Home Case Index All Cases Companies Law Companies Law + Board Companies Law - 2014 (6) TMI Board This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (6) TMI 813 - COMPANY LAW BOARD NEW DELHIVacation of interim order - Oppression and mismanagement of company - controversy over the shareholding of the Petitioners - restriction with regard to immovable assets to be mortgaged with the banks/institutions - Held that:- the license to construct the Hydro Power Project was obtained by Respondent No.5 i.e. Spacebars Switchgears Ltd. and the said project seems to have been assigned to Respondent No.l Company. However, the Respondent No.l Company has not been able to start the construction activity on the Hydro Power Project till date and has been paying extension fees of Rs.10,000/- per Mega Watt i.e. Rs.50,000/- per month since 1.7.2008. Presently, the Respondent No.l Company is faced with a situation of cancellation of its license to build, own and operate the Sechi-II 5 MW hydro power project, being its only asset. However, on one side, the Respondent/Applicant Advocate alleged that the malafide intention of the Petitioner is evident from the fact that while they claim to be 14% shareholders, they have suppressed the transfer of all their 14% shares and resignation from Board of directors of the Respondent No.l Company. Construction of 5 MW hydro electric project is a capital intensive project and requires an estimated expenditure of Rs.42 crores and hence, it is the necessity to get funding from banks/financial institutions against the security of immovable and movable assets of Respondent No.l Company. Nonetheless, the argument given by the Petitioners Advocate that the heavy burden or the assets of the company cannot be undone, carries some force. But, it is relevant to highlight that the interest of the Respondent Company is supreme and such interest lies in completion of the 5 MW hydro electric project. Therefore, to part finance the project, there is requirement to raise funds from banks/financial institutions against security of immovable and movable assets of the company. Keeping in view the allegations contained in the Company Petition, facts and circumstances explained supra, I am of the considered opinion that the 5 MW hydro electric project be taken up by the Respondent No.l Company by raising loans from banks/financial institutions and the sums so borrowed be utilised for efficient and effective completion of "this project without involvement of diversion of funds for other purposes - Interim order stands vacated - Decided in favour of company / respondents.
|