Company Law Board
Shri Prakash Nath, Shri Manu Nath, Mrs. ... vs Shri Achal Nath, Mrs. Sheila Ashok Nath, ... on 30 May, 2002
Equivalent citations: [2002]111COMPCAS711(CLB)
ORDER
S. Balasubramanian
1. It is unfortunate that the contesting parties who had decided to amicably settle the disputes as early as in 1992 by dividing the 4th respondent company into two equal divisions, each to be damaged independently and having thus managed, should have come before us through this petition filed under Sections 397/98 of the Companies Act (the Act) complaining of mismanagement against each other.
2. The facts of the case are that the company was incorporated in Lahore in 1939 and the registered office was transferred to Delhi in 1967. The parties to the proceedings are family members of two brothers. The 1st petitioner Shri Prakash Nath, is one of the brothers and the 1st respondent is the son of the other brother, Shri Ashok Nath. The company was being managed by both the brothers jointly till about 1990. On 8th April, 1990, a family settlement was arrived at between the brothers in the presence of 5 Panchas. In pursuant to this family settlement, further discussion were held between the parties with the assistance of the Panchas and finally, the company was divided into A and B Divisions w.e.f. 30th November, 1992 in pursuant to a Memorandum dated 29th August, 1992 by which Division A was taken over by Shri Ashok Nath while Division B was taken over by the 1st petitioner and these Divisions are being independently managed by these two groups right from 30.11.92. A balance Sheet as on that day was also got prepared to identify the assets and liabilities as on that date. Presently, both the groups hold 50% shares each in the company. In addition to the company, there are two other companies, namely, the 5th respondent (AMRO) and Ashok Brothers Impex Private Limited within the family. The petitioners' group filed this petition alleging various acts of oppression and mismanagement in the affairs of the company by the respondents' group. Considering the fact that there had already been a family settlement by which the company had been divided into two divisions 5 years back, to be independently managed by the respective groups, in the hearing held on 9.12.1997, it was suggested by this Bench that once the liability of the company is divided between these two divisions, the disputes between the parties could be finally settled and this suggestion was accepted by the parties. Accordingly, this Bench, by an order dated 9.12.1997 appointed M/s. V. Shankara Iyer & Co., Chartered Accountants to examine the books of accounts to identify the various items of liabilities shown in the books of accounts as on the date of the division of the company and give their recommendation on apportionment of these liabilities between these two divisions. However, both the sides represented that the report given by the Chartered Accountants did not co all the claims made by each division on the other and as such the report was not acceptable to them and as such no further progress could be made. Thereafter, from time to time, the parties wee reporting that compromise talks were going on between the parties. In the meanwhile, on an application made by the respondents complaining that the petitioners' group was taking action to close the Division B, this Bench passed an order on 16.9.1999, directing the petitioners' group not to proceed with the closure application pending with the Government. Thereafter also some attempts were made by this Bench to get the matter resolved amicably but without any result. In spite of the division of the company into A and B Divisions between the two groups, yet, various issues relating to the ultimate parting of ways remained incomplete resulting in filing of this petition.
3. The main allegations in the petition are that shareholders belonging to Division A, being the respondents, are guilty of diversion of funds of the company through ABRO and Ashok Brothers Impex Private Ltd. (ABI) and that in spite of division of the company into Divisions A and B, the Division A has been withholding legitimate claims of Division B and that various other issues relating to the division are not being implemented by Group A. On the basis of these allegations, the petitioners have sought for directions to Group A to implement, in full, the terms of the family settlement so as to bring about legal separation of the company, to compensate the company of all the funds diverted to ABRO and ABI etc.
4. Ms. Pinki Anand, Advocate, appearing for the petitioners submitted:
Even though as per the family settlement, all the three companies were to be polled together for the purposes of division, it was not done so. The benefits of ABRO and ABI were retained by Division A. ABRO was incorporated as a family company in 1974, yet, it always remained under the control of late Prakash Nath. Over the years, huge amount of the company had been diverted from the company to ABRO, ABRO supplies electronic boxes and the company is the sole purchaser of these electronic boxes which are used in the final product manufactured by the company. The final product, namely, the balancing machines are marketed through ABI. Before ABRO was set up, the average profit margin of the company was 11.55%. However, after the company started procuring electronic boxes from ABRO, the average profit margin from 1976 to 1992 came down to
5.17% and the average profit of ABRO during this period was 36.44% very clearly indicating that there had been a large diversion of funds of the company to ABRO. The chart enclosed with the written submissions would indicate that a sum of Rs. 1.52 crores have been diverted and with interest the diverted amount comes to nearly Rs. 9 crores. Of this amount Division B is legitimately entitled to get Rs. 4.5 crores.
5. She further submitted : In ABI, Group A holds 51% shares and Group B 49%. ABI is the sold selling agent of the company right from 1965. Till 1974 i.e. before ABRO was incorporated, ABI was charging around 6% commission which was later hiked up to 13% commission. For the period from 1965 to 1992, the company had paid Rs. 3.83 crores as commission to ABI. Payment of such a huge amount of commission reflects mismanagement on the part of Group A. Even assuming that ABI could retain 25% of the said amount as commission, of the balance of Rs. 2.87 crores, Division B should get Rs. 1.44 crores. Since both ABI and ABRO have no infrastructure assets of their own, they are using all the facilities of the company. The over draft facility taken by the company was being used for the benefit of ABI and ABRO. The amount of interest paid by the company for the overdraft facilities attributable to ABRO and ABI works out to nearly Rs. 6.4 crores which should be recovered from ABRO and ABI. Of this Rs. 6.4 crores recoverable from ABRO and ABI, Division B should get Rs. 3.4 crores.
6. Dealing with the issues relating to division of the company, the learned counsel submitted : In the proceedings before M/s Sankara Iyer & Co Division B had made a claim of Rs. 1.9 crores against Division A while Division A had made a claim against Division B of Rs. 0.8 crores. In all fairness, Sankara Iyer & Co should have awarded Rs. 1.01, being the difference between the two claims, but awarded a sum of Rs. 21.9 lacs which has also not been paid by Division A to Division B. Adding interest on this amount, the total amount payable by Division A to Division B works out to Rs. 33.75 lacs. Even though the Bench appointed M/S Shnakar Iyer & Co. to settle all the claims between the parties in terms of the family settlement, yet, they have not dealt with the claims of Division B on account of diversion of funds to ABRO and ABI and also in respect of interest on over draft and the other actual claims of Division B. Thus, there has been no final settlement in regard to the inter-se settlement within the parties.
7. Summing up his arguments, the learned counsel submitted that all the three companies are family companies and therefore all the assets and liabilities of these companies should be clubbed together and should be equally divided between Division A and Division B. If this is done, Division B would be entitled for nearly Rs. 9 crores from Division A. Till such time the same is done, Division A should be directed to pay at least Rs. 22 lacs determined by M/S Shankar Iyer & Co. together with an interest of 24%. This Bench should pass an order effectively dividing the company into Division A and Division B to enable each group to independently manage the divisions pending final order by competent courts.
8. Dr. Singhvi appearing for the respondents submitted : This petition is not maintainable as all the events complained of relate to years prior to 1992 when the division took place. Since the alleged acts are past and stale, there could be no cause of action to file this petition. It has been held in Shanti Prasad Jain v. Kalinga Tubes Ltd. (35 CC 351- SC), Chander Ktishan Gupta v. Pannalal Girdhari Lal Pvt. Ltd. (55 CC 702-Del) Palaghat Exports Pvt. Ltd. v. TV Chandran (79 CC 213- Ker) that there should be continuous acts of oppression/mismanagement continuing up to the date of the petition, which is not the present case. Therefore, this petition is not maintainable. Further by this petition, the petitioners seek to implement the family settlement which is not permissible in a Sections 397/398 petition. No family arrangement or private agreement could be sought to be enforced through this petition as contractual obligations cannot form part of this petition. Further, the 1st petitioner has been a director of the company for a long time and as such he had full knowledge of the transactions between the company and ABRO/ABI. By having not raised any objections for over 20 years, the petitioner are estopped from raising these issues on account of acquiescence, participation and waiver.
9. On merits, he submitted : The main allegations in the petition relate to ABRO and ABI. The allegations against these two companies relate to the period before 1990 and as such do not deserve to be examined at this point of time. ABRO was incorporated in 1973 by Shri Atul Nath (S/o Ashok Nath). The petitioners' group never participated in this company. Shri Atul Nath being an electronic engineer developed dynamic balancing machine at the laboratories of IIT Delhi and there after set up his own factory. With a view to have a synergy, while electronic component was supplied by ABRO, mechanical aspect was done by the company. Both had separate cost and adding a margin of profit to be shared by both, composite product was marketed. By this business and commercial association, the turnover and the profit of the company went up between 1976 and 1990 as would be evident from Annexure A-1 to the reply. None of the resources of the company was ever utilized by ABRO and this fact is known to the petitioners. Therefore, this allegation of diversion of funds of the company to ABRO is absolutely false.
10. In regard to ABI; the learned counsel submitted; Both the groups are shareholders in the company. The 3rd petitioner has been a director of this company. This company was appointed as the sole selling agent of the company and in addition it also handled imports and other products. The appointment of this company as the sole selling agents had been going on right from 1971 with the approval of the Company Law Board. As a matter of fact, many of the applications to the CLB were 0 signed by the 1st petitioner himself. The rates of commission payable had also been approved by the CLB. This company had its own infrastructure and as such none of the facilities of the company was being used by ABI. Even otherwise, since the petitioners' group hold substantial shares in ABI, even if abnormal commission had been given to ABI, the petitioners also had the benefit of the same.
11. He further submitted : One of the promoters of the company Late Ashok Nath was the father of the 1st respondent. At the time when the disputes arose, Ashok Nath family held majority shares and the petitioners group held only 28% shares. At the time when the family settlement was arrived at, all factors had been taken into account and it was decided, as a matter of good will, that even though the petitioners were not equal shareholders, they would be given 50% shares in the company and that the company would be divided into two Divisions, each group taking one Division. The whole settlement was arrived at with the assistance of 5 Panches. It was also agreed that the parties would abide by the decisions of one Shri M.S. Sud, Chairman of the company. After a number of discussions, by an agreement dated 21.1092, de facto division was finalized. A separate Balance sheet as on 30.11.92 was prepared and all assets and liabilities were separated as per this Balance Sheet. From that date, the two divisions were being managed independently by the two groups. Even though, there had been a number of further discussions, finality was given to the family settlement on 27.1.1994 as is evident from the document signed by both the groups and also by Shri Sud (Page No. 366 of petition). According to this, Division B was to take the bank liability of Rs. 32,31,633 which the Division B has not taken over so far and has also not implemented some of the decisions of Shri Sud. If Division B had settled these issues, there would have been no need to file this petition.
12. He further submitted: At the time of division, Division B got more favourable terms in the nature of products, part of the land of the factory etc. After the petitioners took control of Division B, they have been mismanaging this Division. Right from 1996 onwards, this Division has started incurring losses and there has been siphoning of funds. Presently, this Division remains closed affecting nearly 120 employees. This closure was done without the approval of the Board. All products which were given to Division B have become outdated as no steps had been taken to introduce technological updates. As on date, the liability of Division B is over Rs. 4.7 crores which includes workers' liability of about Rs. 3.2 crores. The net worth of Division B has been taken completely eroded. Since Division B could not clear, the dues to suppliers, one M/S Bright Tips Private Limited to which Division B owes Rs. 66.8 lacs has filed a winding up petition before the Delhi High Court. Having divided the company and taking control of Division B, now the petitioners are trying to sell away the assets of Division B and pass on the huge liabilities to Division A.
13. Summing up his arguments, Dr. Singhvi submitted: The 1st petitioner is guilty of diversion of the business of the company. Even though the parties have divided the company into two Divisions, yet, the company is not a party to the family settlement and for all legal and practical purposes, the company alone would be responsible for actions of these two independent Divisions. Any liability of Division B would be the liability of the company and therefore the fortunes of Division A also will be affected. The very fact that the petitioners have closed down the activities of Division B, would indicate that they are no longer interested in the welfare of the company. It is further strengthened by the fact that the petitioners had sought for vacation of the interim order dated 2.4.1997 wherein this Bench had ordered that none of the movable and immovable properties of the company would be disposed or parted with. By getting the order vacated, the petitioners seek to dispose of the assets of Division B. The Board of Directors of the company comprising of majority from the respondents' group is not in a position to take any decision in view of the order of this Bench dated 2.4.97. De-merger of the company as prayed for by the petitioners is not practical as the liabilities of Division B is more than its assets and that retrenchment cost of the workers of that Division would be substantial and that the creditors of Division B have filed a winding up petition against the company claiming over Rs. 80 lacs. Therefore, practical solution to the disputes would be, since the petitioners have mismanaged the affairs of Division B and since none of the allegations has been established, this petition should be dismissed, the 1st petitioner be removed from the Board and the Board should be allowed to take appropriate decisions in regard to Division B. Or else an independent valuer be appointed to ascertain the present value of Division B and that if the value is negative, the petitioners should be asked to compensate the same. In other words, the entire company should be allowed to be managed by Division A.
14. Ms. Pinky Anand, in reply, submitted : The contention of the respondents that the allegations of oppression and mismanagement did not continue up to the date of the petition is not correct in as much as the diversion of funds to ABRO and ABI has resulted in substantial loss to the company and this had the effect till the date of filing of the petition. Even though, through a family settlement, all the disputes were sought to be settled, yet, due to the obstacles created by Division A, no finality could be given to the family settlement and the implementation was being discussed till the filing of the petition. Since non implementation of the family settlement itself is an act of oppression and mismanagement, such non implementation till the date of filing of the petition. Therefore, the contention of the respondents that there has been delays and latches cannot be accepted. As far as the contention that this petition has been filed to seek implementation of the family settlement which cannot be done through this petition, the Company Law Board has inherent powers to do justice in the interest of the company and the shareholders. The admitted position is that all the 3 companies are family companies and the principles of partnership could be applied in resolving the disputes between the family members. In Pushpa Prabhudas Vohra v. Vohra Exclusives Tools Private Ltd. (2000 36 CLA 377), this Board has applied the principles of quasi partnership in a family company. Since both the sides have agreed to settle the disputes by division of the company, the only issue remaining settlement is compensating Division B of all the funds diverted to ABRO and ABI. If this is done, there will be complete settlement of all the disputes. Further, this Bench has already recognized the family settlement while appointing M/S Shanker Iyer & Co., to give a finality to the family settlement by assessing the liabilities to be shared by both the Divisions. Therefore, the respondents cannot claim that the family settlement cannot be sought to be implemented through this petition. In other words, by consenting to the appointment of M/S Shankar Iyer & Co., the respondents have subjected themselves to the jurisdiction of this Bench in implementing the family settlement and as such they are estopped from claiming that the family settlement cannot be implemented through this petition. Further, both the parties have acted upon the family settlement by dividing the company into tow Divisions and independently managing the same for over 10 years. When is now required to be done by this Bench is only to ensure that all the assets and liabilities of the 3 companies are pooled together and divided between the two Divisions. This pooling of the 3 companies has also been agreed to by the respondents in view of letter of 9.4.1998 from M/S Shankar Iyer & Co., suggesting such pooling.
15. She further submitted: It is wrong to say that the agreement dated 27.1.1994 had given a finality to the family settlement. This agreement related exclusively to the Bank liability and not other pending issues. As a matter of fact, there were further meetings with Shri Sud as is evident from the documents dated 24th September, 1994 (Page 339 of the petition), 25th October, 1994 (Page 340 of the petition), 12.6.1995 (Page 341 of the petition). Till filing of this petition, various other issues more particularly relating to division of assets and liabilities of the company and also pooling of the assets and liabilities of ABRO and ABI remain unresolved in relation to the family settlement. Further, Division A was to pay a sum of Rs. 20 lacs to ANZ Grindlieys Bank by sale of a plot in Okhla Industrial Estate in terms of agreement dated 25.10.1994. However, it had failed to do so and the bank has filed a suit before DRT. However, Division A had sold this plot and has pocketed the money. The contention of Division A that it had cleared dues of Rs. 50 lacs to ANZ Grindleys is false as is evident from the fact that this amount has not been indicated to M/S Shankar Iyer & Co. as having been made.
16. As far as the allegation of the respondents that Division B has accumulated huge liabilities is concerned, the learned counsel submitted that the respondents have execrated the liabilities of Division B. This Division started making losses due to acts of mismanagement by Division A. As on date, the liabilities of division B is about Rs. 2.3 crores and Division has sufficient assets to take care of these liabilities and therefore it is wrong to say that the net worth of Division B has become negative. Therefore, the prayer sought for by the petitioners should be granted.
17. We have considered the pleadings and arguments of the counsel. As we have indicated in first paragraph, it is unfortunate that inspite of having mediated through 5 Panchas and having agreed to abide by the decision of Shri Sud, both the sides have complained that the other side has not complied with the various decisions given by Shri Sud. To resolve the disputes relating to apportion the quantum of liabilities, this Bench had appointed M/S Shankar Iyer & Co., Chartered Accountants and this effort also failed in bringing about complete settlement between the parties. The entire episode only reflects uncompromising attitude of the parties.
18. In regard to the various objections raised by the respondents that the petition suffers from delay, latches and that the act complained are stale and past and that the acts complained of did not continue upto the date of petition etc, we agree that these objections are very valid. But, in the present case, these objections cannot be taken as the respondents, had, by their agreeing to the appointment of M/s Shankar Iyer & Co. abandoned their right to advance these objections. Therefore, we are not looking into these objections to test the maintainability of this petition. When we come into the merits of this case, these aspects would be considered.
19. Before we proceed with the merits of the case, it is essential to reproduce the order of this Bench dated 9.12.97 as it would have a bearing on the merits. The said order reads "When the matter was heard it was brought to our notice that, there had already been a family settlement between the parties according to which the assets of the company have already been divided into Division A na d Division B and taken over by the respective parties. The only disputed issue relates to the apportionment of liability of the company which has to be apportioned between Division A and Division B. The counsel for the parties have agreed that the liability that is shown in the books of account on the date of division would be examined by a Chartered Accountant and on the basis of the findings given by him, the same will be apportioned between Division A and Division B. They have sought our directions in regard to the appointment of a Chartered Accountant. We hereby appoint M/S Shankar Iyer & Co., Chartered Accountants to examine the books of accounts to identify the various items of liabilities shown in the books of accounts as on the date of division of the company and give their recommendations on apportionment of these liabilities between the two divisions. ....."
20. In the background of this order we have to examine the allegation of the petitioners. Their main grievance is that late Ashok Nath of Division A had diverted the funds of the company to ABRO and ABI. As far as ABRO is concerned, the petitioners have not furnished the manner and mode of the alleged diversion. Since the company was procuring electronic parts from ABRO, the only manner by which the funds could have been diverted is by paying excessive prices for these electronic parts. No details have been given in this regard. The petitioners, it appears, seem to have raised this allegation purely based on the comparative percentage of profits of the company and that of ABRO. Another allegation is that ABRO had no assets or resources of it own and that the resources of the company were being utilized by ABRO and this has been denied by the respondents. Since ABRO is a limited company, the petitioners could have produced the Balance Sheets and Profit Loss Accounts of the company, from which we could have found out whether ABRO had its own resources. We note that even the respondents have not produced these documents. Further, the period of alleged diversion was between 1972-1990, that is over a period of 15 years during which period, the 1st petitioner was on the Board of the company. Therefore, in view of absence of proper material to substantiate this allegation of diversion, and the 1st petitioner was a director of the company during the relevant period, we cannot hold that the respondent shareholders had acted in a manner prejudicial to the interests of the company in its dealing with ABRO or that funds had been diverted to ABRO.
21. As far as ABI is concentred, we find that the petitioners are also substantial shareholders in this company with one of them on the Board and that the 1st petitioner had signed the applications for getting approval of the CLB for payment of commission to ABI. A party to a decision can never allege mismanagement, that too, after a period of a decade. Therefore, we do not find any merit in the stand of the petitioners that by paying commissions to ABI, the respondent shareholders had acted against the interest of the company. In regard to allegation that ABI was suing the resources of the company is concerned, we reiterate our observation in regard to ABRO in this respect.
22. Having held that the petitioners have not established the two main allegations in the petition regarding diversion of funds of the company, the next issue for consideration is as to what remains in the petition to adjudicate. The petitioners have claimed that as per the family settlement, the resources of all the three companies were to be pooled together and division was to take place and that it has not been done. The learned counsel for the respondents contended that this petition cannot be invoked for implementation of a private/family agreement especially when the company is not a party. A reading of the order of this Bench dated 9.12.97 would indicate that both the sides had agreed for the implementation of the family settlement in these proceedings subject to the apportionment of the liabilities between the two divisions as determined by a Chartered Accountant. When the parties themselves had agreed as above, as far as these proceedings are concerned, the issue as to whether a family/private agreement between the shareholders could be implement through a petition under Sections 397/98 has become redundant and as such we are not examining the same.
23. As far as the contention of the petitioners that all the resources of the three companies are to be pooled together for a meaningful division is concerned, we do not find any scope to do so in view of our order date 9.12.97 according to which the only issue, as per the statement of the parties, that remained for determination was the quantum of liabilities to be apportioned as per the books of accounts of the company on the date of the division of the company and accordingly this bench also appointed M/s Sankara Iyer & Co only for determination of the same. This being the case, no other issue could have been raised for determination before M/s Shankara Iyer & Co and they were right in not entertaining any other claims other than the liabilities recorded in the books of accounts of the company on the date of division. We find from the report of the Chartered Accountants that both the sides had raised issues which were not related to entries in the books of accounts of the company on the date of the division and that has led to the present stalemate.
24. In regard to the contention of the respondents that the document dated 27.1.94 has given finality to the division, we find that the same is not borne on facts. As rightly pointed out by the petitioners there had been 4 other meetings subsequent to that date wherein issues relating to the division had been discussed and recorded. Further, the very fact of the respondents agreeing to the appointment of M/s Sankara Iyer & Co indicates that there we issues still to be settled. This being the case, it is quite possible, as contended by the petitioners, that the document dated 27.1.97 relates only to the apportionment of the bank liabilities between the two divisions.
25. The main object of the provisions of Section 397 and 398 is that the acts complained of should be put an end to. In family companies where the shareholding is more or less equal, if the disputes arise between the two groups of shareholders, the best way of putting an end to the acts complained of is either to direct one of the groups to go out of the company on receipt of fair consideration for their shares or divide the company so that each group could manage one part of the company independently of the other. In a number of such cases, with the view to put an end to the acts complained of, this Bench had ordered that one of the groups should go out of the company on receipt of fair value for their shares. In some cases, wherein the shareholding is more or less equal and that the possibilities of a company being divided existed, this Board had also ordered division of the company (K.N. Bhargava v. Trackparts India Ltd. 2000 2 CLJ 275) each part to be to be independently managed by the warring groups. This decision was upheld by Allahabad High Court.
In the present case, the parties themselves had divided the company and each group has been managing the affairs of a particular division independent of the other for over 10 years, but without formal division into two separate companies. It is the reason by the respondents are complaining that the liabilities of Division B would fall on the company to be taken care of by Division A. In view of this, the respondents have sought for allowing them to take decision regarding Division B while the petitioners desire for formal division after pooling of the assets of the 3 companies. We have already held that the pooling of the 3 companies is beyond the scope of the consent order dated 9.12.97. Since the company had already been divided and that the two groups are managing the affairs of the divisions independently for nearly 10 years, it would be more appropriate to formalize the division of the company especially when we find that both the division are independently maintaining separate accounts which are consolidated for the purpose of preparation of the annual accounts of the company. Therefore, in exercise of or powers under Section 402 of the Act, we direct as follows: The petitioners will incorporate a new company in respect of Division B within period of 3 months. All assets and liabilities of Division B as on date shall be taken over by the new company. The existing company will consist of Division A along with its assets and liabilities. All the assets acquired and liabilities incurred by or attributable to Division B with effect from 30.11.1992 shall be with the new company and the assets acquired and liabilities incurred by or attributable to Division A shall be with the company. As far as the apportionment of the unapportioned liabilities as on 30.11.92 between the two divisions is concerned, since this issue is pending for long inspite of intervention of their parties viz Shri Sud and M/s Shankara Iyer & Co, we direct, even if it is to cause some prejudice to one of the groups, that these liabilities on that day should be divided equally between the two divisions as the sharholding of each group is equal. Likewise, undivided assets also will be divided equally. If either of the divisions had incurred any expenditure on behalf of the other Division or cleared any liability of the other division after 30.11.92, adjustments should be made. In view the directions in regard to the liabilities, Group A need not have the apprehension that it may have to shoulder the liabilities of Division B which apprehension is found to be their main objection for formal division of the company. The statutory auditor of the company will recast the accounts of both the Divisions in terms of the above directions within a period of 3 months to enable the parties to part way. Once the new company is incorporated, the share capital of the 4th respondent company will be reduced by 50%.
26. The petition is disposed of in the above terms with no order as to cost.