# In the matter of Cheran Properties Ltd Vs Kasturi and Sons Ltd Civil Appeal No. 10025-2017

> SC judgment dated 2018-04-24. Citation: TCN-2018-SC-00061. The appeals were filed under Section 423 of the Companies Act, 2013, against a judgment and order…

- **Court:** SC
- **Order date:** 24 Apr 2018
- **Citation:** TCN-2018-SC-00061
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/supreme-court-of-india/cheran-properties-ltd-vs-kasturi-and-sons-ltd-civil-appeal-no-10025-2017-292f154a

## Summary

### Background

The appeals were filed under Section 423 of the Companies Act, 2013, against a judgment and order of the National Company Law Appellate Tribunal (NCLAT) dated 18 July 2017. The NCLAT had dismissed an appeal against an order dated 6 March 2017 of the National Company Law Tribunal (NCLT) at its Chennai Bench. The case involves a share purchase agreement dated 19 July 2004 between KC Palanisamy, Kasturi and Sons Limited (KSL), Sporting Pastime India Limited (SPIL), and Hindcorp Resorts Pvt. Ltd. (Hindcorp). Disputes arose when the transaction was not completed, leading to arbitral proceedings. The arbitral tribunal made an award on 16 December 2009, which was challenged by KCP but upheld by the Madras High Court. KSL initiated proceedings for rectification of the register

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## Facts

Kasturi and Sons Limited (KSL) and Sporting Pastime India Limited (SPIL) entered into an agreement with KC Palanisamy (KCP) and Hindcorp Resorts Pvt. Ltd. (Hindcorp) on 19 July 2004. Under the agreement, SPIL was to allot 240 lakh equity shares to KSL against book debts. KSL offered to sell 243 lakh equity shares to KCP or his nominees, representing 90% of the share capital, for a lumpsum consideration of Rs 2,31,50,000. The intention was for KCP to take over SPIL's business, shares, and liabilities. Clause 14 of the agreement recognized KCP's right to sell or transfer his SPIL holding, provided the transferees accepted the agreement's terms. KCP paid Rs 2.5 crores against a total consideration of Rs 30 crores. Ninety-five percent of the shares were transferred to

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## Issues and analysis

### Issue 1: Whether the arbitral award dated 16 December 2009 can be executed against the appellant, which is …

**Ratio:** Section 35 of the Arbitration and Conciliation Act, 1996, stipulates that an arbitral

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**Reasoning:** The court reasoned that the appellant, Cheran Properties Limited, was claiming under KCP,

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**Interpretation:** The court interpreted Section 35 to mean that an arbitral award binds not only

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**Application:** The court applied this principle to the facts of the case, finding that the

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## Parties

- **Judges:** Dr D Y Chan…; DIPAK M…; +1 more
- **Appellants:** CHERAN PROPERTIES…
- **Respondents:** Sporting Pastime…; KASTURI AND SONS…

## Timeline

- **2004-07-19 — Share Purchase…**: Agreement entered into between KC…
- **2004-08-17 — Letter fr…**: KCP, as authorized signatory of the appellant, sent a letter to KSL referencing the share…

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