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2020 (5) TMI 560 - HC - Companies LawTransfer of shares pending - right to subscribe for rights issue - HELD THAT - The urgency expressed by the applicants is on account of the rights issue announced by Reliance Industries Ltd (RIL). The applicants claim that certain shares of RIL, which are registered in the name of CRB Capital Markets Limited (CCML) belong to them and their applications for transferring the said shares are pending. They claim that they should also be entitled to subscribe the rights shares of RIL based on their claim to shares of RIL registered in the name of CCML. This Court is not persuaded to accept that the rights entitlement of CCML to subscribe to the shares of RIL ought to be renounced in favour of the applicants. However, it the duty of the Official Liquidator to ensure that maximum value is realised for the assets of the CCML. If the shares of RIL are not subscribed or renounced, the entitlement would lapse and the same would be of no benefit to CCML or the applicants. In the circumstances, this Court considers it apposite to direct that its rights entitlement of CCML to subscribe to RIL s shares be sold at the maximum value as available. The principal relief sought by the applicant in the present application cannot be granted - application disposed off.
Issues:
1. Application for various reliefs regarding shares of M/s Reliance Industries Limited held by a company in liquidation. 2. Dispute over ownership of shares prior to the appointment of the Official Liquidator. 3. Directions regarding rights issue of equity shares of Reliance Industries Ltd. 4. Appointment of Karvy Stock Broking Limited as Court Commissioner to sell the rights entitlement of shares. 5. Disposal of the application based on previous court directions. Analysis: 1. The application filed by M/s Kuber Securities Limited sought various reliefs related to the shares of M/s Reliance Industries Limited held by a company in liquidation. The applicant requested the Official Liquidator to deliver the Offer of Rights shares immediately upon receipt, among other directions. 2. A dispute arose over the ownership of shares purchased by the applicant prior to the appointment of the Official Liquidator. Despite the dispute, the Court referred to a previous order dated 13.05.2020, which provided directions for similar relief applications by other parties. The Court emphasized the urgency due to a rights issue announced by Reliance Industries Ltd. 3. The Court addressed the rights issue of equity shares of Reliance Industries Ltd, entitling shareholders to subscribe to one share for every fifteen shares held. The Official Liquidator was unable to subscribe to the right shares of RIL, leading to opposition to renouncing the rights entitlement to the applicants. The Court directed the sale of the rights entitlement of RIL shares through Karvy Stock Broking Limited to maximize value. 4. Karvy Stock Broking Limited was appointed as a Court Commissioner to sell the rights entitlement of RIL shares held by the company in liquidation. Karvy was tasked with obtaining necessary forms for renouncing the rights entitlement and selling it to the highest bidder. The order extended to all shares of RIL registered in favor of the company in liquidation. 5. As per the Court's directions based on the previous order, the principal relief sought by the applicant could not be granted. The applicant was advised to pursue rights and remedies in another pending case before the Court. The application was disposed of in accordance with the Court's directions from the previous order dated 13.05.2020.
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