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2021 (3) TMI 661 - Tri - Companies LawReduction of shares - seeking rectification of the register of members of the 1st Respondent Company by cancelling the allotment of shares - to appoint an Independent Auditor directing to audit the accounts - seeking to direct the 1st Respondent Company to conduct a valuation of shares of the Company before further allotment of Securities. HELD THAT:- The Companies Act, 2013 came into effect w.e.f. 01.04.2014. Hence, further issue of share capital will be done by complying the Companies Act, 2013. Section 62 of the Companies Act, 2013 deals with issue of Share Capital, which is applicable to all companies. It does not make any distinction whether it is a public or private company. This Tribunal also note that Section 62(1)(a) of the Companies Act, 2013 deals with issuance of shares on the principle of Rights basis. Section 62(1)(b) of the Companies Act, 2013 deal with issuance of shares to employees under a scheme of employees’ stock option, subject to special resolution passed by company and subject to such conditions as may be prescribed. Section 62(1)(c) deals with issue of shares to any person. Since the shares have been allotted to ‘Applicants/Petitioners and their nominees’ as per the Interim Order dated 12.01.2017, the shares so issued must have the compliance of Section 62(1)(c) of the Companies Act, 2013. A reading of the Section 62(1)(c) shows that (a) special resolution has to be passed by the company; and (b) that the price of share as will be determined by valuation report of registered valuer - It is again noticed that the special resolution can be passed only in the AGM or EOGM where all the shareholders will have a say. No such material has been produced or pleaded before this Tribunal that the special resolution has been passed in the AGM or EOGM. Neither any material has been placed before the Tribunal that the fair price has been determined with the approval of the registered valuer. It is noted that the allotment has been done at the face value of ₹ 10/-. In the absence of fair value, it cannot be determined that the ₹ 10/- is the fair value of the equity share. Compliance of Section 62(1)(c) ensures that the allotment is done to any person at a price which is not prejudicial to the interest of other shareholder or to the interest of the company. Though enough has been pleaded to justify allotment of shares to 2nd Respondent, not a single evidence could be placed or pleaded to show that the compliance of Section 62(1)(c) has been done. In view of the above position, allotment of shares to 2nd Respondent cannot be held to be validly done - the exercise carried out is not only illegal but oppressive to the Shareholders. Petition is disposed of with a direction to the Respondent No. 1 to cancel the allotment of 1,10,00,000 equity shares in favour of Respondent No.2 and thereby rectify the Register accordingly.
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