CHDAVALAVADA KRISHNA MURTHY Vs. VINOD BAID

JUDGEMENT

(1.) The plaintiffs/petitioners in I.A.No.668 of 2015 in O.S.No.821 of 2015 have preferred this Civil Miscellaneous Appeal aggrieved by the orders passed on 31.03.2015 by the learned XXV Additional Chief Judge, City Civil Court, Hyderabad dismissing the said I.A.

(2.) I.A.No.668 of 2015 (I.A.No.2074 of 2014, earlier) was preferred seeking an injunction to restrain the respondents from conducting physical postal ballot, e -voting, filing of report and result of postal ballot, declaring the result of postal ballot and other consequential or incidental acts in connection with the sale/transfer of the 2nd respondent companies sugar business, pending disposal of the suit.

(3.) The case of the appellants is that the 1st appellant herein/1st plaintiff has entered into Memorandum of Understanding (MOU) on 09.12.2008 to takeover 50% of the equity share capital of the respondent No.2 company, held by respondent No.1, persons and entities known to respondent No.1, subject to the terms and conditions stipulated therein. It is his case that the said deed, though is mentioned as MOU, but for all practical purposes accepted and acted upon as an agreement of commercial transaction by and between them. The 2nd respondent/2nd defendant is a company incorporated under the provisions of the Companies Act and its shares are listed on various stock exchanges. As on 09.12.2008, the date on which MOU was entered, the paid up capital of 2nd respondent company was comprising of 2,57,52,000 shares of face value of 10/ - each, which are fully paid up and 1,00,00,000 equity shares of Rs.10/ - each, but partially paid at the rate of Rs.2.50/ - per equity share. The 1st respondent and persons associated with him are holding 76.92% of the total equity of the 2nd respondent company. As per the terms of MOU dated 09.12.2008, the 1st plaintiff/appellant has to invest a sum of Rs.19.51 crores in the 2nd respondent company which constitutes 50% of the share holding in that company. In terms of and in accordance with said MOU the 1st plaintiff/appellant and the 1st respondent have incorporated a new company named as Shri Venkateshwara Sugar Industries Pvt. Ltd. (for short henceforth referred to as "SVSIPL"). In that company the 1st appellant/ plaintiff and the 1st respondent herein are Directors. It is also agreed between the parties that none of the assets of the 2nd respondent company shall be sold/disposed of, transferred, assigned, mortgaged, pledged or otherwise encumbered, except in favour of the 2nd plaintiff - appellant company, without the written consent of the 1st plaintiff - appellant and without compliance of the applicable provisions and procedures under various enactments from time being in force. It is also the case of the 1st plaintiff/appellant that he has invested considerable amounts pursuant to the MOU dated 09.12.2008 in the 2nd respondent company. However, the shares of the 2nd respondent company have not been allotted to the 1st plaintiff - appellant. Hence, another MOU was entered into on 14.09.2011, which was also accepted and acted upon by both the parties as an agreement, wherein the 1st respondent has agreed to transfer 35% of the equity share holding of 1st respondent in the 2nd respondent company instead of 50% as agreed to earlier, in recognition of the remittance of Rs.13.42 crores by the 1st plaintiff/appellant as against Rs.19.51 crores, which was agreed to be invested by him as per the MOU dated 09.12.2008. Accordingly, the 1st plaintiff/appellant and his family members have been allotted 61,25,000 fully paid up equity shares of Rs.10/ - each and 35,00,000 partly paid up shares of 2nd respondent company. It is also the claim of the 1st plaintiff - appellant that subsequent to the 2nd MOU entered on 14.09.2011 a further sum of Rs.7.92 cores has been invested in 2nd respondent company as per the instructions of the 1st respondent. Further, as per the 2nd MOU dated 14.09.2011 the new company SVSIPL was required to repay the liability of the 2nd respondent to IFCI, in a sum of Rs.2,45,40,554/ - and thereafter the assets and liabilities of 2nd respondent company, after being assigned by IFCI shall be transferred back to the 2nd respondent company. In terms of this 2nd MOU dated 14.09.2011 the 1st plaintiff - appellant and the 1st respondent shall contribute each a sum of Rs.1,22,75,000/ - to the 2nd plaintiff company, so that the 2nd plaintiff - company would be liquidating the liability of the 2nd respondent - company towards IFCI. Accordingly, 2nd plaintiff - appellant company has paid a sum of Rs.2,45,40,000/ - to IFCI and discharged the liability of the 2nd respondent company to IFCI.