The Delhi high court has cleared the decks for division of the Atlas group among the three Kapur family descendants, after almost three years of dispute in the promoter family.
While upholding the valuation report prepared by Ernst & Young Pvt Ltd to divide the group assets amicably among the three Kapur families, who jointly own the Rs 407 crore (Rs 4.07 billion) Atlas Cycles (Haryana) Ltd, justice Madan B Lokur said the valuation was final and binding on all the parties and due respect should be given to the family settlement arrived at by all the members.
"...since the parties had agreed to be bound by the valuation given by KN Memani (valuer), they should accept the impugned report as a matter of grace rather than pick small loopholes in it..", Justice Lokur said, adding the courts should go slow in interfering with such matters.
The court has also vacated the stay order on implementation of the report and the family now can go ahead with its original plan of drawing lots and division of assets between the families as suggested by E&Y.
It also rejected the prayer seeking to incorporate Atlas cycles as the party to the dispute, saying that "the entity is a completely independent legal and juristic entity that has nothing to do with the MoU entered between the groups..."
Regarding the issue whether the valuation report was absurd, the court said that if that was the case then it should have been rejected by all the groups.
Besides, it has also imposed cost of Rs 110,000 on the plaintiffs for filing frivolous cases. The suit filed by three other family members and purported shareholders - Arun Kapur and his two sons Akshay and Ashwat - had sought permanent injunction to restrain the sale or disposal of the group's assets and stay on the implementation of the valuation report of the Kapur family group.
The plaintiffs had alleged that they were deliberately kept out of the assets' valuation process by E&Y in order to dispose of the property illegally.
Earlier, the court had issued notices to nine members of the Kapur family and had restrained them from implementing the valuation report.
Arun Kapur, who was ousted from the management and affairs of the Malanpur unit of Atlas Cycles (Haryana) Ltd in March 2001 allegedly for siphoning off around Rs 10.45 crore (Rs 104.5 million), had also filed an appeal against the arbitrator's award directing it to deposit Rs 5 crore (Rs 50 million).
In January 1999, the Kapur brothers - late B D Kapur, Jai dev Kapur and Jagdish Kapur - who jointly owned the group of companies thought it prudent to amicably split the ownership, management and control of the three manufacturing units of Atlas at Sonepat (Haryana), Malanpur (Madhya Pradesh) and Sahibabad (Uttar Pradesh) in three equal shares.An MoU was signed between the members to divide the assets equally. The pact envisaged that one cycle unit would fall to the share of each group, all the assets would be divided into three equal baskets after valuation at the present market price by a draw of lots in the presence of sole arbitrator former chief justice AM Ahmedi and market areas for domestic sales and exports for each separate unit would be clearly identified and demarcated.
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