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2018 (4) TMI 683

ast affairs can also be considered - Held that:- We find that “have been” relates to present perfect tense. It relates to action that began some time in the past and is still in progress. Wording “are being” relates to present continuous tense. There is a difference between “have been” and “had been”. “Had been” would be past perfect tense indicating acts which were committed in the past and which came to an end in the past. Apart from this, in view of our earlier finding that since 2005 itself the petitioner has had Board of Directors constituted of its own selected Chairpersons and also its own nominee and nominees of other lenders, except one promoter, as well as the management of the Company itself has had been with Petitioner and other lenders, such Petitioner can clearly not be heard putting blames on others. Thus, the petition would require to be dismissed even on this count. - With R.O.C. after Petitioner and Promoters with enquiry under Section 206 of the New Act, the Appellant’s object in filing Petition appears to be to stop and delay action being taken against the Petitioner, its employees and other lenders for the acts committed with regard to Respondent No. 1 Comp .....

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2/NCLT/AHM/2017. By the impugned judgement, the NCLT dismissed the Company Petition filed by the Appellant (hereinafter referred to as Petitioner ), and accordingly disposed off IAs pending. Case of Petitioner 2. The Company Petition as filed before the NCLT and the case which was put up in short are as follows :- A. Respondent No. 1 Company (hereinafter referred to as Company ) was incorporated and was to deal in generating, developing etc. energy including electricity and other types of power like gas, coal etc. Its authorized Share capital is ₹ 2500 Crores and Paid-up capital is ₹ 565,379,0000/-. The Petitioner is a Government of India Enterprise under the Ministry of Power, New Delhi. It is holding 13,18,46,779 equity shares of ₹ 10/- each in the Respondent Company representing 23.32% of Issued and Paid-up Share Capital. Respondents Nos. 2 to 5 are Promoter Directors of the Respondent Company. Respondent Nos. 2 to 6 are Personal Guarantors of the Respondent Company and Respondents Nos. 7 to 9 are Corporate Guarantors. Respondent No. 10 was one of the Executive Directors and Company Secretary of the Respondent Company at the concerned point of time. B. Maheshwa .....

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; 5.32 per unit. Scenario - II Government companies having majority equity project with management control project could be taken over by NHPC/NHDC and petitioner company would be amenable to infusing equity or additional debt as well as lowering of interest rate for existing debt and with commensurate support from lenders, tariff could be reduced to ₹ 5.32 per unit which is acceptable to M.P. Power Management Company Limited. Scenario - III Cancellation of PPA If the scenario I & II above do not fructify, the last option will be that M.P. Power Management Company Limited cancels the existing Power Purchase Agreement, Government of Madhya Pradesh and M.P. Power Management Company Limited would be burdened on account of Govt. MP counter guarantee deed of ₹ 400 crores issued to petitioner company. This is apart from ₹ 102.48 crore which has already been paid by M.P. Power Management Company Limited to petitioner company. C. According to the Petitioner, the Promoters were given 90 days time to submit a firm and binding proposal regarding arrangement of additional equity of ₹ 600 Crores and the debt of ₹ 1100 Crores at concessional rate and to ensure t .....

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issued by the Respondent Company to MPPMC in 2013 and 2014; (vi) Respondent No. 10 when he ceased to be Company Secretary failed to hand over statutory records; (vii) Respondents failed to deposit T.D.S. deducted to Income Tax Authorities; (viii) Respondents failed to infuse equity. F. In sanction letter dated 2nd March, 2005 issued by the Petitioner for revaluation of loan, it was proposed that there should be nominee Director of the Petitioner in the Company and Articles of Association of Respondent No. 1 Company need to be modified. The Respondent Company availed credit facilities for the Project without raising any objection and after amendment to Articles of Association, Mr. G.S. Patra, Nominee Director of the Petitioner and nominee directors of other lenders were taken on Board of the Respondent Company. Prayers in Company Petition G. In the Company Petition, the Petitioner made following prayers : (A) Declare that the Respondent No. 2 to 6 and Respondent No. 10 have indulged in serious and grave acts of financial mis-management and siphoning of funds and other illegal and fraudulent acts; (B) Direct the Respondent No. 2 to 6 and Respondent No. 10 to restore the funds of the .....

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rate Affairs not to launch any prosecution either under the Companies Act, 1956/2013 or any other law against the petitioner, nor its nominee director on the Board of Respondent No. 1 and/or other lenders/equity shareholders who are public financial institutions; 3. Thus, Prayers A, C, D, J and K related to declaration while Prayer B claimed restoration of funds. The Prayer F related to claim of Petitioner for restoration of the statutory records. Rest of the prayers were mainly for seeking protection from various authorities. Case of Respondent No. 1 4. In NCLT, Respondent No. 1 Company filed reply and claimed that one Mr. Nirbhay Goel had been appointed Company Secretary on 1st January, 2016. It was claimed that in the Board Meeting dated 1st January, 2016, the request of lenders was considered and approved invoking the pledge of shares due to which shareholding of Respondent No. 8 - M/s. Entegra Limited in Respondent No. 1 Company reduced from 58% to 12.28%. The Petitioner being lead lender had decided to invoke the pledge. M/s. Entegra Limited thus ceased to hold the status of the holding company. This Respondent gave particulars as to the numbers of shares held by the Petition .....

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the period when the Petitioner itself was in actual control of the affairs of the Respondent Company. The Petition has been filed belatedly and was not bonafide. These Respondents claimed that they had made complaints regarding illegal and wrongful manners in which the Petitioner was conducting the affairs of Respondent Company. According to them, in 2005, it is the Petitioner who took over control of the Respondent Company by appointing managing Committee of its own. They got the Articles of Association of the Respondent Company altered which amendments gave additional powers to the Petitioner. Because of this, Respondent Company was transformed from Promoter Managed Company to Lenders Managed Company . The day-to-day affairs of the Company were taken over by the Petitioner. The Petitioner appointed on the Board of Respondent Company persons as Chairman, Managing Director, Finance Director and Nominee Directors of its choice. The only right which remained with these Respondents was to appoint a single Non-Executive Director as Promoter Director. Thus, according to them, even if any acts of oppression and mismanagement are to be attributed, they are to be attributed to the officer .....

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the affairs of the Respondent Company since 2005. Respondent No. 7 claimed that the Corporate Guarantee of Respondent No.7 as claimed by the Petitioner was not legal or subsisting. The High Court of Bombay had in Company Petition No. 511 of 2014, on 1st July, 2016 ordered winding-up of the Respondent Company but Respondent No.7 filed appeal against the said order and there is stay. Respondent No. 7 had on 5th April, 2007 asked the Petitioner to release Corporate Guarantee given by him to the lenders. Case of Respondent No. 10 8. It appears that Respondent No. 10, the Executive Director and Company Secretary had considering the approach of Petitioner resigned vide letter dated 26th August, 2015 and Board vide Meeting dated 17th December, 2015 accepted it w.e.f. 31st December, 2015. He claimed before the NCLT that Maheshwar Committee created by the Petitioner was Shadow Supervisory Board of Respondent Company. Since 2005, the lenders dominated the Board of Directors of the Respondent Company. The Petitioner illegally convened Board Meeting dated 1st June, 2016. The Petitioner diverted Project Funds to itself and to fellow lenders. The Petitioner illegally got shares transferred. Acc .....

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that he had not been paid salary for 30 months and by letter dated 26th May, 2015, he had pointed out deficiencies in functioning of the Company. Seeing the approach of the Petitioner, he tendered resignation on 26th August, 2015. The Board on 29th September, 2015 asked him to continue till alternative arrangement is made. Later on, on 17th December, 2015, the Board accepted his resignation with effect from 31st December, 2015 without any reference to settlement of dues and without naming any official to whom the charge of the functions and records could be handed over. No officer was nominated to take charge. Respondent No. 10 filed form for cessation to ROC on 11th January, 2016 and stopped attending office. According to him, the Records were there where they had been for last 25 years. They were maintained in Mumbai Office and were in safe custody of employees. He also complained to the ROC regarding lack of governance in the Respondent Company. Points before NCLT 11. In NCLT, the parties completed their pleadings and were heard. NCLT framed following points for determination : (1) Whether the statements made in the sur-rejoinders filed by the respondents can be taken into consi .....

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titled for reliefs on grounds of delay and latches. (5) Failure to repay debts etc. and failure to infuse equity do not amount to acts of oppression and mismanagement. (6) Allegation of siphoning of funds is vague and there is no material to substantiate the same. (7) Parties are entitled for copies of ROC report from the office of ROC, Gwalior. (8) Petitioner is not entitled for reliefs C, D, E, F, G, H, I specifically. (9) Petition is not a Bona fide petition. (10) Row over records is raised as a pretext. 13. After recording such findings, learned NCLT considered as to what steps could be taken with regard to the Project and interest of lenders and promoters. Keeping in view Section 242 (2) of the New Act, the NCLT was of the view that workable solution would require consent of all the stakeholders. It expressed that the stakeholders should evolve a scheme with consent of all including promoters so that the Project could be completed. In the ultimate, the NCLT went on to dismiss the petition. Various I.As pending were also disposed of. 14. The Original Petitioner, aggrieved by the impugned judgment & order has filed this appeal, raising various grounds. Arguments of Appellant .....

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rror because there was no requirement of endorsement on the Memo of Transfer in the Share Certificate No. 47 as it was new share certificate issued to the Appellant-Petitioner on allotment of shares, pursuant to the conversion of subordinate loan into equity. The argument is that NCLT took hyper-technical approach while determining title of the shares of the Petitioner although there was evidence that on the date of filing of the Petition, the Appellant was member and the acquisition of shares had been consented to and acquiesced and that the Respondents had not filed petition challenging the petitioner. (d) It is argued that the other lenders who also invoked conversion of the loan into equity are not parties and they could not be condemned unheard. (e) It has been argued by the learned counsel for the Appellant-Petitioner that the NCLT committed error while dealing with Point No. 5 relating to conversion of debentures into equity. It is stated that reasoning with reference to subsequently introduced Clause 1.4 in the Subordinate Loan Agreement by way of letter dated 18th June, 2010 was wrong. Argument is that Clause 1.4 stating conversion rights was clearly a part of Subordinate .....

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ppellant along with the share transfer forms duly filled by Respondent No. 8. It was transaction in the nature of mortgage of shares. Power of Attorney was executed by Respondent No. 8 to constitute, appoint and enable the Appellant as its attorney to execute and do all acts and to complete, when required, the transfer of pledged shares in its name. Petitioner was entitled to register shares in its name and the transfer of shares was procedural aspect. The Market value of the shares of Respondent was determined by SBI Capital Markets Limited at the time of notice of invocation dated 19th May, 2016 which was Nil. Token amount of Re.1/- was mentioned and it was not objected and shares were transferred. According to the learned counsel, the NCLT wrongly held that in spite the notice of 30 days, in 15 days itself the transfer was effected. According to the counsel, NCLT failed to appreciate that transfer of shares was prerogative of Respondent Company and it was for the Company to transfer the shares within the maximum time of 30 days, which was done on 1st June, 2016. The transfer thus could not be invalidated, it is argued. (j) It is stated that Section 176 of the Contract Act, 1872 .....

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, the impugned judgement & order cannot be upheld and it should be held that the Respondents mismanaged the Company and also the Petitioner was entitled to reliefs as sought in the Company Petition. Arguments of Respondents Nos. 2, 4, 6, 8 and 10 17. Against this, Respondents Nos. 2, 4, 6, 8 and 10 have argued that Annexures -A/2 to A/5, A/7 to A/18 and A/21 filed with the appeal did not form part of the record before NCLT and should be struck-off. It is stated that the Appellant-Petitioner did not state in the appeal that new documents are being produced by it nor the Appellant identified the new documents. The reasonings of the Appellant that NCLT did not give opportunity to produce these documents in response to sur-rejoinder filed by the Respondents is liable to be rejected as the Appellant has not shown that any effort was made to seek permission from NCLT to place the documents on record and that such permission was declined. The conduct of the Appellant in not identifying and stating the new documents which are produced is unfair. The NCLT drew adverse inference against the Appellant on account of the documents not being produced. Rule 22 of the NCLAT Rules relied on doe .....

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that the NCLT could not have gone into the question as to how the Appellant became shareholder has no substance because when the Respondents disputed the rights of the Petitioner, NCLT was bound to look into the question as to how the Petitioner claimed to be the Member or shareholder. It was not necessary for the Respondents to file separate petitions and they rightly raised dispute in the Company Petition and the same has been correctly decided by the NCLT. It is claimed that separate proceedings for rectification of Register have been filed before the NCLT to remove the name of the Petitioner from Register of shareholders. This Respondent has also claimed that the Petitioner did not produce necessary documents before the NCLT like (i) Pledge Deed dated 30th November, 2006, (ii) Common Loan Agreement dated 29th September, 2006; (iii) Notice Invoking Pledge dated 19th May, 2016; (iv) Subordinate Loan Agreement dated 29th September, 2006; (v) Notice of Invocation of Subordinate debt dated 27th May, 2016; (vi) Share Transfer Certificates; and (vii) Minutes of Board Meeting dated 1st June, 2016. This defendant claimed that the documents were not produced in spite of the opportunitie .....

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ers to lenders since 2005. Counsel referred to amendments carried out in the Articles of Association which show as to how the control was diverted to the lenders. It is argued that Respondent No.2 had stepped down as Chairman on 10th February, 2005. One P.V. Narsimhan (Ex. CMD of Petitioner) was appointed as Chairman of Respondent No. 1 Company at the instructions of Petitioner. The Managing Director and Director (Finance) were also appointed by the Petitioner. On 2nd March, 2005, the Appellant had issued letter setting out terms and conditions for loan which included that these posts would be controlled by the lenders and that they would be doing periodic review of transactions and the fund will flow through Trust and Retention Account (TRA). The Respondent has given further details to show the full control of the Petitioner since 2005. Thus the Respondent No. 9 wants the appeal to be dismissed. 20. Having heard counsel for both sides, we now proceed to analyse the material relating to disputes raised. In the arguments one thing is clear and there appears to be no dispute regarding the fact that since 1993 when the Project was allotted to Respondent No. 8 the project delayed inter .....

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CL. 11. Lender s nominee Directors shall be allowed to exercise full management control for the smooth implementation of the project till the entire debt is repaid. Mechanism for such control will be finalized after discussion with other Lenders. 20. Lender s Auditors would be involved in periodic review of various commercial transactions including TRA transactions. Thus the Petitioner laid down the condition that the Petitioner and other lenders would be the persons who would appoint Chairman, Managing Director and Director (Finance) of Respondent Company and they should have full management control. C. Then, there is letter dated 18th April, 2005 (Reply Volume - 1 Page 160) where a reference was made to above letter dated 2nd March, 2005 and Petitioner inter-alia recorded that :- The following milestones would need to be achieved prior to commencement of disbursements by the lenders :- xxx xxx 4. Board Resolution of SMHPCL in a form acceptable to PFC; empowering the Management Team consisting of the Chairman, Managing Director and Director (Finance) nominated by PFC on behalf of lenders to take all operating decisions for implementation of the project. xxx xxx 6. Flow of ₹ .....

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r but also the Management was taken over by Petitioner with other lenders, through what was called Management Team . E. Petitioner by this time, having taken a grip, the records show Amendatory and Restated Agreement dated 16th September, 2005 (Reply Volume - I, Page 141) and later Supplementary Agreement dated 25th November, 2005 (Reply Volume - I, Page 135), being passed. It has been argued by Respondent No. 9 with reference to these documents that by these documents, it was ensured that the Director (Finance) would be one recommended by the Petitioner and the lenders and the Management Team would also be nominated and appointed by them. The Trust and Retention Account (T.R.A.) was also to be opened in consultation with the lenders before financial closure for receiving all Equity, Project Loans etc. It is argued that the Supplementary Agreement executed ensured that for the release of ₹ 10 Crore to be made on immediate basis, the Respondent Company will to the satisfaction of the Petitioner amend the Articles of Association to empower Management Team of the lenders to exercise effective management control till the entire debt is serviced and repaid. The movement of funds w .....

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ed 16.09.2005, the restart of the project was being held back by not releasing funds and pushing for Amendment of Articles of Association to empower the Management Team of the lenders to exercise management control till the entire debt is serviced and repaid. Thus development and completion of the project was not the main object. Management control was targeted to ensure flow back of funds. G. Then if the Articles of Association of the Respondent Company are perused (Volume - VII, Page 1270), it can be seen that the material amendments were brought about in E.G.M. in the Articles of Association on 25th November, 2005. In Paragraph 105 of the Articles of Association, under the head- DIRECTORS , the substituted clause in the Extraordinary General Meeting held on 25th November, 2005, read as under. :- *#(d) The Board shall consist of four permanent (non-retiring Nominees of Lenders; three Directors liable to retire by rotation - one each to be nominated by the Government of Madhya Pradesh, the Promoter Group and Power Infrastructure India (all retiring by rotation); at least Two Independent Directors to be appointed under Section 149 of the Act not liable for retirement by rotation; O .....

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dum and Articles of Association of SMHPCL. In the process, PFC has been assigned the role of lead FI, with the approval of all the lending institutions. J. The Minutes of the Meeting of the Board of Directors held on 5th December, 2006 (Appeal Volume-XIII, Page 2690) recorded : The Chairman informed that he had himself written to the Chairman & Managing Director of Power Finance Corporation Ltd. on the subject. He also mentioned that the Articles of Association does not preclude appointment of Vice-Chairman for the Company. The Chairman emphasized that such a position to Shri Mukul Kasliwal is in the overall interest of the Company as his services are still being used extensively and will be used for some more time in tackling sensitive and serious issues with the Central/State Governments. The Chairman also confirmed that Shri Kasliwal will not hold any executive position. 20 It is clear that the position of Mukul Kasliwal - Respondent No. 3 who was being kept on the Board as Vice-Chairman was apparently not one contemplated under the Articles of Association and his presence was continued so that issues with the Central and State Governments, could be tackled. 21. It has been .....

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e demands of Petitioner and other lenders when it was their responsibility to manage the Company as per the Companies Act. The incomplete project had public interest and pubic money involved taken through Banks. The Project was taken up from State Government with benefit of public in view. 23. Before the NCLT, Point No. 2 raised was whether it could decide the dispute raised by the respondents relating to shareholding of the Petitioner and other lenders. The respondents raised dispute that the pledge had not been validly invoked by the Petitioner and the other dispute was that there was no valid conversion of debt. The Petitioner claimed in the petition that it was holding 23.32% shares in the paid-up share capital of the Company. The NCLT, in order to consider the right claimed by the Petitioner to maintain the Petition went into the defence raised that the pledge was not validly invoked and also went into the defence that the conversion of sub-debt into equity was not valid. We do not find that the NCLT erred when it looked into these aspects. Whether the Petitioner makes out right to maintain petition under Section 241 - 242 of the Act can be looked into. INVOCATION OF SHARES PL .....

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edge was not valid. The NCLT found that (1) the invocation of pledge of shares had not been done validly; and (2) even if it was to be said that invocation was validly done, the transfer of shares was not according to the provision of Section 56 of New Act. ADDITIONAL EVIDENCE FILED IN APPEAL WITHOUT LEAVE 26. In the course of present appeal, the Appellant-Petitioner filed documents which were not filed before NCLT, without taking leave of this Tribunal. Both the parties however have argued relating to these documents. We are not impressed by the argument of the learned counsel for the Appellant-Petitioner that National Company Law Tribunal Rules do not bar filing of new document(s). An appeal filed against an impugned order can be found fault with only on the basis of the grounds raised material which was brought before the Tribunal below. It is unfair to simply slip in the documents while filing the appeal without disclosing that they are new documents which had not been filed before the Tribunal below and without giving explanation as to why they were/could not be filed in the Tribunal below, and without taking leave of the Appellate Tribunal. The argument that the parties can s .....

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nd would endlessly delay the matter and looking to the Project of dam which is stuck, it is necessary in the interest of justice and public interest that finality is reached in this Company Petition, which was filed making allegation of oppression and mismanagement . 28. The copy of notice dated 19-05-2016 invoking rights over the shares pledged has been filed in this appeal by the Petitioner-Appellant (Volume-V Page 848). It referred to the Deed of Pledge dated 30th January, 2006 (Volume -IV at Page 575). It referred to Addendum dated 16th November, 2010 and the Deed of Pledge dated 14th January, 2011 for 29,17,20,330 fully paid-up equity shares held by Respondent No. 8, the pledgor. The notice was addressed to Respondent No. 8 and Respondent No. 1. The Notice refers to multiple documents and in Paras 19 and 20 claims Pledgor has agreed to constitute Petitioner as its attorney and authorized it to act on its behalf and even without Notice to Pledgor they could complete and register the transfer of shares. Para 21 of the Notice reads as under : 21. In view of the above and defaults committed by the Borrower, the Lenders have decided to initiate the Enforcement Action in terms of th .....

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tor, Mukul Kasliwal, was not present. The Minutes show that he had sent an e-mail giving his views on various agenda items and wanted the same to be recorded verbatim in the Minutes. The Board did not record the same. Apparently, he was opposing. Shri Rajiv Dak, Alternate Director to nominee of Strategic Investor also opposed the proposals taken up in this meeting. The Minutes show that these Chairmen and the Directors were aware that the Registrar of Companies (ROC) has on 29th April, 2016 flagged the company as Management Dispute and had even issued notice seeking various clarifications/documents/records. The Board of Directors proceeded in Item No. 134.11 to consider the notice sent by the Petitioner for transfer of shares and splitting of share certificates. The Board had a difficulty which is recorded as under : ITEM No. 134.11 TO CONSIDER AND TAKE NOTE NOTICE RECEIVED FROM PFC FOR TRANSFER OF SHARES AND SPLITTING OF SHARE CERTIFICATES. xxx xxx xxx The Board noted that the share transfer forms had been executed by the pledger under the applicable provisions of Companies Act, 1956 and the rules made thereunder. The PFC nominee produced these original share transfer forms, origi .....

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in the definition of Pledged Shares of S. Kumars . Amendment had been brought to Article 89(2) also to provide that voting rights attached to shares pledged shall be exercisable in the pledgor and members name and on behalf of pledgee. How merely because the shares were pledged, right of the members to vote was taken away is surprising. Looking to the Minutes of the Board of Directors dated 1st June, 2016, it is clear that the nominee Director of the Petitioner and other lenders also participated. Additionally, there was invitee, the General Manager of Petitioner, Mr. P.K. Sinha also present in the meeting. We find that the Directors, apparently all nominees of the lenders, participated in this Board Meeting and ignoring provisions of Section 56 of the New Act went ahead to enforce the Pledge Deed as per desire of Petitioner. We have noted the argument of the learned counsel for the Appellant-Petitioner that only a director having more than two percent interest in some other body corporate could be treated as interested director while dealing with the present Company s affairs with other body corporate. Invoking jurisdiction of Section 241, what is needed to be shown is not only th .....

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as made to Clause 1.4 of the subordinate loan agreement (Volume-III at Page 550) which prescribed that on the notice of conversion, the borrower (i.e. Respondent No. 1) shall allot and issue requisite number of fully paid-up equity shares at par to the Petitioner and the Petitioner shall accept the same in satisfaction of the principal amounts of the subordinate loan to the extent so converted. By this notice dated 18th December, 2015, the Appellant claimed Principal amount of ₹ 375 Crores with interest was due. It called upon Respondent No. 1 to issue 13,74,20,000 equity shares of ₹ 10/- each against partial conversion of total outstanding subordinate loan. The notice asked Respondent No. 1 to convert outstanding amount of ₹ 137.42 Crores into 13,74,20,000 equity shares and start process for the same. By subsequent notice dated 27th May, 2016 (Volume -V at Page 862), the Petitioner mentioned that the notice was in continuation of the earlier notice of conversion and called upon Respondent No. 1 to issue 6,61,00,000 New equity shares of ₹ 10/- each against partial conversion of the total outstanding loan of ₹ 375 Crores. 36. Both these notices were dis .....

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ersion of the loan into equity shares. The Appellant claimed that the Company is in default of repayment of aggregate principal amount of ₹ 375/- crores disbursed under the subordinate loan agreement dated 29-09-2006 from time to time and also the interest thereon. The subordinate loan agreement dated 29-09-2006 (Annexure A6) in turn referred to the background that the borrower has sought financial assistance from the Appellant and other Lenders as defined in the common loan agreement dated 29-09-2006. The said common loan agreement (Annexure A5 - page 233) in turn refers to the fact of the loan borrowed and the Appellant having advanced a sum of ₹ 100 cores towards the rupee term loan and USD 52.9 million towards the foreign currency loan. It shows the background of the transactions. Now if the resolution of the Board of Directors in item No.134.10 (supra) is seen, the Board of Directors appear to have relied on the EGM dated 17th June, 2010 which was annexed to the agenda to say that EGM had approved the conversion. (Copy of the EGM Resolution is at Annexure A-20 page - 907). Sub-Section 3 of Section 62 referred above in the proviso requires that the terms of issue of .....

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of, make such order as it thinks fit. 41. The arguments of the counsel for the Respondents are that the past and concluded acts could not be made grievance of. The learned counsel for the Petitioner-Appellant, however, submitted that the affairs which have been or are being conducted in a prejudicial or oppressive manner both can be looked into and thus past affairs can also be considered. We find that have been relates to present perfect tense. It relates to action that began some time in the past and is still in progress. Wording are being relates to present continuous tense. There is a difference between have been and had been . Had been would be past perfect tense indicating acts which were committed in the past and which came to an end in the past. Apart from this, in view of our earlier finding that since 2005 itself the petitioner has had Board of Directors constituted of its own selected Chairpersons and also its own nominee and nominees of other lenders, except one promoter, as well as the management of the Company itself has had been with Petitioner and other lenders, such Petitioner can clearly not be heard putting blames on others. Thus, the petition would require to b .....

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ent of majority of the lenders and PFC. With regard to casual vacancies of the Directors also, the amendment made provisions that it can be filled up only with the consent of PFC and majority of lenders . If this is so, clearly there was no right and discretion as such left with the promoters and shareholders of the Company to take decision on these counts and even the Board created was to act as per what Petitioner and Lenders desired. Thus the overriding effect of the Act was indirectly taken away. Even in the amendment made to Article 134, it was brought about that all the decisions taken by the Board either at the meeting or by Circular would require the affirmative vote of the meeting / Chairman and majority of Directors appointed by the lenders. Although quoram was specified as of six directors, it was added that the meeting shall require attendance of Chairman and three nominee directors of the lenders. 43. Article 105(d) [Para 21 G - supra] which we have reproduced earlier appears to be in conflict with Section 255 of the Old Companies Act, 1956, which reads as under : 255. Appointment of directors and proportion of those who are to retire by rotation.- (1) Unless the artic .....

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pposition worth the name in Board Meetings is shown. Both sides have not brought to our attention the Resolutions which approved these amendments on 25th November, 2005 and thereafter to consider respective roles of parties, although so many other documents have been loaded on Record. HIGH LEVEL COMMITTEE REPORT 45. In the appeal (Volume -V at Page 798), there is letter dated 2nd May, 2015 submitting report of the High Level Committee constituted by the Government of Madhya Pradesh vide order dated 16th October, 2014. The said Committee appears to have deliberated with different stakeholders in the matter. Paragraph 14 reads as under : 14. PFC has suggested the putting of an additional condition that equity stake of the present equity holders should be brought down to less than 26%, so that functioning of the project could proceed without interference from them. The promoter has vehemently objected to the suggestion and stated that at least 26% would be reserved for the promoter, while the investor M/s. IIP would separately hold a percentage in proportion to its present shareholding. It is apprehended that the project may get stalled on this account, if there is lack of agreement o .....

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t is surprising how the Appellant - Petitioner can claim that it should be given declaration of condonation/granting immunity to violations of various provisions of the Companies Act with regard to its employee, Gauri Shankar Patra, and earlier nominee Directors. With R.O.C. after Petitioner and Promoters with enquiry under Section 206 of the New Act, the Appellant s object in filing Petition appears to be to stop and delay action being taken against the Petitioner, its employees and other lenders for the acts committed with regard to Respondent No. 1 Company which in turn had an impact on the Project which the Respondent No. 1 had taken up. No doubt, a person lending money may put conditions to protect its interest but there has to be a limit and it is unthinkable that the lenders took over the Company itself and committed acts attracting actions under the Companies Act and other Acts from which now protection was sought. The NCLT rightly held that the Petitioner had not approached the NCLT with bonafide intention. WHERE ARE THE STATUTORY RECORDS? 49. One of the disputes being raised by the present parties is with reference to statutory records required to be maintained under the .....

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upstream side. The letter then asked Petitioner to take steps regarding maintenance. The letter makes evident seriousness of the issue and matter cannot be left to present warring parties. The Central Government and M.P. State Government need to urgently find a way out in public interest, to get the project completed. We are not directing appointment of administrator to avoid further litigation on that basis and looking to the fact that Petitioner, being Government of India Undertaking, who is in control of the Company it will be easier for Central Government on administrative side to ensure change of guard having proper instructions to ensure that while moving forward the project there is no breach of the Companies Act. 51. The Project appears to have made some progress but remains incomplete. The completion of the Project is necessary in the national interest. It will benefit the farmers in the State of Madhya Pradesh. The Project has been delayed endlessly. The voluminous records put up before us show facts are intertwined with various complications. The learned NCLT has not been able to find workable solution by way of orders/directions except to the extent of all stakeholders. .....

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