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2017 (8) TMI 673 - HC - Companies LawTransfer of Preference Shares - corporate debt restructuring - Held that:- Having perused the materials on record, it is observed that the appellant’s side could not show from the records that the assignment deed, which contained a list of securities, contained those RCCP and CCP (i.e. preference shares). The learned CLB has also arrived at the same finding. The appellant’s side has also not been able to successfully demonstrate that the said 30,00,000 (thirty lakh shares) were pledged as security for the loan availed from the ICICI. Unless it is satisfactorily shown that the said shares formed a part of security, only then the plea of the appellant that the said shares was a part of ‘corporate debt restructuring’ i.e. CDR can be entertained, and not otherwise. There is no infirmity in the opinion of the learned CLB that the respondent No.1 had exit from the CDR way back in 2006 by assigning the debt to the Standard Chartered Bank and thereafter, it was no t concerned with the CDR. Therefore, having retained the 30,00,000 (thirty lakh) preference shares, the ICICI was within its right to sell the same to the respondent No.1. This court does not find any infirmity in the sale. There is no material on record to show that the 30,00,000 (thirty lakh) preference shares (RCCP and CCP) were not subscribed by ICICI and that those preference shares were offered as security for the loan. Therefore, if the shares had been purchased for value in the first place, either as a source of finance or by any other means of finance, there is no provision in the Companies Act, 1956 or in the Contract Act, 1872 to prohibit the owner of such shares to deal with the same and/or to sell it. Therefore, the inevitable conclusion of this Court is that the validity of the sale of those 30,00,000 (thirty lakh) Preference shares (i.e. RCCP and CCP) is not impeachable on the basis of materials on record. Moreover, this court cannot be influenced by the value in which the said preference's hares were sold because in a sale transaction, only the contracting parties may at all be the one aggrieved and it was certainly not open to the appellant to challenge the sale on account of low value.
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