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2020 (8) TMI 648 - AT - Companies LawOppression and mismanagement - Illegal allotment of shares - It is argued that the allotment of 20 lakh shares made in pursuance of the scheme of 2002 is liable to be set aside in view of the fact that it violates the provision of section 18(3) of SICA - appellant sought relief of Status quo ante on the shareholding pattern of the Respondent No.1 company as prior to the allotment of 25 lakhs shares to Respondent No.2 in 2005 - HELD THAT:- It is not in dispute that the unsecured loan was given to Respondent No.1 company by the 2nd Respondent. It is also not in dispute that the Respondent No.1 company was in financial stress and a reference was made and the company was referred to BIFR who approved rehabilitated scheme and directed that the unsecured loan to the tune of ₹ 2,50,00,000/-granted by 2nd Respondent be converted into equity shares and accordingly these were converted into shares. It is also noted that during the arguments the appellant is agitating that the allotment of 25 lakh shares is illegal but have never come forward to argue that the appellant is ready to infuse the fund and the shares may be allotted to him. In the absence of any such offer and in the light of the Scheme approved by the BIFR directing the conversion of unsecured loan to equity shares what other alternatives could be operated in the circumstances - It is but natural that who has granted unsecured loan to the company, will be allotted shares as per the scheme approved by BIFR and upheld by AAFIR. The Hon’ble High Court has dismissed the appeal filed by the appellant challenging the orders of BIFR and AAIFR - impugned order upheld. Oppression and mismanagement - allotment of shares - Allegation that the Respondent No.2 beached his trust and abused the position of power to usurp control on the company and resort to illegal enrichment at the cost of appellant - HELD THAT:- It is not in dispute that the unsecured loan was given to Respondent No.1 company by the 2nd Respondent. It is also not in dispute that the Respondent No.1 company was in financial stress and a reference was made and the company was referred to BIFR who sanctioned the Scheme and directed that the unsecured loan to the tune of ₹ 2,00,00,000/-granted by 2nd Respondent be converted into equity shares and accordingly these were converted into shares. We also note that during the arguments the appellant is agitating that the allotment of 20 lakh shares is illegal but have never come forward to argue that the appellant is ready to infuse the fund and the shares may be allotted to him. On the other hand when he was offered shares he refused the offer. It is but natural that who has granted unsecured loan to the company, will be allotted shares as per the scheme sanctioned by BIFR. The Hon’ble High Court has dismissed the appeal filed by the appellant challenging the orders of BIFR and AAIFR in another matter - Impugned order upheld. Both the appeals dismissed.
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