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2014 (6) TMI 578 - COMPANY LAW BOARD MUMBAIAppointment of receiver - Validity of sale of shares - whether the alleged allotment of 50,00,000 shares made in the Board Meeting of the Company purportedly held on 21/05/2013 is prima facie non-est, illegal and liable to be cancelled for the reasons stated hereinafter - Held that:- Ajay Singh Group was under an obligation to take consent of IL & FS Group and/ or obtain the affirmative vote of their directors before making such an allotment. Furthermore, taking into consideration the reasons pleaded by the Petitioners challenging the validity of the Board Meeting purportedly held on 21/05/2013 prima facie, I find that the said Board Meeting was not held by following due process of law - while granting an ad-interim injunction order, the Court is required to examine not only the "prima facie case", but also the other factors, like balance of convenience and "question of irreparable loss". Admittedly, IL & FS Group has made huge financial exposure in the Company and its interest is at stake now after losing the Appeal in the DRAT. I am, therefore, of the view that in case, the proposed settlement does not get through by the shareholders of the Company in the EOGM, that may be held by the Company for the purpose, the Petitioners may suffer irreparable loss as compared to the Ajay Singh Group. Therefore, in my considered view, both the factors are found in favour of the Petitioners. - Decided in favour of applicants.
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