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TMI Blog2019 (5) TMI 1354X X X X Extracts X X X X X X X X Extracts X X X X ..... 15Annual General Meeting and failure to provide information sought by the shareholders were also stated to be made. Notice of the petition was directed to be issued by order dated 19.09.2018. The petitioners have contended that as a result of continuous and indiscriminate pledging of shares of Omaxe held by Guild coupled with failure of Guild to question the decision of declaration of dividend by Omaxe only to public shareholders has resulted in erosion of net worth and valuation of Guild and consequently loss to the petitioners and that any default in the loans by Omaxe and consequent invocation of pledge would result in irreparable loss to the petitioners, especially when the petitioners have no control in the management of Guild or Omaxe. As regards the pledging of shares of Omaxe, Guild has stated that during the period when the petitioner No.1 was Joint Managing Director, he never objected to the practice of pledging. As regards non declaration of dividend for the Financial Years 2017 and 2018, it is submitted that Omaxe has duly explained the rationale behind the non-declaration of dividend in its AGMs being due to the impact of GST, RERA on real estate sector and the cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. When the matter was listed on 19.09.2018, notice of the petition as well as for interim stay was issued and in the meanwhile it was directed that respondent No.1 shall not issue fresh equity shares. 3. CA No.435/2018 (Diary No.3889 dated 09.10.2018) was filed by the petitioners, under Rule 11 of NCLT Rules, 2016 to bring on record additional facts not in the knowledge of the petitioners at the time of filing of the petition. It is stated that at the time of filing of the petition, the petitioners were not aware that the Guild once again, on 12.09.2018, has further pledged 38,15,000 equity shares i.e. 2.09% shares of Omaxe owned by it without giving any information whatsoever to the petitioners. It was further stated that the petitioners owned 24.64% shares of Guild and the balance is owned by the branches comprising of other two elder brothers of petitioner No.1. It was also stated that Guild presently holds 62.57% of equity shareholding of Omaxe directly and 4.88% of equity shareholding of Omaxe indirectly through its 99.99% subsidiary Dream Home Developers Pvt. Ltd. and that Guild in addition to giving loans and advances to Omaxe and its subsidiary and associat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entitled were issued. 7. Reply on behalf of Guild to CA No.435/2018 was filed by Diary No.5077 dated 21.12.2018. It was submitted that the petitioner/applicants have filed the present application falsely stating that the same has been filed to bring on record additional facts not within the knowledge of the petitioner/applicants at the time of filing of the petition since admittedly, the pledge dated 14.08.2018 was done with respect to and in compliance of the terms and conditions of the term loan, Bank Guarantee and letter of credit dated 30.03.2018 availed by Omaxe Chandigarh Extension Developers Pvt. Ltd. It is stated that the shareholding of the petitioners/applicants in Omaxe is merely 1.84% and that since 2011, the petitioner No.1 has himself pledged 33,00,000 shares constituting 98.92% shares of Omaxe held by him and extended his own personal guarantees to help Omaxe secure financial assistance and that the petitioner/applicants have never objected to the practice and have only started raising objections to the practice pursuant to non-appointment as Joint Managing Director of Omaxe by the public shareholders of Omaxe in AGM dated 27.09.2017. It is submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l within one week of doing so with copy advance to the counsel opposite. It is stated on instruction by learned Senior Counsel for respondent No.1 company that other than the above respondent No.1 company would not create further pledge for the time being. This undertaking is taken on record. 11. CA No.25 of 2019 was filed by the petitioners under Rule 11 of NCLT Rules, 2016 inter alia seeking directions to restrain Guild from pledging/mortgaging any unencumbered shares of Omaxe held by Guild. Reference was made to the relevant part of para 5 at page No.15 of the reply filed by Guild (supra) inter alia stating that Guild is ready and willing to commit that shares of Omaxe held by Guild which are not pledged/unencumbered as on 16.12.2018 being 1,48,59,726 shall not be pledged/encumbered by Guild except on account of top-up required and /or margin calls. 12. It was submitted that contrary to the aforesaid statement, Guild in its disclosure letter dated 19.12.2018 addressed to Bombay Stock Exchange Ltd. (BSE) and National Stock Exchange of India Ltd. (NSE) stated that till 19.12.2018, 7,32,65,971 shares out of total number of 11,44,47,697 shares of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6,98,43,971 8,35,000 7,06,78,971 Less: No. of shares not free/committed. 3,10,94,000 - 3,10,94,000 No. of shares not pledged/unencumbered 1,35,09,726 13,50,000 1,48,59,726 16. As regards 3,10,94,000 shares shown as not free/committed, it was stated that often not only is there a commitment/lien on a certain number or value of shares in terms of the loan agreement, such shares are placed at the disposal of the lender and the lender takes shares into its own depository account without formally creating a pledge. The details of the shares not free/committed as on 16.12.2018 was furnished as Annexure R- 2 of Diary No.837 dated 18.02.2019. It was stated that Guild has not encumbered the shares of Omaxe held by it in any manner whatsoever in violation of the order passed by the Tribunal. 17. The rejoinder in CA No.25/2019 was filed by the petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cumbered shares as 4,11,81,726 and therefore, a false, incorrect and misleading statement was made in the reply filed by Diary No.5077 dated 21.12.2018 that the shares of Omaxe held by Guild which are not pledged/unencumbered as on 16.12.2018 are 1,48,59,726 shares. It was pleaded that clarification desired vide letters dated 29.12.2018 and 14.01.2019 were not responded to. Specific reference was made to the documents furnished by the petitioners vide Diary No.837 dated 18.02.2019 with reference to credit facility by Yes Bank sanctioned to Ansh Builders Pvt. Ltd. for ₹425 crores. It was pleaded that the NDU is executed on 06.12.2018 on stamp paper purchased on 27.06.2017 for executing power of attorney-GPA and that no evidence of filing the NDU with Yes Bank was submitted and therefore, the documents are suspect. 20. It was also pleaded that for grant of interim relief the pre requisite are prima facie case; balance of convenience; irreparable loss and all these conditions are satisfied in the present case and any further encumbrance would be to the disadvantage of the petitioners. Reference was made to details of shares of Omaxe held and pledged by Guild (Ann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in para No.7 of CP No.183/Chd/Hry/2018 would show that these are not the grounds for claiming oppression and mismanagement. 23. In rejoinder, it was pleaded that all the six transactions have been denied and reference was also made in this regard to the rejoinder filed. It was pleaded that post 2016, there is no dividend received from Guild and moreover, the petitioner No.1 is wrongly ousted as Director and therefore, interim relief is necessary. 24. We have carefully considered the submissions of the learned Senior Counsel for the petitioners, Guild and Omaxe and have also perused the records. CP No.183/Chd/Hry/2018 was filed under Sections 241, 242, 244 and 246 of the Act. The instances of oppression and mismanagement are given in para 7 thereof. It is stated that through a chain of unfair and inequitable acts, all grossly oppressive, the petitioner No.1 (representing interest of petitioners) has been systematically ousted by the respondent No.2 from the affairs of Guild and through it of Omaxe to gain control over the company and all its subsidiaries. It is further stated that Guild has failed to safeguard its interest as shareholders of Omaxe and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Pvt. Ltd. It is stated in para 3 (d) of CA no.435/2018 that Guild in addition to giving loans and advances to Omaxe and its subsidiary and associate companies, has also been pledging its assets including the shareholding in Omaxe as collateral for the financial assistance being availed by Omaxe. In para 3 (e), it is stated that as on September, 2017 i.e. up till when petitioner No.1 was Joint Managing Director of Omaxe, 55.1% of the shares of Omaxe held by Guild were pledged or otherwise encumbered. 29. We have discussed above that reply to CA No.435/2018 was filed by Diary No.5077 dated 21.12.2018. In the reply to para no.5 of CA No.435/2018, it was inter alia stated by Guild that it was ready and willing to commit that the shares of Omaxe held by Guild which are not pledged/unencumbered as on 16.12.2017 being 1,48,59,726 shares shall not be pledged/encumbered by Guild except on account of top-up required and/or margin calls. Vide order dated 31.12.2018 and during the course of the hearing of CA No.435/2018, it was directed that in case further pledge of the shares is required, as per the statement made in the reply, in order to top-up and/or margin calls, Guil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmitted. The details of the six relevant transactions was also furnished as Annexure R-2. In rejoinder (Diary No.1125 dated 08.03.2019), it was stated that Guild contrary to Securities Exchange Board of India (Substantial Acquisition of Shares and Take Overs) Regulations, 2011 has cooked a false and frivolous story of committed/lien on certain number or value of shares without formal pledge and that false undertaking on 21.12.2018 was given with regard to the unencumbered shares. 32. We find that for all these six transactions, no details have been furnished to show that subsequently finance facilities were received by Omaxe/its subsidiaries. The evidence available is with regard to the sanction of the loans and not the disbursal of the loans. During the course of the hearing, it was specifically accepted that in respect of claim of 1,34,22,000 shares committed in relation to Yes Bank, the loan was still to be received. Therefore, it is presently being presumed that the shares not pledged/unencumbered were 1,48,59,726 shares as stated in the reply to CA No.435/2018 and 3,10,94,000 shares claimed as not free/committed as per reply filed by Diary No.837 dated 18.02.20 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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