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2020 (5) TMI 559 - HC - Companies LawTransfer of shares pending - entitlement to subscribe right shares - HELD THAT - 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. Application disposed off.
Issues:
1. Applications seeking early hearing of certain cases. 2. Claim of entitlement to subscribe to rights shares of a company. 3. Appointment of a Court Commissioner to sell rights entitlement. Analysis: Issue 1: Applications seeking early hearing The judgment addresses applications seeking early hearing of specific cases related to the rights issue announced by Reliance Industries Ltd (RIL). The applicants claim entitlement to subscribe to rights shares of RIL based on their claim to shares registered in the name of CRB Capital Markets Limited (CCML). However, the Court finds these applications not feasible and dismisses them, stating that the urgency expressed by the applicants is due to the rights issue by RIL. Issue 2: Claim of entitlement to subscribe to rights shares The applicants assert that they should be entitled to subscribe to the rights shares of RIL as certain shares of RIL, registered in the name of CCML, allegedly belong to them. The Official Liquidator opposes the request for renouncing the rights entitlement to the applicants. The Court decides not to renounce the rights entitlement of CCML in favor of the applicants. Instead, it appoints Karvy Stock Broking Limited as a Court Commissioner to sell the rights entitlement of RIL shares held by CCML at the maximum value available. Issue 3: Appointment of a Court Commissioner The Court appoints Karvy Stock Broking Limited as a Court Commissioner to handle the sale of the rights entitlement of RIL shares held by CCML. Karvy is tasked with determining the number of RIL shares registered in CCML's name, obtaining necessary forms for renouncing the rights entitlement, inviting offers for sale, and renouncing the rights entitlement to the highest bidder. Karvy is authorized to complete transactions on behalf of CCML/Official Liquidator and receive consideration for the sale, remitting it to the Official Liquidator for the benefit of CCML. In conclusion, the judgment addresses the issues of early hearing applications, entitlement to subscribe to rights shares, and the appointment of a Court Commissioner to facilitate the sale of rights entitlement of RIL shares held by CCML. The Court's decision aims to ensure the realization of maximum value for the assets of CCML while addressing the concerns raised by the applicants regarding their claimed entitlement to the rights shares of RIL.
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