Though the title to the shares is yet to be decided, the court held that the shares, in question, shall be transferred in favour of BK and VK Modi to the extent of 50 per cent of the total number of shares involved, as per an earlier order, at the rate of Rs 90 per share, which is higher than the quoted value on the stock exchange.
The two brothers will only have the right to vote and to participate as shareholders but will not be entitled to further sell, transfer or alienate the shares in favour of a third party or a nominee.
BK Modi and VK Modi, the applicants in the case, will be entitled to receive dividends provisionally, subject to restitution, in case the matter is finally decided against the transfer of shares in their favour.
Both the brothers had agreed to buy certain MRL shares held by Modipon pursuant to a process of public offer at the rate of Rs 90 per share. The relief claimed from the court by them was that either Rs 8.27 crore, jointly deposited by them in the escrow account, should be paid back or the shares should be transferred in their favour as they had already paid the entire consideration amount.
As per the interim arrangement, the transfer of shares will be subject to further orders that will be passed on the main appeal. The amount, kept in the escrow account, will be kept in a suitable interest-bearing deposit with Industrial Finance Corporation of India (IFCI). Neither the amount, nor the interest can be appropriated by anyone, including IFCI, till further orders.
The division bench, comprising justice Devender Gupta and justice S Mukherjee, observed that “the applicants having blocked Rs 8.27 crore, cannot be made to wait for long after paying such a huge amount and not get any rights to the shares at all.”
While senior advocate AM Singhvi, along with K Budhiraja, appeared for BK Modi, the main applicant, Rajiv Sawhney appeared for VK Modi, who supported the application.