2022 (6) TMI 57 - Tri - Companies Law

Oppression and mismanagement - issuance of fresh share capital - the shareholding of the Petitioner was reduced rom 84% to 42%. - Sections 59, 213 and 241-242 of the Companies Act, 2013 - valuation of shares - HELD THAT - It is clear that out of the 4,17,086 equity shares allotted, 10,000 equity shares with a face value of Rs. 100 each were allotted to Ms. Laly Joseph on 30.09.2011 at a premium of Rs. 650 per share. The consideration of Rs. 75,00,000/- due to the 1st respondent company was realized by appropriating the credit balance in the account of Ms. Laly Joseph. The account of Ms. Laly Joseph was credited in the books of accounts of the company on 30.09.2011 by debiting the account of Mr. Nikesh Kumar, the 2nd respondent. It appears that this entry was shown in the books of accounts of the company to recognize the value of 75,000 equity shares with a face value of Rs. 100 each transferred by Ms. Laly Joseph in favor of Mr. Nikesh Kumar, the 2nd respondent, on 04.04.2011 for a consideration of Rs. 75,00,000/-. Through the statement showing the particulars of the consideration received by the 1st Respondent Company against the allotment of Equity Shares to its members from the date of incorporation (26.07.2010) to the date of order of this Tribunal on 02.01.2020. It appears from the report that on 07.09.2010 Rs. 1.5 crore received was used equally for allotment of equity and preference shares (i.e. Rs. 75 lakhs each). Thus it is clear that the petitioner had made the investment to the Company even though the shares are allotted as equity and preference. It is clear that the petitioner had invested an amount of Rs. 1,50,00,000/- (One Crore Fifty Lakhs Only) in the R1 Company. The petitioner has not subscribed to the Memorandum of Association or admittedly she has not done anything in relation to the R1 Company. The only concern of the petitioner is that the amount invested by her is not transferred into equity shares as promised by the 2nd Respondent - it is seen that the petitioner wants this Tribunal to direct the 2nd Respondent to obey the initial promise made by him while the deposits were made by her. It is clear that the R1 Company was established by the 2nd Respondent with the help and investment of the petitioner. It is settled law that when a matter is before NCLT under Section 241-242 irrespective of what parties plead, say, or do, the paramount consideration of the Tribunal is to keep in view what is in the interests of the Company - this Tribunal finds it appropriate to get a valuation of the shares which may enable the Petitioner to leave the company with fair value and fair interest. List TCP/20/KOB/2019 on 30.06.2022 for report of the Independent Valuer/hearing.

Summary

Issues Involved:
1. Allegations of oppression and mismanagement.
2. Allotment and transfer of shares.
3. Limitation period for filing the petition.
4. Investment conversion into equity shares.
5. Appointment of an independent valuer.

Detailed Analysis:

Allegations of Oppression and Mismanagement:
The petitioner alleged that the Respondents engaged in acts of oppression and mismanagement, thereby prejudicing her interests and those of the company. Specifically, the petitioner claimed that the Respondents, after receiving her investment, manipulated the capital structure and shareholding pattern to their advantage, reducing her equity stake significantly. The Tribunal acknowledged these allegations, noting that the Respondents had taken control of the company through illegal means and had siphoned funds, which was prejudicial to the company's and shareholders' interests.

Allotment and Transfer of Shares:
The petitioner argued that she was entitled to 1,50,000 equity shares for her investment of Rs. 1.50 crore but was only allotted 85,000 equity shares, with 75,000 shares being illegally transferred to the 2nd Respondent. The Respondents contended that the petitioner was initially allotted 75,000 equity shares and 75,000 preference shares and later transferred her equity shares to the 2nd Respondent. The Tribunal, upon reviewing the Chartered Accountant's report, confirmed discrepancies in the share allotment and transfer process, indicating that the petitioner's grievances had merit.

Limitation Period for Filing the Petition:
The Respondents argued that the petition was barred by limitation under Section 433 of the Companies Act, as the petitioner was aware of the issues since 2011 but filed the petition only in 2019. The Tribunal considered this argument but noted that the petitioner lodged a complaint with the Police Department in 2016 and pursued legal remedies, indicating that she acted within a reasonable timeframe upon discovering the alleged mismanagement.

Investment Conversion into Equity Shares:
The core issue was the conversion of the petitioner's investment into equity shares. The petitioner claimed that her investment was not converted as promised by the 2nd Respondent, leading to a significant reduction in her equity stake. The Tribunal noted that the petitioner had invested Rs. 1.50 crore, and although shares were allotted, the process was not transparent, and the petitioner's equity stake was unfairly diluted.

Appointment of an Independent Valuer:
To resolve the dispute fairly, the Tribunal appointed an independent valuer, Shri Anil Xavier, to determine the true and fair value of the company's shares. The valuer was directed to consider the last three financial years and submit a report within four weeks. The Tribunal emphasized that the primary consideration was the company's interest and ordered that the shareholding pattern remain unchanged until the valuation process was completed. The fee for the valuer was to be borne by the 1st Respondent Company.

Conclusion:
The Tribunal found merit in the petitioner's allegations of oppression and mismanagement and directed the appointment of an independent valuer to determine the fair value of the shares. The Tribunal's order aimed to balance the interests of the petitioner and the company, ensuring a fair resolution of the dispute. The case was listed for further hearing on 30.06.2022, pending the valuer's report.