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2022 (4) TMI 141 - NATIONAL COMPANY LAW TRIBUNAL , CHANDIGARH BENCHContribution for allotment of equity shares - whether there is a justification to allow the applicant to make further borrowings? - whether to allow the applicants to raise further share capital of the company by issuing shares to meet its immediate requirement of working capital? - HELD THAT:- The issues involved in the main petition relate to the lack of proper representation in the Board meetings by one group of shareholders, who are respondents in the present application and the alleged illegality in passing important resolutions involving the directorship of the same group of shareholders and in issuance of Rights Issue. In related CAs, apart from the aforementioned issues, the prayers include stalling the appointment of additional Director, the appointment of Administrators to manage the company in the short-run and to maintain the status quo with respect to the shareholding. In short, the governance process of the corporate itself has been challenged by one major group of equal shareholding, who are respondents in the present application. It is clear that the issues are closely related and If the interim reliefs are granted then it would have direct bearing on the outcome of the Main Petition. As held in Union of India & Ors. v. Modiluft Ltd., [2003 (5) TMI 530 - SUPREME COURT] & Raja Khan v. Uttar Pradesh Sunni Central Waqf Board & Anr., [2010 (11) TMI 201 - SUPREME COURT], if interim relief is same as that of permanent relief, then it is not permissible because no case would be left for adjudication at the time of the final hearing. Unfortunately, there are unresolved issues between the two groups running the company mainly relating to the appointment of Directors and effective control over the management of the company. The prime objectives of this Bench are to ensure the smooth running of the company so that its existing assets are utlised to the fullest, to protect the legitimate interests of both the groups of shareholders and those of the current employees - The raising of finance to meet the EMI requirements is only a short-term measure. While the applicants, who are effectively in control of the company, have made efforts to arrange the short-term finance required to manage the short term requirements, the issues of Directorship and effective management by two groups, each holding 50% of shares, is still under the active consideration of this Bench. This Bench is of the view that whether a company is in genuine need of more capital or not, and the route to be adopted for meeting the financial requirements of the company, will be decided by the Board of Directors and it is incumbent on them to exercise their powers for the benefit of the company. It is noted that the Board of Directors has inherent powers, unless otherwise provided in the Articles, to increase the prescribed share capital as per the provisions of the Companies Act 2013 - Application dismissed.
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