National Company Law Appellate Tribunal
M/S A P Refinery Pvt Ltd & Ors vs Aar Kay Chemicals Pvt Ltd & Ors on 6 May, 2024
NATIONAL COMPANY LAW APPELLATE TRIBUNAL
PRINCIPAL BENCH, NEW DELHI
Company Appeal (AT) No.102 of 2022
(Arising out of the Order dated 03.06.2022 passed by the National Company Law
Tribunal, Chandigarh Bench in Execution Application - CA No.722/2019 in
Company Petition No.146/ND/2012 (RT CP No.27/CHD/PB/2016)
In the matter of:
1. M/s. A.P. Refinery Pvt. Ltd.
Village TaparHarnia,
Nakodar Road,
Jagraon - 142026
Distt. Ludhiana, Punjab ...Appellant No.1
2. M/s. Dhuri Cold Storage Pvt. Ltd.
17-18-19, Apex Nagar
Near Easy Day,
Barewal Road,
Ludhiana - 141001 ...Appellant No.2
3. Ravi Nandan Goyal
17-18-19, Apex Nagar
Barewal Road,
Near Easy Day,
Ludhiana - 141001 ...Appellant No.3
4. Shiv Kumar Goyal,
B-35-951/45/7-1, Shivalik Enclave
Barewal Road, Near Easy Day,
Ludhiana - 141001, Punjab ...Appellant No.4
5. Bhuwan Goyal
17-18-19, Apex Nagar
Barewal Road, Near Easy Day,
Ludhiana - 141001 ...Appellant No.5
6. Arun Kumar Goyal
17-18-19, Apex Nagar
Barewal Road, Near Easy Day,
Ludhiana - 141001 ...Appellant No.6
7. Anu Buildwell Pvt. Ltd.
18, Chander Lok Enclave,
2
Pitam Pura
New Delhi - 34 ...Appellant No.7
8. Ms. Anita Rani,
B-35-951/45/7-1, Shivalik Enclave
Barewal Road, Near Easy Day,
Ludhiana - 141001, Punjab ...Appellant No.8
9. Ms. Kusum Garg,
Gali No.3, Talwandi Road,
Raikot, Punjab ...Appellant No.9
10. Mr. Pratul Goyal,
House No.153,
Punjabi Bagh, Patiala ...Appellant No.10
Versus
1. AAR KAY Chemicals Pvt. Ltd.
Village Saroud, Ludhiana Road,
Malerkotla - 148023 ...Respondent No.1
2. Mr. Achhru Ram Sharma
Son of Late Mr. Karam Chand,
349, A.P. Enclave, Dhuri - 148024 ...Respondent No.2
3. Mr. Pawan Kumar Singla,
Son of Late Mr. Miri Mal,
Kothi Opp. P.S.E.B.
M.K. Road, Dhuri - 148024 ...Respondent No.3
4. Mr. Vijay Kumar Goyal,
Son of Late Mr. Payare Lal,
16B-146/6, Yash Chaudhary Market
Dhuri - 148024 ...Respondent No.4
5. Mr. ParshotamDass Garg,
Son of Late Mr. Jagan Nath,
352, A. P Enclave,
Dhuri - 148024 ...Respondent No.5
Company Appeal (AT) No.102 of 2022
3
6. M/s Kaveri Shilpkala Limited
TU-[19, 2ND Floor,
Pitampura, New Delhi - 110019 ...Respondent No.6
7. M/s Rajasthan Plantation Co. Ltd.
4858, Sham Nagar,
Ludhiana - 141001 ...Respondent No.7
8. Mrs. Rita Singla,
Wife of Mr. Pawan Kumar Singla
Kothi Opp. P.S.E.B.
Malerkotla Road,
Dhuri - 148024 ...Respondent No.8
9. Mr. Dev Raj,
Son of Mr. Miri Mal,
Kailash Oil Mills,
Dhuri - 148024 ...Respondent No.9
10. Registrar of Companies,
Corporate Bhawan,
Plot No.4-B,
Sector 27-B, Madhya Marg,
Chandigarh - 160019 ...Respondent No.10
11. Regional Director
B-2 Wing, 2nd Floor, Paryavaran Bhawan,
CGO Complex,
New Delhi - 110003 ...Respondent No.11
Present
For Appellants : Mr. Arnav Kumar & Mr. Mudit Gupta, Advocates
For Respondents : Mr. Sudhir K. Makkar, Sr. Advocate along with
Ms. Tushita Ghosh, Mr. Sarojanand Jha, Ms. Renu
Gupta, Mr. Rohit, Ms. Rajreeta Ghosh & Mr. Rahul
Kumar, Advocates
Company Appeal (AT) No.102 of 2022
4
JUDGEMENT
(06.05.2024) NARESH SALECHA, MEMBER (TECHNICAL) This Appeal has been filed under Section 421 of the Companies Act, 2013 challenging the Impugned Order dated 3rd June, 2022 passed by National Company Law Tribunal, Chandigarh Bench (in short, the Tribunal) in the Execution Application filed by the Respondent Nos.1 to 9 herein being Company Application No.722/2019 in Company Petition No.146/ND/2012 (RT CP No.27/Chd/Pb/2016).
2. Heard the Counsel for the parties and perused the record made available including cited judgements.
3. The Execution Application CA No.722 of 2019 was filed by the Respondents No.1 to 9 seeking enforcement of Order dated 16th April, 2019 passed by this Appellate Tribunal in Company Appeal No.394 of 2017 and Company Appeal No.55 of 2018. These Company Appeals were filed by the Respondents No.1 to 9 and the Appellants respectively against the final Order dated 15th November, 2017 passed by the Tribunal, Chandigarh in CP No.146/ND/2012 being oppression and mismanagement petitions filed by the Respondents No.1 to 9 against the Appellants under Section 397, 398, 237(b) and 111(4)(a)(ii) of the Companies Act, 1956. It has been alleged by the Appellants that Impugned Order wrongly concluded that Appellants herein have Company Appeal (AT) No.102 of 2022 5 not complied with this Tribunal Order under execution dated 16th April, 2019. It is further case of the Appellants that the Appellant No.1 vide Board Resolution dated 24.11.2017 and 10th May, 2019 had already complied with the directions passed by the Tribunal in Order dated 15.11.2017 by this Appellate Tribunal in the Order dated 16.4.2019 and therefore there was error in the Impugned Order to this effect. The Appellants stated that the Tribunal has misinterpreted this Appellate Tribunal's Order dated 16.4.2019 and passed wrong Impugned Order.
4. The Appellants brought out that on 1st August, 2003, the Appellant No.1 Company was incorporated and is engaged in the business of manufacturing and supply of refined rice bran oil. The Appellants stated that in the year 2009 they held approximately 88.70% of equity shares of the Company and Respondent No.1 to 9 held around 11.30% of equity shares. It was brought to the notice that the Appellants contributed Rs.6,96,70,000/- (88.7%) towards equity capital whereas the RespondentsNo.1 to 9 collectively contributed Rs.88,45,000/- (11.31%).
5. The Appellants clarified that on 19.5.2010, Respondent No.1 Company purchased 14,96,000 shares of Appellant No.1 Company from the five investment companies and the same is reflected in the register of members of the Appellant No.1 Company at Serial No.16 to 20 and the said transfer dated 19.5.2010 from the five investment companies to the Respondent No.1 Company is called as "First Transfer".
Company Appeal (AT) No.102 of 2022 6
6. The Appellants further submitted that on 24.05.2010, the Respondent No.1 Company transferred the 14,96,000 shares to the Appellant No.2 Company and the same was reflected in the register of members of the Appellant No.1 Company at Serial No.21 and is referred in the present case as "Second Transfer". It has been submitted that in November 2012, the Respondent No.1 to 9 herein filed Company Petition against the Appellants under Section 397, 398 and 111 of the Companies Act, 1956 in CP No.146/ND/2012 alleging oppression and mismanagement regarding the affairs of Appellant No.1 Company and challenged the transfer of 14,96,000 shares of Appellant No.1 Company from Respondent No.1 Company to Appellant No.2 Company on 24.5.2010. In the said Petition, the RespondentsNo.1 to 9 also challenged allotment of 3,50,000 shares by Appellant No.1 Company to the Appellant No.7 on 29.6.2011 (Allotment No.1) and allotment of 4,00,000 shares by the Appellant No.1 Company to Appellant No.2, 3, 8, 9 and 10 on 10.10.2012 (Allotment No.2).
7. It was submitted that the Tribunal vide its Judgement dated 15.11.2017, disposed Company Petition No.146/ND/2012, inter alia, setting aside the second transfer and directed the Appellants to transfer back 14,96,000 shares to Respondent No.1 Company. It was brought to the notice of this Appellate Tribunal that the detailed directions were contained in para - 161 of the Tribunal's Order dated 15.11.2017, especially, para- 161(ii) contained direction Company Appeal (AT) No.102 of 2022 7 of transfer of 14,96,000 shares to the Respondent No.1 which was to be with prospective effect from 15.11.2017 and the second transfer of 24.5.2010 was primarily declared invalid by the Tribunal on the ground that the supporting board resolution in respect of the second transfer was not produced. The Appellants stated that, under protest and without prejudice, it transferred 14,96,000 shares to the Respondent No.1 Company w.e.f. the date of Judgement dated 15.11.2017 and transferred date was recorded in the list of transfers in the Register of Members of Appellant No.1 Company at Sl. No.24 and Board Resolution was passed in this respect on 24.11.2017. The Appellants also claimed that they complied with directions contained in para - 162 (iii) to (vi) of the Tribunal Order dated 15.11.2017 by sending offer letter to Respondent No.2 to 9 of offer them proportionate shares from allotment made by the Appellant No.1 Company in the year 2011 and 2012. However, the same was not accepted by Respondent No.2 to 9.
8. The Appellants stated that both the Appellants and the RespondentsNo.1 to 9 challenged the Order of the Tribunal dated 15.11.2017 before this Appellate Tribunal by way of two different Appeals. The Respondents No.1 to 9 challenged the Order in Company Appeal No.394/2017 and the Appellants also challenged the Tribunal Order dated 15.11.2017 vide Company Appeal No.55 of 2018.
9. The Appellants claimed that in the meantime on 27.11.2017, the Respondent No.1 Company vide Board Resolution, authorized sale of 14,96,000 Company Appeal (AT) No.102 of 2022 8 shares of Appellant No.1 Company to the Appellant No.2 Company which was in conformity with the Settlement-Cum-Exit-Arbitral Award dated 12.7.2017. It has been stated that on 28.11.2017, the Appellant No.2 Company vide Board Resolution dated 28.11.2017 again authorized purchased of 14,96,000 shares from the Respondent No.1 Company for a consideration of Rs.15,10,960/-.
10. The Appellants clarified that acting on the Board Resolution dated 27.11.2017 and 28.11.2017 passed by the Respondent No.1 Company and Appellant No.2 Company respectively, a separate share purchase agreement was executed between the Respondent No.1 Company and the Appellant No.2 Company for sale/purchase of 14,96,000 shares of Respondent No.1 Company and a fresh transfer deed dated 28.11.2017 was also executed between the parties and further pointed out that a fresh transfer on 28.11.2017 was a new and completely separate independent transaction which was made pursuant to Board Resolution dated 27.11.2017 and 28.11.2017 in the Respondent No.1 Company and the Appellant No.2 Company and has got no connection with the earlier second transfer dated 24.5.2010 which was challenged by the Respondents No.1 to 9 in earlier proceeding in CP No.146/ND/2012. The Appellants stated that on 29.11.2017, the Appellant No.1 Company after Board Resolution duly recorded in its register of members, fresh transfer of 14,96,000 shares from Respondent No.1 Company to Appellant No.2 Company and it Company Appeal (AT) No.102 of 2022 9 reflected in the register of members of Appellant No.1 Company at Sl. No.28 (Termed as "FRESH TRANSFER").
11. The Appellants have highlighted that all directions were complied and steps were taken to issue the fresh transfers, without prejudice with the rights of the Appellants to challenge the Tribunal's Order dated 15.11.2017 and the same was specifically mentioned in Clause - 5 of the share purchase agreement dated 28.11.2017 according to which in case Appellants succeed in the Appeal that the Respondent No.1 Company would be liable to return the sale consideration.
12. The Appellants submitted that pursuant to fresh transfer of28.11.2017, the Register of Members of Appellant No.1 Company reflected the ownership of 14,96,000 shares as under:-
"
Transfer Date Event Owner of
No. 14,96,000
shares
16-20 19.05.2010 Transfer of 14,96,000 R1
shares from five (Aar Kay
investment companies Chemicals)
to R1
21 24.05.2010 Transfer of 14,96,000 A2 (Dhuri
shares from R1 to A2 Cold
Storage)
24 15.11.2017 Date of NCLT R1
(Aar Kay
Judgment Chemicals)
Company Appeal (AT) No.102 of 2022
10
28. 28.11.2017 Fresh Transfer Deed A2 (Dhuri
again transferring Cold
14,96,000 shares from Storage)
R1 to A2
"
13. The Appellants further submitted that Respondent No.5 i.e. Mr. Parshotam Dass Garg, as shareholder of Respondent No.1 Company - AARKAY Chemicals Pvt. Ltd., filed a fresh Company Petition under Section 241, 242 of the Companies Act, 2013 being CP No.276 of 2017 alleging oppression and mismanagement regarding the affairs of Respondent No.1 Company and challenged the validity of Board Resolution dated 27.11.2017 passed by Respondent No.1 Company which authorized fresh sale of 14,96,000 shares and alleged that the Board Resolution was in violation of Section 188 of the Companies Act, 2013 and also transfer deed dated 28.11.2017 was not supported by Board Resolution. The Appellants clarified that this Company Petition No.276/2017 is still pending adjudication before the Tribunal and it was also clarified that the said CP No.276/2017 came up for hearing before the Tribunal on 13.12.2017 on which date the Tribunal restrained the Appellant No.2 from further alienating or transferring these 14,96,000 shares.
14. The Appellants further elaborated that in January, 2018, the Respondent Nos.1 to 9 herein as shareholders of Appellant No.1 Company also filed a fresh Company Appeal (AT) No.102 of 2022 11 Company Petition No.24/2018 under Section 241, 242 of the Companies Act, 2013 alleging oppression and mismanagement regarding the affairs of the Appellant No.1 Company and further challenged the fresh transfer of 14,96,000 as fresh transfer on 28.11.2017 which is also pending adjudication before the Tribunal. The Appellants emphasised that the fresh transfer of 14,96,000 shares on 28.11.2017 was neither subject matter of challenge in CP 146/ND/2012 nor was subject matter of Company Appeal No.394/2017 or Company Appeal No.55/2018 in which the Order dated 16th April, 2019 was passed, and, therefore, at the best, fresh transfer of 28.11.2017 can be treated as fresh cause of action which is still sub-judice before the Tribunal in CP No.276/2017 and CP No.24/2018.
15. The Appellants have stated that on 16.4.2019, this Appellate Tribunal vide its Orders dismissed Company Appeal No.55/2018 filed by the Appellants and allowed the Company Appeal filed by the RespondentsNo.1 to 9 i.e. CA No.394/2017.
16. The Appellants submitted that with respect to challenge to the second transfer of 24.5.2010, this Appellate Tribunal modified the Order dated 15.11.2017 passed by the Tribunal to the extent that instead of "transferring back" the 14,96,000 shares to the Respondent No.1 Company but it set aside the transfer of 14,96,000 shares retrospectively w.e.f. 24.5.2010 and this Appellate Tribunal never made any mention about fresh transfer dated Company Appeal (AT) No.102 of 2022 12 28.11.2017 in the said Order dated 16.4.2019. Thus, the direction of this Appellate Tribunal was that in the list of transfers in the register of members of the Appellant No.1 Company regarding entry at Sl.No.21 and 24 would have to be omitted and 14,96,000 shares would stand registered in the name of R1 Company w.e.f. 19.5.2010.
17. The Appellants conceded that they challenged the Order of this Tribunal dated 16.4.2019 before the Hon'ble Supreme Court by filing Civil Appeal No.4774
- 4775 of 2019 which is still pending before the Hon'ble Supreme Court of India.
18. In this background, the Appellants pointed out that this Tribunal in Order dated 16.4.2019 did not reflect the present ownership of 14,96,000 shares as on 28.11.2017 and the Respondent No.1 Company vide fresh transfer deed had independently transferred these 14,96,000 shares to the Appellant No.2 Company. On 10.8.2019, the Respondents No.1 to 9 vide their letter dated 10.8.2019 requested the Appellants to comply with this Appellate Tribunal's Order dated 16.4.2019 and the Appellant No.1 Company replied vide letter dated 19.8.2019 stating that it has complied with the Order of this Appellate Tribunal and not satisfied with this, the Respondent No.1 to 9 filed Execution Application in October, 2019 before the Tribunal being CA No.722 of 2019 seeking enforcement of this Tribunal's Order dated 16.4.2019 passed in Company Appeal No.55 of 2018 and Company Appeal No.394 of 2017, without mentioning the facts regarding subsequent fresh transfer on 28.11.2017. Company Appeal (AT) No.102 of 2022 13
19. It is the case of the Appellants that tribunal after hearing the party passed the Impugned Order dated 3rd June, 2022 where it wrongly held that Appellants have not complied with the directions passed by this Tribunal in its Order dated 16.4.2019. The Appellants alleged that the Tribunal erred in wrong interpretation of this Appellate Tribunal's Order dated 16.4.2019 and passed the Order contrary to this Tribunals' Order and in fact made out a new case and new decree beyond the jurisdiction of the executing Court.
20. It is the case of the Appellant that the Impugned Order wrongly observed that even if shares were transferred by Respondent No.1 Company to the Appellant No.2 Company on 28.11.2017, then also the shares have to be transferred back in the name of the Respondent No.1 Company in pursuant to the Order dated 16.04.2019 of this Appellate Tribunal. The Appellant claimed that there was no such direction in the Order dated 16.04.2019 passed by this Appellate Tribunal and this Appellate Tribunal only directed the Appellant No.1 Company to rectify the register of members so as to reflect 14,96,000 shares standing in the name of Respondent No.1 Company w.e.f. 19.05.2010 and not from 15.11.2017. The Appellant further argued that the Order of this Tribunal dated 16.04.2019 did not take into cognizance of the subsequent fresh transfer dated 28.11.2017 nor it directed the Appellant No.1 Company to reflect the Respondent No.1 Company at present owners of the 14,96,000 shares and furthermore it did not prohibit the Respondent No.1 Company from transferring Company Appeal (AT) No.102 of 2022 14 14,96,000 shares to the Appellant No.2 Company in future. The Appellant, therefore, pleaded that directions passed by the executing Court vide Impugned Order to return back the share certificates to the Respondent No.1 Company are illegal and perverse and need to be set aside as it completely ignored the fact that the subsequent fresh transfer of 28.11.2017 was beyond the scope of the original decree/original proceedings.
21. The Appellant emphasised that, under protest and without prejudice to their rights and contentions in the Civil Appeal pending before the Hon'ble Supreme Court, the Appellant have complied with direction passed by the Tribunal in the Order dated 15.11.2017 and the Order of this Appellate Tribunal contained in Order dated 16.04.2019 and also rectified the register of members in accordance with the direction passed by the Tribunal as well as this Appellate Tribunal.
22. The Appellant further stated that the Tribunal did not appreciate the reason that 14,96,000 shares stand in the name of the Appellant No.2 Company is because of the fresh share transfer of 28.11.2017 which was independent cause of Respondent No.1 Company to retransfer 14,96,000 shares to Appellant No.2 Company by way of fresh transfer deed, which incidentally was not subject matter of Company Petition No. 146/ND/2012 or Company Appeal No.397 of 2017 or Company Appeal No.55 of 2018 and therefore the question of this Company Appeal (AT) No.102 of 2022 15 Appellate Tribunal setting aside the subsequent fresh transfer of 28.11.2017 did not arise.
23. The Appellant emphasized that the specific directions contained in para 161(ii) to (vi) of the Order dated 15.11.2017 of the Tribunal were complied and there was no direction to the Respondent No.1 Company prohibiting retransfer of 14,96,000 shares to the Appellant No.2 Company, which was done through fresh transfer on 28.11.2017 which was complete separate transactions and was done pursuant to Board Resolution dated 27.07.2017 and 28.7.2017passed by Respondent No.1 Company and Appellant No.2 Company respectively and also in accordance with share purchase agreement dated 28.11.2017. The Appellants emphasized that the subsequent fresh transfer of 14,96,000 shares has no connection with the transfer of 24th May, 2010 which was challenged by the Respondent in CP 146/ND/2012.
24. It is the case of the Appellants that the Tribunal misinterpreted this Tribunal's Order dated 16.04.2019, especially, contained in para - 40(A) where this Tribunal held that "steps taken by the party pursuant to such directions"
include the fresh transfer dated 28.11.2017 despite the fact that the fresh transfer was not deliberated by the Appellate Tribunal. It is the case of the Appellant that this Appellate Tribunal vide Order dated 16.04.2019 merely directed the Appellant No. 1 Company to ignore the Second Transfer of 24.05.2010 and rectify the Register of Member so as to reflect 14,96,000 shares Company Appeal (AT) No.102 of 2022 16 standing in the name of Respondent No. 1 Company w.e.f. from 19.05.2010, and not from 15.11.2017. The Appellants stated that this Appellate Tribunal in its Order dated 16.04.2019 does not take cognizance of the subsequent Fresh transfer of 28.11.2017; nor does it direct the Appellant No. 1 Company to reflect Respondent No. 1 Company as present owner of these 14,96,000 shares; and nor does it prohibit the Respondent No. 1 Company from transferring the 14,96,000 shares to the Appellant No. 2 Company in future. Therefore, directions passed by the Executing Court vide the Impugned Order to reflect Respondent No. 1 Company as present owner of the 14,96,000 shares or to return back the share certificates to the Respondent No. 1 Company, are liable to be set aside.
25. The Appellants submitted that the Appellant No. 1 Company had rectified its Register of Member and other relevant records to reflect cancellation/setting aside of the allotment of 3,50,000 shares to Appellant No. 2 on 29.06.2011 and allotment of 4,00,000 shares on 10.10.2012 to Appellant No.2, 3, 8, 9 and 10 in terms of directions recorded at Para 40(C) of the order dated 16.04.2019 passed by this Appellate Tribunal.
26. The Appellants stated that the Tribunal wrongly noted that the Respondent No. 1 never received back the share certificates for 14,96,000 shares in pursuance of Order dated 16.04.2019, without appreciating the fact that there is no direction in the Appellate Tribunal's order with respect to the Share Certificates, moreover, the Appellant No. 1 Company has never issued any Company Appeal (AT) No.102 of 2022 17 physical share certificates to any of its shareholders. As such, there was no question of delivering back the Share Certificates to the Respondent No. 1 Company.
27. Concluding pleadings, the Appellants requested to allow their Appeal and set aside the Impugned Order.
28. Per contra, the Respondent stated that the pleadings of the Appellants are baseless, mischievous and misleading and submitted that the Adjudicating Authority, after going through all the records and the legal issues, passed the reasoned impugned order which is free from any error whatsoever.
29. It has been pleaded by the Respondents No.1 to 9 that Appellants have not complied with the Order dated 16.4.2019 since as per list of shareholders filed by the Appellant on 21.11.2019 along with Form MGT 7 in 2018-2019; 14,96,000 shares stand in the name of Appellant No.2 and not in the name of Respondent No.1.It is the case of the Respondent that since subsequent transfer of 28.11.2017 was step taken by the Appellants pursuant to direction contained in para - 161 (ii) and (vi) of the Tribunal Order dated 15.11.2017, therefore, the same has been specifically and clearly set aside by this Appellate Tribunal in its Order dated 16.4.2019. It is the case of the Respondents No.1 to 9 that the Appellant No.1 Company should have omitted transfer No.28 from the register of members and should have shown 14,96,000 shares in the name of Respondent No.1 Company and not in the name of Appellant No.2 Company. Company Appeal (AT) No.102 of 2022 18
30. The Respondents No.1 to 9 stated that the pleading of the Respondents No.1 to 9 was accepted by the Tribunal as contained in para - 23 to 26 of the Impugned Order and concluded that Appellants have not complied with this Tribunal Order dated 16.4.2019 and directed the Appellants to transfer back the share certificate to Respondent No.1.
31. The Respondents No.1 to 9 submitted that there has been chequered history of the case which has seen several rounds of litigations and the Orders of the Tribunal as well as this Appellate Tribunal has gone against the Appellants and supported the Respondents No.1 to 9. The Respondents No.1 to 9 further submitted that it is only for the compliance of the Orders of the Tribunal as well as this Appellate Tribunal, the Respondents No.1 to 9 moved for execution Orders and the Impugned Order was passed accordingly in the Tribunal.
32. The Respondent alleged that they have been facing oppression and mismanagement almost since 12 years as they filed the original Petition No.146/ND/2012 in October, 2012 challenging the reduction of their shareholding in the Appellant No.1 Company to 9.52%through illegal transfer of 14,96,000 shares of Respondent No.1 to Appellant No.2 Company purportedly made on 24.5.2010 and illegal allotment of 3,50,000 shares on 29.6.2011 and 4,00,000 shares on 10.10.2012 to the Appellants group which was without consent of the Respondents No.1 to 9.
Company Appeal (AT) No.102 of 2022 19
33. The Respondent alleged that the Appellant No.3 - Ravi Nandan Goyal and Appellant No.4 - Shiv Kumar Goyal who are on Board of Directors of all the relevant companies i.e. Respondent No.1 Company (AAR KAY Chemicals Pvt. Ltd.) purported transferor), Appellant No.2 Company - Dhuri Cold Storage Pvt. Ltd. (purported transferee) and Appellant No.1 - A.P. Refinery Pvt. Ltd., it is the case of the Respondents No.1 to 9 that the fraudulent transfer of 14,96,000 shares illegal transfer was caused by Respondent No.1 company to the Appellant No.2 Company, which was facilitated by Appellant No.3 and Appellant No.4 at a time when the Respondents No.1 to 9 herein held clear majority shares in the Respondent No.1 Company.
34. The Respondents No.1 to 9 stated that the Tribunal vide Order dated 15.11.2017 after hearing all the parties came to the clear conclusion regarding oppression and mismanagement being done by the Appellants and set aside the illegal transfer of 14,96,000 shares from Respondent No.1 Company to Appellant No.2 Company. The Respondents No.1 to 9 submitted that cross appeals were filed by both the Respondents No.1 to 9 and the Appellants before this Appellate Tribunal against the Tribunal's Order dated 15.11.2017 i.e. CA(AT) 294/2017 filed by Respondent No.1 to 9 on 28.11.2017 and Company Appeal (AT) 55/2018 was filed by the Appellants.
It is the case of the Respondents No.1 to 9 that during this interregnum period and after passing of the Order by the Tribunal on 15.11.2017 i.e. from Company Appeal (AT) No.102 of 2022 20 24.11.2017 to 28.11.2017, the Appellants No.3 and 4 illegally and only on paper allegedly transferred 14,96,000 shares from Appellant No.2 to Respondent No.1 on 24.11.2017 and within four days of this transfer again on 28.11.2017 retransferred the same back to Appellant No.2 and again registered shares of Respondent No.1 to Appellant No.2 by fabricating documents in violation of Section 188 of Companies Act, 2013.
35. The Respondents No.1 to 9 emphasized that all these facts were brought to the notice of this Appellate Tribunal through pleadings and arguments by both the parties and, therefore, this Appellate Tribunal was very conscious and cognizant of these facts including the fact that the Appellant allegedly purportedly transferred the shares to Appellant No.2 only on papers based on forged documents and thereafter this Appellate Tribunal vide its Order dated 16.4.2019 gave clear directions.
36. The Respondents No.1 to 9 further reiterated that this Appellate Tribunal was made aware of the illegal acts of the Appellant after the Order of the Tribunal dated 15.11.2017 regarding alleged paper transfers and this Appellate Tribunal set aside all the steps taken by the parties pursuant to the order of the Tribunal dated 16.11.2017 vide suitable directions as contained in para - 40, where it was clearly indicated that "any steps taken by the party pursuant to such directions" recorded in para - (ii) to (vi) pending Appeal shall stand set aside." Company Appeal (AT) No.102 of 2022 21
37. It is the case of the Respondents No.1 to 9 that this Appellate Tribunal held that 14,96,000 shares would be shown in the name of Respondent No.1 Company w.e.f. 19.5.2010 and thus in effect set aside the fresh allotment of shares of the Appellants on 29.6.2011 and 10.10.2012 along with fresh transfer of 28.11.2017 and imposed cost on the Appellant Directors.
38. The Respondents No.1 to 9 disputed the claims of the Appellants that they did not press for the stay in the Hon'ble Supreme Court and submitted that Appellant in fact filed I.A. No.78176 of 2019 for ex-parte stay on operation of this Appellate Tribunal's Order dated 16.4.2019,however, Hon'ble Supreme Court of India vide Order dated 10.5.2019 did not grant any stay of operation of the Judgement of this Appellate Tribunal and in absence of any stay and also keeping in view the fact that the Appellant had not implemented the Orders dated 16.4.2019, Respondent No.1 to 9 on 6.9.2024 filed an Application before the Tribunal under Section 424(3) of the Companies Act, 2013 for execution and enforcement of the order passed by this Appellate Tribunal.
39. The Respondent elaborated that during the Execution Petition, the Tribunal called for report from ROC, Punjab and Chandigarh who filed its report dated 14th January, 2020 clearly advising regarding non-compliance by the Appellants of this Appellate Tribunal's Orders dated 16.4.2019 and based on such report of the ROC, the Tribunal passed the Impugned Order dated 3.6.2022 allowing the Execution Petition and directed ROC to appoint a Gazetted Officer Company Appeal (AT) No.102 of 2022 22 to ensure strict compliance of this Tribunal's Order dated 16.4.2019 and to verify and ensure that the Appellant No.1 Company had rectified its register of members so as to reflect 14,96,000 shares in the name of Respondent No.1 Company. The Tribunal also passed necessary direction for payment of cost by the Appellant Directors from their own funds to the Respondents No.1 to 9.
40. The Respondents No.1 to 9 submitted that during the hearing of the present Appeal, a status quo Order was passed by this Appellate Tribunal on 7.7.2022 in the present Appeal, therefore, the direction contained in this Appellate Tribunal's earlier Order dated 16.4.2019 are yet to be implemented even after four years of the Orders of this Appellate Tribunal, which in fact tantamount that Appellants despite losing the legal battle in various legal Fora still enjoy the status of the majority shareholders in the Appellant No.1 Company.
41. The Respondents No.1 to 9 submitted that this Appellate Tribunal's Order dated 16.4.2019 has already been challenged by the Appellants but could not succeed in getting a stay and as such there is no legal embargo in execution of the Orders of this Appellate Tribunal which has correctly been passed by the Tribunal in the Impugned Order as Execution Court and, therefore, the Execution Court has not gone beyond the decree i.e. the Judgement dated 16.4.2019 by this Appellate Tribunal.
Company Appeal (AT) No.102 of 2022 23
42. The Respondent submitted that Executing Court i.e. the Tribunal has powers and jurisdiction to interpret the decree for ensuring proper authority and decree and in case any ambiguity found then the Executing Court is required to look into the true import of such decree and cited the Judgement of "Raj Kumar vs. Harbans Lal, AIR 1978 P&H 186", "Laxmidhar Sahu Vs. Smt. Padmini Tripathy and others, AIR 1991 Ori 9", Bhavan Vaja and others vs. Solanki Hanuji Khodaji Mansang and Another, AIR 1972 SC 1371", "Manish Mohan Sharma and Others v. Ram Bahadur Thakur Limited and Others, (2006) 4 SCC 416", Justice (RTD.) Shambhu Singh and Ors. vs. Union of India and Ors., 2020 ILR (M.P.) 2804), "Jai Narain Ram Lundia v. Kedar Nath Khetan and Ors., 1956 SCR 62", "Brakewel Automotive Components (India) Pvt. Ltd. v. P.R. Selvam Alagappan, 2017 (5) SCC 371", "Rajinder Kumar v. Kuldeep Singh and Ors. 2014 (15) SCC 529", "Desh Bandhu Gupta v. N.L. Anand & Rajinder Singh, MANU/SC/0562/1994", "Hira Devi and others v. Harinath Chaurasia and others, AIR 1989 ALL 11 at p 13", in support of their arguments.
43. The Respondents No.1 to 9 submitted that the Appellants have failed to comply with Appellate Tribunal's Order dated 16.4.2019 and the same fact has been elaborated by the ROC and further the register of members of the Appellant No.2 Company does not reflect the name of Respondent No.1 Company even on date i.e. after this Tribunal's Order dated 16.4.2019, holding14,96,000 shares. Company Appeal (AT) No.102 of 2022 24
44. The Respondents No.1 to 9 also alleged that no share certificate has been handed over to the Respondent No.1 company in pursuant to direction contained in this Appellate Tribunal's Order dated 16.4.2019.
45. The Respondent further mentioned that subsequent transfer dated 28.11.2017 regarding transfer of 14,96,000 shares from Respondent No.1 Company to Appellant No.2 Company was specifically set aside by this Appellate Tribunal and the pleadings of Respondents No.1 to 9 were acknowledged by this Appellate Tribunal and therefore this Appellate Tribunal in the common Order dated 16.4.2019 recorded the correct position in para - 23. Further, this Appellate Tribunal also observed in para - 30 of the Order dated 16.4.2019 to show Respondent No.1 as shareholders of 14,96,000 shares w.e.f. 19.5.2010 as if shares were never transferred to Appellant No.2.
46. The Respondents No.1 to 9 submitted that this Appellate Tribunal was aware of the fact that subsequent retransfer of 14,96,000 shares were pursuant to direction contained in para - 161(ii) and observation in para - 158 of the Order dated 15.11.2017 passed by the Tribunal and accordingly this Appellate Tribunal, in the background of above Orders of the Tribunal, set aside all the steps taken by the parties pursuant to directions recorded in para - 161(ii) to
(vi). This Appellate Tribunal in para - 40(B) issued fresh direction to the Appellant No.1 to rectify the register of members so as to reflect 14,96,000 shares standing in the name of Respondent No.1 Company w.e.f. 19.5.2010. Company Appeal (AT) No.102 of 2022 25 The Respondent submitted that as a consequence to subsequent transfer dated 28.11.2017 regarding alleged illegal transfer of 14,96,000 shares from Respondent No.1 company to Appellant No.2 Company, there were no choice left with the RespondentsNo.1 to 9 but to file the Company Petitions before the Tribunal and accordingly, Company Petition No.276(CHD) of 2017 and Company PetitionNo.24(ND) of 2018 were filed and therefore filing of the fresh Company Petitions does not come in way regarding Execution Order passed by the Tribunal.
47. Concluding their arguments, the Respondents No.1 to 9 submitted that the Appeal may be dismissed with exemplary cost since the Respondents No.1 to 9 have been deprived of their rights despite getting all the favourable decisions from the Tribunal as well as this Appellate Tribunal.
48. We will now examine various issues discussed in preceding discussions.
49. At this stage, we will like to reproduce relevant portions of the Tribunal's Order dated 15.11.2017 as contained in para - 161 which reads as under:-
"161. From the discussion made above, it is found that the facts of the case would attract the provisions of Section 397 of the Companies Act, 1956, but winding up would unfairly prejudice the members. The instant petition is disposed of with the following directions:-
i) CA No. 255 of 1015 filed by the respondents is dismissed;
Company Appeal (AT) No.102 of 2022 26
ii) 14,96,000 shares now existing in the name of R-2 company be transferred back in the name of P-1 and its name be entered in the register of members of R-1 company. At the same time, the amount of Rs.15,00,000/- shown in the account of P-1 Company towards loan to AP Oil Mills shall stand written off and the name of R-2 company be omitted from the register of members of R-1 company; and
iii) R-1 company shall hold fresh meeting of the Board of Directors offering the proportionate shares out of additional allotment of 3,50,000 shares in 2011 and 4,00,000 shares in 2012 respectively at the rates at which these were transferred to some of the respondents. The transfer shall be made in favour of the petitioners proportionately as per shares held by P-2 to P-9, on these petitioners offering to subscribe to these shares at the rates allotted to some of the respondents within the time to be allotted by R-1 company in the said meeting and they shall deposit the required amount with R -1 company; and
iv) Failing the petitioners to send the offer for allotment of proportionate shares as were held by them on the date of allotment of additional shares or in making payment, the Board of Directors of R-1 Company would be at liberty to decide against the said allotment of proportionate shares; and
v) Rest of the shares out of the additional allotment of 3,50,000 and 4,00,000 shares, will continue to be held by the respondents to whom the shares were allotted; and
vi) The petitioner No.1 is not to be offered any share in these additional shares on the basis of this order as P-1 company Company Appeal (AT) No.102 of 2022 27 became the shareholder only on 19.05.2010. Rest of the prayers regarding mis-management on account of falsification of the accounts or siphoning of the funds and other reliefs are declined."
50. We will also revisit our earlier Order dated 16.4.2019. We would also like to take into consideration the relevant portion of Order of this Appellate Tribunal contained in Order dated 16.04.2019, especially, para - 40 which reads as under:-
"(A) We do not disturb directions in para marked - 163 of the Impugned Order. We agree with the learned NCLT as regards operative direction - 'i' in para 161 of the Impugned Order that CA 255 of 2015 filed by the Respondents deserved to be dismissed. However, for reasons discussed above, we set aside rest of the operative Order as recorded in para - 161 of the Impugned Order and reasons recorded by NCLT in support of the same. Any steps taken by the parties pursuant to such directions recoded in para - ii to vi, pending Appeals shall stand set aside.
(B) For the above reasons, we set aside the second transfer dated 24.05.2010 recorded in the register of members in the record of OR1 transferring the shares of OP1 in favour of OR2. The Respondents will rectify the register of members so as to reflect 14,96,000 shares standing in the name of OP1 - Aar Kay Chemicals Pvt. Ltd. with effect from 19.05.2010, and the second transfer dated 24.05.2010 done shall stand ignored.
Company Appeal (AT) No.102 of 2022 28 (C) We find that the first allotment made on 29.06.2011 as well as the second allotment made on 10th October, 2012 were both illegal and are hereby struck down.
(D) The Company Petitions shall stand disposed
accordingly.
(E) Original Respondents 3 to 5, each will pay costs of
Rs.50,000/- to each of the Original Petitioners
(Appellants of CA 394/2017), from their own funds."
51. We note that the first transfer occurring on 19th May, 2010 where the Respondent No.1 Company purchased 14,96,000 shares from five investment companies and this transfer was reflected in the list of transfers in the register of members of the Appellant No.1 company at Serial No.16 to 20 which is termed as "First Transfer" in the various petitions and the Appeal herein. This was followed by the second transfer on 24th May, 2010 whereby the Respondent No.1 Company subsequently transferred exact number of shares i.e. 14,96,000 to Appellant No.2 Company. This transfer was reflected in the list of transfers in the register of members of the Appellant No.1 company at Serial No.21 and the said transfer of 24th May, 2010 has ben referred as "Second Transfer" in various petitions and the Appeal herein.
52. This was challenged by Company Petition No. CP 146/ND/2012 filed by the RespondentsNo.1 to 9 herein challenging the validity of second transfer and Company Appeal (AT) No.102 of 2022 29 the Tribunal in its Order dated 15th November, 2017 directed transfer back of share to Respondent No.1 company.
53. The bone of contention is regarding subsequent fresh transfer which occurred on 28th November, 2017 whereby the Respondent No.1 Company retransferred the same exact number of shares to the Appellant No.2 Company under alleged separate Board Resolution and alleged share purchase agreement against which the Company Petition No.276/2017 and Company Petition No.24/2018 were filed by the Respondents No.1 to 9 challenging the validity of the Board Resolution and fresh transfers made thereon. We have noted that this Appellate Tribunal in its Order dated 16th April, 2019 dismissed the Appellants' Appeal and modified the Tribunal's Order allowing the Respondents No.1 to 9 Appeal, which was challenged by the Appellants herein before the Hon'ble Supreme Court of India in Civil Appeal No.4774 - 4775 of 2019, however, no stay was granted by Hon'ble Supreme Court of India and the same is still pending for adjudication before the Hon'ble Supreme Court of India. We may reiterate that the Tribunal vide its Order dated 15.11.2017 disposed the Company Petition No.146/ND/2012 whereby the second transfer was set aside and directed to transfer back 14,96,000 shares to Respondent No.1 company.
54. We note that the Order of the Tribunal dated 15.11.2017 was challenged by both the Appellants and Respondents No.1 to 9 by cross Appeals before this Appellate Tribunal. The Respondents No.1 to 9 preferred an Appeal before this Company Appeal (AT) No.102 of 2022 30 Appellate Tribunal bearing Appeal No.394/2017 and similarly the Appellants challenged vide Company Appeal No.55 of 2018.
55. It is the case of the Appellants that both the Tribunal as well as this Appellate Tribunal have dealt only regarding second transfer dated 24.5.2010 and did not deal with the subsequent fresh transfer of 14,96,000 shares transferring shares from the Respondent No.1 Company to Appellant No.2 Company allegedly done after passing proper Board Resolutions and share purchase agreement by the concerned parties. We also note the plea of the Appellant that they never issued any physical share certificate hence no physical shares have been transferred in name of the Respondent No.1 company. The Appellants have also claimed that since the fresh transfer dated 28.11.2017 were not subject matter of any dispute before the Tribunal or this Appellate Tribunal, they have legally transferred these shares and as such there could not have been Execution Order in this regard. The Appellant has pleaded that in any case, the Respondents No.1 to 9 have already challenged the fresh allotments of shares before the Tribunal and is pending adjudication.
56. We note that there have been series of litigations between the Appellants and the Respondents No.1 to 9 right from the Tribunal to this Appellate Tribunal and up to level of the Hon'ble Supreme Court of India. We also observe that the Tribunal gave its specific Orders after detailed Order contained in Order dated 15.11.2017 and this Appellate Tribunal upheld the Appeal of the Respondent Company Appeal (AT) No.102 of 2022 31 and partially modified the Order of the Tribunal 15.11.2017. We have noted from the Order contained in this Appellate Tribunal in para - 40, the five directions were given, (which we have already discussed in detail in previous discussion).
57. The directions of this Appellate Tribunal were not to disturb directions contained in para marked 163 of the impugned Order dated 15.11.2017 and also agreed with the Tribunal with regard to operative directions contained in para - 161(i) i.e. "CA 255/2015 filed by the Appellants herein deserve to be dismissed." However, this Tribunal after recording detailed reasons set aside rest of the operative part as recorded in para - 161(ii) to (vi) of the Orders of the Tribunal dated 15.11.2017. It is important to note that this Appellate Tribunal recorded in para - 40(A) last line, which recorded that "any steps taken by the parties pursuant to such directions recorded in para - (ii) and (vi), pending Appeals shall stand set aside."
58. We have taken into consideration that the Order of this Appellate Tribunal dated 16.4.2019 was challenged by the Appellants before the Hon'ble Supreme Court of India in April, 2019. However, despite the application for stay by the Appellants, no stay was granted by the Hon'ble Supreme Court of India and is pending for adjudication before the Hon'ble Supreme Court of India.
In this background, the objection of the Appellants that the Tribunal should not have gone ahead with the execution order since the Appellants have Company Appeal (AT) No.102 of 2022 32 filed the Appeal before the Hon'ble Supreme Court of India, we note Order 41 Rule 5 of CPC which reads as under:-
"...........
5. Stay by Appellate Court (1) An appeal shall not operate as a stay of proceedings under a decree or order appealed from except so far as the Appellate Court may order, nor shall execution of a decree be stayed by reason only of an appeal having been preferred from the decree;
but the Appellate Court may for sufficient cause order stay of execution of such decree."
[Emphasis supplied]
59. Hence, it is clear that the Appeal does not operate as a bar on decree or execution order except if ordered so by the superior Court. Thus, we are not convinced with pleadings of the Appellants on this issue.
60. We note that the Tribunal before passing the Execution Orders has gone through further objection of the Appellants and accorded clear finding in para - 21 of the Impugned Order:-
"After hearing both the parties and careful perusal of the order dated 16.04.2019, we are of the considered view that there are three cardinal points for determination before this Bench are as under:-
i) Whether the present execution application is not maintainable in view of pendency of appeal against Company Appeal (AT) No.102 of 2022 33 order dated 16.04.2019 before the Hon'ble Supreme court?
ii) Whether applicant No.1 has itself transferred 14,96,000 shares to Dhuri Cold Storage Private Limited, respondent No.2? If so its effects?
iii) Whether respondents have already acted upon for implementation of order dated 16.04.2019?"
61. We further take into consideration that the issue framed in the Impugned Order regarding maintainability of the Execution Petition pending adjudication Civil Appeal before the Hon'ble Supreme Court was rejected in para - 22. Another issue regarding Respondent No.1 itself transferred back 14,96,000 shares to Appellant No.2 on 28.11.2017 was also discussed and rejected in para - 23 of the Impugned Order by referring to para - 40(A) of this Appellate Tribunal on 16.4.2019. Third issue whether the Appellant has implemented completely directions of this Appellate Tribunal dated 16.4.2019 was also discussed in full in para - 25 and 26 of the impugned Order and concluded that the Appellants were found to be non-compliance of the direction contained in Order dated 16.4.2019 under execution.
62. We note that there was no dispute regarding the first transfer of shares dates 19th May, 2010. However, the second transfer dated 24.5.2010 was challenged and was adjudicated by the Tribunal as well as this Appellate Tribunal in terms of para - 40 of this Appellate Tribunal's Order dated 16.4.2019. Company Appeal (AT) No.102 of 2022 34 The second transfer dated 24.5.2010 recorded in the register of members transferred the shares in favour of Appellant No.2 was set aside and further direction was given to the Appellant No.1 company to rectify the Register of Members so as to reflect 16,94,000 shares standing in the name of Respondent No.1 Company w.e.f. 19.5.2010 and second transfer dated 24.5.2010 shall stand ignored.
63. This Appellate Tribunal also recorded in para - 40(C) that the first allotment made on 19.6.2011 i.e. 3,50,000 shares and second allotment made on 10th October, 2012 for 4,00,000 shares were declared as illegal and were struck down. This Appellate Tribunal in 40(E) also imposed the cost of Rs.50,000/- each on the original respondents Nos.3 to 5 each to pay to each of the original petitioners (Appellant of CA 394/2017) from their own funds.
64. With these observations, the Company Petition was disposed.
65. It is important to note that this Appellate Tribunal in Para - 40(A) in the last sentence very categorically stated that any steps taken by the party pursuant to such directions recorded in para -(ii) to (vi) of para - 161 of the Tribunal pending Appeal shall stand set aside.
66. We have already noted para - 161 of the Order of the Tribunal dated 15.11.2017 and held after detailed discussions that in terms of this Appellate Tribunal's Order dated 16.4.2019, only para - 161(i) was allowed remining all Company Appeal (AT) No.102 of 2022 35 directive contained in para - 161(ii) to (vi) were set aside. In effect, the status quo as on 19th May, 2010 was allowed and all subsequent actions of the Appellants in transferring shares were set aside.
67. We have noted that the Appellants pleaded that they have complied with all the directives of the Tribunal as well as the Appellate Tribunal and submitted that in the meantime on 27.11.2017, the Respondent No.1 company vide separate new Board Resolution authorized sale of 14,96,000 shares of Appellant No.1 company to the Appellant No.2 company and same was in conformity with the Settlement-Cum-Exit-Arbitral Award dated 12.7.2017. It has been stated that on 28.11.2017, the Appellant No.2 Company vide Board Resolution dated 28.11.2017 again authorized purchased of 14,96,000 shares from the Respondent No.1 Company for a consideration of Rs.15,10,960/- and acting on Board Resolution dated 27.11.2017 passed by the Respondent No.1 Company and Board Resolution dated 28.11.2017 passed by Appellant No.2 Company, a separate share purchase agreement was executed between Respondent No.1 company in the name of Appellant No.2 Company for sale and purchase of 14,96,000 shares of the Respondent No.1 company and therefore a fresh transfer deed dated 28.11.2017 was also executed between the parties whereby 14,96,000 shares from the Respondent No.1 Company to the Appellant No.2 company on 28.11.2017 which is a case of fresh transfer (Fresh Transfer) and there was no restriction by the Tribunal or this Appellate Tribunal and this Company Appeal (AT) No.102 of 2022 36 transaction being completely new, separate and independent transaction was valid as per the Appellants.
68. In this regard, we revisit the Order of the Tribunal. We also take into account the discussion on the arbitral Tribunal as contained in para - 5 of this Appellate Tribunal as contained in its earlier Order dated 16.4.2019 which reads as under:-
"5. The Impugned Judgement and Order of NCLT when perused, shows summary recorded from the Company Petition. The NCLT noted the various contentions raised and prayers made by the original Petitioners. The Respondents filed written Reply in NCLT and the learned NCLT took note of the defence raised by the Respondents. The Respondents defended their actions, details of which can be seen in the Impugned Order. It appears that the original Petitioners filed Rejoinder and Respondents filed Sur- Rejoinder to support the respective cases as pleaded by the parties. All this is summarized in the Impugned Order which can be seen and we need not prolix this judgement reproducing those details, though we note the same. In para - 88 of the Impugned Judgement, the NCLT after referring to the various pleadings put up by the parties, recorded that the arguments before it were confined only with regard to transfer of 14,96,000 shares and issue of fresh equity shares.
In para - 94 of the Impugned Order, NCLT has recorded that during the pendency of the Petition, R3 and R6 filed CA 255/2015 claiming that the said Respondents being Directors of Company Appeal (AT) No.102 of 2022 37 R1 - A.P. Refinery, entered into the Arbitration Agreement dated 12.07.2015 with P2 to P5, the Directors of Ricela Health Foods for referring the disputes to arbitration and appointing Arbitral Tribunal comprising of Ravi Kalra, Subhash Chand Singla, Meghraj Garg, Hemant Jindal, Satdev Jindal and Deepak Jindal to resolve the dispute between the parties. Copy of the agreement was attached as Annexure A-1. It was claimed that after due proceedings before the Arbitral Tribunal, a consent Order was passed on 12.07.2015 itself. The Impugned Judgement refers to details of what was recorded as consent award, which was tendered as Annexure A-2. The Respondents claimed that because of this, the Petitioners were bound to withdraw the Petition and could not challenge shareholding of R1 - AP Refinery.
5.1 The NCLT appears to have taken Reply of the Petitioners 2 to 5, who opposed the prayers of Respondents and who claimed that the said Annexures A1 and A2 had nothing to do with the present Petition. NCLT in para - 106 of the judgement took up CA 255/2015 which claimed that the Petition deserved to be dismissed on the ground of Arbitration Agreement and said Award and after discussing the matter and the provisions of Arbitration and Conciliation Act, 1996, found that the jurisdiction of the Tribunal was not barred and for reasons recorded, dismissed CA 255/2015 (para - 144 of the Judgement)."
69. The pleadings of the Appellant regarding alleged fresh transfers of shares dated 28.11.2017 are not sustainable in view of very clear directive of this Company Appeal (AT) No.102 of 2022 38 Appellate Tribunal contained in para - 40(A) especially in view of the last sentence which is again reiterated:-
"(A) We do not disturb directions in para marked - 163 of the Impugned Order. We agree with the learned NCLT as regards operative direction - 'i' in para 161 of the Impugned Order that CA 255 of 2015 filed by the Respondents deserved to be dismissed. However, for reasons discussed above, we set aside rest of the operative Order as recorded in para - 161 of the Impugned Order and reasons recorded by NCLT in support of the same. Any steps taken by the parties pursuant to such directions recoded in para - ii to vi, pending Appeals shall stand set aside."
[emphasis supplied]
70. The intent of this Appellate Tribunal was very clear to restore the status quo as was at the time of first transfer of shares on 19th May, 2010 and all subsequent actions of the Appellants was set aside.
71. In this background and in view of the detailed discussion above, we do not find any sound logic of the Appellants to issue alleged fresh transfer dated 28.11.2017 to justify the action of transferring back 14,96,000 shares in the name of Appellant no.2.
72. We note that the concerned persons i.e. Appellant No.3 - Ravi Nandan Goyal and Appellant No.4 - Shiv Kumar Goyal executed the documents for transfer of the shares and board resolution, were the common directors of all Company Appeal (AT) No.102 of 2022 39 three companies i.e. Appellant No.1, Appellant No.2 and Respondent No.1. If the contention and the arguments of the Appellants about alleged fresh transfer dated 28.11.2017 are accepted, it will tantamount of making the Order of the Tribunal dated 15.11.2017 and Order of this Appellate Tribunal dated 16.4.2019 as nullity.
We therefore do not accept the pleadings of the Appellants regarding validity of fresh transfer dated 28.11.2017. We also do not accept the contentions that both the Tribunal in Order dated 15.11.2017 and this Appellant Tribunal in its earlier Order dated 16.4.2019, did not intend to set aside fresh transfer dated 28.11.2017 and rather allowed the same. We make it absolutely clear that such contentions of the Appellants are wrong and illogical. The earlier Order of this Appellate Tribunal was very clear and unambiguous in restoring shareholding position as on 19.5.2010 and set aside all subsequent actions of the Appellants which clearly included fresh transfer of the Appellants dated 28.11.2017.
73. We find the force in the logic of the respondents No.1 to 9 that despite 12 years legal battle and winning the legal battle before the Tribunal as well as this Appellate Tribunal, the Respondents No.1 to 9 are still being treated as minority shareholders.
74. Since the cost has already been imposed on the mentioned Appellants by this Appellate Tribunal earlier in its Order dated 16.04.2019, which has Company Appeal (AT) No.102 of 2022 40 apparently yet not been paid to the Respondents No.1 to 9. We are restraining ourselves from further imposition of the cost keeping in view the pending Civil Appeal before the Hon'ble Supreme Court of India but would like to take into account the Appellants' disobedience which tantamount to contempt of Court, since no stay has been obtained by the Appellants regarding cost to be paid by the Appellants based on this Appellate Tribunal's earlier Order dated 16.4.2019. The Appellants are directed once again to pay the cost as imposed by this Appellate Tribunal in earlier Order dated 16.4.2019 now along with interest @ 12% p.a. from 16.4.2019 till payment is made.
75. In fine, we do not find any error in the Execution Order of the Tribunal dated 03.06.2022. The Appeal fails and stand dismissed.
76. Interlocutory Application, if any, are closed.
[Justice Rakesh Kumar Jain] Member (Judicial) [Mr. Naresh Salecha] Member (Technical) rs/ravi Company Appeal (AT) No.102 of 2022