The Mumbai Bench of the National Company Law Tribunal (NCLT) observed that the allotment of shares at the concessional price is oppressive act qua existing members to whom no such allotment was made.
The company petition was filed by the petitioners Mr. Ajay R Tajpuriya and Manoj R. Tajpuriya (Petitioners) seeking relief in terms of section 397, 398, 399, 402, 403 and 406 of the Companies Act, 1956 in the matter of M/s Goel Ganga Infrastructure and Real Estate Pvt. Ltd. This petition was originally filed before the Company Law Tribunal Board, Mumbai later came to be transfer to this Tribunal after creation of the National Company Law Tribunal.
It was alleged by the petitioners that the Respondent made attempt removed to the petitioners from the Board of Company and also shifted the registered officer of the Respondent Company from Mumbai to Poona further the Respondents refused to provide video conferencing/audio visual arrangement for Board Meeting and shareholders meetings of the Respondent Company. On at least two occasions, Respondents attempted to remove the Petitioners as directors by requisitioning for the same.
The principal grievance of the petitioner is dilution of share holdings by the Respondents by making further allotments to themselves which resulted into their holding rising from 50% to 93.39% and consequently dilution of the petitioner share holding from 50% to 6.61%. The dilution in share holding has been challenged contending that Respondent company was formed as a quasi-partnership and dilution as altered the structure of said partnership to the detriment of petitioners.
The respondents contended that the share allotment to themselves was made after following the due procedure contemplated under Companies Act and was necessitated on account of fresh infusion of Capital by the Respondents in Respondent Company by way of share contribution and unsecured loans from time to time, and the petitioners have decline to contribute to the business requirement any further. It was also respondents case that petitioners have also declined to stay as guarantor when asked to do so. The Respondents have also contended that the petitioner had participated in all the proceedings pertaining to share allotment and cannot plead ignorance.
A Two-Member Bench comprising Prabhat Kumar, Member (Technical) and Justice V.G. Bisht Member (Judicial) observed that “The allotment of the share value at a face value, which is less than its book value is itself is not in accordance with provision of Section 42 and Regulation made there under. Further, the allotment of the shares at a concessional price is a certainly as oppressive act qua existing members to whom no such allotment has been made. We are of considered view that the Respondents have taken advantage of Petitioners unwillingness to further contribute to the share capital of the Respondent Company. Since the Respondent Company has real Estate Projects and exposure to the lenders it shall not be appropriate to pass an order of winding up in the facts and the circumstances of the case as such order shall be prejudicial to the interest of Respondent Company and other stake holders.”
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
