HANSA INDUSTRIES PVT. LTD. AND ORS. versus KIDARSONS INDUSTRIES PVT. LTD.

Citation: [2006] SUPP. 7 S.C.R. 235 · Decided: 13-10-2006 · Supreme Court of India · Bench: B.P. SINGH · Disposal: Case Partly allowed
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Judgment (excerpt)

HANSA INDUSTRIES PVT. LTD. AND ORS. 
A 
v. 
KIDARSONS INDUSTRIES PVT.LTD. 
OCTOBER 13, 2006 
(B.P. SINGH AND ALT AMAS KABIR, JJ.] 
B 
Companies Act; Ss. 100-104: 
Filing of Petition for winding up of a company by appellant No.2 and 
counter petitions by respondents/brothers for issuance ;f ilyunction to C 
appellant No.2 from carrying on Agency business of a foreign company-
Settlement-Appellant No.2 agreeing to transfer certain percentage of equity 
shares of the company in favour of respondents in lieu of transferring of 
assets of the company and also a residential property in his favour-Allegedly, 
value of the property exceeding the amount as settled and also causing D 
inconvenience to respondents-Disputes-Court directing valuation of assets 
of the company by a firm of Chartered Accountants-Valuation Report 
dismissed by Single Judge of the High Court-Appeal against dismissed by 
Division Bench of the High Court-On appeal, Held: Terms of Settlement 
between the parties ordinarily could not be modified except with the consent 
of the parties-Terms of the Settlement not challenged by either of the parties- E 
Hence, they cannot be challenged at the stage of implementation on the 
ground of causing practical inconvenience to other-party/parties. 
Valuation of assets of the company by Chartered Accountanfs·-
Deduction of certain amount as anticipated liability towards Capital Gains F 
Tax-Correctness of-Held: An undertaking may be obtained from appellant 
No.2 accepting the liability and to create a charge over the assets to secure 
payment towards capital gains tax, if so levied in future, but there should not 
be any deduction made from the value of the assets. 
Family Settlement-Passing of title in property/properties- G 
Conveyance-Requirement of-Discussed-Pleading and Conveyancing. 
Respondent No.I is a Private Limited Company. The members of the 
family of Appellant No.2 held entire shareholding of the Company, except a 
few shares. The main source of income of the Company was the commission 
TIS 
H 
236 
SUPREME COURT REPORTS [2006] SUPP. 7 S.C.R. 
A earned from the agency business of a foreign Company. Disputes arose 
between appellant No.2 and his family members. The foreign Company served 
a notice on Respondent No.1 - terminating the agency. The appellants filed a 
petition for winding up of the Company since the main source of income of 
the Company had vanished due to termination of Agency by the foreign 
B Company. Appellant No.2 succeeded in getting the agency of the foreign 
company transferred exclusively in his name. On the other hand, the 
Respondents filed a suit for issuance of injunction restraining the appellants 
from carrying on the agency business. 
During the pendency of the proceedings the parties arrived at a 
C compromise whereby appellant No.2 and his group agreed to transfer their 
equity shares in the Company, in favour of the respondents. The price of the 
shares was to be paid in specie by transferring to the appellants 30.14% of 
the assets equivalent to value of the shares of the Company. The agency of the 
foreign firm was to be retained by appellant No.2 and his group. The 
Commissioner/Mediator allotted certain property/assets of the company to 
D appellant No.2 even though the value of the property so allotted exceeding the 
value of the assets/amount he was entitled. Further disputes arose between 
the parties and the matter came up before the Court when the parties agreed 
that the valuation of the shares and the immovable properties owned by the 
Company shall be done by the Chartered Accountants. The Chartered 
E Accountants gave their report which was dismissed by Single Judge of the 
High Court. Appeal against was dismissed by the Division Bench of the High 
Court. Hence the present appeal. 
Appellants contended that Clause 14 of the settlement in clear terms 
provided that appellant No.2 was to continue to occupy the portion of the 
F property of the Company in which he was residing as deemed owner/owner; 
that the value of such portion shall be taken into account for evaluating the 
assets of the Company; that the value of such part of the property was to be 
adjusted against the value of his share; that in case anything more has to be 
paid that will be paid by appellant No.2, but the Respondents cannot insist on 
the ground of inconvenience that the entire property be allotted to them; that 
G when a settlement had been reached which is sought to be given effect,
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