9911796707
TMI Blog2020 (8) TMI 464X X X X Extracts X X X X X X X X Extracts X X X X ..... s, mobile airs, tools, power pumps and light towers. The issued, subscribed and paid up share capital of the Respondent company before filing the Company Petition before the NCLT was Rs. 22,56,15,640/- comprising of 22561564 equity shares of Rs. 10/- each. 96.32% shares of the company were held by the holding company viz Atlas Copco AB and the remaining 3.68% shares were held by public shareholders and group companies of the Respondent Company. The shares of the Respondent company were listed on BSE and Pune Stock Exchange. In May, 2011 the equity shares of the Respondent company were delisted from the Bombay and Pune Stock Exchange. 3. Respondent company issued a notice dated 18.9.2018 to its shareholders convening an EOGM on 25.10.2018 to consider a special resolution approving reduction of the paid up equity share capital held by the public shareholders and extinguishing their entire shareholding in the Respondent company. The special resolution was passed on 25th October, 2018 by the shareholders whereby the shareholding of the company would get reduced from 22,561,564 fully paid up shares of Rs. 10/- each to 2,17,31,951 fully paid up shares of Rs. 10/- each. 4. In the EOGM h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 18.9.2018 to its shareholders convening an EOGM on 25th October, 2018 to consider a special resolution in reduction of capital of the company and that such reduction be effected by cancelling and extinguishing 3.68% of the total issued, subscribed and paid up equity shares capital of the company (Non-Promoter shares which are held by the public shareholders. Appellants stated that on perusal of the explanatory statement under Section 102 of the Act, there was no option available to any minority or public shareholder to exercise the option of remaining a shareholder. Appellants stated that in other words the resolution proposed and the explanatory statement of reduction of share capital was mandatory for all minority or public shareholders. Appellants stated that they were opposed to their shareholding being compulsorily extinguished as also to the value of Rs. 2100/- per equity share. Appellants stated that they hold only 5464 equity shares and the 96.32% of the total share capital is held by the Respondent company, they realised that the appellants will be outvoted despite genuine concerns regarding reduction and extinguishment and value offered to each shareholder. Therefo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mani is a professional stock broker and is selling the Respondents shares on his own website at a price of INR 2125 per share while at the same time alleging that the Respondent's offer price of INR 2100 is grossly undervalued. Respondent submitted that the appellants have themselves admitted themselves decided to object the said reduction only on 11.10.2019, almost a year after the resolution. Respondent stated that Mr. Janak Mathuradas sent email dated 7th October, 2019 to appellants and other public shareholders to support his objections before the NCLT, Mumbai. Respondent stated the appellants are falsely alleging that the Respondent has modified the resolution passed in EGM by an undertaking in the affidavit 8th November, 2019 filed by Respondent. Respondent stated that the said undertaking was filed at the directions of the NCLT Mumbai and there has been no modification of the Resolution. Respondent further stated that who want to participate in the said reduction and have not appealed against the impugned order, they are approaching the Company for release of payment but the Respondent company is unable to release in view of the stay on the implementation of impugned order. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch reduction be effected by cancelling and extinguishing 3.68% of the total issued, subscribed and paid up equity shares capital of the company (Non-Promoter shares which are held by the public shareholders. Appellant stated that on perusal of the explanatory statement under Section 102 of the Act, there was no option available to any minority or public shareholder to exercise the option of remaining a shareholder. Appellant stated that in other words the resolution proposed and the explanatory statement of reduction of share capital was mandatory for all minority or public shareholders. Appellant stated that he attended the EGOM held on 25th October, 2018. Appellant stated that the Meeting was held and several minority or public shareholders voiced their concern against the capital reduction and voted against the resolution. Appellant stated that he voted against the resolution. Appellant stated that the Resolution was passed and the Respondent filed company petition for approval before the NCLT, Mumbai. Appellant stated that during the EGM the appellant requested for copies of the valuation report as well as the Fairness Opinion procured by Respondent in support of the valuation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l is vested with the responsibility of protecting the minority shareholders from oppression of majority promoter shareholders in the matters of reduction of share capital. Appellant stated that as per Section 188 of the Act only the meeting of the affected parties i.e. the non promoter minority shareholders should have been conducted and the special resolution for reduction of share capital should have been put to vote. Appellant stated that an option to remain with the Company was never disclosed to its shareholders before the EGM. Appellant stated that valuation report issued by Valuer is admitted based only on the information provided by the Compan and valuer has admittedly not even independently verified or checked the accuracy or timelines of the same. The valuer has not done necessary due diligence. Appellant stated that the business plan, assumptions and otaher information relied in the valuation report are not even placed before NCLT so as to enable it to verify the reasonableness of the assumptions. Appellant stated that the valuer has even ignored the anticipated enhanced revenues and operational efficiency which the Company expects to derive. Appellant stated that due to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing to all capital reduction schemes undertaken by companies in which he is a shareholder. Respondent stated that the appellant follows a set pattern of placing a frivolous and biased valuation report before the Courts to cast doubts and aspersions on the valuation exercise conducted by company and then raises the same frivolous and baseless allegations to challenge the legality of the capital reduction process despite being well aware of judicial precedents to the contrary. Respondent stated that the appellant sent an email to other shareholders, after obtaining Register of Members of the Respondent from ROC, requesting them to support his objections before NCLT Mumbai. Respondent stated that Section 66 does not distinguish between promoter and public shareholding or require a separate meeting of any class of shareholders to be convened as sought by the appellants. Respondent stated that once a notice has been duly served on the parties and they choose not to attend or vote at the meeting it must be presumed that they have no objection the scheme and have given their implied consent thereto. Respondent stated that they have received various requests and email from public sharehol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before this Appellate Tribunal is on the patent incorrectness and manifest unfairness in the valuation arrived by the valuer at the instance of Respondent company. Appellant stated that it is wrong that the valuation report put up by him is frivolous or biased. 16. In all other five appeals namely Company Appeal (AT) No.24, 27, 28, 29 and 30 of 2020 the facts, grounds, prayer are similar as are in Company Appeal (AT) No.366 of 2019. The only difference is that in one appeal the appellant acquired/shares after the resolution was passed; in another appeal the appellant did not attend the meeting to cast their votes; in another appeal the appellant voted against the resolution for some shares and for some shares the appellant did not vote and in other case the appellant cast invalid votes. But the relief sought in these appeals are similar as sought in the earlier appeal. The following reliefs have been sought in the present appeals:- a) Hon'ble Tribunal be pleased to quash and set aside the impugned order dated 10th December, 2019 and be further pleased to reject the petition for capital reduction of Respondent. b) Hon'ble Tribunal be pleased to appoint an independent valuer to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enging the order of the NCLT. 21. Learned counsel for the appellants in Company Appeal (AT) No.365/2019 has argued that the appellants did not attend the EOGM dated 25th October, 2018 for reduction of share capital and did not voted in favour of Resolution. Learned counsel for the appellants further argued that they vide email dated 25th November, 2019 and reminder dated 27th November, 2019 called upon the Respondent to provide evidence in this regard but Respondent company neglected to provide any such details. 22. Learned counsel for the Respondent argued that the report submitted by Mr. Shalesh Indapurkar & Associates, Company Secretaries, who was appointed to scrutinize the e-voting process and ballot process in relation to the propose capital reduction has submitted his report which states that evoting period commenced from 20th October, 2018 (9 AM) till 24th October, 2018 (5PM) and the shareholders who have voted in favour of the proposed capital reduction considered and approved at the EGM includes the name of Mrs Jayshree Sanjay Damani holding 1892 shares and Ms Yashita Sanjay Damani 261 shares at the time. Learned counsel for the Respondent also argued and shown attendan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ares. In Company Appeal (AT) No.24/2020, the appellants have 18434 shares at the time of EGM and he voted against for 17858 shares and did not vote for 576 shares. In Company Appeal (AT) No.27 of 2020 the appellant has 348 shares and voted against for all shares. In Company Appeal (AT) No.29 of 2020 the appellant voted against 219 shares and cast an invalid votes for 594 shares. 28. Learned counsel for the appellants argued that they are the minority shareholders and have opposed the scheme but despite such opposition the scheme has been approved on a valuation report dated 14th September, 2018 and the date of valuation is taken as 31st March, 2018. Learned counsel for the appellants further argued that prior to valuation, in November 2017 the mining and excavation business of the Respondent was hived off to another company namely Epiroc Mining Ltd. Learned counsel for the appellant further argued that an independent valuer. Learned counsel further argued that the valuation is on lower side as he got done the valuation from Jayesh Desai & Co which has valued Rs. 3627/- as against Respondent valuation of Rs. 2100/- per share. 29. Learned counsel for the Respondent argued that appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e that to ensure fairness a fair play of the share purchase is necessary. The company appointed M/s BSR & Associates LLP to do the valuation of share of the company. The company also added valuation taking into consideration the past performance as well as future projection by expert. 33. We find no irregularity in the valuation done by the valuer. 34. Further the data of the company is available with the Management and the same has been provided to the valuer to done the valuation. An outsider may have some data of company, in other words it can be said the outsider has the incomplete data. We also note that if an outsider has incomplete data, he will get the valuation done on that incomplete data which is of no use. We also note that the appellant in Company Appeal (AT) No.366/2019 has voted against the resolution and as per the affidavit of Respondent the appellant can hold the shares of Respondent company. If the appellant, Mr. Janak Mathuradas feels that the offer price is less and the valuation got done by him is the best, then we allow him to purchase/acquire the shares of other minority shareholders at a price of Rs. 2100/- and can hold it as per his wish. 35. Learned co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tors of the Respondent may agree. We note from the record that the NCLT has given directions and the same has been approved by the Board of Directors of the company. 38. If the contention of the appellant is that NCLT or Board of Directors on instructions from NCLT has not power to modify the Scheme as approved by the Shareholders, it will destroy the case of appellant altogether that even if he has been given an opportunity to continue as a shareholder of the company it would destroy his option to retain his shares as the shareholders in the EOGM has already approved the scheme for acquisition of the shares. We may state here that the NCLT has the powers, therefore, the Company has approached for approval of the same and the objectors have objected to the Scheme and the modification has been done. The same modification has been ratified by the Board of Directors. Therefore, it can not be said the NCLT has no power. If we assume that the NCLT has no power then it means that the scheme approved by the shareholders, whether wrong or right, the NCLT has to approve. We are not satisfied with the argument of the appellants that the NCLT has no power. 39. Thus, we also note that the di ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
