2024 (3) TMI 1337 - Tri - Companies Law

Seeking to restrain the Respondent Nos. 1 to 5 from convening and conducting of the proposed Extraordinary General Meeting - direction to the Respondent No. 1 to urgently disclose by way of an affidavit by its Chief Executive Officer - HELD THAT - The R-1 Company, in response vide letter dated 15.02.2024 (which is placed on record at page no. 1330 of the main CP) informed that the Respondent company had no objection in providing the information and the same will be provided to the Petitioners/Shareholders in the next five business days. However, the same was not furnished. It is not required to stay the conducting of the EGM proposed to be held on 29.03.2024. However, all the contentions raised in the main CP are kept open for being argued and consideration before this Tribunal when the main CP is taken for hearing on 04.04.2024. Application disposed off.

Summary

Issues:
1. Application seeking to restrain the Respondents from conducting an Extraordinary General Meeting (EGM) and to disclose necessary information.
2. Violation of Section 94 of the Companies Act, 2013 regarding inspection of documents.
3. Discrepancy in serving notices of the EGM to all shareholders.
4. Alleged delay in completing the share allotment process within the stipulated time frame.
5. Disagreement over the purpose of the EGM and objections to restraining its conduct.

Analysis:

1. The application sought to restrain the Respondents from conducting the EGM scheduled on 29.03.2024 and to disclose information requested by the Petitioner. The Applicant argued that the Respondents had not followed previous tribunal orders and denied shareholders the right to inspect documents, violating Section 94 of the Companies Act, 2013.

2. The Applicant highlighted that the Respondents initially permitted document inspection but later revoked access, citing the filing of the current application as the reason. The Respondents assured to provide the requested information, leading to the disposal of that specific prayer in the application.

3. Concerns were raised regarding the service of EGM notices to all shareholders. The Respondents confirmed that notices were sent to all eligible shareholders. The Tribunal directed the Respondents to file an Affidavit confirming the service of notices within a week.

4. The Applicant pointed out a potential delay in completing the share allotment process beyond the stipulated 60 days. However, the Respondent clarified that the EGM was solely for increasing the Authorized Share Capital, in compliance with previous proceedings where objections were raised against the Rights issue offer letter without such an increase.

5. Despite objections from the Applicant to restrain the EGM, citing past objections to the Rights issue offer letter, the Tribunal declined to stay the EGM. The Tribunal kept all contentions open for future consideration during the main CP hearing scheduled for 04.04.2024, ultimately disposing of the application.

This judgment addressed various issues, including the right to restrain an EGM, compliance with legal provisions, document inspection rights, notice service discrepancies, and the purpose of the EGM. The Tribunal's decision to keep contentions open for the main CP hearing demonstrates a comprehensive approach to resolving the disputes raised in the application.