TMI Blog2019 (1) TMI 194X X X X Extracts X X X X X X X X Extracts X X X X ..... 0,000/-”. The Impugned Order is approved with this correction of typing error. The Appeal is dismissed with costs. The Appellant will pay ₹ 1,50,000/- as costs to Respondent No.1 – LVN Muralidhar. Other Respondents to bear their own costs. - Company Appeal (AT) No.65 of 2018 - - - Dated:- 16-11-2018 - Mr A.I.S. Cheema And Mr Balvinder Singh, JJ. For The Appellant : Shri Tarun Johri and Shri Ankit Saini, Advocates For The Respondents : Shri Arun Kathpalia, Sr. Advocate with Shri J. Krishna Dev, Ms. Bani Brar and Shri Siddharth Nath, Advocates And Shri Arun Khatri and Shri Gagan Deep Panwar, Advocates JUDGEMENT A.I.S. Cheema, J. : 1. This Appeal has been filed against Impugned Order and Judgement dated 1st January, 2018 passed under Section 59 and 62 of the Companies Act, 2013 ( Act , in brief) by National Company Law Tribunal, Hyderabad Bench ( NCLT , in short) in CP No.08/59/HDB/2017. 2. The Company Petition was filed by present Respondent No.1 LVN Muralidhar original Petitioner, Ex. Director of Respondent No.1 Company (present Appellant) claiming that deposits made by him to the extent of ₹ 1.54 crores in the account of Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r KVV Subba Rao (Respondent No.3) was served. Meanwhile, the Company sent a courier letter to the Petitioner showing latest shareholding as on 31st March, 2015 and on verification, Petitioner found that the amount lent by him had been converted into equity without his knowledge, intimation or authorization. He claimed that he had never made any request to allot shares and the Company had illegally with intention to defraud and to avoid to pay his money allotted the shares. According to him, the action of the Respondent Company was afterthought. After he had issued the Notices, the Company recorded PAS 3 with the Registrar of Companies on 3rd July, 2015, to show the allotment of shares dated 18.12.2014 and 31.03.2015. 5. The Petitioner claimed in the Petition that he immediately filed complaint with ROC on 12th August, 2015, copy of which he filed. Company submitted letter to ROC on 6th January, 2016. Referring to the same and provisions of Section 62(1)(a)(i) of the Act, Petitioner claimed that there was neither any offer nor Notice by the Company and no postal acknowledgement had been filed or proof given of sending offer letter dated 18th December, 2014. He also pleaded that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f shares on Right issue basis to meet the Funds requirement of OTS payable to the Bank with a view to save the Educational Institution being developed by the First Respondent Company and to get rid of the Loan and offered 85,00,000 equity shares of nominal value of ₹ 10 each at par on proportionate basis. It is further submitted that all the Promoters of the First Respondent Company including the Petitioner herein have brought their respective Amounts to save the Educational Institute and in that process, the Petitioner herein in order to save his Immovable Properties worth Crores of Rupees agreed to bring in the necessary Funds enabling the First Respondent Company to meet the payment to the Bank. 13. It is further submitted that in that process, several deliberations and discussions held among the existing Shareholders including the Petitioner and his associates of the First Respondent Company, wherein, it was categorically agreed that each of the Promoter shall bring in their proportion of the Amounts into the Company after the sale of their properties mortgage with the bank and in consideration thereto, the Company shall Issue further Share Capital to the existing S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d thus, the entire Process of Allotment of Shares on 24th January, 2015 and also on 31st March, 2015 was in strict compliance with the Provisions of the Companies Act, 2013 and as such, the present Petition filed with malafide intention. 8. The learned NCLT heard both sides and referred to the pleadings of the parties in details and the admitted facts. The arguments and counter arguments of the parties as made before the NCLT and which have been repeated before us have been referred to by NCLT in its Impugned Order. NCLT framed following issues:- ( a) Whether the Company petition is maintainable under section 59 62 of the Companies Act 2013; ( b) Whether money ₹ 1,54,000,00/- paid by the Petitioner is towards the share Application money or as a loan; c) Whether the impugned shares are issued in accordance with law or not; ( d) If so, what is the relief, the petitioner is entitled for. 9. As the pleadings of parties would show and as noted by NCLT, the fact that the original Petitioner was earlier Director and the fact that loan of ₹ 10 Crores was taken from State Bank of India is not in dispute. The loan became NPA is also not in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... return the money as agreed upon, and, on the contrary, it had tried to establish a counter case that the money in question was deposited with the Company for issue of impugned shares. As stated supra, the Company Secretary also failed to scrutiny the relevant documents while filing PAS-3. The Company cannot put the petitioner to test to prove that the money in question was given as loan, after having accepted it. As stated supra, it is the responsibility of Company to disprove that the money in question was not taken as loan by producing relevant evidence, as the receipt of money is not at all in question/dispute. Therefore, the impugned allotment of shares is liable to be declared as illegal and void. 10.2 For such and other reasons as recorded, the learned NCLT set aside the allotments made by the Appellant Company and directed paying back of the amount paid by the Petitioner. In the last para of the Impugned Order, there appears to be error regarding the figure. There is no dispute between both the parties that the amount deposited by the Appellant was of ₹ 1.54 Crores. However, in the last part of the Impugned Judgement, the figure got referred as ₹ 1,50,00,0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Judgement of the NCLT and submitted that because the original Petitioner was caught in a situation where his personal guarantees were there and as his properties were involved in the security given to the bank, the original Petitioner wanted to come out of the situation to save his properties and his assets. According to the Counsel, the liability payable to the State Bank of India was of the Appellant Company and to help out the Company in the situation and to save his own interest, the original Petitioner had deposited the money so that the one-time settlement does not fail. According to him, the Appellant sent legal Notices on 10.06.2015 and 18.06.2015 (Reply - Diary No.3916 Page 61 and 65) and only after such Notices were issued by the original Petitioner claiming back the money, the Appellant Company disclosed that it had done allotment of shares on 18.12.2014 and 31.03.2015. According to the Counsel, this was an afterthought and documents were created subsequent to the Notices issued by the Appellant which is clear from the fact that the PAS 3 was submitted only on 03.07.2015. The Counsel referred to the cognizance taken by the Institute of Company Secretaries to initiate a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sciplinary proceeding against the Company Secretary Mr. Vikas Chandra had been completed and he has been found guilty during pendency of the present litigation. It has been further argued by the learned Counsel for Respondent no.1 original Petitioner that Annexure R-11 filed with the counter (Page 107) shows that when on September 4, 2015, the original Petitioner had sent e-mail to K. Seethayya who has 76% shareholding in the holding Company of the Appellant, sending draft of Facility Agreement with regard to the amounts being deposited, K. Seethayya never responded that already shares had been allotted and so question of entering into such documents did not arise. On such basis, the argument is that the document relating to alleged Board Meeting dated 18.12.2014 and 31.03.2015 as well as the alleged offer letter dated 18.12.2014 have been created subsequently just to avoid returning money of the original Petitioner. 14. We have gone through the record and the Impugned Order as well as heard the learned Counsel for respective parties. Admittedly, earlier the original Petitioner was Director of the Company when loan was taken from State Bank of India and the properties ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r admitting and relying on additional documents and to directly refer and rely on additional documents in the Rejoinder. The learned counsel for appellant now states that they wanted to file additional documents with application but Registrar did not accept stating that the order of the Court would be necessary and so with the rejoinder the same have been filed. We find this to be still more inappropriate method of putting on record documents without permission of the Court. For the above reasons, at the moment we will treat the Rejoinder as not on record as well as the application and documents tendered with it. At the time of final hearing in the course of arguments if it appears to us necessary in the interest of justice, we will consider the Rejoinder and application to file additional documents. Otherwise, the Rejoinder and application and documents filed with Diary No.6282, shall remain as not on record. List the appeal for hearing on 27th August, 2018. The learned Counsel for the original Petitioner has questioned these documents which were not filed in NCLT and now tendered in the Appeal righty submitting that no reasons have been given as to why the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... due procedures were followed or that Notice was served on Petitioner. 16. With regard to the letter of offer made on 18.12.2014 (Appeal Annexure A-9 - Page - 151), there is no material to show that any such letter of offer was issued to all the shareholders of the Company. As required by Sub-Section (2) of Section 62 of the Act, there is no material to show that such letter of offer was sent to the original Petitioner by registered post or speed post or through electronic mode. There is no document to show that the original Petitioner consented to such letter of offer. As per Section 62(1)(a)(iii) of the Act, where such offer is made, after the expiry of time specified in the Notice or on receipt of earlier intimation of declining to accept the shares offered, the Board of Directors may dispose of the shares in such manner which is not disadvantageous to the shareholders and the company. In the present matter, there is nothing to show that the Petitioner accepted the offer. If he had not accepted the offer, after the expiry of the time specified in the letter dated 18.12.2014 where closing date was specified as 17.01.2015, there is nothing to show that the Company acted in term ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irectors of Vestal Schools Private Limited dated 26th December, 2014, copy of which is at Page 24 with the Reply of Respondent No.2 (Diary No.5703) shows the present Respondent No.2 KVVL Kumari signing the certified copy as a Director and nothing is shown that to any such Resolution the Appellant was party or had knowledge. We would not give weightage to such Resolution of Vestal Schools Private Limited to attribute knowledge to the original Petitioner. This is apart from the fact that the Company would still require to show that the original Petitioner consented to any such conversion. 19. The same Resolution dated 26th December, 2014 has been made part of the documents tendered by the Appellant with the Rejoinder. As regards the application filed with the Rejoinder for filing additional documents, we find that there are no reasons given as to why these documents were not filed in NCLT. Alternatively, we find that even if we look into such documents like the Board Resolution dated 26th December, 2014 of Vestal Schools Private Limited and that letter like alleged Board Resolution dated 6th December, 2014 sent with letter dated 6th December, 2013 to the said Bank (Page 55 of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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