Ashok Kumar Mishra, Member - (1.) This Company Petition was originally filed before the Company Law Board, Southern Region, Chennai. Consequent Upon the establishment of National Company Law Tribunal Bench at Bengaluru, the said case was transferred to this Tribunal on abolition of Company Law Board, Southern Region, Chennai Bench and it was taken on file and numbered as T.P. 55/2016.
(2.) The Counsel for the petitioners and respondents have filed compromise petition today before this bench seeking leave of this Tribunal to pass order in terms of the Compromise Petition executed between the parties. We have gone through the contents of the compromise terms. 12. Terms of Settlement 12.1 It is submitted that in terms of Settlement Deed the Petitioners will sell their entire shareholding in the Company and relinquish all rights to all its shares in the Company in favour of Respondent No. 2 or its nominees to enable the Respondent No. 2, its nominees, if any and their affiliates to together hold the entire issued share capital of the Company. 12.2 It is submitted that the Sale Shares of the Petitioners viz., (i) 19,289 Ordinary Equity Shares and 49 class A Equity Shares owned by Petitioner No. 1; (ii) 11,783 Ordinary owned by Petitioners No. 2 and (iii) 911 Ordinary Equity Shares owned by Petitioners No. 3 are proposed to be transferred to Respondent No. 2 or its nominee as per the Settlement Deed. The aforementioned shares that are proposed to be sold shall be referred to as the "Sale Shares" 12.3 It is submitted in consideration of the proposed transfer of all the shares held by the Petitioners to the Respondent No. 2 or its nominees and in view of the settlement of the Pending Litigations and disputes, the Company and Respondent No. 2 jointly and severally agree that the Petitioners shall be paid a consideration of Rs. 9,00,00,000/- (Rupees Nine Crores) and the same shall be settled by way of wire transfer by Respondent No. 2 as detailed below: a) Rs. 5,43,24,881/- to Petitioner No. 1 towards sale of 19,289 Ordinary Equity Shares and 49 class A Equity Shares; b) Rs. 3,31,14,851/- to Petitioner No. 2 towards sale of 11,783 Ordinary Equity shares; and c) Rs. 25,60,268/- to Petitioner No. 3 towards sale of 911 Ordinary Equity Shares. 12.4 It is submitted that each Petitioner shall, simultaneously on wire transfer, handover to Respondent No. 2, his/her respective share certificates and the duly stamped and signed share transfer forms in respect of the Sale Shares. Further, the Petitioners shall get the FC-TRS form (duly filled) with all the relevant annexures pre-approved by the concerned authorized dealer to ensure that the FC-TRS is endorsed by the concerned authorized dealer without any delay after the money is received by the Petitioners for transfer of Sale Shares. The Company shall take the necessary steps as contemplated in the Articles of Association of the Company in relation to transfer of Sale Shares by the Petitioners to Respondent No. 2. The Respondent No. 2/shall pay the applicable Stamp Duty on the Sale Shares. 12.5 It is submitted that the Effective Date as per the Settlement Deed would be the date on which the Honourable Tribunal passes an order accepting the terms of the Settlement Deed and disposes of the above Transfer Petition. 12.6 It is submitted that Mr. Vasudeva Adiga and Mr. Parameshwar Adiga will cease to the Directors or officers of the Company in terms of Settlement Deed from the Effective Date. 12.7 It is submitted that the Petitioners as officers of the Company assure Respondents No. 1 to 5 that they will give their unanimous written consent to compound all or any non-compliances or deviations of the applicable laws by the Company prior to the Effective Date. 12.8 It is submitted that subject to the terms of the Settlement Deed, on and from the Effective Date, the Petitioners shall be deemed to have agreed to relinquish all rights, title, claims, interests in their shareholding (whether equity or preferential) in the Company and its holdings thereto. 12.9 It is submitted that the Petitioners declare that on and from the receipt of the amount as per the Settlement Deed, they shall not have or make any Claims on or in relation to any of the assets/revenues of Respondent No. 1 or against Respondent No. 2 to 5. 12.10 It is submitted that the parties have agreed under the Settlement Deed, that on and from the Effective Date, the Investment Agreement viz., Shares Subscription cum Share Purchase Agreement dated March 24, 2012, ("SSSPA") and the Shareholders agreement ("SHA") dated 24th March 2012 shall subject to the qualification made herein, stand cancelled and shall no longer be binding or enforceable against the Parties, and the Company and Respondent No. 2 will be free to amend the Articles of Association of the Company to capture the revised rights and obligations pursuant to the Settlement Deed. However, the tax indemnities, the representation and warranties given in respect of the sale shares in the SSSPA shall continue to be in full force and effect even after the Effective Date. It is submitted that the said indemnities, representation and warranties refer to matters pertaining to the Adiga Entities (as defined in the SSSPA) and for the period's stated in the Investment Agreements. 12.11 On and from the Effective Date, each of the Petitioners (for themselves and, their directors, shareholders, heirs, executors, administrators, successors, legal representatives and permitted assigns), in consideration of the mutual releases, hereby immediately, unconditionally, irrevocably and forever release and discharge the company, the Respondent No. 2 and their respective Shareholders, nominees, directors, employees, successors and assigns, from any and all Claims arising out of any matter, cause, fact, thing, act or omission whatsoever occurring or existing at any time to and including the date of the Settlement. Deed that any ways relates to or arise out of (i) the execution, performance or cancellation of the Investor Agreements or (ii) the Petitioners holding any shares of the Company. 12.12 It is submitted that on and from the Effective Date, the Respondent No. 2, for themselves and their nominees, shareholders, directors, employees, successors and assigns, in consideration of the mutual release and subject to the terms of the Settlement Deed unconditionally, irrevocably and forever releases and discharge the Petitioners from any and all Claims arising out of any matter, cause, fact, thing, act or omission whatsoever occurring or existing at any time to and including the date of Settlement. Deed in any way relate to or arise out of the execution, performance or cancellation of the Investor agreements. It is submitted that any Claims arising from the tax indemnities and the representation and warranties given in respect of the sale shares in the SSSPA shall continue to be in full force and effect even after the Effective Date. It is submitted that the said indemnities, representation and warranties refer to any matter pertaining to the Adiga Entities and for the period/s stated in the Investment Agreements. 12.13 It is submitted that the term "Claims" used in this petition shall mean any or all claims, demands, damages, liabilities, obligations, costs, expenses, actions and cause of action of every kind and nature whatsoever, whether direct or derivative, known or unknown or suspected or unsuspected. 12.14 It is submitted that the term "Pending Litigations" shall mean the litigations instituted or filed by the Petitioners and pending before any competent authority against the Company, Investor or any of their nominees (past or present). 12.15 It is submitted that the Respondent No. 2 and Company have agreed that the Company and the Respondent No. 2 Investor shall take all steps necessary to: a. Convene and hold one or more Board meetings of the Company inter alia to; i. Ratify the execution of the Settlement Deed. ii. Accept and approve the letters of resignation of Mr. Vasudeva Adiga and Parameshwara Adiga from their Directorship, effective from the Effective Date and file the necessary Forms to ROC (Respondent No. 6); iii. Convene and hold EGM of the Company at shorter notice to amend the Articles of Association of the Company to inter alia provide for deletion of special articles thereto and make other required modifications as may be deemed necessary; iv. To convert, if required, the CCPS into any other security as may be decided by the Board: v. Record the transfer of Sale Shares from the Petitioners to Respondent No. 2 or its nominee as per law; vi. To consider and approve any other matters as may be deemed necessary or required. b. Convene and hold an EGM of the Company inter alia to amend the Articles of Association of the Company to inter alia provide for deletion of Special Articles thereto and make other required modifications as may be deemed necessary and such other matters as may be deemed necessary or required; c. File all required returns and complete filings before the Registrar of Companies (ROC) and Reserve Bank of India (RBI) including filling of the Order as may be passed by the NCLT along with a copy of the Settlement Deed with the ROC, including filling of DIR 12 in respect of the resignation of Petitioner No. 1 and Petitioner No. 3 hereto and filing of the FC-TRS with the competent authority for transfer of shares from the Petitioners (resident) to Respondent No. 2 (non-resident). d. Take such other actions as may be required to give effect to the consent order of the NCLT. 12.16 It is submitted that the Petitioners have further agreed that they on the date of receipt of the consideration for the Sale Shares shall take all steps necessary including filing of the FC-TRS with the competent authority in relation to the transfer of the Sale Shares in favour of Respondent No. 2. 12.17 It is submitted that the Petitioners have agreed that no further notice to the Petitioners for any general meetings or board meetings will be necessary and Respondent No. 2 be and are hereby authorised to receive the notice for and to appoint a representative/proxy/alternate to attend and vote at such meetings on behalf of the Petitioners Directors in any manner that they deem fit. 13. Additional Covenants: 13.1 It is submitted that the Petitioners represent that title to the Sale Shares is absolute, clear, valid, marketable and free of all encumbrances. Further, the Petitioners have not entered into or arrived at any agreement or arrangement written or oral, with any person in respect of the Sale Shares, or their membership of the Company which would be violated or breached upon consummation of the transaction contemplated herein and upon delivery to the Investor of the Sale Shares pursuant to the Settlement Agreement, the Investor will acquire good, valid and marketable title to such Sale Shares, free and clear of all encumbrances and/or any pre-emptive rights failing which the Petitioners shall indemnify Respondent No. 2 to the full extent for all losses suffered by way of damages. 13.2 It is submitted that Petitioner No. 1 shall have an informal role as an honorary consultant advising the Board of the Company on strategic issue as and when required by the Company till 30th June 2018 13.3 It is submitted that the Petitioners covenant with the Company and Respondent No. 2 that they shall not (either directly or indirectly) start any new restaurants or outlets in any capacity either in the food and beverages business of catering business for a period of one year from the Effective Date. 13.4 It is submitted that for a period of up to one year from the Effective Date, the petitioners shall not induce or attempt to induce any supplier of the Company to cease to supply, or to restrict or vary the terms of supply to, any of them or induce, or poach or attempt to induce, any employee of the company to leave the employment of that Company. 13.5 It is submitted that no modification or amendment to the Settlement Deed and no waiver of any of the terms or conditions hereto shall be valid or binding unless made in writing and duty executed by all the petitioners and all the Respondents. 13.6 It is submitted that the Petitioners and Respondents acknowledge that the Settlement Deed is executed voluntarily and without any duress or undue influence on the part or behalf of any of the Parties hereto, with the full intent of releasing all disputes as per the terms of the Settlement Deed. 13.7 It is submitted that the Petitioners and Respondents acknowledge that, they have each received legal advice on the terms and consequences to enter into the Compromise and the Settlement Deed and are fully aware of its legal and binding effect. 13.8 It is submitted that the Petitioners and Respondents declare that the Settlement Deed represents the entire understanding between the Petitioners and Respondents in relation to full and final settlement of all their disputes and Claims and supersedes and replaces any and all prior agreements, deeds and understandings (whether written or oral) between the Petitioners and Respondents, subject to the exclusions make in the Settlement Deed. 13.9 The Petitioners and Respondents unanimously agree that the Compromise shall be binding on them. In the event of any dispute between the Petitioners and Respondents concerning the Settlement Deed the Court of Bengaluru shall have the exclusive jurisdiction to adjudicate the dispute under the laws of India. 13.10 It is submitted that the Petitioners and Respondents agrees to refrain from any defamation, libel or slander of the other or tortuous interference with the contracts and relationships of the other. Neither the Petitioners nor the Respondents shall make any statement that may cause disrepute or damage the name of the other party. 13.11 It is submitted that each of the Petitioners and Respondents represents that he/she/they/it has/have entered into the Compromise and Settlement Deed with free consent to resolve all disputes in good faith, in the absence of coercion, fraud, inducement, misrepresentation or force. That each party as Petitioner and Respondent out of their own free will have the authority and capacity to enter into the Compromise and execute the Settlement Deed and perform their respective obligations under the Settlement Deed and the same would be binding and enforceable against such person under all applicable laws; and that each of the Petitioners and Respondents has full power and authority to grant the releases to the other as contemplated in the Settlement Deed. 13.12 The Petitioners and Respondents have wholeheartedly jointly and severally agreed, confirmed and affirmed the terms of this Compromise Petition. 13.13 The Settlement Deed is herewith produced as Annexure A to this Compromise Petition under Memo to the Honourable Tribunal. 13.14 The Board Resolution by circulation passed by the Respondent No. 1 is herewith produced as Annexure B to this Compromise Petition under Memo to the Honourable Tribunal. 13.15 The Petitioners and Respondents agree that the Honourable Tribunal may on an application filed by either the Petitioners or Respondent or the Company institute an execution proceeding to enforce the consent order passed pursuant to this Compromise Petition.
(3.) The parties in person informed the Tribunal that they are accepting the terms of the compromise and that they have signed in the compromise settlement noting the contents. The Compromise is recorded.;