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2022 (12) TMI 52 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , CHENNAI BENCHOppression and Mismanagement - oppression of minority shareholders - time was essence of the Assets Transfer Agreement (ATA) as specified Long Stop Date (LSD) or not - consent of the Appellants was necessary for any change in LSD - minority shareholder were oppressed by the majority shareholder - violation of rights of the Appellants in implementation of the SPSHA along with the Addendum to the SPSHA - implementation of the ATA was without consent of the minority shareholder - whether this tantamount to their oppression and detrimental to their rights? Whether, the time was essence of the Assets Transfer Agreement (ATA) as specified Long Stop Date (LSD) - Whether, the consent of the Appellants was necessary for any change in LSD? - HELD THAT:- It has been brought out that the LSD could not have been extended or extensions of the LSD was detrimental to right of the Appellants in any way. This establishes that although time is a significant concept in such transaction but cannot be a condition which cannot be altered with mutual consent of the concerned parties - This Appellate Tribunal also do not consider above action of extension of the LSD especially without consent of the Appellants as act of oppression of minority shareholders (the Appellants) by the majority shareholders. Looking into all these aspects and implication of extension of the LSD impacting favourably all stakeholders, the implementation of the ATA and revival of the company, this Appellate Tribunal do not find any error in the impugned order. Whether, the Appellants as minority shareholder were oppressed by the majority shareholder in the present case? - HELD THAT:- This Appellate Tribunal is not inclined to accept the arguments of the Appellants regarding their allegations of oppressions especially when the plant itself was shut down. There was no alternative except liquidation or revival of company through other modes including sale of assets to other entity who could revive the company. It is also not out of context to take into account that prima-facie payment of dues to stakeholders and bringing an additional investment of Rs. 66 crores by the 2nd Respondent as purchaser of the company as helped the company has well as all stakeholders including the Appellants. By no stretch of imagination these acts and deeds can be construed as oppression of the Appellants and therefore this Appellate Tribunal do not find any error in the impugned order on this account. Whether the rights of the Appellants have been violated in implementation of the SPSHA along with the Addendum to the SPSHA? - Whether the implementation of the ATA was without consent of the minority shareholder and whether this tantamount to their oppression and detrimental to their rights? - HELD THAT:- It seems that all decisions were required to be taken with approval of Investors and the Chairman was supposed to be Director nominated by the Investors (the Appellants) and it has been noted from the averments that the Appellants were appointed as Director and CEO on 02.02.2014 assuming charge and control of the company. However, due to deteriorating financial health of the company causing heavy losses and incurring debts, the Appellants resigned from the BoD and CEO position on 02.01.2015. It is also observed that the ATA was signed on 24.06.2016 by 1st Respondent, 2nd Respondent and each of the shareholder of the seller whose name was listed out in Schedule 1 of the ATA. This ATA was signed subsequent to resolution passed in ‘EGM’ held on 16.04.2016 wherein Mr. Sanjeev Baba director of the company to authorise to negotiate, to settle the terms and conditions, signing and executing the requisite the Sale Agreement, Sale Deeds and such other documents as may be found necessary - This Appellate Tribunal therefore do not find that the provisions of the SPSHA or the addendum to the SPSHA were breached. Similarly, it is also held that no prior consent of the Appellants was needed for any amendments (in the present case extension of the LSD). Looking to all these agreements, events as discussed earlier and proper legal documents signed this Appellate Tribunal do not find any error in the impugned order. Similarly, not taking consent of the Appellants cannot be construed as act of oppression by majority shareholders especially keeping in view that the sale of the assets of the company was for the benefits of all stakeholders including shareholders and the company itself. This Tribunal, is of the considered opinion that there is no error, in the impugned order dated 11.02.2020, passed by the Tribunal and the Instant Appeal, is devoid of merits. Consequently, the Appeal fails. Appeal dismissed.
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