RAMESH CHAND GOYAL Vs. HIMALAYA COMMUNICATIONS LTD

JUDGEMENT

(1.) M /s. Himalaya Communications Ltd. is a company duly incorporated under the Indian Companies Act, 1956, having its registered office at Village Katha, Baddi, District Solan, H.P. The original promoters of the company were Mr. Ramesh Chand Goyal and Smt. Manorama Goyal (hereinafter referred to as the "Goyal group") and M/s. Satish Chand Jain, Darpan Jain and Smt. Meenu Jain (hereinafter referred to as the "Jain group"). The company was incorporated in the year 2000.

(2.) THE undisputed facts are that differences arose between the two groups with regard to the control and management of the company. According to the Goyal group the Jain group on May 6, 2002, forcibly took over the physical control and possession of the company. Thereafter, the Jain group filed a company petition under Sections 397 and 398 of the Companies Act, 1956, before the Company Law Board (hereinafter referred to as the "Board") in May, 2002. Since the parties were closely related efforts were made to arrive at an amicable settlement between the two groups. On September 18, 2002, some understanding was reached between the two parties and a memorandum of understanding was drawn up. According to this memorandum of understanding the Goyal group agreed to walk out from the company and transfer their share holding to the Jain group. Rupees 4.5 crores was payable to the Goyal group for transfer of the shares. Another sum of Rs. fifty lakhs was payable subject to the company succeeding in a sales tax case. Rupees 2.5 crores was to be paid immediately and the balance in eight quarterly instalments of Rs. 25 lakhs each. The parties were to withdraw all litigations and complaints made against each other. The book value of the equity shares as on March 31, 2002, was to be taken into account for transfer of the shares. There were other conditions also which are not relevant for decision of the present appeals.

(3.) THEREAFTER , one of the members of the Goyal group filed a company application before the Company Law Board seeking directions to the Jain group to honour the memorandum of understanding signed between the parties. Disputes arose with regard to the valuation and method of valuation of the shares. The Company Law Board vide order dated November 7, 2003, on the said application passed a detailed order, relevant portion of which reads as follows : 71 have considered the pleadings and arguments of counsel. Neither of the parties desire to adjudicate the petition on merits as is evident from their applications. It is not in dispute that the respondents have agreed to go out of the company as recorded in order of this Bench dated October 18, 2002 and October 23, 2002 and still they are willing to do so. The only issue for consideration is whether the respondents should go out of the company in terms of the memorandum of understanding or on a valuation to be made by an independent valuer. The memorandum of understanding was entered into by the parties on their own and not in terms of any direction given by this Bench. It is an admitted position, as recorded in the order of this Bench October 23, 2002, that the second respondent, who was present in person, made a voluntary statement that the respondents were willing to go out of the company by selling the shares to the petitioners at a value to be determined by an independent valuer. He even expressed his willingness to hand over the entire management of the company to the petitioners on the stipulation that his guarantees to the banks should be released. At that time, he did not make any reference to the memorandum of understanding. Any statement before the court in the present case this Bench is binding on the party making such a statement. As a matter of fact, on the basis of the statement made by the second respondent, this Bench had passed a further ex parte order on October 28, 2002, directing the petitioners to release the respondent from his personal guarantee within a period of three months. Therefore, the second respondent is bound by the statement made on October 23, 2002 and he will have to go out of the company on receipt of the consideration for his shares at a value determined by an independent valuer. This Bench cannot enforce the memorandum of understanding as sought for by him, as other than noting the existence of the memorandum of understanding, this Bench had not passed any order in regard to the same nor recorded anything to the effect that both the parties were willing to abide by the terms of the memorandum of understanding. The memorandum of understanding was privately entered into by the parties, the enforcement of specific performance of which lies in a civil court. 8. Since I have held that the respondents are bound by the statement made by the second respondent, the matter is posted on November 24, 2003, at 4.30 p.m. at which time both the parties will suggest the name of a mutually acceptable valuer to value the shares failing which this Bench itself will appoint a valuer.