TMI Blog2018 (2) TMI 1683X X X X Extracts X X X X X X X X Extracts X X X X ..... sification plan to entice R22 which is a subsidiary of a public sector enterprise is totally unfounded and misconceived. The Petitioners stated that in the Balance Sheet of the company for the year ended 31-3-2010, there are violation of Sections 217(l)(b), 217(l)(c), 217(2A), 211(3A), 211 and 211(1) for which the Respondents suitably explained that none of the Section have been violated by the Company. However, violation of certain sections of the Companies Act, 1956 cannot become a ground to convert such violation in an act of oppression and mismanagement under sections 397-398 of the Companies Act against these Petitioners, hence this allegation also falls to the ground. Further for invoking the equitable jurisdiction of this Tribunal under sections 397-398, the Petitioners have not made out a case that the company’s affairs are being conducted in a manner prejudicial to public interest or in a manner oppressive to the Petitioners, and there being no ground for commanding it for winding up of the company, there could not be any occasion to look into as to whether wind up of the company would unfairly prejudice such member or members but that otherwise the facts would justi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... compulsorily convertible debentures of the face value of ₹ 100 each to IFCI limited (R22) and also authorised to issue and allot 11,25,000 Optionally Convertible Debentures of ₹ 100 each convertible into equity shares of the Company based on the performance of 2012-2013, which will cause irreparable loss to the Petitioners by way of not only of dilution of their stake in the company but also leads to substantial reduction of the value of their shares. The R1 company is apparently creating some false and fictitious expansion/diversification plans to entice R22 which is a subsidiary of a public sector enterprise to subscribe in the convertible debentures which may be prejudicial to R22, and by this, the Respondents are falsely and mischievously enriching themselves, by allotting a 32,60,298 equity shares of ₹ 10 each to themselves i.e. (R2 to R21). The R1 company has not obtained any permission from the shareholder for the issue of shares and debentures and no notice has been served to the shareholders individually or by newspaper advertisement and hence the allotment is mala fide and wrong, bad in Law and dishonest. The said allotment is in total breach of trust wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... P1 and P3 to P11 was declined, the transfer of R1 shares by ICICI Bank Limited in favour of P2 is under challenge in a suit filed by R2 on the file of District Judge Rajandgaon in Chattisgarh and R1 Company finally submitted that it has not violated Sections 217(1)(b), 217(l)(c), 217(l)(e), 217(2A), 211(3A), 211, 211(1). 4. R2 in his counter, apart from the points raised by R1 in its counter, stated that P2 is holding only 2.72% of shares and is not eligible under section 399 to maintain the petition under sections 397 and 398 of Companies Act, 1956, P1, P3 to P11 claim themselves as shareholders of R1 Company with full awareness that statutory Register of Members does not show them as shareholders, the petitioners (excluding P2) even though submitted the transfer deed dated 17-9-2011 and most of the allegations in the Company Petition relates to the period prior to 17-9-2011 i.e. before purported transfer of shares to other Petitioner. P2 is a non-banking financial company carrying on business without licence from Reserve Bank of India dealing with acquisition of shares and selling the same to the Promotors of concerned Companies at huge profits. P2 who was holding 4.88% share ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been executed by any person shall, when affixing such stamp, cancel the same so that it cannot be used again; and (b) Whoever executes any instrument on any paper bearing an adhesive stamp shall at the time of execution, unless such stamp has been already cancelled in manner aforesaid, cancel the same so that it cannot be used again. (2) Any instrument bearing an adhesive stamp which has not been cancelled so that it cannot be used again, shall so far as such stamp is concerned, be deemed to be unstamped. (3) The person required by sub-section (1) to cancel an adhesive stamp may cancel it by writing on or across the stamp his name or initials or the name or initials of his firm with the true date of his so writing, or in any other effectual manner. 10. As per Section 12(2) of the Indian Stamp Act, 1899, any instrument bearing adhesive stamp which is not cancelled, shall be deemed as unstamped and hence there is no compliance of provisions of section 108 of the Companies Act, 1956, due to which the shares are not transferred in favour of P1, P3 to P11. In view of this, P1 and P3 to P11 are not Members of the R1 Company and hence they are not entitled to file ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (3) Increase of authorised and subscribed capital of the Company, and further allotment of shares and debentures (4) Illegal allotment of shares (5) Violation of provisions of Sections 217(l)(b), 217(l)(c), 217(1)(e), 217(2A), 211(3A) and 211. 16. As far as the refusal to register of transfer of shares is concerned the same was discussed in issue No.1 and the same was held against the Petitioners and hence there is no need of further discussion on this point. 17. The Petitioners contended that R1 Company called for an EGM on 30-3-2011 for which notices were not served on the Petitioners, wherein the following agenda was taken up and resolutions were passed to, (a) Increase of Authorised Share Capital and Amendment of Memorandum of Association. (b) amend of Articles of Association. (c) to borrow upto ₹ 75,00,00,000 (Rupees Seventy-Five Crores only) under Section 293(a)(d). (d) to create charge/mortgage on the assets of the company under Section 293(1)(a). (e) to issue Preferential Allotment of Compulsorily Convertible Debentures under Section 81(1A) (f) to issue Preferential Allotment of Optionally Convertible Debentures under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The Petitioners have contended that there has been no substantial change in the performance of the company over the past few years nor have any expansion plans etc., as stated by the company necessitating it to infuse capital, for which, the Respondents have stated that the fund raised was utilized by the company for land and site development, building, plant and machinery, furniture, other miscellaneous assets, working capital, etc. and also stated that the company s Board consists of independent professionals, and also IFCI nominee who monitors the utilization of funds. In view of the abovestated position, it is crystal clear that the company has raised funds for the purpose of this expansion plans only and the further issue of capital, issue of debentures etc. are justified and the contention of the Petitioner that the company is creating some false and fictitious expansion and diversification plan to entice R22 which is a subsidiary of a public sector enterprise is totally unfounded and misconceived. 21. The Petitioners have alleged that there is mismanagement in the affairs of the company, in support of which, they have stated that the financial statements of the company ..... X X X X Extracts X X X X X X X X Extracts X X X X
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