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2023 Supreme(Online)(NCLAT) 516
NATIONAL COMPANY LAW APPELLATE TRIBUNAL PRINCIPAL BENCH, NEW DELHI Company Appeal (AT) No. 62-63-64 of 2023 IN THE MATTER OF: Cotmac Electronics Pvt. Ltd., Having Registered Office at S-168, ‘S’ Block, MIDC, Bhosari, Pune-411026. Mr. Arjun Sirur, Son of Mr. Shyam Sirur, Occupation Director, residing at Villa 7, Lodha Belmondo, Gahunje, Pune-412101. Mr. Shyam Sirur, Son of Mr. Mohan Sirur, Occupation Director, residing at Flat 102, Tower 22, Lodha Belmondo, Gahunje, Pune 412101. …Appellant No. 1 …Appellant No. 2 …Appellant No. 3 Versus Mr. Mukund Muley Son of Mr. Shankarrao Muley, Occupation Professional, residing at A 6, Nandan Festiva, Nagras Road Aundh, Pune-411007. Mrs. Arati Muley, W/o Mr. Mukund Muley, residing at A 6, Nandan Festiva, Nagras Road Aundh, Pune-411007. Mrs. Suman Sirur, W/o Mr. Shyam Sirur, Occupation Director, residing at residing at Flat 102, Tower 22, Lodha Belmondo, Gahunje, Pune 412101. Mr. Vikram Sirur, Son of Mr. Raghavesh Sirur, Occupation .. Respondent No. 1 .. Respondent No.2 .. Respondent No.3 .. Respondent No.4 Director, residing at Opp. HDMC Office, Hubli, Dharwad. Karnataka - 580020. Mr. Vivek Sirur, Through Legal Representative, Son of Mr. Raghavesh Sirur, Occupation Director, residing at Opp. HDMC Office, Hubli, Dharwad. Karnataka - 580020. Director of the Appellant No.1 Mr. Pralhad Hage, Son of Mr. Namdeorao Hage, Occupation Director, residing at Sector 25, Parveen Palace, Flat No. 5, Pradhikaran, Pune – 411044. Director and Shareholder of the Appellant No. 1 Mrs. Archana Hage, Wife of Mr. Pralhad Hage, Occupation Housewife, residing at Sector 25, Parveen Palace, Flat No. 5, Pradhikaran, Pune – 411044. Mr. Gajanan Dhakane, Son of Mr. Gangaram Dhakane, Occupation Director, residing at N 302 Queens Town, Near Lokmanya Hospital Chinchwad, Pune. Director and Shareholder of the Appellant No.1 N.A. Sirur (Hubli) Private Ltd., Having its Registered Office at Syed Blgs., Lamington Road, Hubli, Karnataka-580009. Sibella Private Limited, Having registered office at Syed Blgs., Lamington Road, Hubli, Karnataka – 580009. Shareholder of the Appellant No. 1 Softech Controls Private Limited, Having its registered office at Sr. No. 169/2, Above Central Bank of India, Akurdi, Pune-411035. Shareholder of the Appellant No. 1 .. Respondent No.5 .. Respondent No.6 .. Respondent No.7 .. Respondent No.8 .. Respondent No.9 . Respondent No.10 . Respondent No.11 Present: For Appellants : Mr. Gopal Jain, Sr. Advocate with Mr. Raunak Dhillon, Mr. Ankoosh Mehta, Ms. Madhavi Khanna, Ms. Srinivas Chatti, Mr. Nihaad Dewan, Advocates For Respondents : Mr. Arun Kathpalia, Sr. Advocate with Ms. Surekha Raman, Mr. Shrenik Gandhi, Ms. Unnimaya S., Advocates for R- 1 & 2.
JUDGEMENT
(Date: 25.5.2023) [Dr. Alok Srivastava, Member (Technical)] 1. This appeal has been filed under section 421 of the Companies Act, 2013 by the Appellants against a common order dated 28th April, 2023 (hereinafter called “Impugned Order”) passed by NCLT, Mumbai Bench in Miscellaneous Application No.
1658 of 2019 (in short “Execution Application), Contempt Application No. 152 of 2020 (in short “Contempt Application”) and MA No. 621 of 2020 (in short “Refund Application”), all filed in CP No. 2977 of 2018.
2. The conspectus of the case is that CP No. 2977 of 2018 was filed by Respondent Nos. 1 and 2 on allegations of oppression and mismanagement in which Consent Terms were agreed and filed by the parties on 4th and 5th May, 2019 leading to the disposal of the original Company Petition No. 2977/2018. The Appellants have stated that the Consent Terms provided for acquisition of the entire shareholding of Respondent Nos. 1 and 2 (in short “R-1” and “R-2) by Appellant Nos. 2 and 3 and Respondent Nos. 3 and 6 (in short “A-2”, “A-3”, “R-3” and “R-6” respectively) and that R-1 and R-2 will strictly comply with non-compete obligations, in particular do not involve themselves with rival companies Trimasys Control Solutions Private Limited (in short “Trimasys”) or Enemtech Capital India Private Limited ( in short “Enemtech”). The Appellants have also stated that they have filed Contempt Application No. 152/2020 regarding willful disobedience of the orders dated 31.1.2019 and 9.5.2019. Further, they have filed a Refund Application being CA No. 621 of 2020 for refund of Rs.2.23 crores paid to the Respondents on 4.2.2019 as non-compete compensation on breach of such obligations in accordance with clause 7 of the Consent Terms.
3. The Appellants have further submitted that while there were three applications namely, Execution Application, Contempt Application and Refund Application before the NCLT, it passed the Impugned Order allowing the Execution Application and dismissing the Contempt and Refund Applications. He has further stated that the Consent Terms are in the nature of compromise decree and NCLT has jurisdiction to execute the Consent Terms under section 424 of the Companies Act, 2013, but before execution and passing of the Impugned Order, it should have looked into alleged breach of the non-compete obligations under the Consent Terms, should have adjudicated upon. They have further alleged that the order regarding Execution was passed by the NCLT looking to the fact that the Appellants made a payment of Rs.2.09 crores on 18.4.2019, which was towards non-compete compensation, even after discovery of the alleged breach of non- compete obligation by R-1. Whereas the payment towards non- compete compensation was made on 4.2.2019 prior to discovery of the e-mail by which R-1 had contacted the petitioner company Trimasys, which was under breach of non-compete obligation. The Appellants have further submitted that clause 7 of the Consent Terms provide that in the event of breach of any term, all the Consent Terms will cease to be binding on non-defaulting parties, which have also been overlooked by NCLT.
4. We heard the arguments of the Learned Senior Counsels for both the parties and perused the record.
5. The Learned Senior Counsel for Appellants has referred to the Consent Terms dated 31.1.2019 entered into between the Appellants and R-1 and R-2, which prominently included in the non-compete and non-solicit obligations. Since there was a background of two US based competitors viz. Trimasys and Enemtech, were attempting to interfere in the business of Cotmac Electronics Private Limited (in short “Cotmac”) and Enemtech had in collusion with Mukund Muley (R-1) hostile takeover of Cotmac by offering to buy majority stake of Cotmac from its shareholders, which takeover bid eventually failed. He has added that in the background of this attempted hostile takeover, dispute arose between the Appellants and R-1
