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2021 (7) TMI 621 - Tri - Companies LawOppression and mismanagement - stay on subscription of rights issue - Whether right issue could be cancelled on the ground of breach of fiduciary duty and relationship between directors? - balance of convenience - HELD THAT:- It is a settled law from judicial precedents that while considering interim relief, the Tribunal has to look into the aspect of balance of convenience between the parties. The interim relief is discretionary and the Court is also required to consider whether Petitioner/Applicant has established "prima facie" case and it is not frivolous or vexatious - The Company is a private limited company and is in practice of obtaining loans from friends, social circles and relatives. The genuineness of loans is not disputed by any party. Under Section 241 and 242 being an Equity Jurisdiction, the interests of the Company are paramount and to be given prime consideration. Balance of convenience - HELD THAT:- The Respondent No. 1 Company is raising and would require that their loans to be paid immediately. The Petitioner has defaulted in payment of loan taken in personal capacity and Petitioner has chosen to not to subscribe to the right issue having been offered to them on the same terms and conditions as well. Thus, requirement of raising funds for the purpose of running business of the Company appears to exist - there is no justification for staying or keeping the right issue in abeyance at this initial stage. The prayer made by the Petitioners for interim relief is rejected. It is made clear that this interim order cannot be construed as an expression of any opinion on the merits of other issues, if any, raised in the present petition filed under Section 241 and 242 of the Companies Act, 2013.
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