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You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> Grewal v Chakraborty [2021] EWHC 3260 (Ch) (16 November 2021) URL: http://www.bailii.org/ew/cases/EWHC/Ch/2021/3260.html Cite as: [2021] EWHC 3260 (Ch) |
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CHANCERY DIVISION
Fetter Lane London, EC4A 1NL |
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B e f o r e :
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SURINDER GREWAL |
Appellant |
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- and - |
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SARJIT CHAKRABORTY |
Respondent |
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Official Court Reporters and Audio Transcribers
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THE RESPONDENT appeared in Person.
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Crown Copyright ©
MR JUSTICE ADAM JOHNSON:
"45. I turn to the question of remedy. The discretion as to remedy is a broad one. The court, says s.996 of the 2006 Act, may make such order as it thinks fit for giving relief. It was not suggested that if unfairly prejudicial conduct was established, there should be no remedy. Indeed, Mr Hyams highlighted how unsatisfactory it would be to leave these shareholders in a relationship but there was no agreement as to what the remedy should be beyond an acknowledgement that one side should be ordered to buy out the other. Overall, there are three matters for me to address: (1) whether the buyout should be by Mr Grewal or Ms Chakraborty; (2) what the valuation date should be; (3) what adjustments to the valuation and further payments there should be. I shall deal with each of those in turn.
46. As to the first, I have decided that the order should be for Ms Chakraborty to buy the shares of Mr Grewal. She is the majority shareholder and it is an unusual case where the majority shareholder will be ordered to sell to the petitioner. This is not one of those unusual cases in my judgment. On the contrary, there are other factors in favour of an order that Ms Chakraborty buy Mr Grewal's shares. While the business is not currently financially successful, it does seem to be providing proper care. There was evidence that a recent CQC report gave the company a good rating which Mr Grewal fairly accepted was a good sign. I should bear in mind the welfare of service users and it is right to observe that Mr Grewal is not a care professional. Further while he suggested that he could be a registered manager temporarily, I did not consider that realistic given his continuing health problems. I am also concerned that if Mr Grewal gains control of the company, he will be distracted from providing care to users by bringing further claims against Ms Chakraborty and others, such as Mr Fergusson, using the company. He referred in his written closing submissions to investigating fraud and a full audit. While I do not ignore Mr Grewal's role in establishing the business and Ms Chakraborty's wrongdoing, the right order is that she buy his shares."
"4. Mr Grewal later became a minority shareholder. That was the effect of the issue of an additional 999 shares on top of the original share on 28 April 2006, 510 being allotted to Ms Chakraborty and Mr Grewal taking a further 489 shares in addition to his original one. Ms Chakraborty was also appointed a director on that day, 28 April 2006.
5. Mr Grewal came to leave the business in 2007, though in the end his absence was a brief one. There was a written agreement dated 9 March 2007. It provided for the resignation of Mr Grewal as a director, which happened on 30 April 2007, and the sale of his shares to Ms Chakraborty. She agreed to pay. under the agreement, £20,000 to Mr Grewal in monthly £1,000 instalments, being £12,500 as to the unpaid price of her shares and £7,500 for Mr Grewal's shares.
Some instalments were paid but by around July 2007, Mr Grewal had returned to the company at the request of Ms Chakraborty. The agreement of 9 March 2007 was treated as at an end. The payments which had been made were re-characterised as wages and dividends of Mr Grewal. Mr Grewal was not, however, reappointed as a director. His roles in the company were those of finance manager and IT manager. A further role was added in 2014, that of registered manager for Leeds, but he was not in frequent attendance on site at Leeds. Owing to a kidney condition, Mr Grewal had been working principally from home from around 2010."
"NC [Ms Chakraborty] is presently indebted to SG [Mr Grewal] in the following sums:
(i) £12,500 for the price of her existing 51 per cent shareholding in Astha Limited, company number 04914301 ('the Company'); and
(ii) £10,000 in respect of an outstanding personal loan".
"NC is to pay SG the following sums:
(i) £12,500 for her existing 51 per cent shareholding in the Company; plus
(ii) £7500 for the price of SG's remaining 49 per cent in the Company free of all encumbrances, charges, loans, options or equities whatsoever."
"(1) The subscribers of a company's memorandum are deemed to have agreed to become members of the company, and on its registration become members and must be entered as such in its register of members.
(2) Every other person who agrees to become a member of a company, and whose name is entered in its register of members, is a member of the company."
"The Contract also provided that your client was to purchase our client's remaining 49 %shareholding for £7500. In July 2007, our clients mutually agreed to vary the Contract so as to ensure that our client kept his 49 % shareholding so that he could return to assist the Company.
By that date no money had been paid by yours under the Contract so that this variation meant that she remained bound to pay the £12,500 consideration and the £10,000 loan. She was contractually bound to do so by making payments of £1000 by standing order. Interest of 8 % is payable on all late payment instalments."