Back
High Court Of Delhi
K.K.MODI - Appellant
Versus
M.K.MODI - Respondent
First Appeal Order (OS) 462 of 2001
Decided On : 02/21/2003
Order 39, Rule 1 and 2 of CPC — Vacation of the orders of Supreme Court by Single Judge on ground of "change in circumstances" holding that there was increased indebtedness — Invalid as "increased indebtedness" does not amount to a change in circumstances.
Held :
Mere increase in the liabilities of the Fibre Division, is not a ground constituting such "change" of the circumstances as would necessitate the variation of the orders passed by the Honble Supreme Court, after considering on merits the competing claims of the parties. The alleged gravity due to the rise in the default, is considerably reduced in view of the fact that one of the leading members of the consortium financial institutions have already re-scheduled the loans granted to the Fibre Division and reconstruction has also been approved. Once the shares, as directed by the impugned order, are sold and the money is used for the purposes of repayment of debts, then even if ultimately at the stage of final disposal of the suit, it be found that such shares were to fall to the share of the plaintiffs, i.e. the appellants, then, the shares as well as the money recovered from the sale of such shares, shall be irretrievably lost and the suit of the plaintiff to that extent shall become infructuous.
Atleast for now, there is no occasion to hold that if the shares are not allowed to be sold, then, certain irretrievable consequences shall arise. There is no "change" of circumstances as envisaged by the orders of the Honble Apex Court dated 4.2.98 or as contemplated by Order 39 Rule 4 in the context of all that was considered by the Honble Apex Court while passing the said order.
Therefore, the Ld. Single Judge way not justified in passing the orders which goes contrary to the spirit of order passed by the Honble Supreme Court.
All interim orders paused/granted in these appeal proceedings, shall stand vacated in terms of the above. The parties are left to bear their own costs.
( 1 ). BY this common Order, we propose to dispose of FAO (OS) 462/01 and FAO (OS) 492/01 both filed against the same order dated 8thoctober, 2001 passed by Ld. Single Judge of this Court.
( 2 ). THE suit from which present appeals arise, is mainly a dispute between two groups of the same family. The dispute is between the sons of late Shri Gujarmal Modi and Shri Kedarnath Modi. The three sons of Shri Kedarnath Modi are in one Group (hereinafter to be referred to as Group A) and five sons of Shri Gujarmal Modi are in another Group (hereinafter to be referred to as Group B ).
( 3 ). THE Modi family had interest in many companies which are popularly known as the Modi Group of Companies. The said Modi Group of Companies had been under the management and control of Gujarmal Modi and his sons on the one hand and his younger brother, Mr. Kedarnath Modi and sons on the other.
( 4 ). AFTER the death of Shri Gujarmal Modi in 1976, as per the averment made by the parties, the Modi Group of companies was under the control and management of Mr. Kedarnath Modi and his sons. Apart from holding interest in various Companies, the family own substantial assets.
( 5 ). DIFFERENCES and disputes arose between Group A and B. To dissolve such differences and disputes, negotiations took place with the help of financial institutions and the Government of India. Ultimately, on 24. 1. 89, a memorandum of understanding was signed and executed between the two groups. In the Memorandum of Understanding so arrived, it was agreed between the parties that Group A will manage and/or control the various companies enumerated in Clause I of the said MOU. One of the companies mentioned in Clause I is Modipon Limited (minus Indofil +selling Agency ).
( 6 ). GROUP B was to manage, own/control the companies enumerated in Clause II. One of the companies which was included in the Clause II as Modi Pon Ltd. (minus Modipon Fibre Division ).
( 7 ). IN the said M. O. U. , the provision for division of assets was also made. Such division was to take place after the evaluation of the assets and was required to be divided in the ratio of 40:60 with Group A getting 40% of the assets and Group B getting 60% of the assets.
( 8 ). THE shares of the companies were required to be transferred to the respective groups after their evaluation, which was required to be done by M/s. Billimoria and Company. Clause 5 of the M. O. U. provided that for companies which were to be split between the two groups, such split was to be done in accordance with the scheme of the arrangement to be formulated by M/s. Bansi S. Mehta and company, after taking into consideration the valuation done by M/s. S. B. Billimoria and Company.
( 9 ). CLAUSE 6 of the M. O. U. provided for the arrangements which were to be made in respect of the three companies which were to be split, viz such Modi Industries Ltd. , Modipon Ltd. And Modi Spinning and Weaving Mills company Ltd.
( 10 ). IN Clause 9 of the M. O. U. , it was provided that implementation was to be done in consultation with the financial institutions and that in case of disputes, clarifications etc with respect of implementation, the same was to be referred to the Chairman IFCI, or his nominee.
( 11 ). THE evaluation was done by M/s. Billimoria and Company, which gave its report. M/s. Bansi S. Mehta and Company who were required to provide a scheme for splitting of the above-referred companies, by taking into account the evaluation fixed by M/s. Billimoria and Company, also sent various reports between November 1989 and December 1994.
( 12 ). THE members of both the groups were dissatisfied with the reports. And as such, they sent various representations to the Chairman and Managing Director of IFCI in terms of Clause 9 of the M. O. U.
( 13 ). THE Chairman and the Managing Director of IFCI, with the assistance of a Committee of experts, gave his detailed decision/report. The said report was not filed as an award, nor was any application filed
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
