Calcutta High Court
Vijay Kumar Goyal And Ors vs Anshul Goyal And Ors on 27 April, 2023
Author: Arindam Mukherjee
Bench: Arindam Mukherjee
OD-8
IN THE HIGH COURT AT CALCUTTA
ORDINARY ORIGINAL CIVIL JURISDICTION
ORIGINAL SIDE
IA NO. GA 6 OF 2023
IN
CS NO. 228 OF 2022
IN THE MATTER OF:
VIJAY KUMAR GOYAL AND ORS.
VS
ANSHUL GOYAL AND ORS.
BEFORE:
The Hon'ble JUSTICE ARINDAM MUKHERJEE
Date : 27th April, 2023.
Appearance:-
Mr.Abhrajit Mitra, Sr.Adv.
Mr. Jishnu Chowdhury, Adv.
Mr. Shaunak Mitra, Adv.
Mr. Satadeep Bhattacharyya, Adv.
Mr. Saumabho Ghose, Adv.
Mr. Sanjeev Kr. Trivedi, Adv.
Ms. Iram Hassan, Adv.
Mr. Sanket Sarawgi, Adv.
Ms. Mahima Cholera, Adv.
For the plaintiffs/petitioners
Mr.K. Thakker, Adv.
Mr. Suryanee Das, Adv.
Mr. Aditya Mondal, Adv.
For defendant/respondent nos. 26 & 27
Mr. Amritam Mondal, Adv.
Mr. Rohit Banerjee, Adv.
For defendant/respondent nos. 1,2, 23 & 24 THE COURT:- This is an application in a partition and administration suit wherein the plaintiffs are seeking a disclosure as to the utilization of the funds received by the defendants out of the buy back of shares said to be family companies pursuant to the order of the Division Bench dated 13th February, 2023.
Initially, an application for injunction was moved being GA 1 of 2022. In the said application, directions for filing of affidavits were given on 28th September, 2022. Against such refusal to pass interim order, an appeal was 2 preferred being APOT 240 of 2022. Subsequently, another injunction application was filed by the plaintiffs being GA 5 of 2022 in which by an order dated 12th December, 2022, the interim order was refused and directions for affidavits were given. The said order dated 12th December, 2022 was challenged in an appeal being APOT 241 of 2022.
Between the first and the second application for injunction filed by the plaintiffs, three applications were filed by the defendant, inter alia, for rejection of the plaint and/or dismissal of the suit.
Both the appeals were heard together and disposed of by an order dated 13th February, 2023. The operative portion of the said order dated 13th February, 2023 is set out hereunder:-
"Considering all the above circumstances, we are of the view that these applications should be heard out on affidavits by the learned single judge as early as possible. In the interim period we restrain the parties from altering the status quo with regard to holding and dealing of the shares held by the family or family companies in the company. Furthermore, we restrain the said respondents from making any use of the fund received by them or the balance fund in their hands received by them from the said buy back arrangement, save and except for running the said two companies in the usual course of business without the leave of the learned single judge."
On a perusal of the order dated 13th February, 2023, it appears that the Hon'ble Division Bench after holding that two most germane issues are whether the family settlement is valid and binding on the parties and to what extent the 3 family settlement binds the members of the family with regard to the dealing of the subject share has held that as long as the family settlement is disproved by the said respondents, prima facie one has to take the family settlement as valid and binding on the parties and as such the restraint orders were passed and further held that the applications wherefrom the orders under appeal emanated are required to be heard on affidavits. However, during the interim period, the parties were restrained from altering the status quo with regard to the holding and dealing of shares held by the family or family companies in the company.
This order protects the interest of the plaintiffs against any alteration of the share holding of the family or family companies in the company in question.
The second part of the order restrains the respondents from making any use of the fund received by them or the balance fund in their hands received by them from the said buy back arrangement, save and except for running of the said two companies being defendant nos. 26 & 27 in usual course of business without the leave of the learned single judge.
The instant application concerns the second part of the order dated 13th February, 2023.
The plaintiffs have caused to be written a letter dated 9th March, 2023 requesting the advocate for the defendants to send details of utilization of the sale proceeds received by the defendants by the buy back of shares of Shyam Ferro Alloys Limited as also the amount lying with the defendants received pursuant to the buy back of shares of Shyam Ferro Alloys Limited. The details were requested to be provided by 15th March, 2023. The plaintiffs say that the defendants, despite lapse of a reasonable period of time, have not provided the details as sought for by the letter dated 9th March, 2023. This, according to the plaintiffs, gives rise to an apprehension that the funds received by the defendants 4 out of the buy back are mis-appropriated and not used for the usual operation of the company. The plaintiffs, therefore, seek an ad interim order for appointment of a receiver/special officer to make an inventory to the books and records of the respondent nos. 26 and 27 to ascertain the full particulars with regard to utilization of the proceeds of the buy back on and from 27th July, 2022 and to file a report before this Court with a further prayer that till the receiver/special officer are appointed, the defendants should be directed to submit weekly account of all expenses incurred for running the said two companies in the usual course of business.
The application is opposed by the defendant nos. 26 and 27. The first ground of objection is that there is no cause of action in favour of the plaintiffs that has accrued subsequent to the passing of the Appeal Court's order dated 13th February, 2023 for which the plaintiffs can seek the particulars of funds and expenses incurred for operating the companies or for appointment of receiver/special officer. The Appeal Court while disposing of the appeal consciously did not direct the defendants to give particulars otherwise the direction would have been specifically given in the Appeal Court's order. Secondly, the said defendants say that there is no prayer of ad interim order. The furnishing of weekly reports is not an ad interim order and the application lacks in pleading to support an ad interim order. Thirdly, it is submitted that as there is already a protective order, no further order is required to protect the plaintiffs with regard to the expenses made in operation of the defendant/respondent nos. 26 and 27. It is also submitted that the instant application is by way of a roving enquiry for fishing out evidence. The Court should not assist the plaintiffs in fishing out evidence by directing the defendant/respondent nos. 26 and 27 to disclose the details particularly when the Appeal Court did not grant the same. 5
Responding to these submissions, it is submitted by the plaintiffs that in the event the money received from the buy back or the balance sum lying with the defendants is mis-appropriated, the plaintiffs will be left remediless from realising the same even if a decree in their favour is passed.
After considering the rival contentions and the materials on record, it is clear from the order dated 13th February, 2023 that the share holding pattern is not to be altered. The Appeal Court has also permitted the defendants to utilize the money or the balance money received out of the buy back for usual operation of the companies being the respondent nos. 26 and 27. The Appeal Court did not give any direction to the defendants to furnish details. On the contrary permitted the defendants to approach the Single Bench to seek leave if any other expenses in addition to the normal expenses for operation is required. The Appeal Court has also directed that the matter will be heard on affidavits.
So far as the interim and ad interim order for appointment of receiver/special officer and furnishing of details till the appointment of receiver/special officer are concerned, I do not find immediate need as the time gap between the order of the Appeal Court dated 13th February, 2023 and the request letter is less than a month. The Appeal Court did not grant this order and unless extraordinary situation is prima facie demonstrated the question of appointment of receiver/special officer or furnishing of details does not arise at this stage. The overall accounts including the facts and figures relating to operational expenses of the company collated from the books of account will be available in the balance sheet. The plaintiffs will have the opportunity to scrutinize the balance sheet being a public document can if any discrepancy is noticed take appropriate steps. That apart, if any information is deficient in the affidavit, to be filed by the defendants while dealing with the allegations made by 6 the plaintiffs, the plaintiffs can take advantage of adverse presumption to pray for orders at the hearing of the application after filing of affidavits taking into account all these facts. The point raised by the plaintiffs that they will be remediless, if the funds are misappropriated was also before the Appeal Court when the order dated 13th February, 2023 was passed but the appeal appears to have consciously did not pass any specific direction to protect the plaintiffs in this regard and as such I also do not find it either expedient or necessary in the interest of justice to pass any ad interim order in terms of prayer (a)(i) and (b) of the application at this stage for reasons aforesaid.
Let affidavit-in-opposition be filed within 10th May, 2023 with an advance copy to the plaintiffs. Let affidavit-in-reply be filed by 15th May, 2023.
Let this mater appear in the list on 17th May, 2023.
(ARINDAM MUKHERJEE, J.) sb.