Resolution Deepak on DOS.
made by
DB
Engg(P)
Ltd for
transfer.
10. Date & Auditor/ Make a list Hand over to
Documents to be Receiver of all that DOS.
exchanged. is required
for each
other
including
DB
Engg(P)
Ltd. Board
Resolution
11 Atlas domain Receiver Make all Handover on
OMP(I)(COMM)326-2016 & connect. matters
DigitallySigned
By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
name the papers DOS
required
12 Deepak can use Receiver Undertakin Hand over on
atlas knives after g from DOS
2 years Deepak to
this effect
13 Machine List Auditor/ List of Toss for which
Receiver CC's is list to where and
authentic, then shift to each
get other unit before
Chartered DOS
Engineers
to value,
make two
equal
groups
14. Money for Auditor/ Keep 10- Use whatever is
separation Receiver 12 Cr in required? Balance
Escrow to be distributed
on DOS.
15. Atul to be paid 1 Auditor/ Get Audit Pay or get back
Cr Receiver done as required
16. 30.06.16 as cut Receiver Decide Finish everything
off date new date by then
possibly
60 days
ahead
17. Documents to be Auditor/ Make all Exchange on
made Receiver documents DOS
get them
signed,
keep in
Escrow
OMP(I)(COMM)326-2016 & connect. matters
DigitallySigned
By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
18. IE & Eversharp to Auditor/ IE Handover on
be distribute Receiver insolveme DOS
nt for
Eversharp
toss or bid
and make
papers for
transfer.
19. Entries in Books Auditor/ Get Make adjustment
with approval of Receiver forensic on group account
both Audit done as required.
and
account for
everything
21. Common Security Auditor/ Appoint Handover unit on
Receiver independe DOS
nt security
in all units
22. IT Personal & Auditor/ List out Handover unit to
Hardware Receiver whatever each group
is not done
23. Representative to Receiver Receiver is Hand back
be run units i.e. appointed, everything on
other than family he is not DOS
family
24. Employees to be Auditor/ Make list Pay & Clear
given an option Receiver and before DOS
amount
due for
those who
decided to
move from
DBE
25 & Compensation to Auditor/ Make list Pay & Clear
OMP(I)(COMM)326-2016 & connect. matters
DigitallySigned
By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
26 be given and full Receiver and before DOS
& final amount
due for
those who
will move.
27 Intangible Assets Auditor/ Make list Distribute on
like software Receiver two equal DOS
if not
possible
buy and
make
equal or
compensat
e in
money.
28. To have equal Receiver Will be
share done once
everything
is achieved
29. Restriction of Nothing
Business needs to be
done.
30. Accounts to be Auditor/ Get Books and final
prepared/maintain Receiver forensic account to be
ed till date with Audit done made upto DOS
knowledge of all finalized and
signed by all.
31. Current assets to Auditor/ Get Divide equally
be divided Receiver Forensic
Audit done
arrive at
correct
figure
32 Will approach No limit Both can do
OMP(I)(COMM)326-2016 & connect. matters
DigitallySigned
By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
bank for working now individually after
capital DOS
33 SK Beri holds his Auditor/ Take Get papers made
share Receiver average for his share, also
share in all papers for his
companies shares finally
arrive at going to Deepak
his and Atul.
percentage
of
ownership
34 Nitting Gritting to Receiver Receiver Receiver to
be worked out to decide decide
35 Code of Conduct Receiver Receiver Receiver to
to decide decide
36 GK JB other Court Oral Get it in writing
family properties settlement and approved by
done Court
37. All assets and Auditor/Receiv Get Distribute equally
liabilities of DBE er Forensic on DOS
and other to be Audit
finalized and Done
shared equally
38. No email to be Receiver Receiver Receiver to
sent to decide decide
39. MOU Binding Court Court has
given its
order on
31.05.2018
OMP(I)(COMM)326-2016 & connect. matters
DigitallySigned
By:MANJU BHATT
Signing Date:25.12.2020
09:21:00
