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2019 (7) TMI 1616 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL NEW DELHIApproval of amalgamation scheme - conduct of the meetings of the equity shareholders and unsecured creditors of NMCE with ICS - Money Laundering - HELD THAT:- There is no dispute that the FMC Order dated 23.07.2011 referred in para 6(B) (supra) was in force on the date of meeting of the shareholders and when Impugned Orders were passed and even when final hearing of the present Appeals took place. FMC found the Appellant and Shri Kailash Gupta and others guilty of various misconducts and illegal activities which led to various actions getting initiated, and litigations arising therefrom, which appear to be at different stages. The FMC Order found 29,32,280 shares to be irregular allotment to the Appellant and directed taking of steps to cancel the same. The operative Orders of FMC which we have referred in para – 6 above, also found Shri Kailash Gupta to be a person not “fit and proper” to hold any position in the management and the Board of any Exchange recognized or registered by the Government of India, FMC or any other financial market Regulatory. Thus, on 23.07.2011 itself, the FMC had found Kailash Gupta as not “fit and proper person” and the shares held by NOL were eclipsed - even if for any technicality or reason the FMC Order dated 23.07.2011 and all consequential actions against Appellant and Kailash Gupta were to get quashed still, Mr. Kailash Gupta may not be able to claim that he has a general reputation and record of fairness and integrity, and should be deemed to be a fit and proper person. Mr. Kailash Gupta who attended the shareholders’ Meeting and who claims himself to be authorized signatory of the Appellant being not fit and proper person, could not have voted and was rightly not allowed to vote. We have gone through the Reports of Chairman (Annexure I – Page 113) and Scrutinizer (Page – 127) and part of the Report we have reproduced at para – 11 (supra). We are aware of the general rule of such meetings where adjournment can be there for want of quorum and at adjourned meeting, quorum figure would stand relaxed. As such, Chairman had no reason to fudge Report. We have no reasons to doubt the Reports. Considering Para – 25(2) of Report of Chairman, the scheme had sufficient support to sail through. Coming to the objections raised by the Appellant with regard to the scheme, some of them were already answered by SEBI itself. It may be recalled that the Appellant claimed that the Appellant claimed to have sent representation to SEBI against the proposed merger and when SEBI did not respond, the Appellant moved the Hon’ble Supreme Court and sought directions - In spite of such communication by SEBI which is a Regulatory, the Appellant has kept harping that ICE is a company which was bleeding and had no net worth and that NMCE could have raised its own cash net worth. Nothing is shown that the Appellant raised any questions to this communication of SEBI. The letter of SEBI itself shows how the shares of the Appellant got affected and the submissions made that ICE was bleeding in finance and had no net worth, etc., need to be discarded. The argument that the scheme does not mention that it was proposed to meet the net worth requirement and so the scheme should be doubted, also needs to be discarded. We have gone through the First, Second and Third Impugned Orders. We do not find any reason to interfere with the same. The shares held by the Appellant in Respondent No.1 Company have been under eclipse since the Order passed by FMC on 23.07.2011 and the same were under eclipse when the shareholders meeting took place and the Impugned Orders were passed and the position remained the same when final hearing of this Appeal took place. In the period after we reserved this matter for Judgement, the parties have not moved us to say that any Orders in favour of the Appellant have been passed in the litigations pending - The Third Impugned Order dated 27.08.2018 shows that when in NCLT, Judgement was reserved by Order dated 02.07.2018 (see para – 32) and some Order came to be passed by the Appellate Tribunal – PMLA, the Appellant had moved NCLT and sought and received rehearing. No such Motion has been brought before us and as such, we presume that the position regarding eclipse to the rights of Appellant and Kailash Gupta is still there - there are no reason to interfere with the Impugned Order and for reasons recorded above, Appeals against the three Impugned Orders deserve to be rejected. Appeal dismissed.
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