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Basudeo Agarwala and Ors. Vs. Banwarilal Agarwala and Ors. - Court Judgment

LegalCrystal Citation
CourtKolkata High Court
Decided On
Judge
AppellantBasudeo Agarwala and Ors.
RespondentBanwarilal Agarwala and Ors.
Excerpt:
.....with such defendants taking over memorandum control also of the third provided for the defendant firs.company. and second such defendants ultimately having the firs.and second plaintiffs discharged as guarantors in respect of the credit facilities obtained by the third defendant company. the relevant memorandum recorded that the firs.and second defendants were to immediately take over the management of the third defendant. the other memorandum pertains to the net consideration of rs.1.5 crore that was payable by the firs.defendants to the firs.and second plaintiffs. and second a sum of rs.50 lakh out of the net consideration of rs.1.5 crore was to come to the firs.and second plaintiffs upon the bank approving the transaction for transfer of the controlling shareholding interest in the.....
Judgment:

O-10 GA No.55 of 2014 CS No.458 of 2013 IN THE HIGH COURT AT CALCUTTA Ordinary Original Civil Jurisdiction ORIGINAL SIDE BASUDEO AGARWALA & ORS.-VersusBANWARILAL AGARWALA & ORS.Appearance: Mr.Abhrajit Mitra, Sr.Adv.Mr.Anirban Roy, Adv.Mr.Swarajit Dey, Adv.Mr.P.Basuchowdhury, Adv...for the plaintiff.

Mr.Ranjan Bachawat, Sr.Adv.Mr.Amit Nag, Adv...for the defendant.

BEFORE: The Hon'ble JUSTICE SANJIB BANERJEE Date : September 15, 2016.

The Court : The plaintiff Nos.1 and 2 were the principal persons in control of the third defendant company till or about the beginning of 2011.

The other plaintiffs are relatives and business entities of the fiRs.and second plaintiffs.

While the fiRs.and second plaintiffs were in control of the third defendant they ran up a huge debt, particularly secured creditor Indian Overseas Bank, Dhanbad Branch.

to The fiRs.and second plaintiffs appear to have been attempting to remove themselves from the third defendant company and wriggle out of the personal guarantees given to the bank.

The fiRs.and second plaintiffs entered into an arrangement with a set of Kanorias against which some advance payment was obtained by the fiRs.and second plaintiffs or the third defendant, but which arrangement ultimately fizzled out.

There is a reference to the previous arrangement with the Kanoria parties in one of the two memoranda of understanding executed between the fiRs.and second plaintiffs, the third defendant February 10, 2011.

and the fiRs.and second defendants on The fiRs.of the memoranda envisaged the fiRs.and second defendants and persons associated with such defendants taking over memorandum control also of the third provided for the defendant fiRs.company.

and second Such defendants ultimately having the fiRs.and second plaintiffs discharged as guarantors in respect of the credit facilities obtained by the third defendant company.

The relevant memorandum recorded that the fiRs.and second defendants were to immediately take over the management of the third defendant.

The other memorandum pertains to the net consideration of Rs.1.5 crore that was payable by the fiRs.defendants to the fiRs.and second plaintiffs.

and second A sum of Rs.50 lakh out of the net consideration of Rs.1.5 crore was to come to the fiRs.and second plaintiffs upon the bank approving the transaction for transfer of the controlling shareholding interest in the third defendant company by the fiRs.and second plaintiffs to the fiRs.and second defendants and the associates of the fiRs.and second defendants.

The balance payment of Rs.1 crore against the net consideration of Rs.1.5 crore was to be received by the fiRs.and second plaintiffs from the fiRs.and second defendants upon the minor misunderstanding with the Kanorias about the Kanorias’ claim against the third defendant company being settled.

It is the plaintiffs’ case that on or about February 11, 2011 the fiRs.and second defendants and men and agents of the fiRs.and second defendants took over complete control of the third defendant transactions.

company, its assets, manufacturing units and The plaintiffs claim that the concerned bank was made contemporaneously aware of such transaction and the bank had also roped in the fiRs.and second defendants as guarantors in respect of the credit facilities granted to the third defendant company.

However, the concerned bank did not immediately release the fiRs.and second plaintiffs as guarantors in respect of the loan obtained by the third defendant.

The plaintiffs allege that the fiRs.and second defendants or agencies and instrumentalities under their control infused some initial funds into the third defendant before monies in excess of what had been brought into company were siphoned off from such company.

the third defendant The plaintiffs also claim that a substantial amount of MODVAT credit due to the third defendant company was availed of by the fiRs.defendants when in control of the third defendant.

and second The immediate grievance of defendants the have plaintiffs taken no is steps that to the have fiRs.the and second and second fiRs.plaintiffs discharged as guarantors in connection with the credit facilities obtained from Indian Overseas Bank by the third defendant.

It is the further grievance of the plaintiffs that the sum of Rs.1.5 crore due under the second MoU of February 10, 2011 has not been tendered to them by the fiRs.and second defendants.

The defendants defendants have been other than impleaded as the fiRs.associates and or second business extensions of the fiRs.and second defendants.

The defendants plaintiffs having complain accepted the of the memorandum fiRs.of and second understanding of February 10, 2011, acted thereupon and fully implemented it before seeking to cancel the same by citing the alleged failure on the part of the plaintiff Nos.1 and 2 to have the controlling shares in the third defendant recorded in favour of the fiRs.and second defendants or their associates.

The plaintiffs rightly point out that if the fiRs.and second defendants and their men and agents came to be in control of the company, its business and all its transactions February a 10, day 2011, after it is the execution of the said preposterous to suggest MoUs that on the plaintiffs or any of them can be blamed for the shares in the third defendant not being recorded or registered in the names of the fiRs.and second defendants or their associates.

The plaintiffs also suggest that it is laughable that a contract which stood executed by the conduct of the fiRs.and second defendants in so far as the obligations of the fiRs.and second plaintiffs were concerned could be undone upon the obligations of the fiRs.and second defendants not being discharged.

Prima facie, there appears to be substance in the plaintiffs’ assertion, though the exact reason for the plaintiffs other than the fiRs.immediately clear.

two plaintiffs being impleaded is not The plaintiffs are right that after the fiRs.and second defendants took over the reins of the third defendant company it would not lie in their mouths to either cite the failure on their part to record their names as the controlling shareholders of the third defendant or annul the MoUs.

The fiRs.and second plaintiffs are now in the unenviable position that they may be sitting ducks to the bank’s claim against them as guarantors in connection with the credit facilities obtained by the third defendant.

The plaintiffs may not even be aware of the present status of the third defendant or all its assets and properties.

An initial order was passed on this petition on December 23,2013 by which the third, fourth, seventh, eighth and ninth defendants were required to maintain status quo in respect of their fixed assets.

Affidavits have not been filed by any of the defendants.

The case run in the petition, is not countered and is deemed to have been admitted, at least for interlocutory purposes.

Accordingly, restraining the there defendant will be nos.4,7,8 an and order 9 and of injunction each of them, whether by themselves or by their servants or agents or assigns or otherwise howsoever, from disposing of or alienating any of their fixed assets in any manner whatsoever without the previous leave of Court.

However, this injunction will be subject to the rider that it would apply to such of the fixed assets which had not been secured in favour of any other creditor prior to the order dated December 23, 2016.

A more specific order is not passed since the plaintiffs have not been able to identify any particular asset.

There will also be an order of injunction restraining the defendant nos.1 and 2 from dealing with or disposing of any of their immovable assets that had not been secured in favour of any other creditor prior to December 23, 2016 in any manner whatsoever without the previous leave of this Court.

The fiRs.and second defendants will also remain restrained from receiving any payments from any bank accounts held or operated by them, whether individually or jointly, without fiRs.depositing a sum of Rs.1.5 crore with the Registrar, Original Side as security in respect of the claim in this suit.

The defendant no.3 will remain restrained from disposing of any of its fixed assets other than at the behest of any secured creditor, without the personal guarantees extended by the plaintiff no.1 and 2 to Indian Overseas Bank, Dhanbad Branch, being discharged.

GA No.55 of 2014 is disposed of.

In the event the suit is decreed in favour of the plaintiffs, the plaintiffs will be entitled to the costs of the present application assessed at 2000 GM with interest at the rate of eight per cent per annum from now till realisation.

Urgent certified website copies of this order, if applied for, be supplied to the parties subject to compliance with all requisite formalities.

(SANJIB BANERJEE, J.) A/s./DG-II


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