(Prayer: Appeal filed under section 10F of the companies Act 1956, to set aside the impugned order passed on 07.07.2011 in C.P.No.41 of 2011 on the file of the Company Law Board,Southern Region, Chennai to the extent and to stay operation of the Resolutions passed by the JV Company in its Board Meeting held on 02.05.2011 and any action implementing such Resolutions; appoint an Independent Administrator to control the management and operations of the JV Company and ) holds that TTK Group have the option to purchase the shares of the applicant, based on valuation.)
1. This company appeal is filed by the appellant against the interim order passed in C.P.No.41 of 2011 by the Company Law Board, Chennai Bench, on the application filed by the appellant under sections 397 and 398 of the Companies Act.
2. The appellant filed the company petition seeking for the main relief:-
(i) Directing the respondents 2 to 9 to abide by and give effect to the terms and conditions contained in the management agreement, dated 02.07.1990 and amendments made therein,
(ii) To declare that the appellant is entitled to equal representation on the Board of Directors of respondent No.1,
(iii) To reconstitute the Board of Directors of the Joint Venture Company and appoint a new Board of Director with equal representation of TTK Group and the petitioner an independent Chairman,
(iv) Terminate the appointment of the respondent No.11 as 'Managing Director' of the Joint Venture Company and direct appointment of a new Managing Director that the Board of Directors meeting held on May 2, 2011 is illegal and void;
(v) Frame a Scheme of Management for the respondent No.1 Company securing Petitioner's right to have equal say in management and equal representation at the Board of Directors of the Company.
3. In the said petition, the appellant also prayed for interim reliefs:-
(i) for staying the resolutions passed in the meeting of the Board of Directors held on 02.05.2011 and restraining the respondent Nos.1 to 9 from acting or implementing the resolutions, dated 02.05.2011.
(ii) Restraining the respondent No.1 Company from holding any meeting of the Board of Directors of the shareholders;
(iii) Appointing an independent and neutral administrator to supervise and control the management of the company.
4. Before going into the merits and the interim order passed by the Company Law Board [herein after called as CLB], the brief history of formation of the Joint Venture Company has to be stated:-
'Originally, the London International Group Plc., a Company incorporated under English Companies Act, having its office at Toft Hall, Toft, Knutsford, Cheshine WA 16 SPD, United Kingdom [herein after called as LIG] and TTK formed a Joint Venture Company in the year 1963 and the Joint Venture Company was known as 'London Rubber Company (India) Limited. On 14.02.1997, the name of the Joint Venture Company was changed into TTK-LIG Limited and in the said Joint Venture Company, LIG was having 49.87% of shares, TTK is having 49.87% of shares and the remaining shares are held by the respondents 2 to 11. The Articles of Association of the Joint Venture Company enables the TTK-LIG to appoint any Director in the casual vacancy and as per the Article 108, if a Director, who vacates office has been designated or appointed by or represents LIG or TTK Group, the Board shall appoint a designee of LIG or TTK Group as the case may be to fill the vacancy. Similarly, as per Article 109, the same principle shall be followed in the case of appointment of alternative Director. Under Article 116(A) specifies that questions arising at meeting of the Board of Directors or Committee thereof shall be decided by a majority of votes and further provided that no resolution will be passed by the Board or its Committee in respect of the certain matters enunciated therein, unless the non-retiring Directors appointed by LIG and TTK Group or their alternates, who are present at the meeting shall have voted in favour of such resolution or where such Directors have waived in writing the requirement of their, respective affirmative votes and among 14 matters enunciated therein, exports and major changes in marketing policies are two among them. On 02.07.1990, two major constituents of Joint Venture Company, namely LIG and TTK entered into a management agreement, by which they agreed that the TTK and LIG shall have the right to nominate an equal number of Directors to serve on the Board of the Company and as per clause (2) of management agreement, originally each constituent was permitted to appoint five persons as Directors and latter, it was reduced to four by the amendment made latter. Similarly, as per clause 3 of the management agreement, dated 02.07.1990, the Chairman of the Board of Directors shall be a Director from the Company of TTK and such Chairman shall not have a casting vote and that was also changed by addendum, dated 11.09.1997 and as per addendum, the Managing Director shall be appointed by agreement between the parties and shall not be one of the Directors, nominated by the parties in terms of clause 2 in the original management agreement.
5. Further, as per addendum, LIG was also permitted to transfer the shareholding in the Company to any of its subsidiary Companies, the equity of which is owned more than 50% by LIG subject to necessary approval of the Government of India and the Reserve Bank of India and such subsidiary will be bound by the Management Agreement.
6. Further, in the year 1997, a Memorandum of Understanding was also arrived at between TTK Group and LIG regarding management of the business. As per clause 5.3 of Memorandum of Understanding, it was agreed that decisions to make major changes in marketing policy shall also include appointment of/changes in distributor. In the year 1999, LIG was acquired by SSL, a Major Health Care Company incorporated in UK and LIG became the wholly owned subsidiary of SSL and it continued to provide all support to the JV Company, including contracts for exports. On 19.03.2001, LIG transferred its entire shares in the Joint Venture Company to its wholly owned subsidiary-New Bridge Holdings B.V., the appellant herein and since then, the appellant has been exercising all rights of LIG, as per the shareholder agreements/understandings and Articles of Association of the Joint Venture Company, with the consent of TTK Group. The transfer of shares in favour of the appellant was also approved and the appellant company has been registered as a member of the Company and its name also finds place in the register of Members. In November 2010, 'Reckitt Benchkiser' [herein after called as RB] took over the SSL and its subsidiary/affiliates and the appellant became the step down subsidiary of RB. After RB has taken over the SSL, misunderstanding arose between the two constituents of Joint Venture Company, as RB indicated its willingness to take over, both the sales and marking of its trade marks, tasks that are currently delegated to TTK of the Joint Venture Company, as RB believes that it is much better placed to do so than TTK. TTK Group was given the right to market the products of the Joint Venture Company and therefore, they did not like the attitude of RB to take over the sales and marking of its product and trademarks and hence, difference of opinion arise between the parties and that is reflected in the various correspondents and email exchanged between them.
7. As stated supra, each constituent of the Joint Venture Company, namely LIG and TTK are entitled to nominate 4 Directors to the Board of Directors of the Joint Venture Company and by resolution, dated 15.10.2000, the nominees of SSL-LIG namely, Bart Becht, Freddy Caspers, Amedeo Fasano and Chander M Sethi were appointed in the place of Mark Moran, Jon Gray, Shaun Davis, Stephen John Coplin, who resigned their posts. Thereafter, Mr.Chander M Sethi, one of the Directors, by email, dated 01.04.2011 appointed by SSL Group, informed TTK Group to replace Bart Becht, Freddy Caspers and Amedeo Fasano by appointing Steve Coplin, Parag Agarwal and Rajesh Jha. It was followed by the appellant in its email, dated 29.04.2011 informing the Company Secretary of the Joint Venture Company that they received all the letters of resignation of Bart Becht, Freddy Caspsers and expressed their willingness to nominate Rajesh Kumar Jha and Parag Agarwal in their place and also to nominate Sreenivas Rao Nandigam as alternative Director to Mr.Fasano. Thereafter, the meeting of Board of Directors held on 02.05.2011 and in that meeting, TTK was represented by four of its Directors and the appellant was represented by Mr.Chander M Sethi and the resignation of the Bart Becht, Freddy Caspers were accepted. Thereafter, the Chairman informed the Board that proposal was received from the appellant to appoint Mr.Rajesh Kumar Jah, Mr.Parag Agarwal to fill up the casual vacancies caused by Bart Becht, Freddy Caspsers and also observed that these nominations are not in accordance with the Articles of Association and hence, that cannot be considered and appointed H.T.Rajan and Mr.Girish, who are the respondents 7 and 8 herein in their place. The resolution was adopted by majority and Mr.Sethi cast his dissenting vote. The proposal to nominate Sreenivas Rao, as alternative Director of Amedeo Fasano was also rejected stating that the appellant has no right to appoint an alternative Director. Thereafter, the newly appointed Directors joined the meeting and agreed to extend the distribution right to market the products of the Company to TTK Health Care Limited for a further period of 5 years with effect from 1st July 2011 and also revised pricing policy in respect of supply made to SSL at Fully Absorbed Manufacturing Costs (FAMAC) plus 50% in respect 15% subject to the condition that SSL should execute an agreement for specified number of years and committed volume of business.
8. The appellant was aggrieved by the rejection of the nominees in the Board of Directors and also felt that the action of TTK Group amounts to oppression of minority and mismanagement and filed Company Petition No.41 of 2011 under sections 397 and 398 of the Act 1956 seeking for the reliefs and the interim reliefs as stated above.
9. The Company Law Board passed an order on 20.5.2011 as follows:-
'Heard the arguments on the both sides and perused the records. With regard to the interim relief (ii), the learned counsel appearing for the respondents undertook that no Board meeting of general meeting of the company will be convened without the permission of the CLB. The above undertaking is recorded.
With regard to the domestic supply of goods manufactured by the company the agreement between the parties is valid upto 30.06.2011 and no interim order are called for at this stage.
The third contentious issue pertains to supply of goods on export. The Joint Venture Company had been exporting the products to SSL Group at a price of FAMC+15%. Despite the protest from the petitioners' nominee, it was proposed to enhance the price to 50% as against 15% and a draft agreement has been circulated. The petitioner says that the decision is illegal for non participation of the nominee Director of the petitioner company and also there is no justification to increase the net profit from 15% to 50%. However, as per a letter dated May 6, 2011 the petitioner agreed to 50% increase provided supply is resumed immediately. The respondents submitted that they are ready to go by the commitments made by the petitioner in the above letter. The mail dated 06.05.2011 is available at Pg 208 of the CP. According to the learned senior counsel for the petitioner the above letter has been withdrawn by the petitioner subsequently and the same has been signed under duress. this is a matter to be decided in the company petition. As rightly pointed out by the learned counsel for the respondents, no judicial intervention can be based on the commercial agreement between the company and the petitioner. Till the matter is heard I think it is just and proper to direct the respondents to restore the supply of goods as per the terms detailed in the letter dated 06.05.2011 i.e. at 50% as against 15%. The above order is made without prejudice to the contentions on both sides. The supply made by the respondents on the basis of this order shall be subject to the final outcome of the CP.'
10. Even after the passing of the order, the Joint Venture Company did not supply the products to SSL and therefore, the appellant moved C.A.No.113 of 2011 in CP No.41 of 2011 for initiating proceedings under Regulations 44 and 47 of the Company Act against the respondents for willfully disobeying the order of CLB, dated 20.05.2011 and for passing appropriate orders for punishing the respondents.
11. The respondent filed a counter and a rejoinder was also filed by the appellant and an order was passed by CLB on 01.06.2011 as follows:-
'Respondents filed counter to CA No.113/2001. Elaborate arguments were heard on both sides. After hearing both sides, it appears that there are some difficulties in implementing my order passed on 25.05.2011, particulars with respect to the supply of goods without a commitment towards quantity or tenure. The respondent company wanted an assurance from the petitioner and RB for the uninterrupted supply of goods, so that the company can have a plan to regulate the production. At this juncture, the petitioner has filed an affidavit with the following undertakings:
'2.1) The petitioner, LIG, SSL and its affiliates had earlier placed Purchase Orders on the JV Company. they would re-place those Purchase Orders on the JV Company within 24 hours; at a price stipulated by this Hon'ble Board in its Order, dated 20.05.2011. The JV Company would commence supply within 48 hours and complete the same, in terms of previously existing arrangement.
2.2.) Payments for the supplies so made, would be made to the JV Company, within 15 days, from the date of receipt of delivery of individual consignments of the ordered goods.
2.3.) The petitioner, LIG,SSL and its affiliates would place purchase orders for a total of 200 million pieces (condoms)or 50% of their collective global requirement, whichever is lower (which includes the purchase orders referred to in paragraph 2.1 above), over the next three months i.e. June, 2011 to August, 2011, at prices stipulated by this Hon'ble Board's Order dated 20.05.2011.
The petitioner, LIG, SSL and its affiliates, would remain bound by the terms of the aforesaid undertaking.'
The copy of the affidavit has been served on the respondents. The affidavit is taken on record. The draft agreement has been made available by the respondents for perusal, as per which 800 million units per annum or 50% global sales of Durex whichever is lower will be supplied for a term of five years. In my view, till a formal agreement is drawn up, it will be in the interest of the company and the joint venture partners to limit the supply for a period of three months form June 2011 to August 2011 at the price stipulated in my order dated 20.05.2011 and on the undertaking given in the affidavit by the petitioner, LIG, SSL and its affiliates. In partial modification of my order dated 25.05.2011, the respondents are hereby directed to resume the supply as per the terms undertaken in the affidavit filed by the petitioners and its affiliates.
The respondent company has made clear that the mutual trust and confidence that was prevalent in the past decades between the parties have been completely destroyed and expressed their willingness to exit from the company on a fair price. The petitioner had undertaken to respond to the offer made on behalf of respondents (TTK Group) on June 22, 2011. I therefore direct both sides to come with proposals in this regard. XXX XXX’) and modified on 01.06.2011
Thereafter, the appellant and the 12th respondent prayed to CLB to stay the resolution passed in the meeting of the Board of Directors held on 02.05.2011 and also to appoint an independent administrator to supervise the management of the Joint Venture Company and those were rejected by CLB holding that staying of the resolution passed in the meeting of the Board of Directors on 02.05.2011 will lead to deadlock in the management of the affairs of the Company and restoration of status quo prior to 02.05.2011 will not be in the interest of the Company, as it will not in any way help the resumption of supply by the respondents to SSL & LIG and also held that whether the appellant has the right to nominate any Director on the Board of the Company, whether the appellant has no any special right vis-a-via the Joint Venture Company, whether the appellant is entitled to claim equal representation on the Board of the Company based on the management agreement, dated 02.07.1990, whether the Articles of Association will prevail over the private agreement between the shareholders of the Company etc., are the issues to be decided in the company petition and appointed a valuer to value the shares of the Company to enable TTK Group to opt out and also permitted TTK Group to purchase the shares of SSL, as per the value fixed by the Valuer and adjourned the company petition, by order, dated 30.06.2011. This order is challenged in this Company appeal by the appellant.
12. Mr.K.G.Ragavan, the learned Senior counsel appearing for the appellant submitted that CLB committed a serious error in not staying the resolution, dated 02.05.2011 of the Board of Directors, even after holding that as per the Board resolution, dated 15.09.2010, equal participation and representation between the Joint Venture partners, namely TTK and SSL has been agreed in principle and that was disturbed by resolution, dated 02.05.2011 by TTK Group refusing to appoint the nominee Directors of the appellant Group and even after the order passed by the CLB directing the Joint Venture Company to supply the goods to Foreign partner of the Joint Venture Group, no acceptable reason or explanation was given by TTK justifying their defiance and having observed and given a clear finding against the respondent 1 to 11, CLB ought not to have framed various issues to be decided in the company petition stated above and ought to have stayed the resolution of the meeting of the Board of Directors, dated 02.05.2011.
13. The learned Senior counsel further submitted that by not staying the resolution, dated 02.05.2011 of the Board of Directors of Joint Venture Company, the CLB is giving a premium to TTK group, who acted in-defiance of the CLB order, acted against the provision of Articles of Association, management agreement and also acted against the resolution, dated 15.09.2010 and the conduct of TTK group in disobeying the orders of the CLB and acting in contravention of the Articles of Association justified the grant of stay of the resolution passed in the Board of Directors meeting, dated 21.05.2011 and also the appointment of administrator, as the TTK Group which has taken control of the Joint Venture Company has acted in oppression of the other partner and also is acting to promote its Group by extending the distribution contract regarding the products of the Joint Venture Company to TTK Health Care Limited for a further period of five years and not supplying the products to the foreign partner as agreed earlier.
14. The learned Senior counsel appearing for the appellant further submitted that the appellant Company has got a locus standi to maintain the application, as the appellant Company purchased the entire equal shares held by LIG in the Joint Venture Company and the name of the applicant Company is also entered in the register of Members and as such, the appellant Company is one of the major shareholders along with the other partner TTK and as such, it has got every right to participate in the management of the Joint Venture Company. He further submitted that as per the management agreement, dated 02.07.1990, LIG, includes its subsidiaries and assignees and LIG was acquired by SSL and the appellant is the subsidiary of SSL and the Joint Venture Company also recognized the right of the appellant company in the management of the Joint Venture Company and that is also evidenced in the Board meeting held on 10.01.2011, wherein it has been stated in resolution No.5 of the minutes of the meeting that New Bridge Holdings B.V., Joint Venture partner of M/S.TTK-LIG Limited, by its letter, dated 07.12.2010 have requested the Board of Directors of TTK-LIG Limited to change its financial year from 1st January to 31st December and that was also approved and resolution was also passed to that effect in that meeting. He further submitted that having accepted the appellant as Joint Venture partner of TTK-LIG Limited and having accepted the rights of SSL, which acquired LIG to nominate its own Directors, it is not open to the respondents now to contend that the appellant has no right in the administration or management of the Joint Venture Company and it has no locus standi.
15. He further submitted that after the transfer of shares in favour of the appellant Company by LIG, it steps into the shoes of LIG and all rights of LIG under the Articles of Joint Venture Company as well as the shareholders agreement/understanding stands transferred in favour of the appellant Company. He further submitted that CLB also held that parties agreed to have equal participation and representation between the Joint Venture partners, namely TTK and foreign partners and that was disturbed on 02.05.2011 and that finding became final.
16. He further relied upon the judgment reported in Vol.59 Company Cases 548 (SC) in the case of Life Insurance Corporation of India vs. Escorts Limited and others, wherein the Hon'ble Supreme court upheld that the rights of the shareholders in the administration of the company. He further submitted that after the transfer of shares in favour of the appellant Company by LIG and entering the name of the appellant in the register of members of the Joint Venture company, the appellant is a shareholder having 49.89% of shares has got every right to nominate its nominees in the the Board of Directors and it cannot be stated that only LIG has got right to nominate Directors in the Board of Directors as per the management agreement. He further submitted that having regard to the conduct of TTK Group in not obeying the order of CLB and refused to supply the products to the foreign partner, despite the order passed to that effect and appointing two Directors of its choice in the Board of Directors by denying the right to the foreign partner and entering into the distribution agreement with TTK Health Care Limited for a period five years, would all prove that the parter of Joint Venture Company, TTK Group has decided to run the Company according to its whims and fancies to the detriment of the other equal partner and if the TTK Group is allowed to manage the Joint Venture Company that would affect the interest of the foreign partner the appellant and therefore, prima facie has been made out by the appellant for the appointment of the administrator and these aspects were not properly appreciated by CLB, while passing the order.
17. The learned Senior counsel further submitted that the appeal filed against the order of CLB is also maintainable, in as much as, section 10(F) of the Companies Act provides for appeal to High Court from any decision or order of the Company Law on any question of law and submitted that question of law that are stated in the grounds of appeal arise by reason of the order passed by CLB and hence, the appellant has made out a case for the interim reliefs prayed for.
18. The learned Senior counsel appearing for the appellant also relied upon the following judgments in support of his contention.
1. Vol.152 Com. Cases 609(Bom.) in the case of Deutsche Bank agreement vs. Vilas Samant and others.
2. (2005)1 SCC 212 in the case of Dale & Carrington Invt. (P) Limited and another vs. P.K.Prathapan and others.
3. (2007)8 SCC 449 in the case of Prestige Lights Limited vs. State Bank of India.
4. (2005)11 SCC 314 in the case of Sangramsing P. Gaekwad and others vs. Shantadevi P.Gaekward (dead)through Lrs and others.
5. (1988)4 SCC 59 in the case of State of U.P and others vs. Renusagar Power Co and others.
19. Mr.A.L.Somayaji, the learned Senior counsel appearing for the respondents 1 and 11 submitted that the appellant has no locus standi to file a company petition under sections 397 and 398 of the Companies Act and by reason of the transfer of shares in its favour it remains only as a shareholder and the appellant Company will not inherit the rights of LIG, which is the original constituent of the Joint Venture Company along with TTK and which also entered into the management agreement with TTK.
20. The learned Senior counsel appearing for the respondents 1 and 11 further submitted that CLB cannot go into the validity of the commercial agreement entered into by the Joint Venture Company, while deciding the issue under the provisions of Companies Act under sections 397 and 398 and therefore, the appellant cannot seek for appointment of administrator on the ground that the Joint Venture Company did not supply the products to the foreign partner and he did not allow the other foreign partner to have equal participation in the Joint Venture Company. He further submitted that as per the management agreement, only LIG has got right to nominate its Director so long it holds any share in the Joint Venture Company and after the transfer of shares to the appellant, LIG ceases to have such right and therefore, the question of equal participation in the Board of Directors cannot be raised by the appellant. He further submitted that the Joint Venture Company is bound by Articles of Association, management agreement and other related agreement that are not incorporated in the Articles of the Joint Venture Company cannot be enforced and on that basis, the appellant cannot claim any equal participation.
21. The learned Senior counsel further submitted that though the appellant has no right or say in the administration and management of the Joint Venture Company, the Joint Venture Company was accommodating the appellant and the gesture shown by the Joint Venture Company to the appellant cannot claim as of right and when the foreign partner, namely RB and the appellant have decided to take over the entire operations of the Joint Venture Company to the determent of Indian Partner, namely TTK Group and the action of the foreign partner, namely RB and the appellant company are determent to the Joint Venture Company, the Joint Venture Company has got every right to protect its interest and that will not amount to oppression of minority as per sections 397 and 398 of the Companies Act and considering all these aspects, the CLB has rightly declined to appoint the administrator and also rightly declined to stay the resolution, dated 02.05.2011, as it would paralise the administration of the Joint Venture Company.
22. Mr.H.Karthik Seshadri, the learned counsel appearing for the respondents 3 and 5 has adopted the argument of the learned Senior counsel appearing for the respondents 1 and 11 and further submitted that the CLB had wide power to make any interim order, which it thinks fit for regulating the conduct of the Companies' affairs, on such terms as appears as just and equitable and the discretionary order passed by the CLB, cannot be challenged in appeal before the High Court and relied upon the judgment reported in (2008)6 MLJ in the case of Palanisamy and another vs.Milka Nutrients Private Limited, Erode and others.
23. He further relied upon the judgment of Kerala High Court reported in Vol.62 Comp. Cases 504 in the case of Rev.C.S.Joseph and others vs. T.J. Thomas and others and submitted that the appointment of a receiver, administrator cannot be claimed as of right and unless adequate and proper reasons are stated, the court is not bound to appoint a receiver or administrator and in this case, no grounds are made out for appointment of administrator of the Joint Venture Company, as there is no allegation of mismanagement against the Joint Venture Company by TTK group. He further submitted that once the foreign partner is permitted to take over the market distribution of the products of the Joint Venture Company, that would affect the interest of the country and the products of the Company consumes major percentage of the contraceptive products used in India and if the product of the Joint Venture Company is allowed to export to foreign country, that would affect the interest of the country and that was also taken into consideration by the CLB, while rejecting the relief of appointing an administrator.
24. He further submitted that the scope of section 10(F) of the Companies Act is very limited and the CLB has not decided the main issue and reserved the same to be decided in the company petition and therefore, no prejudice would be caused to the appellant by the order passed by CLB and if the appellant is able to substantiate its ground regarding its locus standi, the right to appoint the Directors in the Board of Directors and claim equal participation, the appellant may get orders in the company petition and the order passed by the CLB is only interim in nature and therefore, the order of CLB need not be disturbed at this stage.
25. Heard both sides.
26. On the basis of the submission made by the learned counsels appearing for both sides, the following questions of law arise for consideration:-
1. Whether the appellant has locus standi to file the petition?
2. Whether the Board Resolution, dated 02.05.2011 is to be stayed?
3. Whether CLB failed to exercise its jurisdiction having held that the respondents 1 and 11, the arrangement with regard to appointment of Director by both the partners to the Joint Venture and respondents 1 and 11 acted in defiance of the order of the CLB passed earlier and erred in rejecting the interim relief for the appointment of administrator?
27. As stated supra, there is no dispute regarding the Joint Venture agreement and the transfer of shares by LIG in favour of the appellant on 19.03.2001 and acquisition of LIG by SSL and latter by RB and the appellant is one of subsidiaries of LIG and has also become the subsidiary of RB. The main defence of the respondent was the locus standi of appellant to file the company petition.
28. The learned Senior counsel appearing for the respondents was that the appellant has purchased the shares of LIG and the Joint Venture Company was formed by LIG and TTK and LIG was holding 49.87% and TTK is holding 49.87% of shares and the remaining shares are held by other respondents and LIG is an independent company, having separate juristic, entity and by purchasing shares from LIG, the appellant Company remains only as a shareholder and it has not taken over LIG, which is a separate entity and therefore, it has no locus standi to file an application under sections 397 and 398 of the Companies Act.
29. I am unable to accept the contention of the learned Senior counsel appearing for the respondents 1 to 11. Admittedly, the order of CLB does not disclose any such points being canvassed before the respondents, while passing the orders on 20.06.2011, 01.06.2011 and 30.06.2011, which is impugned in this appeal. Therefore, in the absence any contention raised before the CLB regarding the maintainability of the petition filed by the appellant, it is not open to them to raise at this stage.
30. Even assuming that they raised the said issue regarding locus standi before the CLB and that was not reflected in the order, even then the argument of the learned Senior counsel for the respondent cannot be accepted.
31. In the judgment reported in Vol.59 Com. case 548 in the case of Life Insurance Corporation Limited and others vs.Escorts Limited and another, the Hon'ble Supreme court relied upon the judgment rendered in AIR 1951 SC 41: 21 Comp Cas 33 in the case of Charanjit Lal Chowdhury vs. Union of India and incorporated the same as follows:-
'The petitioner as a shareholder has undoubtedly an interest in the company. His interest is represented by the share he holds and the share is a movable property according to the Indian Companies Act, with all the incidence of such property attached to it. Ordinarily, he is entitled to enjoy the income arising from the shares in the shape of dividends; the share like any other marketable commodity can be sold or transferred by way of mortgage or pledge. The holding of the share in his name gives him the right to vote at the election of the Directors and thereby take a part, though indirectly, in the management of the company's affairs. If the majority of shareholders sides with him, he can have a resolution passed which would be binding on the company, and lastly, he can institute proceedings for the winding up of the company which may result in a distribution of the net assets among the shareholders.'
32. The Hon'ble Supreme Court further observed at page No.671 as follows:-
'On an overall view of the several statutory provisions and judicial precedents to which we have referred, we find that a shareholder has an undoubted interest in a company, an interest which is represented by his shareholding. Share is movable property, with all the attributes of such property. The rights of a shareholder are (i)to elect Directors and thus to participate in the management through them; (ii)to vote on resolutions at meetings of the company; (iii)to enjoy the profits of the company in the shape of dividends; (iv)to apply to the court for relief in the case of oppression;(v)to apply to the court for relief in the case of mismanagement;(vi)to apply the court for winding up of the company; (vii)to share in the surplus on winding up.
Therefore, from the law laid down by the Hon'ble Supreme Court, the shareholder has got right to apply to the court in the case of oppression mismanagement.
33. As stated supra, the appellant purchased the shares from LIG on 19.03.2001 and the same was also accepted by the Joint Venture Company and the shares were also transfered in the name of the appellant Company and the appellant Company's name was also entered in the register of members of the Joint Venture Company.
34. Further, as rightly submitted by the learned Senior counsel appearing for the appellant, in the meeting held on 10.01.2011, the Joint Venture Company admitted that the appellant is the Joint Venture partner of the Joint Venture Company and sent a letter to change the financial year and that was accepted by the Joint Venture Company. If the appellant has no locus standi to interfere with the management of the Joint Venture Company, why the appellant has been described as 'Joint Venture partner' of the Joint Venture Company in the Board Resolution, dated 10.01.2011 and why the request of the appellant to change the financial year was accepted by the Joint Venture Company and there is no answer to such questions. Therefore, I hold that the appellant has locus standi to file the petition before the CLB.
35. Admittedly, the appellant Company is the subsidiary Company of SSL, which was acquired by RB and therefore, the appellant Company became the subsidiary of RB. It is seen from the Board Resolution, dated 02.05.2011, the nominees of SSL were appointed as its Directors in the Board of Directors and the Joint Venture Company also considered the appellant as one of the Joint Venture parter and also accepted the change of financial year, as suggested by the appellant Company.
36. The contention raised by the respondents is that LIG and TTK formed the Joint Venture Company 'TTK-LIG' and admittedly, LIG is a separate legal entity and that Company had 49.87% of shares in the Joint Venture Company and in addition to holding of 49.87% of shares in the Joint Venture Company, LIG has got its own independent separate identity as 'juristic person' and in that capacity, became the partner in the Joint Venture Company. As per the Articles of Association, the power was given only to LIG and TTK to appoint any Director to fill up the casual vacancies and therefore, the power to appoint the director rests only with the acquisition of shares in the Joint Venture Company by the appellant, it cannot claim any status of LIG.
37. The learned Senior counsel appearing for the respondents 1 and 11 also submitted that lifting of corporate veil to find out whether the applicant Company is the subsidiary of LIG or RB cannot be entertained and principle of lifting of corporate veil cannot be applied to facts of this case and relied upon the judgment reported in Vol.59 Company Cases 548 in the case of Life Insurance Corporation of India vs Escorts Limited and others.
38. On the other hand, the learned Senior counsel appearing for the appellant submitted that the old theory of lifting of the corporate veil has been much diluted latter and relied upon the judgment reported in (1988)4 SCC 59 in the case of matter of State of U.P and others vs. Renusagar Power Co. and others.
39. The learned Senior counsel for the appellant further submitted that the argument of the respondents that only LIG can exercise the power to appoint the Directors cannot be accepted, as admittedly, SSL which acquired the LIG, was permitted to nominate the Directors on earlier occasions and that was also reflected in the Board Resolution. He further submitted that after the sale of shares by LIG in the Joint Venture Company in favour of the appellant, the appellant became the shareholder and member of the Joint Venture Company and all the rights exercised by the transferor, LIG, devolves upon the appellant Company by reason of the transfer of shares and therefore, only the appellant Company has got the right to appoint the Directors and LIG withhold such right. He further submitted that the respondents 1 and 11 did not even allow the LIG to appoint its Directors and therefore, it is not open to the respondents 1 and 11 to contend now that the appellant has no right to nominate its Directors.
40. No-doubt, Article 110 of the Joint Venture Company states LIG or TTK is entitled to appoint their nominees in the vacancy caused by the resignation of their nominees. Though, LIG is a separate legal entity, while forming the Joint Venture Company LIG was holding 49.87% shares and TTK Group was holding 49.87% shares and they were the major constituents of the Joint Venture Company. Therefore, in such context only, it is stated in the Memorandum of Understanding and Articles of Association that the two major constituents are entitled to appoint their own nominees in the Board of Directors. Therefore, in my opinion, the word 'LIG' used in the Articles of Association only refers to the Company or entity, which owns 49.87% of shares and as LIG was having 49.87% shares, it is mentioned in the Articles of Association that LIG has got power and right to nominate four directors in the Board. The right to nominate the Directors in the Board arises by virtue of holding of shares and in the absence of any shares held in the Joint Venture Company, LIG cannot be expected to exercise the right to appoint any nominee Directors. This is known to the respondents 1 and 11 and therefore, when LIG was acquired by SSL, the Directors nominated by SSL were accepted by Joint Venture Company, as seen from the earlier resolution. Therefore, after the transfer of shares held by LIG in the Joint Venture Company in favour of the appellant, the appellant step into the shoes of LIG and whatever rights exercised by LIG is transferred to the appellant and the appellant alone can exercise the right to appoint the Directors. Therefore, I hold that by reason of the transfer of entire shareholdings in the Joint Venture Company by LIG in favour of the appellant, the appellant became the major shareholder along with TTK Group and the appellant has got right to nominate its Directors to the Board of Directors and LIG cannot exercise that right after the transfer of its shares to the appellant Company. Therefore, the reference to LIG in the Articles of Association is only on the basis of the shares held by LIG in the Joint Venture Company and once, the shares are transferred in favour of the appellant Company, the appellant Company is entitled to exercise all the powers that was vested with LIG, as per the Articles of Association.
41. Further, in the judgment reported in Vol.58 Company Cases 548 at Page 628, in the case of Life Insurance Corporation of India vs. Escorts Limited and others, the Hon'ble Supreme Court held as follow:-
‘Generally and broadly speaking, we may say that the corporate veil may be lifted where a statute itself contemplates lifting the veil, or fraud or improper conduct is intended to be prevented, or a taxing statute or a beneficent statute is sought to be evaded or where associated companies are inextricably connected as to be, in reality, part of one concern. It is neither necessary nor desirable to enumerate the classes of cases where lifting the veil is permissible, since that must necessarily depend on the relevant statutory or other provisions, the object sought to be achieved, the impugned conduct, the involvement of the element of the public interest, the effect on parties who may be affected, etc.’
42. In the judgment reported in (1988)4 SCC 59, in the case of State of U.P and others vs.Renusagar Power Co and others, the Hon'ble Supreme Court held as follows:
'66.) It is high time to reiterate that in the expanding horizon of modern jurisprudence, lifting of corporate veil is permissible. Its frontiers are unlimited. It must, however, depend primarily on the realities of the situation. the aim of the legislation is to do justice to all the parties. The horizon of the doctrine of lifting of corporate veil is expanding. Here, indubitably, we are of the opinion that it is correct that Renusagar was brought into existence by Hindalco in order to fulfil the condition of industrial licence of Hindalco through production of aluminum. It is also manifest from the facts that the model of the setting up of power station through the agency of Renusagar was adopted by Hindalco to avoid complications in case of take over of the power station by the State or the Electricity Board. As the facts make it abundantly clear that all the steps for establishing and expanding the power station were taken by Hindalco, Renusagar is wholly owned subsidiary of Hindualco and is completely controlled by Hindalco. Even the day-to-day affairs of Renusagar are controlled Hindalco. Renusagar has at no point of time indicated any independent volition. Whenever felt necessary, the State or the Board have themselves lifted the corporate veil and have treated Renusagar and Hindalco as one concern and the generation in Renusagar as the own source of generation of Hindalco. In the impugned order the profits of Renusagar have been treated as the profits of Hindalco.
43. Therefore, if the corporate veil is lifted, it can be seen that LIG was acquired by SSL, which was later acquired by RB and the appellant company being the subsidiary of LIG, automatically becoming the subsidiary of RB and SSL was permitted to nominate its Directors to the Board on earlier occasion and hence, being the subsidiary of RB, the appellant company can also exercise that right.
44. According to me, there is no need to lift the corporate veil and by reason of the re-transfer of shares by the appellant Company, the appellant Company has became one of the constituents of the Joint Venture Company along with TTK Group and therefore, the appellant Company is entitled to exercise the powers, which were exercised by LIG. Therefore, I hold that having regard to the reasons stated above, the appellant Company has made out a prima facie case to arrive at a conclusion that it has got every right to nominate persons to the Board of Directors.
45. It is seen from the Board Resolution, dated 02.05.2011 that the Board accepted the resignation of Bart Becht, Freddy Caspsers and rejected the nominations of Parag Agarawal and Rajesh Kumar Jha on the ground that the nominations were not in accordance with the Articles of Association and therefore, it cannot be considered.
46. Even, assuming for argument sake that the appellant has no power to nominate any Director, in the vacancy caused by the resignation of two Directors, which were appointed earlier by SSL, the next question arises for consideration is whether those vacancies can be filled up by TTK Group.
47. It is admitted that both the constituents of the Joint Venture Company, namely LIG and TTK are entitled to appoint equal number of persons in the Board of Directors. Admittedly, TTK Group has appointed four Directors and two Directors appointed by LIG resigned and therefore, LIG alone, as per the argument of the learned Senior counsel appearing for the respondents 1 and 11, has got power to nominate any person in the vacancy caused by the resignation of those two Directors.
48. It is the further contention of the respondents that Articles of Association also provides such nominations by LIG and therefore, the nomination of two Directors by the appellant Company cannot be considered. If one goes by Articles of Association, then the respondents 1 and 11 cannot appoint their persons of choice in the vacancies caused by the resignation of the Directors nominated by LIG earlier. Therefore, the respondents 1 and 11 either ought to have allowed the appellant to nominate its Directors or requested the LIG to nominate any two persons and they have no right to appoint persons of their choice as 'Directors' in the vacancies caused by the resignation of two Directors nominated by LIG. Further, CLB has also accepted this position and observed that ‘As evident from the Board resolution, dated 15.09.2010, equal participation and representation between the J.V. partners (TTK and foreign partner) has been agreed in principle. That understanding has been disturbed on 02.05.2011, when the TTK group refused to appoint the nominee Directors of the petitioners' group.'
Therefore, having given such finding that the respondent has violated the understanding between the Joint Venture partners and disturbed the understanding by rejecting the nominees of the appellant and appointing its own nominees, CLB ought to have held that the act of the respondents 1 and 11 in nominating its own persons into the Board of Directors in the vacancies caused by the resignation of two Directors of LIG is illegal and ought to have stayed the resolution.
49. Further, a perusal of the Board meeting held on 02.05.2011 would also make it clear that the respondent 1 and 11 have already decided to take over the management of the Company and in that motive only, rejected the nominations of the appellant Company and after appointing its own nominees, the distributor of TTK Health Care was extended for a period of five years. As a matter of fact, the contract in favour of TTK Health Care expired on 30th June 2011 and it was extended for a period of three months and by reason of the majority in the Board, the respondents 1 and 11 extended the contract for a further period of five years, without giving any opportunity to the other equal partners in the matter of granting extension.
50. As stated supra, as per the Memorandum of Understanding, important decisions are to be taken jointly by the two constituents and as per Article (5.3) of Memorandum of Understanding, decisions to appoint or/change in distributor comes within the ambit of major changes in the marketing policy and the recommendation and implementation of any changes are the sole responsibility of the Company's management and TTK undertakes to approve such proposals without undue delay so long as they are consistent with the agreed joint venture.
51. Further, as per clause 4 and 4.13 of the Management agreement, each party shall exercise their voting rights in the Company so as to ensure that no decision shall be taken by the Company in General Meeting or at Board Meetings in respect of the matters enumerated under the clause, unless such decisions have been agreed upon between LIG and TTK in writing and the decision to make major changes in marketing policies, the decisions to make major changes in marketing policies, includes appointments or/changes of distributor. Therefore, for appointing a person as distributor or extending the contract for distribution comes within the ambit of marketing policies and as per the Management Agreement, both the constituents have to take a joint decision in writing and that decision cannot be taken by TTK Group alone. Therefore, having regard to the fact that the appellant Company was not permitted to nominate its own Directors in the vacancy caused by the resignation of two Directors appointed by LIG and no opportunity was given to LIG to nominate its nominees, as per the Articles of Association, as contented by the learned Senior counsel appearing for the appellant and TTK group appointed its own nominees in those vacancies and immediately, extended the distribution rights to TTK Health Care, would all lead to the conclusion that the respondents 1 and 11 preplanned and deliberately prevented the appellant Company from nominating its own Directors and therefore, the Resolution, dated 02.05.2011 is to be stayed.
52. Accordingly, the 2nd substantial question of law is answered in favour of the appellant and the Board Resolution, dated 02.05.2011 is stayed.
53. The learned Senior counsel appearing for the appellant vehemently contested that CLB having held that the respondent Company has made it clear that the mutual trust and confidence that was prevalent in the past decades between the parties have been completed destroyed and expressed their willingness to exit from the Company on a fair price, ought not to have allowed the Joint Venture Company to be managed by the respondent Company.
54. Further, the respondent Company has violated the orders passed by the CLB and acted in defiance of those orders and that was also accepted by CLB and when the respondents 1 and 11 have acted in defiance of the orders passed by CBL and the respondent has opted to exist by receiving fair price and the mutual trust and confidence that was prevalent in the past decades between the parties have been completed destroyed, ought to have held that it is a fit case for appointment of administrator and ought to have appointed the administrator.
55. He further submitted that in the judgment reported in (2007)8 SCC 449, in the case of Prestige Lights Ltd vs. State Bank of India, the Hon'ble Supreme Court observed as follows:-
'An order passed by a competent court-interim or final-has to be obeyed without any reservation. If such order is disobeyed or not complied with, the court may refuse the party violating such order to hear him on merits. We are not unmindful of the situation that refusal to hear a party to the proceeding on merits is a ‘drastic step’ and such a serious penalty should not be imposed on him except in grave and extraordinary situations, but sometimes such an action is needed in the larger interest of justice when a party obtained interim relief intentionally and deliberately flouts such order by not abiding by the terms and conditions on which a relief is granted by the court in his favour.'
Therefore, he submitted that by allowing TTK Group to run the Company is rewarding the person, who has committed contempt and acted in defiance of the court order and therefore, the administrator has to be appointed. He further relied upon the judgment reported in Vol.152 Company Cases 609, in the case of Deusche Bank agreement vs. Vilas Samant and others and (2005)1 SCC 212, in the case of Dale & Carrington Invt. (P) Ltd., and another vs. P.K.Prathapan and others, at page 216, to highlight the scope of power conferred under section 10(F) of the Companies Act, when dealing with the appeal.
56. On the other hand, the learned Senior counsel appearing for the respondents 1 and 11 submitted that the appointment of Receiver or Administrator is an extreme step and the court cannot appoint an administrator for the sake of asking and relied upon the judgment reported in Vol.62 Company Cases 504 in the case of Rev.C.S.Joseph and others vs. T.J.Thomas and others and vehemently opposed for the appointment of the administrator.
57. It is no doubt true that the appointment of Receiver or Administrator to manage the affairs of the property in dispute cannot be ordered as of right and the court has to consider various circumstances and appoint such person as a Receiver or Administrator only when the persons seek for the appointment, makes out a strong prima facie case.
58. As a matter of fact, in the judgment reported in Vol.62 Company Cases 504, in the case of Rev.C.S.Joseph and others, Vs. T.J.Thomas and others, the Hon'ble Mr.Justice K.G.Balakrishnan, as he then was, observed as follows:-
'The appointment of a receiver is in many cases a matter for the most serious consideration of the court. The court by taking possession at the instance of the plaintiff may be doing a wrong, in some cases irreparable wrong to the defendant, for, if the plaintiff should eventually fail in establishing his right, the court may by its interim interference have caused mischief to the defendant and subsequent restoration of the property may afford no adequate compensation. It has been held by various judicial authorities that the jurisdiction given to the court must not be lightly but most cautiously exercised. The relief is not one ex debito justitiae but one which is within the judicial discretion of the court. The court is not bound to grant such relief merely because it is lawful to do so. the power to appoint a receiver is not to be generally exercised as a matter of course and that it can do no harm to appoint a receiver, is no reason for allowing an application. It has been stated in Halsbury's Law of England, fourth edition, volume 39, pages 426 and 427:
'A strong case must be made out to dispossess a party who is interested and who has the legal title. As against a prior legal mortgagee in possession, for instance, a receiver will not be appointed unless the mortgagee's debt has been wholly satisfied.'
'Generally, the court does not appoint a receiver if the appointment may involve grave risk of injury to the interests of other persons interested.
The court will be reluctant to risk damage to the reputation of a professional partnership by appointing a receiver, particularly where the integrity of the partners is not in question.'
Therefore, a strong case has to be made out for the appointment of Receiver or Administrator.
59. In this case, as stated supra, the CLB has observed that mutual trust and confidence that was prevalent in the past decades between the two constituents of the Joint Venture Company have been completely destroyed and TTK Group expressed its desire to go out in the Joint Venture Company on receipt of the fair price and a valuer was also appointed in that regard.
60. Further, TTK Group has violated the earlier order passed by CLB regarding the supply of products to the foreign partner, a per the order, dated 20.05.2011 and 01.06.2011 and TTK Group prevented the other joint partner to participate in the management of the Company by appointing its own persons as 'Directors' in the Board of Directors. Therefore, in my opinion, the appellant has made out a prima facie case for appointment of administrator and the CLB having held that TTK Group acted in defiance of earlier orders and the mutual trust between the parties have lost, erroneously declined to appoint an administrator and therefore, as held in Vol.152 Company Cases 609, in the case of Deusche Bank agreement vs. Vilas Samant and others, this court has got power to set aside the order of CLB and in my opinion, the CLB without properly appreciating its own findings, acted perversely in rejecting the relief of appointment of administrator.
61. Though, the Joint Venture Company is registered under the Companies Act, the two constituents, namely TTK and the foreign partner, namely the appellant are considered as parters in the Joint Venture Company and it has been admitted by the above two entities in various Board Meetings. For example, in the Summary of the Agreement annexed as Annexure I to the Minutes of the Meeting of the Board of Directors on September 15, 2010, it has been stated as follows:-
'The JV is intended to operate as an equal partnership with each partner having equal levels of control over management performance and overall company strategy.'
62. Further, in the Email, dated 09.02.2011 sent by the 2nd respondent, he reaffirms that TTK-LIG is in effect a partnership, albeit in a corporate form. In its Email, dated 25.01.2011, the 3rd respondent also accepted that the Company is being run as a partnership and stated as follows:-
'I am sure that by now you would have realized that TTK-LIG is a 50:50 partnership and no one partner can take unilateral decision to change the existing arrangements unless the other partner willingly agrees to the same. Till such time status-quo is required to be maintained.'
Therefore, the principles applicable to the partnership firm can be invoked to decide whether an Administrator has to be appointed to manage the affairs of the Joint Venture Company. In this case, as stated supra, the appellant has made out a prima face case for appointment of an 'Administrator'. As a matter of fact, the CLB has also observed that the mutual trust between the parties was lost and the respondents 1 to 11 acted in violation of the understanding and after inducting two of its persons as 'Directors', the respondents 1 to 11 extended the distributi
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on agreement in favour of its sister concerns TTK Health Care Limited and considering all these aspects and also the fact that the respondents 1 to 11 acted in defiance of the order passed by CLB, in my opinion, the appellant has made out a case for the appointment of Administrator. 63. In the cerebrated judgment reported in AIR 1955 Mad. 430, in the case of Krishnaswamy Chetty v. C.Thangvelu Chetti, our High Court has laid down five principles upon which a court can appoint a Receiver, which are as follows:- '(1)it is a matter resting in the discretion of the court for the purpose of protecting the rights of all parties and the subject-matter; (2) the court should not appoint a Receiver except upon proof by the plaintiff that prima facie he has an excellent chance of success in the suit; (3) not only the plaintiff must show a case of adverse and conflicting claims to property, but he must show some emergency or danger or loss, demanding immediate action and of his own rights he must be reasonably clear and free from doubt; (4) an order for appointment of receiver will not be made where it has the effect of depriving a defendant of a de facto possession since that might cause irreparable wrong; the position however may be different if the property is shown to be in different if the property is shown to be in medio, that is to say, in the enjoyment of none; and (5) the court should look to the conduct of the party who makes the application who must come to court with clean hands.' 64. In the judgment reported in AIR 1985 J & K 50, in the case of Tilak Chand Jam vs. Darshan Lal Jam and another, the learned Judge after relying upon the judgments reported in AIR 1955 Mad. 430 in the case of T.Krishnaswamy Chetty v. C.Thangavelu Chetty and AIR 1955 Mad 571, in the case of Muniammal v. P.M.Ranganatha Nayagar, laid down the following guidelines for appointment of a Receiver in a partnership concern:- '(i) A partner seeking appointment of a Receiver must have a strong case in his favour and claim asserted by him must be free from doubt. (ii) That a partner seeking relief of appointment of a Receiver must further show that he has been excluded from partnership property in which he has an equitable interest and the partnership property as it stood on the day of dissolution had not been distributed in accordance with the provisions of Ss.46 and 48 of the Partnership Act. (iii) A partner seeking relief must further show that partnership property including assets, goodwill, in which he has a share are retained by the partner against whom the relief is sought, in violation of the provisions of the Partnership Act. (iv) There must be prima facie proof of misconduct against a partner who is said to be in control of the partnership property to the detriment of a partner who seeks the relief. Misconduct will be inferred if one partner carries on trade on his own account with the partnership property and assets of the dissolved firm. Inference of misconduct will be readily drawn if the partner who has control over the assets and partnership property of dissolved partnership has employed the share of the outgoing partner to his own use without his permission. (v) Property, assets and goodwill being in possession of one partner to the exclusion of others is not ground for refusing to appoint a Receiver. It will be a different matter if it is shown that a partner seeking relief has expressly abandoned his share in the dissolved firm or has rendered himself disentitled by being guilty of laches or inordinate delay not explained by him. (vi) Principles which govern the appointment of a Receiver as regards dissolved partnership are not the same which are taken into consideration in this regard in relation to a running partnership business, though element of mis-management of partnership property and its income is present in both cases. (vii) The appointment of a Receiver in respect of a dissolved partnership is in the discretion of the Court and by exercising that discretion, the Court will be guided by the consideration of preserving and protecting the property and assets of the dissolved firm and will not permit them to be dissipated or used by one partner exclusively to the detriment and manifest disadvantage of the other partners who are excluded from such property and assets. 65. In the judgment reported in AIR 1993 SUPREME COURT 1721, in the case of Maharaj Jagat Singh vs. Lt.Col.Sawai Bhawani Singh and others, it has been held that in order to effectively prevent any of the suit properties being dissipated or disposed of and in order to preserve the same, that the suit properties should be placed under the management and control of a person other than the parties. 66. According to me, the above guidelines laid down in the aforesaid judgments apply to the facts of the present case and therefore, an Administrator has to be appointed for managing the affairs of the Joint Venture Company. 67. Hence, the 3rd substantial question of law is also answered in favour of the appellant. 68. I hereby appoint Mr.Justice N.V.Balasubramanian, a former Judge of this court as 'Administrator' of TTK-LIG Joint Venture Company, the 1st respondent herein. The Administrator is to head the Committee of Management replacing the Board of Directors and the Committee of Management will have four members, two to be nominated by the appellant and two to be nominated by the respondents 2 to 11. The Administrator shall convene the first meeting at the earliest and the Joint Venture Company shall be administrated by the Administrator and four members nominated as stated above. The remuneration of the Administrator shall be Rs.1,00,000/- [Rupees One lakh only] per month. This amount may be varied hereafter by the court taking into account of the work involved. The Administrator is also entitled to other perks. It is also open to the Administrator to engage the services of the lawyers, Charted Accountants, Valuers, and such other experts, as he may consider. The administrator shall appoint such persons after consulting the nominees of the applicant and the respondents 1 and 11 to operate the bank account and it is open to the Administrator to make applications to this court for further direction, if he feels necessary. 69. In the result, the company appeal is allowed. No costs. Consequently, connected M.P. is closed.