AMARTAX INDUSTRIES LIMITED Vs. AMAR GAWRI

JUDGEMENT

(1.) The present appeal under Section 10F of the Companies Act (hereinafter referred to as the Act) is directed against the order dated 18.10.2001 passed by the Company Law Board, Principal Bench, New Delhi (hereinafter referred to as the Board) in C.P. No. 46 of 1999 and C.A. No. 101 of 2001 directing the appellants herein to purchase the shares held by the respondents at the rate of Rs. 20/- per share on or before 31.12.2001.

(2.) The respondents herein filed a C.P. No. 46 of 1999 complaining oppression and mismanagement by the appellants herein. In the said petition, it was pleaded that the appellants are shareholders of M/s Amar Tax Industries Ltd. holding in aggregate, 1,96,928 Equity Shares of Rs. 10/- each credited as fully paid up as on 30.9.1996 in the share capital of the Company forming 27.05 per cent of the total paid-up Share Capital. It was pleaded that Amar Tax Pvt. Ltd. (hereinafter referred to as the Company) was incorporated on 27.1.1988. There are two groups of the shareholders in the Company Amar Gawri and his Associates and Arun Grover and his Associates. It was pleaded that the appellants being persons-in-charge of affairs of the company became greedy and started conducting the affairs of the Company in a manner oppressive to the interests of the respondents.Various allegations were mentioned in the petition filed under Sections 397 and 398 of the Act. Said petition came to be decided by virtue of compromise on 14.12.1999 when both the counsel for the parties and the parties agreed that the respondents group will go out of the company by selling their shares to the appellants group on a valuation to be made by the statutory auditors of the company. The agreement was also in respect of the date of valuation as 31.3.1998 and that two additional issues of shares made in October, 1997 and January, 1998 will not be taken into account. The statutory auditors were directed to determine the value of shares on the basis of accepted principles of valuation and shares taking into consideration the family relationship between the parties and also holding of respondents of about 27% share of the company. The parties were given opportunity to make oral as well as written submissions to enable a draft valuation report and to circulate the same to the parties. After making representation on the basis of draft report, the valuer was to submit final valuation report. For facility of reference the entire order reads as under:

(3.) In pursuance of said order, the statutory auditors assessed the value of the shares at Rs. 30.80p. but both the parties raised objections on such valuation. On 1.11.2000 both the sides agreed that the Board may fix fair price of the shares. The said order reads as under: