NEW BRIDGE HOLDINGS B V THROUGH ITS AUTHORISED SIGNATORY RAJESH KUMAR JHA Vs. TTK LIG LIMITED THROUGH ITS MANAGING DIRECTOR T R VENKATESH

JUDGEMENT

(1.) The petitioner, New Bridge Holdings B.V., through its Authorised Signatory seeks for a direction to punish the respondents for their act of disobeying and defying the order dated 1.6.2011 made in C.A.No.113 of 2011 in C.P.No.41 of 2011 on the file of Company Law Board, Chennai Bench, Chennai.

(2.) In support of the petition, the petitioner has averred as follows. The first respondent, M/s TTK-LIG Limited is a joint venture company incorporated in 1963 with the petitioner/its parent company. The petitioner and TTK group hold 49.87 per cent shares each and the balance percentage is held by 40 individuals. The first respondent, inter alia, manufactures contraceptives including condoms under the trademarks "Durex" and "Kohinoor". The group/parent company of the petitioner had provided the technology, machinery, processes, etc., in 1963 and continue to provide the same to the first respondent. The group company had also permitted the use of its world renowned trademarks "Durex" and "Kohinoor" to the first respondent and in addition 80 per cent of the turnover and profit of the first respondent comes from exports to the petitioner and its group companies.

(3.) Both the petitioner and the first respondent are under the joint and equal management right from the year 1963 and their inter-se rights are governed by the Articles of Association and the agreements executed between them. The ninth respondent by name T.R.Venkatesh is the Managing Director of the first respondent company. Though he is supposed to be independent, he started acting in collusion with TTK group. In the meeting of the Board of Directors of the first respondent company held on 2.5.2011, resolutions were passed reducing the petitioner to minority from the position of equal and joint management of joint venture company. A further resolution was passed to suspend the export, unless the group companies of the petitioner agree for the sale price of total costs plus profit of 50 per cent instead of the profit of 15 per cent and agree to purchase 80 crore pieces per year for five years. It was also resolved to appoint a distributor in India from amongst the TTK group companies for five years. According to the petitioner, all the resolutions were contrary to the Articles of Association of joint venture company and therefore ultra vires and illegal. Though the condition in regard to the sale price and increase of profit from 15 per cent to 50 per cent was onerous, the foreign buyer agreed under duress and coercion only in order to get the supplies. The foreign buyer agreed to the terms only on condition that the first respondent company should resume the exports by 10.5.2011. As the first respondent did not resume the export and forced the petitioner to give its consent to the resolutions as a pre-condition for resumption of export, the petitioner had to withdrew its offer.