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Companies Law - Case Laws
Showing 21 to 40 of 49 Records
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2017 (5) TMI 1274 - NATIONAL COMPANY LAW TRIBUNAL, CHENNAI
Lien on shares - Held that:- The Articles of Association is a constitutional document of the company and is also a binding instrument on the shareholders and the company has all the rights to take action against the shareholder as per the Articles of Association by exercising the lien on the shares of the Petitioner. The amount which was due and payable by the Petitioner to the company have not been paid, due to which the company has exercised its lien on the Petitioner's shares
The company has rightly exercised its lien over the shares of the Petitioner. Therefore, the Petitioner is no longer share holder in the company w.e.f. 26.12.2013. Hence, the Petitioner cannot continue with this Petition after cancellation of his shares by R1 company. In view of the facts, circumstances and case law stated above, the Company Petition is hereby dismissed.
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2017 (5) TMI 1226 - NATIONAL COMPANY LAW TRIBUNAL, KOLKATA
Validity of notices of the Board meetings and the EOGM - oppression and mismanagement - appointment of directors - Held that:- For vacation of office of Director under section 283(g), notices of the meetings which the director is alleged to have not attended is must. Vacation on the ground that the director failed to attend three consecutive meetings is invalid, if the meetings were not validly held. Since the meetings held without notice, those are not valid.
The appointment of Ms. Mridula Gupta, respondent No. 3, as Additional Director vide Board meeting dated 11-04-2013 and resolution thereat are illegal and void;
The removal of Mr. Rajnandini Pachisia, (Petitioner No. 2) vide Board meeting dated 21-05-2013 and the resolution thereat, are illegal and void;
The appointment of the respondent No. 4, Mrs. Priyanka Gupta and the respondent No. 5, Miss Kashmira Gupta as additional Directors vide Board meeting dated 20-04-2013 and the resolution thereat, are illegal and void; and
The removal of the petitioner No. 1, Shri Shyam Saran Gupta by way of EOGM dated 03-09-2013 and 03-10-2013 and the resolution thereat, are illegal and void; and
Any other act/acts done by the respondent(s) in pursuance of the Board meeting and EOGM dated 11-04-2013, 20-04-2013, 24-04-2013, 21-05-2013, 03-09-2013, and 03-10-2013 respectively are bad in the eye of law and hence, hereby declared null and void.
Further, the respondent No. 2 is hereby directed not to cause any hinderance in restoration of original position of the petitioner Nos. l and petitioner No. 2.
This order is hereby concluded directing the respondent Nos. 1 and 2 to give effect to the cancellation of the appointment of the Respondent No. 3 to 5 as Additional Directors and to restore the petitioners as Directors of the company and the same shall continue till either of the parties will have fair exit from the company.
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2017 (5) TMI 1225 - NATIONAL COMPANY LAW TRIBUNAL, AHMEDABAD
Compounding of offence under Section 621A of the Companies Act, 1956 - violation of Section 307(1) of the Companies Act, 1956 punishable under Section 307(8) - Held that:- The offence relates to the period from 2001 to 2008. The petitioners filed the petition on 20th April, 2010. Therefore, the violation under Section 307(1) was committed before the Companies Act, 2013 came into force. Therefore, this Tribunal has to follow the procedure as laid down under Section 621A of Companies Act, 1956.
The Ministry of Corporate Affairs, by of notification No. SO 1936E dated 01.06.2016 declared that the matters transferred from Company Law Board to NCLT shall be disposed of in accordance with the provisions of Act 18 of 2013 or Companies Act, 1956. Since Section 441 of the Act has not come into force by the date of violation and by the date of filing of this petition, this Tribunal has to follow the procedure laid down under Section 621A of the Companies Act, 1956.
Considering violation of Section 307(1) and also considering the long duration of violation, this Tribunal is directing the petitioners 1 to 6 are directed to pay ₹ 50,000/- each for the violation of Section 307(1) of the Act. The violation continues for eight years, i.e. 2920 days. Therefore, each of the petitioners is directed to pay ₹ 100/- for each day of violation. The total amount comes to ₹ 20,52000/- (Rupees twenty lakh fifty-two thousand). Therefore, the compounding amount that would be payable by each of the petitioners comes to ₹ 3,42,000/-.
Hence, the violation of Section 307(1) committed by the petitioners is compounded on payment of ₹ 3,42,000/- each by way of Demand Draft drawn on any nationalised bank in favour of Pay and Accounts Office, Ministry of Corporate Affairs, Mumbai within three weeks and to file the original Demand Draft before the Registry of this Tribunal on or before 12th April, 2017.
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2017 (5) TMI 1118 - MADRAS HIGH COURT
Oppression and mismanagement - removal of the Director - Held that:- The observations of the CLB that the provisions of Section 397 and 398 of the 1956 Act would not be applicable in the instant case, as the grievance articulated by the appellant are in the nature of directorial complaints, in my view, does not bear in mind the fact that in a small private limited company, such as DPPL, which emerged out of a partnership comprising of members of one family, who, decided to give a corporate structure to their business relationship, only to manage their affairs in a manner which would benefit each member of the family - would, necessarily, give rise to charge of oppression, upon exclusion of a member, who represents a branch of the family, from an assigned managerial role. In the given case, the appellant, stands excluded from a managerial role, after having invested over a period of 34 years, in a manner of speech, his "blood, toil and sweat" to the growth of DPPL - it cannot but, to my mind, be an act of oppression. To entertain any other view, in my opinion, would cause such deep chasm between law and justice that it would defeat the very purpose, for which these provisions are enacted. More often than not a single infraction, which has a continuing impact, as in this case can be more oppressive than a series of acts. This is not, in substance, a case of a single act of oppression, as was sought to be portrayed by the counsel for the respondents.
Therefore, the removal of the Director in a widely held public limited company may not always compare, with the removal of a Director in a closely held private company, where, as in this case, each branch of the family is expecting to be represented on its BOD. In such cases, removal of a member from the BOD, can amount to oppression and mismanagement, when, it is carried out on made-up and flimsy grounds, as in this case and would, thus, in my opinion, bring the action within the ambit of provisions of Sections 397 and 398 of the 1956 Act.
In a public limited company, much would depend on the facts obtaining in that case. Say, for example, where, controlling interest is centered in one or more groups, and shares, though, listed on the Stock Exchange, are not freely traded. In such cases, different connotations may arise. The acts of oppression, in my view, will, thus, have to be examined, bearing in mind the totality of circumstances obtaining in a case, without being unduly burdened by the fact that it is a family company, or a private limited company, or even a public limited company. For grant of relief, qua oppression, the principles of quasi partnership are applicable, even to a public limited company.
Allow the appeal and set aside the impugned order of the CLB dated 28.05.2015. Resultantly, the decision taken at the EOGM convened on 27.06.2009, to remove the appellant as the Director of DPPL and as a consequence thereof, his removal as the Executive Director is held to be bad in law.
It is relevant to note that the nature of jurisdiction, which stood vested upon the High Court under Section 66 of the Income Tax, 1922, is different from the jurisdiction, which is conferred on the CLB under Sections 402 of the 1956 Act. In the given case, the failure to exercise such jurisdiction may give rise to a question of law under Section 10F. That the power of CLB under Section 402 of the 1956 Act is of the widest amplitude, is statutorily exemplified by clause (g) of the very same provision. Clause (g) of Section 402 brings within its sway, all other matters, qua which it is just and equitable for CLB to make a provision.
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2017 (5) TMI 1059 - CALCUTTA HIGH COURT
Application of the petitioner under Section 420(2) of the Companies Act, 2013 - revision petition - Held that:- In the present case, it remains undisputed by the opposite parties that while passing the order dated January 30, 2017 the Tribunal did not record the contentions raised on behalf of the present petitioner through oral argument and by filing the written note of submissions. Therefore, the Tribunal ought to have entertained and disposed of the application of the petitioner under Section 420(2) of the Act of 2013, but once again the Tribunal failed to discharge its duty to remove the mistake in passing the order dated January 30, 2017 which is apparent from the record.
In the facts of the case as already discussed find substance in the contention raised on behalf of the petitioner on the strength of the Supreme Court decisions in the cases of Shalini Shyam Shetty (2010 (7) TMI 877 - SUPREME COURT ) that the impugned order dated April 11, 2017 passed by the Tribunal is vitiated by patent perversity resulting in gross and manifest failure of justice. For all the foregoing reasons, the revisional application succeeds.
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2017 (5) TMI 1058 - PUNJAB AND HARYANA HIGH COURT
E-auction - SARFAESI Act - Held that:- The petitioner in the present case purchased the property in e-auction under Section 13(9) of the SARFAESI Act being the highest bidder, believing that the property was free from all encumbrances and charges. Thus, there was no obligation on the part of the petitioner to discharge liability of the outstanding dues towards the previous owner.
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2017 (5) TMI 994 - DELHI HIGH COURT
Compounding of offence - composition fee declined - Held that:- Considering the default in filing the annual returns and the balance sheets which amount to the offences punishable under Section 162/220 (3) of the Companies Act, applying the doctrine of proportionality, negligible imposition of composition fee would also not serve the purpose. It cannot be held that the composition fee of ₹ 8,00,000/- on each of the petitioners imposed by the learned Additional Sessions Judge was not a fair and just exercise of the discretion. This Court in a petition under Section 482 Cr.P.C. or Article 226 of the Constitution of India would interfere in the order of the Court below only if the same results in failure of justice or the discretion is exercised contrary to the settled principles of law.
Considering the fact that the composition fee has been brought down considerably by the learned Additional Sessions Judge, this Court finds no merit in the petition.
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2017 (5) TMI 924 - PUNJAB AND HARYANA HIGH COURT
Scheme of Amalgamation - Held that:- Considering all the relevant facts, the procedural requirements contemplated under Sections 391 to 394 of the Act, the relevant Rules and on due consideration of the reports of the Regional Director, Northern Region, Ministry of Corporate Affairs, New Delhi and the Official Liquidator and the separate reply(s) thereto by way of affidavits of the Authorised Signatory of the Petitioner-Companies, the Scheme of Amalgamation is hereby sanctioned and as a result thereof, the assets and liabilities relating to the Transferor Company/Petitioner Company-I shall stand vested in the Transferee Company/Petitioner Company-II and the Transferor Company/Petitioner Company-I shall be dissolved without being wound up. The Petitioner-Companies shall comply with all the applicable Accounting Standards upon sanctioning of the Scheme or any other undertaking made by the Petitioner-Companies.
The Scheme shall be binding on the Petitioner-Transferor and Transferee Companies, their respective shareholders, creditors and all concerned.
Let formal order of sanction of the Scheme be drawn in accordance with law and its certified copy be filed with the Registrar of Companies within 30 days from the date of receipt of the same.
A notice of the order be published in the newspapers, namely, “Indian Express” (English), “Jansatta” (Hindi) both Delhi/NCR Edition and in the Official Gazette of Government of Haryana.
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2017 (5) TMI 853 - NATIONAL COMPANY LAW TRIBUNAL, CHANDIGARH
Demerger - Held that:- We are convinced that the petitioners and respondents cannot get along and conduct business of the company. Both the parties have agreed to the parting of the ways by giving exit to the petitioners. We hold that it would be just and proper that the respondent group namely, R-2 to R-13 and particularly R-2 and R-3, who are admittedly in the control of the affairs of the company be directed to buy out the shares held by the petitioners in the company at a fair price to be determined by an independent valuer. The instant petition therefore stands disposed of with the following orders:
A. As discussed the alleged violators of section 314 namely, S.Gursimran Singh Grewal (R-3), S.Paramvir Singh Grewal (R-4), S.Saminder Singh Grewal (R-6), S.Mandeep Singh Grewal (R-10) and Mrs.Harsimran Dutta (R-11) are required to refund to the respondent company, the amount paid to them in excess of the permissible limits u/s 314 along with interest payable at the bank rate enhanced by 2% within 30 days of receipt of this order. For this purpose, the bank rate applicable as on 31st March of each of the financial year shall be taken.
B. M/s Ernst & Young, 6th floor, Wing A & B, Worldmark-1, Aero city, IG1 airport Hospitality District, Opp. Holiday Inn, Mahipalpur, New Delhi 110037 is appointed from out of the list of valuers submitted by the petitioners and agreed to by the respondents, as an independent valuer for fair value of the shares held by the petitioners of the company. The cut- off date for determining the value of the shares will be 31.3.2007 i.e, the date nearest to the filing of the petition. While computing the share value, the Valuers Shall also consider the asset based valuation as the Respondent Company has a large asset base.
C. The date of filing of the petition is April 2007. Hence, the said valuer will find out the fair value of the shares of the company as on 31.3.2007 on the basis of going concern by all recognised methods and applicable rules and regulations as applicable on the said date in this regard.
D. The parties are directed to extend every cooperation to the said Valuer. The company shall submit all the necessary documents and papers for the purpose of valuation as desired/required by the said Valuer.
E. The valuation report shall be prepared within 90 days from the date of receipt of copy of this order.
F. Copy of the report shall be supplied to the parties who shall be entitled to file their respective objections, if any, to the valuation of the shares. After receipt of the objections the valuer shall dispose of the same within four weeks and shall prepare a comprehensive/speaking supplementary report dealing with each and every objection. Thereafter, the Valuer shall send final report to the parties.
G. After determination of the value of the shares, the respondents 2 to 13 shall pay the amount to the petitioners, other than those who have withdrawn from the petition and whose application for withdrawal is pending (as per (he petitioners' shareholding proportions) within 30 days thereof and upon receipt of the amount, the petitioners shall execute all the documents/deeds necessary for the transfer of the shares held by the petitioners of the company in favour of the respondents and/or their nominees within two weeks.
H. In case, the respondents decline to purchase the shares of the petitioners as aforesaid at the determined share value, the petitioners shall have the right to purchase the same from the respondents. The procedure and the time line as detailed above shall be followed.
I. The remuneration of the Valuer shall be negotiated and paid by the company in three equal instalments. First instalment shall be paid on the commencement of the valuation process and the second instalment shall be paid after submission of the valuation report by the Valuer within the stipulated period. The third and final instalment shall be paid to the valuer after submission of the final report together with objections and the supplementary report.
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2017 (5) TMI 794 - SECURITIES APPELLATE TRIBUNAL, MUMBAI
Guilty of violating the SEBI (PFUTP Regulations) and SEBI (PIT Regulations) - restraining the appellants from accessing the securities market and prohibiting the appellants from buying, selling or otherwise dealing in securities, directly or indirectly for a period of 14 years also the WTM has directed the appellants to disgorge the unlawful gains arising on sale/ pledge of Satyam shares during the period from 2001-2008 with interest at the rate of 12% per annum from 07.01.2009 till the date of payment
Held that:- Argument of the appellants that the impugned order passed on 15.07.2014 without giving inspection of documents and without permitting the appellants to cross-examine the persons whose statements were relied upon in the show cause notice, is violative of the principles of natural justice cannot be accepted because, admittedly, before commencement of the criminal trial in February 2011 all documents relating to the charge of inflating/ manipulating the books of Satyam were made available to the appellants and inspite of receiving requisite documents appellants (excluding Prabhakara Gupta) failed and neglected to file detailed reply to the show cause notices till May 2014. Moreover, during the period from 2011 till May 2014 appellants, including Prabhakara Gupta consistently failed and neglected to participate in the proceedings before the WTM even though their request for keeping the proceedings in abeyance till conclusion of the criminal trial was repeatedly rejected and repeatedly the appellants were warned that ex-parte order would be passed if they fail to avail the opportunity of hearing. In these circumstances, in the facts of present case, argument of the appellants that the impugned order is violative of the principles of natural justice cannot be accepted.
Email admittedly sent by Ramalinga Raju on 07.01.2009 as also the statements of the appellants recorded by SEBI and the documents referred to in the show cause notices issued to the appellants clearly establish that the appellants were instrumental/ involved in inflating/ manipulating the books of Satyam during the period from 2001 to 2008. That information was a price sensitive information and while in possession of that unpublished price sensitive information, appellants had sold/ transferred shares of Satyam and made huge profits. In these circumstances, decision of the WTM that the appellants violated the provisions contained in the SEBI Act, PFUTP Regulations and PIT Regulations, 1992 cannot be faulted.
The decision of the WTM in uniformly restraining all the appellants from accessing the securities market for 14 years without assigning any reasons is unjustified. Similarly, the quantum of illegal gain directed to be disgorged by each appellant is based on grounds which are mutually contradictory and also without application of mind. In these circumstances, we set aside the impugned order to the extent it relates to the period for which the appellants are restrained from accessing the securities market and the quantum of illegal gain directed to be disgorged by the appellants and remand the matter to the file of the WTM of SEBI for passing fresh order on merits and in accordance with law. Fresh order be passed as expeditiously as possible preferably within a period of 4 months from today. Appellants are directed to cooperate in the proceeding so as to enable the WTM to pass fresh order expeditiously.
Statement made by counsel for each appellant as also the statement made by G. Ramakrishna appearing in person that they shall not access the securities market and shall not buy, sell or otherwise deal in securities, directly or indirectly till the WTM passes fresh order on merits and in accordance with law, is accepted. Accordingly, we direct that the appellants shall not access the securities market and shall not buy, sell or otherwise deal in securities, directly or indirectly till fresh order is passed by the WTM of SEBI on merits and in accordance with law.
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2017 (5) TMI 662 - SECURITIES APPELLATE TRIBUNAL, MUMBAI
Violation of various provisions of SAST Regulations of 1997 and 2011 read with Regulation 13(1) of Prohibition of Insider Trading Regulations, 1992 - Penalty imposed - Held that:- AO has not brought out any convincing and cogent evidence to support the finding that the noticee i.e. appellant acted as a PAC with Narois within the meaning of Regulation 2(e)(2)(i) of SAST Regulations, 1997. There is no material / evidence which can support the present findings of the learned AO. In fact, to some extent the learned AO has travelled even beyond the scope of show cause notice dated October 1, 2014. Therefore, we are constrained to hold that the learned AO has not satisfactorily examined and considered the contentions of the appellant raised during the proceedings before him, particularly pertaining to the question of ‘person acting in concert’ i.e. PAC for holding the appellant liable for violation of Section 7(1) of the SAST Regulations, 1997 read with Regulation 35 of SAST Regulations, 2011.
In this view of the matter, penalty of ₹ 2,50,000/- imposed on appellant is set aside and restored to the file of learned AO for hearing this aspect afresh and deciding it as per law after giving an opportunity of hearing to the appellant in respect of the allegation under the SAST Regulations, 1997 read with those of 2011. Accordingly, the impugned order is upheld to the extent of imposition of two penalties of ₹ 2,00,000/- each for violation of Sections 11C(3) and (5) of the SEBI Act, 1992 whereas the penalty of ₹ 2,50,000/- under SAST Regulations, 1997 is set aside and the matter is remanded to the learned AO for a fresh look as directed hereinabove.
The appellant is directed to deposit the penalty of ₹ 4,00,000/- within a period of four weeks from today failing which the respondent shall be at liberty to initiate appropriate proceedings to recovery of the said amount as per law.
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2017 (5) TMI 589 - DELHI HIGH COURT
Scheme of Amalgamation - Held that:- upon considering the approval accorded by the members and creditors of the Petitioner Companies to the proposed Scheme, and the affidavits filed by the Regional Director, Northern Region, Ministry of Corporate Affairs and the Official Liquidator attached to this Court, whereby no objections have been raised to the proposed Scheme by the OL, and in view of the circumstance that the objections rasied by the RD stand satisfied, there appears to be no impediment to the grant of sanction to the Scheme.
Consequently, sanction is hereby granted to the Scheme under sections 391 and 394 of the Act. The Petitioner Companies will however, comply with the statutory requirements, in accordance with law.
A certified copy of this order, sanctioning the Scheme, be filed with the ROC, within thirty (30) days of its receipt.
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2017 (5) TMI 588 - NATIONAL COMPANY LAW TRIBUNAL, CHANDIGARH
Oppression and mismanagement - Siphoning of funds of the company and turned a profit making and debt free company into a debt ridden company running into losses - demerger of assets between the shareholding group of petitioners and the majority seeked - Held that:- After considering and weighing all the facts, arguments made by the petitioners and respondents, and the judgments cited by them, we are convinced that the petitioners and respondents cannot get along and conduct business of the company. Both the parties have agreed to the parting of the ways by giving exit to the petitioners. We hold that it would be just and proper that the respondent group namely, R-2 to R-13 and particularly R-2 and R-3, who are admittedly in the control of the affairs of the company be directed to buy out the shares held by the petitioners in the company at a fair price to be determined by an independent valuer. The instant petition therefore stands disposed of with the following orders:
The alleged violators of section 314 namely, S.Gursimran Singh Grewal (R-3), S.Paramvir Singh Grewal (R-4), S.Saminder Singh Grewal (R-6), S.Mandeep Singh Grewal (R-10) and Mrs.Harsimran Dutta (R-11) are required to refund to the respondent company, the amount paid to them in excess of the permissible limits u/s 314 along with interest payable at the bank rate enhanced by 2% within 30 days of receipt of this order. For this purpose, the bank rate applicable as on 31st March of each of the financial year shall be taken.
M/s Ernst & Young New Delhi is appointed from out of the list of valuers submitted by the petitioners and agreed to by the respondents, as an independent valuer for fair value of the shares held by the petitioners of the company. Other procedures to be strictly adhered to.
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2017 (5) TMI 542 - SUPREME COURT
Validity of anti-competitive agreement - offending the provisions of Section 3(3) of the Competition Act, 2002 - penalty imposed by COMPAT - CCI jurisdiction to hold enquiry - Held that:- Merely because the purported agreement between the appellants was entered into and bids submitted before May 20, 2009 are no yardstick to put an end to the matter. No doubt, after the agreement, first sting was inflicted on May 8, 2009 when the bids were submitted and there was no provision like S. 3 on that date. However, the effect of the arrangement continued even after May 20, 2009, with more stings, as a result of which the appellants bagged the contracts and fruits thereof reaped by the appellants when Section 3 had come into force which frowns upon such kinds of agreements.
We are, thus, of the opinion that inquiry into the tender of March 2009 by the CCI is covered by Section 3 of the Act inasmuch as the tender process, though initiated prior to the date when Section 3 became operation, continued much beyond May 20, 2009, the date on which the provisions of Section 3 of the Act were enforced. We agree with the COMPAT that the role of the appellants did not come to an end with the submission of bid on May 08, 2009.
No doubt, clause (d) of sub-section (3) of Section 3 uses both the expressions ‘bid rigging’ and ‘collusive bidding’, but the Explanation thereto refers to ‘bid rigging’ only. However, it cannot be said that the intention was to exclude ‘collusive bidding’. Even if the Explanation does contain the expression ‘collusive bidding’ specifically, while interpreting clause (d), it can be inferred that ‘collusive bidding’ relates to the process of bidding as well. Keeping in mind the principle of purposive interpretation, we are inclined to give this meaning to ‘collusive bidding’. It is more so when the expressions ‘bid rigging’ and ‘collusive bidding’ would be overlapping, under certain circumstances which was conceded by the learned counsel for the appellants as well.
We are, therefore, of the opinion that the two expressions are to be interpreted using the principle of noscitur a sociis, i.e. when two or more words which are susceptible to analogous meanings are coupled together, the words can take colour from each other. We, thus, answer Issue No. 1 in the negative by holding that the CCI was well within its jurisdiction to hold an enquiry under Section 3 of the Act in respect of tender of March, 2009.
Jurisdiction of DG/CCI to investigate into the boycott of 2011 FCI’s tender - Held that:- The starting point of inquiry would be the allegations contained in the complaint. However, while carrying out this investigation, if other facts also get revealed and are brought to light, revealing that the ‘persons’ or ‘enterprises’ had entered into an agreement that is prohibited by Section 3 which had appreciable adverse effect on the competition, the DG would be well within his powers to include those as well in his report. Even when the CCI forms prima facie opinion on receipt of a complaint which is recorded in the order passed under Section 26(1) of the Act and directs the DG to conduct the investigation, at the said initial stage, it cannot foresee and predict whether any violation of the Act would be found upon investigation and what would be the nature of the violation revealed through investigation. If the investigation process is to be restricted in the manner projected by the appellants, it would defeat the very purpose of the Act which is to prevent practices having appreciable adverse effect on the competition. We, therefore, reject this argument of the appellants as well touching upon the jurisdiction of the DG.
2009 tender of the FCI, all the three appellants had quoted the same price, i.e. ₹ 388 per kg. for the APT - Held that:- We feel that COMPAT has examined the matter in right perspective. After examining the record, one finds that important fundamental conditions were the same which used to be in the earlier tenders. In 2009 tender, a specific quantity of 600 MT was prescribed. At that time, all the three appellants participated and did not object to the same. As against this in 2011 tender, the tentative annual requirement of APT was stated to be 400 MT and not 75 MT per month. The condition referred to by the appellants was not for supply of 75 MT per month. It only stated that in a given month the tenderer should have capacity to supply 75 MT. It was nowhere stated that 75 MT will have to be supplied by the successful tenderer every month. In any case, from the conduct of the three appellants, it becomes manifest that reason to boycott the May 2011 tender was not the purported onerous conditions, but it was a concerted action. Otherwise, if the appellants were genuinely interested in participating in the said tender and were aggrieved by the aforesaid conditions, they could have taken up the matter with the FCI well in time. They, therefore, could request the FCI to drop the same (in fact FCI dropped these conditions afterwards when the matter was brought to their notice). However, no such effort was made. As pointed out above, M/s. Excel Crop Care wrote the letter only a day before, just to create the record which cannot be termed as a bona fide move on its part.
We feel that COMPAT has examined the matter in right perspective. After examining the record, one finds that important fundamental conditions were the same which used to be in the earlier tenders. In 2009 tender, a specific quantity of 600 MT was prescribed. At that time, all the three appellants participated and did not object to the same. As against this in 2011 tender, the tentative annual requirement of APT was stated to be 400 MT and not 75 MT per month. The condition referred to by the appellants was not for supply of 75 MT per month. It only stated that in a given month the tenderer should have capacity to supply 75 MT. It was nowhere stated that 75 MT will have to be supplied by the successful tenderer every month. In any case, from the conduct of the three appellants, it becomes manifest that reason to boycott the May 2011 tender was not the purported onerous conditions, but it was a concerted action. Otherwise, if the appellants were genuinely interested in participating in the said tender and were aggrieved by the aforesaid conditions, they could have taken up the matter with the FCI well in time. They, therefore, could request the FCI to drop the same (in fact FCI dropped these conditions afterwards when the matter was brought to their notice). However, no such effort was made. As pointed out above, M/s. Excel Crop Care wrote the letter only a day before, just to create the record which cannot be termed as a bona fide move on its part.
Penalty - whether penalty under Section 27(b) has to be on ‘total/entire turnover’ of the company covering all the products or it is relatable to ‘relevant turnover’? - Held that:- In the absence of specific provision as to whether such turnover has to be product specific or entire turnover of the offending company, we find that adopting the criteria of ‘relevant turnover’ for the purpose of imposition of penalty will be more in tune with ethos of the Act and the legal principles which surround matters pertaining to imposition of penalties. Cases at hand itself amply demonstrate that the CCI’s contention, if accepted, would bring about anomalous results. In the case of M/s. Excel Crop Care Limited, average of three years’ turnover in respect of APT, in respect whereof anti-competitive agreement was entered into by the appellants, was only 32.41 crores. However, as against this, the CCI imposed penalty of ₹ 63.90 crores by adopting the criteria of total turnover of the said company with the inclusion of turnover of the other products as well. Likewise, UPL was imposed penalty of 252.44 crores by the CCI as against average of the three years’ turnover of APT of ₹ 77.14 crores. Thus, even when the matter is looked into from this angle, we arrive at a conclusion that it is the relevant turnover, i.e., turnover of the particular product which is to be taken into consideration and not total turnover of the violator.
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2017 (5) TMI 494 - SECURITIES APPELLATE TRIBUNAL, MUMBAI
Open offer obligation under the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 - whether the inter-se promoter transfers made prior to completion of 3 years of listing the target company are eligible for general exemption from open offer under Regulation 10(1)(a)(ii) of SAST Regulations? - Held that:- Regulation 10(1)(a)(ii) clearly states that in order to be eligible for exemption from making an open offer inter-se transfers of shares amongst persons named as promoters in the shareholding pattern by the target company in terms of its listing agreement has to be for not less than 3 years prior to the proposed acquisition. The argument that the promoters have to be named in the listing agreement for minimum period of 3 years overall, not necessarily 3 years subsequent to the signing of the listing agreement, cannot be accepted by a plain reading of Regulation 10(1)(a)(ii).
The impugned order clearly states that the inter-se transfers amongst promoters on July 9-10, 2014, September 5, 2014 and October 20, 2014 were not exempted from the open offer obligations. Further, vide e-mail dated December 4, 2015 addressed to the Manager to the Open Offer it was stated that Regulation 10(1)(a)(ii) of SAST/Takeover Regulations, 2011 was triggered. As such, there is no ambiguity in the order as the provision relating to exemption of inter-se promoter transfers from the open offer obligations is available only under Regulation 10(1)(a)(ii) of SAST/Takeover Regulations, 2011.
An interpretation provided under the Scheme by an official of department of SEBI cannot be used against the correct interpretation of law (in the instant matter SAST/Takeover Regulations, 2011). Thus no reason to interfere with the impugned direction of SEBI dated May 5, 2016. As a result, the appeals fail.
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2017 (5) TMI 493 - NATIONAL COMPANY LAW TRIBUNAL, AHMEDABAD
Compounding of offence for the violation of Section 309(5B) of the Companies Act, 1956 - company had not obtained approval for initial appointment under Section 269 read with clause (e) of Part I to Schedule XIII of the Act - Held that:- Sub-section (9) of Section 269 says that the Tribunal may terminate the appointment if it is in contravention of requirements of Schedule XIII. Sub-section (10) of Section 269 says that the Tribunal may, while passing an order declaring there is contravention of requirements of Schedule XIII, pass an order imposing fine on the company and its officers. Therefore, this Tribunal is given power under Section 269(9) of the Act to declare that there is contravention of requirements of Schedule XIII and to impose fine on the company and its officers. Further, sub-section (11) says that, if the company contravenes the orders passed by the Tribunal under sub-section (10) of Section 269, the company and its officers shall be punishable with imprisonment for a term which may extend to three years and shall also be liable to pay a fine which may extend to 500 rupees.
Unless and until a reference is made to the Tribunal, unless and until the Tribunal declares contravention of requirements of Schedule XIII and unless and until the Tribunal proposed to imposes fine as contemplated under sub-section (10), there is no cause of action for the petitioners to invoke Section 621A of the Act.
The Registrar of Companies in his report also stated that the application does not appear proper.
In view of the above discussion, it is held that the petitioners cannot seek compounding of violation of Section 309(5B) before this Tribunal under Section 621A of the Act.
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2017 (5) TMI 440 - NATIONAL COMPANY LAW TRIBUNAL, CHENNAI
Scheme of Demerger - Held that:- The accounting treatment seems to be in conformity with the established accounting standards. In short, there is no apprehension that any creditors of the demerged company or resulting company would lose or be prejudiced as a result of the proposed Scheme being sanctioned. The arrangement of demerger will, in no way, cost any additional burden on the shareholders of any of the companies involved in the Scheme and also it will not prejudicially affect the interest of any classes of the creditors. We do not feel that there is any requirement of any modification in the Scheme. Hence, the Company Petition is allowed and the said Scheme under reference is hereby sanctioned.
This Scheme shall be binding on the Transferor Company, Transferee Company and secured & unsecured creditors both. The Petitioner Companies to the Scheme or other persons interested, shall be at liberty to apply to this Bench for any direction that may be necessary in regard to the working of the said Scheme. Accordingly, the Order of sanction of this Scheme shall be prepared by the Registry as per the format provided under the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016. The Petitioner Companies shall file with the Registrar of Companies a certified copy of this Order within 30 days from the date of receipt of copy of the order.
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2017 (5) TMI 439 - NATIONAL COMPANY LAW TRIBUNAL, KOLKATA
Scheme of Arrangement of Aura Merchants Private Limited and Enargy Tie-Up Private Limited (the Transferor Companies) and Freshlight Biotech Private Ltd. (the Resulting Company) whereby Strategic Real Estate & Share Investment Division of Transferor Company no. 1 and Transferor Company no. 2 will stand transferred to and vest in the Transferee Company on the terms and conditions as fully stated in the said Scheme of Arrangement.
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2017 (5) TMI 375 - RAJASTHAN HIGH COURT
Winding up petition - Held that:- There is substance in the case of the petitioner company that even otherwise both the consultancy agreement of 24-7-2010 and the following bill dated 20-8-2010 between the petitioner company and CGEPL are got up documents, and set up in a desperate attempt to derail the winding up petition. This inter alia not least for the reason that the respondent company has not controverted the allegation specifically made that its Memorandum of Association does not include as the main or even ancillary and incidental objects, business relating to Solar Energy. Nor does the respondent company has any expertise in the field of Solar Energy having exclusively engaged in the business of dairy since its inception in 1997. Further the consultancy agreement dated 24-7- 2010 was signed on behalf of CGEPL by Ajay Pareek, brother of Alok Pareek and Akshay Kumar Bhargava, co-promoter and director with Alok Pareek, on behalf of the respondent company. No explanation has also been forthcoming from the respondent company as to why the bill dated 20-8-2010 bears No.1/2010 for a company doing business since 1997 and why despite consultancy being a service chargeable to Service tax, service tax was not deducted and paid to the government. Also extremely odd and suspicious is that the bill No.1/2010 dated 20-8-2010 for alleged consultancy service by the respondent company to CGEPL was signed by Ajay Pareek, brother of Alok Pareek and marked attention to his brother Alok Pareek as director of CGEPL-also director in the respondent company.
In the facts and evidence on record a case of a debt of ₹ 20 lac remaining unpaid to the petitioner company despite a winding up notice to the respondent company has been made out. The defence of the respondent company to the winding up petition is malafide, convoluted, mutually destructive and palpably false, what of being bonafide and based on substantial grounds making out a triable issue. No iota of public interest against the winding up has even been urged and cannot be found.
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2017 (5) TMI 374 - DELHI HIGH COURT
Attachment orders - Official Liquidator take over possession of the subject property - Held that:- There are two inescapable conclusions that are axiomatic:
(a) That DAL had offered attachment of the subject property to the Official Liquidator to discharge and pay all the existing and future liabilities, including all the dues owed to various secured and unsecured creditors of GAL.
(b) Despite repeated opportunities both, DAL and GAL have failed, avoided and neglected to disburse and discharge the said outstanding liability.
Therefore, in view of the foregoing facts and circumstances, it is considered appropriate, at this stage in the first instance, whilst awaiting the decision of the Hon’ble Supreme Court in the Special Leave Petitions instituted on behalf of Taneja and DAL, to direct the Official Liquidator to comply with the direction issued by this Court by way of the order dated 08.10.2013 (relevant portion of which has been reproduced in paragraph (12) hereinabove), insofar as, it required the Official Liquidator to take over possession of the subject property. The Official Liquidator is directed to comply with the direction contained in the order dated 08.10.2013, forthwith. 24. The order dated 11.09.2014 (reproduced in paragraph (15) hereinabove), rendered by this Court is modified accordingly.
The Official Liquidator is directed to file a report in compliance with the present order, on or before the next date of hearing.
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