MANISH MOHAN SHARMA Vs. RAM BAHADUR THAKUR LTD

JUDGEMENT

(1.) Ram Bahadur Thakur Ltd. , the respondent no. 1 was founded by Chatur Bhuj sharma and Madan Mohan Sharma. They were first cousins, their fathers being brothers. The shareholding of the two cousins in the respondent no. 1 was equal. Since 1992, disputes arose between the two groups, who are referred to respectively as the CBS Group and the MMS Group. The mms Group is in appeal before us and the cbs Group is represented by the respondents no. 2 to 4. The disputes related primarily to the management of the various companies owned by the family including and in particular the respondent no. 1.

(2.) In 1996 the MMS Group filed a company petition (No. 56 of 1996) before the Company Law Board, new Delhi under the provisions of Sections 397 and 398 of the Companies Act, 1956, complaining inter alia of having been ousted from management of the companies and seeking a role in such management. Various interim orders were passed. On 9th January, 1997, the Company Law Board removed the respondent no. 2 as Chairman and Managing Director of the company and appointed a retired judge, Justice A. N. Varma as the Chairman of the company. In 1998, pursuant to another interim order passed by the Company law Board, the MMS Group was put in joint management of the company.

(3.) The creditors of the companies including the company's bankers, namely syndicate Bank initiated proceedings against the company inter alia for recovery of outstanding dues. The matter was ultimately resolved between the parties with the persuasion of the Company Law Board and praiseworthy efforts of the Chairman, Justice A. N. Varma. The terms of the family settlement were set down in a Memorandum of Family Arrangement and Transfer Document.