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Showing contexts for: SSA in Companies Act vs Mr. Ashok Khurana on 10 January, 2014Matching Fragments
(a) Respondent No. 1 to 4 are the erstwhile promoters and shareholders of the Hvn 19 APL-1796-1793.2013.sxw company Welspun Projects Ltd (Formerly known as MSK Projects (India) Limited), (hereinafter referred to as "said company"). Respondent nos. 1 to 4 were desirous of disposing of their entire share holding of the said company and petitioner agreed to purchase the same. On 18 th March, 2010, petitioner and respondent nos.1 to 4 entered into a share purchase agreement. By the said Purchase Agreement (for short "said SPA"), petitioner agreed to purchase 47,32,545 shares in the said company from respondent nos 1 to 4 for the total consideration of Rs.62,01,81,022.50. Petitioner and respondent nos. 1 to 4 also entered into share subscription Agreement on 18 th March, 2010 by which petitioner agreed and subscribed to 1,71,78,888/- shares of the said company from respondent nos. 1 to 4 for the consideration of Rs.211,30,03,224/- (for short "said SSA"). It is the case of the petitioner that both these agreements were entered into by the petitioner on the strength of the representations, warranties, covenants, disclosures made and indemnities given by respondent nos. 1 to 4 as set out in the said two agreements. Petitioner accordingly acquired total of 2,19,31,233 shares in the said company for the total consideration of Rs.2,73,31,84,246.50. Petitioner deposited first trench of the purchase price of Rs.52,01,81,022.50 into escrow account pursuant to clause 3.1 of the said SPA. It was agreed by and between the parties that the payment of the purchase price including escrow account shall be conditional upon respondent nos. 1 to 4 completing conditions precedent to share closing and the said amount in escrow account (I) was not to be released to respondent no. 1 to 4 unless condition precedent to the share closing were applied by these respondents to the satisfaction of the petitioner as described in clause 4.1 of the said SPA. It is the case of the petitioner that respondent nos.1 to 4 however, have procured release of escrow account I through misrepresentation. The second trench of price of Rs. 10 Crores was deposited by the petitioner into separate escrow account II vide escrow agreement II dated 18th March, 2010 which was entered into between petitioner, respondent nos. 1 to 4 and the escrow agent. It was agreed between the parties that unless respondent nos.
(e) In so far as the said SSA is concerned, according to petitioner, respondent nos.1 to 4 committed several breaches of the said agreement and as a result thereof, respondent nos. 1 to 4 became liable to pay to the petitioner sum of Rs.1,64,91,73,248/-
and Rs.2,62,50,39,273/- with interest thereon.
(f) It is the case of the petitioner that since respondent nos. 1 to 4 did not allow the independent valuer to submit report on the difference in value of the agreed value and actual value, petitioner obtained a report from an independent valuer and according to such report, there was difference of Rs.41,29,00,000/-.
18. Mr. Tulzapurkar learned senior counsel for the petitioner in rejoinder submits that there was no application filed under section 11 by the petitioner before the Gujarat High Court in so far as SSA is concerned. Section 42 of the Arbitration Act thus in any event, would not apply in respect of the subject matter of the said SSA. In so far as issue of jurisdiction raised by respondent nos. 1 to 4 in respect of the arbitration petition filed by the petitioner arising out of the said SPA is concerned, the learned senior counsel submits that even if respondent nos. 1 to 4 had withdrawn the petition filed under section 9 before the District Judge, Vadodara, it was contended by respondent nos. 1 to 4 in the said proceedings that the District Judge had jurisdiction to entertain the said petition being court under section 2(e) of the Arbitration Act, being principal Civil Court of the original jurisdiction in the district and the parties in the said SPA had agreed to the jurisdiction before that court. Mr. Tulzapurkar then submits that in so far as arbitration petition filed in this court by respondent nos. 1 to 4 is concerned, respondent nos. 1 to 4 has referred to various provisions of SPA in the said petition entered into between the petitioner and respondent nos. 1 to 4. Standard Charted Bank was appointed as escrow agent pursuant to the SPA and KPMG India Limited was appointed as independent valuer. Learned senior counsel invited my attention to paragraph 15 of the said petition in which it is averred by respondent nos. 1 to 4 that clause 11(m) of the SPA provides for arbitration in case of dispute between the parties. In prayer clause (a), respondent nos. 1 to 4 have prayed that pending constitution of arbitral tribunal, arbitral proceedings adjudication and disposal of all disputes between the petitioner and respondent no. 1 by the arbitral tribunal by an award, Standard Chartered Bank should be restrained from releasing Rs.10 Crores. It is submitted that thus respondent nos. 1 to 4 cannot be allowed to urge that the said petition was filed by invoking arbitration agreement under escrow agreement and not under SPA. It is submitted that thus both the parties have agreed that not only Gujarat court had jurisdiction but also this court has jurisdiction to entertain the proceedings between the parties. This petition thus filed under section 9 before this court is maintainable.
30. It is not in dispute that there was no application filed by the petitioner under section 11 before Gujarat High Court in so far as the said "SSA" is concerned and thus question of applicability of section 42 of the Arbitration & Conciliation Act in respect thereof would thus not apply in respect of the subject matter of the said "SSA".
31. On perusal of the record, it is clear that under clause 7.16 of the SPA, it was agreed that the actual value would be determined by mutually appointed independent valuer KPMG. Respondent no. 1 to 4 were required to deliver to the said independent valuer consolidated trial balance of the said company along with all such information as the said independent valuer may request for. It is not in dispute that so far the said valuation report has not been furnished by the said KPMG. Petitioner had deposited sum of Rs.10 Crores in the escrow account which deposit was to be dealt with finally based on such valuation report which was required to be submitted by the said independent valuer KPMG. The said amount of Rs. 10 Crores is lying in escrow account with respondent no. 6 and is not fetching any interest.