SHIVAM ADHESIVE PVT. LTD Vs. SHIV RATAN KHADAWAT

JUDGEMENT

(1.) By way of this appeal under Section 10F of the Companies Act, 1956 ('the Act of 1956'), the respondents of a company petition pending before the Company Law Board, New Delhi Bench ('the Board'), seek to question the order dated 23.04.2013 whereby, the Board has declined their prayer for stay of proceedings in the company petition until disposal of a civil suit (CO No.123/2012), which has been filed by the appellants Nos.2 & 3 in the Court of District Judge, Hanumangarh.

(2.) In brief, the relevant background aspects of the matter are as follows: The respondents herein have filed the said company petition [No.129(ND)/2011] under Sections 397, 398 and 403 of the Act of 1956, alleging oppression and mismanagement in respect of the affairs of the appellant No.1 company. The appellants have filed a reply to the said company petition alleging, inter alia, that the petitioners (respondents herein) have not approached the Board with clean hands and have deliberately concealed the fact of execution of a family settlement dated 22.09.2009. It has also been contended that in view of the said family settlement, the petition does not fall within the purview of oppression and mismanagement under Sections 397 and 398 of the Act of 1956. It is noticed that the appellant No.2 and the respondent No.1 are brothers; and most of the other parties are also closely related to them and with each other.

(3.) It appears that the relations amongst the parties and their families were cordial until the year 2008. However, thereafter, differences and disputes cropped up; and it is alleged that in order to resolve the disputes relating to the family properties and businesses, four arbitrators were appointed who made the settlement by their award dated 28.01.2009. It is further alleged that as per the said award, the appellant company would belong to the appellant No.2, who has been handed over the possession of factory premises of the company and who has also shifted his residence therein. Further, according to the appellants, the respondents handed over the share certificates to the appellant No.2 but subsequently, when the respondent No.1 refused to abide by the terms, a written family settlement was arrived at on 22.09.2009; and as per the terms thereof, so far as the subject company is concerned, it was agreed that the respondent No.1 and his sons would transfer their shareholdings to the appellant No.2 and from that date, they shall have no interest or title or right or liability in the appellant company.