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2021 Supreme(Mad) 2093
IN THE HIGH COURT OF JUDICATURE AT MADRAS
G. JAYACHANDRAN, J.
M/s. Tidel Park Limited – Plaintiff
Versus
M/s. Arkay Energy (Rameswaran) Limited – Defendant
C.S. No. 389 of 2011
Decided On : 20-10-2021
Advocate Appeared:
For the Plaintiff : Jose John for M/s. King, Partridge.
For the Defendant : Anirudh Krishnan.
Headnote:
Civil Procedure Code, 1908 - Order IV Rule 1 and Order VII Rule 1 - Electricity Act, 2003 - Companies Act, 1956 - Securities Contracts (Regulation) Act, 1956 - Section 18-A - Tamil Nadu Electricity Rules, 2005 - Rule 3 - Company - Purchase Shares - Whether plaintiff is entitled to interest at rate of 16% per annum till realization, for investment of Rs. 90 lakh made in 1st Defendant Company - Whether 2nd Defendant is liable to purchase shares of 1st Defendant Company held by plaintiff, as per shareholders agreement - Whether suit filed by plaintiff is premature and consequently whether suit is liable to be dismissed - Whether 1st Defendant or 2nd Defendant are liable to pay cost of suit to plaintiff – Held, It is declared that value of 1st defendant Company share as Rs. 19.05 per share as per Chartered Accountant Certificate furnished by 1st defendant - 1st defendant is directed to buyback 90,000 shares from plaintiff on payment of Rs. 19.05/- per share along with interest at rate of 12% till date of filing suit - Thereafter, at rate of 9% p.a. from date of suit, till date of decree and 16% p.a. from date of decree till date of realization - In case, decree amount and other monetary benefits gained put together fall short of assured return of 16% p.a - Plaintiff is at liberty to file fresh suit for shortfall if any, within a period of 3 years from date of decree – Appeal allowed.
JUDGMENT :
G. JAYACHANDRAN, J.
Prayer: This Suit is filed under Order IV Rule 1 of Original Side Rules read with Order VII Rule 1 of C.P.C.
(a) To declare that the Plaintiff is entitled to interest at 16% p.a. on the investment of Rs. 90 lakh from 05.12.2005 and for a consequent direction for payment of Rs. 77,79,945/- being the money payable for interest at 16% p.a. on Rs. 90 lakh from 05.12.2005 until 29.04.2011, date of filing the suit.
(b) To direct the first Defendant to pay interest at 16% p.a. pendente lite on the investment of Rs. 90 lakh from 30.04.2011, the date of filing the suit, until payment by the first Defendant of the value of the shares as assessed by the statutory auditor of the first Defendant in terms of the preliminary decree or the paid up value of the shares, i.e. Rs. 90 lakh, whichever is higher.
(c) To pass a preliminary decree declaring that the second defendant is liable to purchase the whole of the shares in the first defendant held by the plaintiff in the terms of the shareholders agreement dated 10.11.2005, directing an inquiry by the statutory auditor of the first defendant as to the value of shares of the first defendant held by the plaintiff and fixing a date for purchase by the second defendant of the shares in the first defendant held by the plaintiff.
(d) To pass a final judgment and decree directing the second defendant to pay the value of the shares as assessed by the statutory auditor of the first defendant in terms of the preliminary decree or to pay the paid up value of the shares, i.e. Rs. 90 lakh, in terms of clause 3 of the shareholders agreement, whichever is higher.
(e) To direct the first and second defendants jointly and severally pay the costs of the suit and pass such further or other orders as may be deemed fit in the interest of justice.
1. The Suit in filed for recovery of the money invested by the plaintiff in the Second defendant Company, pursuant to the Power Purchase Agreement dated 10.11.2005 with the first defendant and the Share Holders Agreement dated 10.11.2005 with first and second defendants.
2. The background facts leading to the dispute:
The plaintiff M/s. TIDEL PARK is a public sector IT and ITES infrastructure services provider in Tamil Nadu. For easy reference (will be hereinafter referred as ‘Captive Power Consumer’ wherever necessary). The plaintiff is one of the share holders in the first defendant company, holding 90,000 equity shares of face value Rs. 10/-. The first defendant M/s. ARKAY ENERGY (Rameshwaram) Limited is a ‘Captive Power Generator’ and the second defendant M/s. Ind Bharat Power Infra Limited (formerly known as Kanumuri Holdings Pvt. Ltd.) is the sister concern of the first defendants. The 3rd defendant substantially holds equity and preferential shares in the first defendant company.
3. Under the scheme of Electricity Act, 2003 and the Tamil Nadu Electricity Rules, 2005 framed thereunder to qualify as a ‘Captive Power Generator’ not less than 26% of the ownership is to be held by the captive users and not less than 51% of the aggregate electricity generated in such plant, has to be consumed by the said captive users. Therefore, the plaintiff which own and operate the IT/ITES facility in a built up area of approximately 1.2 million sq. ft. housing IT companies, for its power need negotiated with the defendants and on 10.11.2005 entered into two agreements for (i) Power Supply and (ii) Share Purchase on 10.11.2005:
(i) Power Supply Agreement (‘PSA’ in short) entered between the plaintiff and the first defendant (M/s. ARKAY ENERGY).
(ii) Share Holders Agreement (‘SHA’ in short) entered between the plaintiff and the first defendant (ARKAY ENERGY - IMPLEMENTING COMPANY) and the second defendant (Kanumuri Holdings Private Limited - later renamed as M/s. IND BHARAT POWER INFRA LTD - PROMOTER COMPANY)
4. The essential obligation and undertaking in the Power Supply Agreement:
Under the Power Supply Agreement, the parties mutually agreed as below:
The first defend
