NEUTRAL CITATION NO:2022/DHC/005815

Page 1 of 47

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IN THE HIGH COURT OF DELHI AT NEW DELHI

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Pronounced on: 23^rd December 2022

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RFA 454/2022

VIDEOCON INDUSTRIES LIMITED THROUGH ITS RP & ANR.

..... Appellants

Through:

Mr. Jayant K. Mehta, Sr. Advocate

with Mr. Vineet Sinha, Mr. Shaan

Taanu G. Tyagi and Ms. Kaveri,

Advocates

versus

RAM RAJ BHANDARI & ORS.

..... Respondents

Through:

Mr. C. Shekhar and Mr. Vibhor

Gupta, Advocates

CORAM:

HON’BLE MR. JUSTICE CHANDRA DHARI SINGH

J U D G M E N T

CHANDRA DHARI SINGH, J.

1. The instant appeal has been filed under Section 96 of the Code of

Civil Procedure, 1908 (hereinafter referred to as ‘the Code’) read with

Order 43 Rule 1 of the Code, assailing the order dated 21^st March 2022

passed by the learned trial Court whereby, the plaint of the Appellants

herein (hereinafter referred to as ‘plaintiff companies’) was rejected under

Order VII Rule 11(d) of the Code against the Respondents herein.

FACTUAL MATRIX

2. The facts necessary for the disposal of the present appeal are that the

plaintiff companies held 50.21% equity shares in Tirupati Ceramics Limited

Digitally Signed By:GAURAV

SHARMA

Signing Date:23.12.2022

18:48:23

Signature Not Verified

NEUTRAL CITATION NO:2022/DHC/005815

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(hereinafter referred to as ‘TCL’) being 30,00,000 equity shares of Rs. 10/-

each and also have a nominee Director on the Board of said company. TCL

was declared as a sick company and consequently, proceedings were

pending before the Board for Industrial and Financial Reconstruction

(hereinafter referred to as ‘BIFR’). The plaintiff companies applied for

impleadment as a party to such proceedings to which the Respondent No.1

and 2 through TCL opposed but the BIFR allowed the impleadment

application. This order allowing impleadment was challenged by TCL

before the Appellate Authority for Industrial and Financial Reconstruction,

Delhi (hereinafter referred to as ‘AAIFR’) which was dismissed and a

further appeal to the Delhi High Court in W.P. (C) No. 11327/2015 was

also dismissed by the Division Bench of this Court.

3. During the pendency of the proceedings before BIFR, the plaintiff

companies entered into a Memorandum of Understanding (hereinafter

referred to as ‘MoU’) dated 25^th January 2011 with Respondent No.3 to

transfer the said 50.21% of the issued share capital of TCL to the

Respondent No.3, and the Respondent No.3 in return agreed to deposit Rs.

60 lakhs with the plaintiff companies as security for the performance of the

said MoU. In furtherance of the MoU, the plaintiff companies delivered the

original share certificates covering the shares along with a Transfer Deed

signed in blank as a security for the fulfilment of its obligation under the

MoU. It was further agreed between the parties to the said MoU that the

Respondent No.3 will not lodge the said shares for transfer until the

conclusion of the proceedings before the BIFR and hence, till such time the

plaintiff companies would remain as the owners of the respective shares and

Digitally Signed By:GAURAV

SHARMA

Signing Date:23.12.2022

18:48:23

Signature Not Verified

NEUTRAL CITATION NO:2022/DHC/005815

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that the said MoU does not confer any right or title in the Respondent No.3

in the said shares except merely an option to purchase the same after

conclusion of the proceedings before the BIFR.

4. Subsequent to the above-mentioned events, the erstwhile Chairman,

Mr. VN Dhoot, of the plaintiff companies was approached by the

Respondent No.2 with an offer to purchase the said shareholding of the

plaintiff companies in TCL. At this stage, the plaintiff companies have

claimed in the present appeal that their erstwhile Chairman due to lack of

communication of the MoU entered into by the plaintiff companies and on

account of serious mistake accepted the offer of Respondent No.2 to

purchase the shares