PRAKASH CHAND SANGHI Vs. PAWAN KUMAR BAJ

JUDGEMENT

(1.) THE appellant has challenged the order of theCompany Law Board dated December 19, 1995, passed under Section 634Aof the Companies Act, 1956.

(2.) THE brief facts of the case are that the two petitions bearing Nos. 66 of 1992 - -P. K. Baj v. P. C. Sanghi and 65 of 1992 - -Sudha Baj v. P. C. Sanghi were filed under Section 397 alleging various acts of oppression and mismanagement in the affairs of Thycon India Pvt. Ltd. A compromise was entered into on May 26, 1994, in accordance with which the respondents were to make the payment of Rs. 12 lakhs for transfer of 3,015 shares in lieu of the factory, land and building situated at F -45, Malviya Industrial Area, Jaipur, and three months' time was fixed to complete the formalities. Since the formalities could not be completed in the aforesaid period, it is stated that as per the memorandum of understanding on August 25, 1994, time was extended till September 9, 1994. The Company Law Board disposed of both the petitions in terms of the deed of compromise on October 31, 1994. According to learned counsel for the appellants, the respondents failed to comply with the terms of settlement by not making the payment of Rs. 12 lakhs within the stipulated time and made an application under Section 634A on April 28, 1995, for enforcement of the order dated October 31, 1994, According to the appellants, the respondents neither filed the draft sale deed nor got clearance from the income -tax authorities and did not make the payment of Rs. 12 lakhs nor transferred the shares and 'no objection certificate' from the bank was also not obtained. The Company Law Board on December 19, 1995, after considering the objections of both the parties, directed that the amount of Rs. 12 lakhs shall be paid along with interest at the rate of 18 per cent, till the date of actual remittance which shall be deposited in escrow account with the State Bank of Bikaner and Jaipur. The vacant possession of land and building as per compromise terms shall be given within one month from the date of deposit of the amount.

(3.) ON behalf of the respondents it was stated that the appellant failed to incorporate the obligation and duty particularly to be performed by him and it was mentioned in the compromise that he has ensured that the properties are free from all the encumbrances and will take all the necessary steps to get the property registered in the name of Shri P. K. Baj or his nominee including obtaining the NOC from the Income -tax Department, if so required and clearance from the bank SBBJ, SMS Highway, Jaipur, with respect to the bank guarantee given by Shri P, K. Baj and his father Shri P. C. Baj, and other conditions were also contemplated in the compromise. A number of letters written to comply with the formalities were placed before the Company Law Board and the appellants have not alleged non -compliance of the obligations with regard to payment to SBBJ, Jaipur, and clearance of the respondents in respect of the bank guarantee given by him and his father and other conditions which were contemplated. So far as the respondents were concerned on the basis of compromise entered into, the civil suit and the contempt proceedingsfiled by them or their relatives or friends were withdrawn, that the appellant did not issue the discharge receipts nor made any payment to the Government or other authorities nor NOC or clearance as required was obtained and, therefore, the petitioner was compelled to move under Section 634A. The payment of Rs. 12 lakhs was also not made and the Company Law Board has not exceeded its jurisdiction as it has inherent powers under Rule 44 of the Company Law Board Regulations, 1991. The interest of Rs. 2,09,400 has been deposited on January 20, 1996.