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2015 (11) TMI 1075 - HC - Companies LawPermanent Injunction - plaintiffs have sought inter alia an interim order restraining the defendants from proceeding any further with the Rights Issue under the impugned Letter of Offer dated 14th September, 2015 in any manner during the pendency of the suit - whether on the date of filing of the suit, the plaintiffs were entitled for injunction or not? - Held that:- There is no force in the submission of the plaintiff that they cannot go to the Company Law Board as the shareholding is less than 10% as the appealable remedy lies before SEBI where no shareholding limit is needed to seek redressal of the alleged grievances raised by the plaintiff. The allegation of false misrepresentation and fraud as alleged if any ought to have come in the picture after 31st March, 2015 when the process was started first time. The grievance of the plaintiffs still can be raised by the plaintiffs. But it is doubtful that at this stage the said claim is decided when the shares have already been allotted once the plaintiffs either were not interested since the year 2011 and from September, 2013 when their names were not shown and still they did not take any steps. There is no force in the submissions. Learned Senior Counsel has argued that most of the issues/objections raised by the plaintiffs are of technical in nature which could have been taken by the plaintiffs before SEBI, if they had. The same cannot be determined after completion of entire process particularly in the interim application. The plaintiffs had enough time to raise the same before appropriate authority and not before this Court at this stage. The plaintiff was at least aware from September 2013 about its non inclusion as part of Promoter & Promoter Company of defendant No.1 in the shareholding pattern filed by Defendant No.1 with the stock exchange. The defendant No.1 then in every quarterly shareholding pattern filed the Plaintiff has not been shown as part of Promoter or Promoter Company of defendant No.1. The aforesaid shareholding pattern has been available on the website of Stock Exchanges since 2013 but no objection was raised. The Resolution approving the rights issue was passed on 31st March, 2015. Thereafter, the said resolution was put up for vote to the shareholders by a postal ballet and the plaintiff chose not to cast its vote. The plaintiff was aware as far back as June 2015 about the terms of the offer when the same was put on the website of SEBI. Even as per plaintiff’s own averment it was aware of the offer in the second or third week of September but despite the same chose to file the Suit only in second week of October, 2015 knowing fully well that the closing date of the rights issue is 14th October, 2015. With regard to objection raised on behalf of the plaintiff that the object for which the rights issue is being made is not justifiable i.e. repayment of loans of Promoter and Promoter Companies and it was argued that some of these loans are not even due till 2017, it was submitted that the object of the letter of offer was set out in the Board Resolution dated 31st March, 2015. The said Resolution was put up for voting by postal ballot to the shareholders. In the postal ballot form sent to shareholders the object of the letter of offer is clearly disclosed at page 175 of the documents filed with the reply. The postal ballot form was sent to the plaintiff at page 181 of documents filed with reply. The plaintiff chose not to vote. 99.97% of the valid votes cast on the resolution by the shareholders voted in favour of the said resolution. Report of postal ballots is filed. SEBI raised a query on the object of the issue vide its interim observations dated 23rd June, 2015. The same was duly replied to by defendant No.1 vide its reply dated 6th July, 2015. Subsequently, SEBI noted compliance vide its letter dated 7th September, 2015. The plaintiff has also not disclosed that an application had been filed on 5th October, 2015 before the High Court of Calcutta in the Testamentary proceedings pending there with regards to the estate of Late Smt. Priyamvada Devi Birla. The said application is listed for 27th November, 2015. Letter of offer was issued and dispatched to the shareholders by defendant No.2 from Mumbai and submitted with SEBI by defendant No.4 in Mumbai and submitted by defendant No.1 to the stock exchanges from Satna, Madhya Pradesh. Thus, no part of cause of action to file the present suit arose within the territorial jurisdiction of this Court. Assuming though denying that any part of cause of action arose in Delhi, even then in view of the categorical jurisdiction clause, only the Courts in Madhya Pradesh would have jurisdiction to entertain the suit, assuming the same is maintainable. The present case does not fall in any of the exceptions carved out in the case of Whirlpool Corporation v. Registrar of Trade Marks, Mumbai & Ors., (1998 (10) TMI 510 - SUPREME COURT) namely enforcement of any fundamental rights or violation of principles of natural justice or where proceedings are without jurisdiction or vires of an act is challenged. No prima facie case is made out by the plaintiffs. The balance of convenience also lies in favour of the defendants. If any order is passed, the defendants would suffer irreparable loss and injury. Third parties right has already been created. The plaintiffs are not entitled to an injunction as prayed for. However, the plaintiffs are at liberty to take appropriate remedy by amending the plaint by seeking the declaration to become promoter or part of promoters group of the company and to seek damages as per law. The same would be decided as per its merit.
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