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2015 (9) TMI 1692 - Board - Companies LawOppression and Mismanagement - Stay on increase in authorized Share Capital - Whether any stay is to be granted over an item for increase of authorised share capital in the AGM to be held on 23.09.2015? - HELD THAT:- It is evident that the respondents are in management they have been continuing in the management without any disputes for last several years, the only objection to the petitioners now is company should not go for rights Issue. The company has been doing its business well; the petitioners have been getting revenue to their company SADL by selling its milk to R1 Company. That being the position, I don't see any point in the argument of the petitioners that company has not been giving any dividend to the shareholders. When the petitioners, through their own company, get revenue from R1 Company, they could not have said that the petitioners have been reinvesting the profits into R1 Company without any returns to the shareholders - The petitioners cannot say that company should alone go for debt not for rights issue. The minority cannot opt for the right under section 397 & 398 of the Act 1956 to stall the functioning of the company, when the act of the management is in the interest of the company. Since there is a decision to purchase dryer costing around ' 100 crores, it can't be said that there is no need to raise fund. Therefore, the argument of the petitioners counsel saying that there is no need for raising fund has no merit. However since the respondents categorically mentioned that they will not invoke allotment of shares under B Class, the shareholding of the petitioners will not come down to 20% as stated by them, when the respondents have come forward saying that they will not allot any shares as B Class shares, there cannot be any more equity than this - here, in the case, the directors in the management indulged in all sorts of malafide acts and irregularities to dilute the aggrieved, therefore this cannot be applicable to the given facts of the case. There are no merit to stay the agenda for increase of authorised share capital of R1 Company, this Bench hereby rejects interim relief seeking stay of the Agenda over increase of authorised share capital and also over other interim reliefs in respect of stay on minutes drawn on 16.07.2015 - the respondents are directed to file reply within 6 weeks hereof, rejoinder, if any, within 6 weeks thereof in the main petition.
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