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TMI Blog2020 (10) TMI 827X X X X Extracts X X X X X X X X Extracts X X X X ..... nies Act 2013 (previously under Section 397/298) to succeed against the majority shareholders, the Petitioners have to bring on record material, tangible and real damage to their proprietary interests due to misdeeds complained of and committed by majority shareholders/Management. The said non-extension of Long Stop Date has not been found to be so severe so as to warrant grant of reliefs as prayed by the Petitioners. Accordingly, we are of the considered view that the Petitioners have not been able to make out case of oppression and mismanagement fit for grant of the said reliefs i.e, against item Nos. 5.1 (a) to (d) herein above. The request for investigation of Respondent Nos 1 2 Companies as mentioned against item No. 5.1 (e) is also not acceded to as the Petitioners have failed to bring on record any material evidence in support of their demand for such a relief. In view of the above discussion, the said petition filed under Section 241 and u/s 213 of the Companies Act, 2013 deserves to be dismissed. Petition dismissed. - CP No. 5/241/HDB/2017 - - - Dated:- 11-2-2020 - Ratakonda Murali, Member (J) And Narender Kumar Bhola, Member (T) For the Appellant : GLV R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s filed the amended copy of the petition on 18.02.2019. 2. AVERMENTS BY PETITIONERS The facts apropos to the Petition, inter-alia, in brief are:- 2.1 The Petitioners are holding 13.32% shares each totalling to 26.64% shares in Respondent No.1 Company / Techbond Laboratories Private Limited who were also inducted as Directors of Respondent No.1 on 02.02.2014 but subsequently resigned from the Directorship on 02.01.2015. They are represented by General Power of Attorney holder Mr. Nikhil Baheti. 2.2 Techbond Laboratories Pvt Ltd /Respondent No.1 (herein after referred to as Company) is a Company incorporated under the Companies Act, 1956 having its registered office at Geetanjali Residency, Plot No.2, Navodaya Colony, Road No.14, Banjara Hills, Hyderabad. 2.3 Clininvent Research Private Limited/ Respondent No.2 is a Company registered under the Companies Act, 1956 having its registered office at Kolkata. Respondent No.3 and Respondent No.4 are Director and Managing Director of Respondent No.1 Company respectively. Respondent No.5 is the Managing Director of Respondent No.2 Company. 2.4. It is stated that a Share Purchase and Shareholder's Agreement (SPSHA) was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espondents is required for the sale of the assets of the Company. The effective date of the Asset Transfer Agreement is 24.06.2016 and Long Stop Date is 22.08.2016. 2.8. The Petitioners relied on Clause 6.2.1 of the Agreement which stipulates Long Stop Date and the fulfilment of the conditions precedent to the ATA before 60 days from the effective date i.e. 24.06.2016. Petitioners further relied on Clause 6.1 stipulates sale and purchase of the assets under the ATA was conditional to the completion of the conditions precedent and Clause 6.3.2 stipulates if conditions precedent are not fulfilled on or before the LSD, the ATA would stand terminated. The petitioners averred that there is a mention in the Agreement that that Long Stop Date can be extended by parties as agreed upon between them. 2.9. It is the case of Petitioners that since the conditions precedent as mentioned in Clause 6.1 and 6.3.1 of the Asset Transfer Agreement were not complied/ satisfied prior to the expiry of the Long Stop date, the Asset Transfer Agreement stood terminated as per Clause 6.3.2 of the said Agreement. It is the further case of Petitioners that the resolution passed in the EGM dated 16.04.201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s violation of Share Purchase and Share Holders Agreement dated 27.01.2014 and terms and conditions of Asset Transfer Agreement dated 24.06.2016. It is further alleged that the movable properties which were fixed in the premises were also sold to Respondent No.2 by Respondents 3 4 without disclosing the value of the said items. 2.13. The Petitioners alleged that Respondents concealed the execution of the sale deed, forged the resolution passed in the EGM on 16.04.2016 to transfer the assets of the land situated at Ananthram Village, Gummadidala Mandal, Sangareddy District, Telangana in favour of Respondent No.2 Company which amounts to oppression and mismanagement under Section 241 of the Companies Act, 2013. Hence, prayed this Tribunal to set aside the transfer of assets of the Company in favour of Respondent No.2. 3. COUNTER FILED BY RESPONDENTS Counters are filed by Respondents 1 3 and Respondent No.2 refuting the averments made by the Petitioners, inter-alia, contested as under: Respondents 1 3 3.1 The preliminary objection raised by the Respondents is that the Petitioners have already initiated arbitration proceedings, by virtue of existence of an arbi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contained clauses for extension of Long Stop Date by the parties by mutual consent. 3.8 Respondents no.1 3 submits that Mr Nikhi Baheti, GPA Holder for Petitioners was apprised about the status of negotiations. The emails exchanged between parties, intrinsically shows that the Petitioners had no objection for the extension. The Petitioners were also informed the reason behind extending the Long Stop Date i.e. for obtaining no objection certificates from the creditors within the original period of 60 days as mentioned in the Agreement. 3.9 The. case of Respondents 1 3 is that the resolution submitted to the Registrar of Companies and the resolution used for registering the sale deeds are one and the same. All the decisions taken by Respondent No.1 were only after due consideration and deliberation with the Petitioners. It is contended that Respondents act does not amount to oppression and mismanagement. 3.10 Respondents 1 3 allege that Petitioners are indulging in forum shopping by filing multiple petitions before different forums for the same course of action. Thus, prayed this Tribunal to dismiss the Petition. Respondent No.2 3.11 The first Preliminary objecti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able and immovable assets. Respondent further claims that time is not the essence of the Agreement and that in the absence of any provision in ATA, it is incorrect for the petitioners to state that ATA would be automatically be terminated if the conditions precedent are not met. At the request of Respondent No.1, Respondent No.2 appears to have waived the requirement of fulfilment of remaining conditions precedent which ultimately nullified the Long Stop Date. This was done by Respondent No.2 under the need of hour due to action from SBI under SARFAESI Act for saving Respondent No.1 from auction and in the interest of the stakeholders. It is the case of Respondent No.2 that Petitioners being Shareholders of the Company, should only be concerned with the proceeds from the alienation of an asset and does not confer right over the asset in general. 3.16 It is the case of Respondent No.2 that Petitioners never complained of any irregularity in payment of consideration by Respondent No.2 Company to Respondent No.1 Company as agreed in the ATA. The transaction was accomplished in a transparent manner by passing a special resolution despite no requirement of any shareholders' res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etitioners have disclosed about initiation of Arbitration proceedings in the additional affidavit and deny the contention of Respondents that they suppressed this fact to this Tribunal. 4.2 The Petitioners state that they deny the contention of Respondent No.3 that the long stop date was extended for smooth completion of the transaction which is contrary to Clause 6.2.1 of ATA which states Long Stop Date to be extended with mutual agreement between the parties in writing and that Petitioners consent were not sought for the extension of the Long Stop Date. 4.3 The Petitioners submitted that Long Stop Date was not extended as such the transaction undertaken on 01.11.2016 is contrary to the terms of EGM Resolution and ATA. It is stated Respondent No.3 was authorised only to act as a signatory on behalf of 1st Respondent Company in an administrative capacity but was not authorised to amend/sign any documents on behalf of parties to the ATA. The action of Respondent No.3 in executing the sale deeds on 01.11.2016 and thereafter registering the sale deeds on 03.11.2016 without there being an extension of Long Stop Date and in spite of emails issued by Petitioners directing Responden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mentioning the consideration as ₹ 50,00,000/-, ₹ 1,13,62,000/- and ₹ 4,10,93,000/- respectively in favour of Respondent No.2. (c) To set aside the transfer of machinery and affixtures to the godown more specifically mentioned in the schedule annexed to this Petition. (d) To pass an interim order restraining the Respondents from creating 3rd party interest over the schedule mentioned property. (e) To order enquiry into the affairs of 1st Respondent Company and the 2nd Respondent Company under the provisions of Section 210 and 213 of the Companies Act, 2013, especially in relation to the transaction of sale and purchase of the assets of 1st Respondent Company undertaken by the majority shareholders in an illegal and oppressive manner and in a manner contrary to law and in order to investigate the manner in which the proceeds have been utilised by Respondent Nos. 1 3. (f) Impose cost of this petition. 5.2 The Counsel for Petitioners submits that Respondents No. 1, 3, 4 5 have not adhered to the terms and conditions of the Asset Transfer Agreement dated 24.06.2016, the draft of which was approved by the Company, in its EGM held on 16.04.2016. In par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... letion of the said transactions, Respondent NO.2 Company as well as Respondent No.1 Company, both have agreed for implied extension of date. He submits that at best, the said violation with regard to the non-extension of Long Stop Date can be taken as mere technical lapse and the same has not resulted in any loss to the Petitioners as shareholders of the Company. He submits that Petitioners have miserably failed to demonstrate as to how their rights as shareholders have been prejudiced and any loss has been caused to the detriment of their position in the Company. It is submitted by him that even the shareholding pattern of the Petitioners remain unchanged throughout and the same is not disputed. He further states that Petitioners themselves have agreed for the sale of the undertaking of Respondent No.1 Company in the EGM held on 16.04.2016 and had consented to the draft Asset Transfer Agreement. 5.4 It is further submitted by him that due to the timely infusion of money by Respondent No.2 Company under the said transactions, the Company's assets have been saved from confiscation by the SBI under the SARFAESI Act. Counsel for Respondent No.2 submits that the Long Stop Date a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s (India) Ltd and Ors Vs Needle Industries Newey (India) Holding Ltd and Ors AIR 1981 SC 1298 05 Rakesh Malhotra Vs Rajinder Kumar Malhotra (2015) 192 Comp Cas 516 (Bom) 06 Sajivbhai Kirtbhai Patel and Ors Vs Biocare Remedies P Ltd and Ors (2017) 13 CLA 99 07 Shanti Prasad Jain Vs Kalinga Tubes Ltd, AIR 1965 SC 1535 o8 Rashima Sa Investments LLC Vs Shristi Infrastructure Development Corporation Ltd, MANU/NC/1951/2017 : 09 Ramnish Kumar Sharma Vs D.R. Johns Lab Pvt Ltd and Ors, MANU/NC/0112/2016 : 10 Dr Jiwan Lal and others Vs Brij Mohan Mehra and Anr,: AIR 1973, SC 559 n Supriya Das and Ors Vs Sova Tea Company Private Limited and Ors MANU/NC/0575/2017 : 12 Jagan Mohan Bahl Vs State (2014) 16 SCC 501 13 Union of India Ors Vs Cipla Ltd and Ors (2017) 5 SCC 262 6. DISCUSSION: In this conn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Sale Agreement, Sale Deed and such other documents as may be found necessary, modify or amend the documents so executed where necessary and present the documents so signed by him on behalf of the Company for registration before the Registrar or Sub- Registrar of Assurances and admit execution of the documents and do all such other acts deeds and things as are incidental or consequential thereto. RESOLVED FURTHER THAT Mr. Sanjeev Chintagunta Baba (DIN: 5310356) Director of the Company be and is hereby authorized to do all such acts, matters, deeds and things necessary, expedient or desirable for giving effect to the said resolution and for matters connected therewith or incidental thereto. The said EGM was attended by five Members as per the attendance sheet attached to the said resolution. The said resolution dated 16.04.2016 was also passed by Mr Vamsidhar Maddipatla and Dr. Ibrahimpatam Krishna, the Petitioners herein. From the above resolution, it is clear that Mr. Sanjeev Baba has been authorised to negotiate / settle the terms and conditions and the most advantageous price etc in relation to sale of the assets as covered by the proposed sale agreement to be execut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and Interpretation), clause 11 (Representations and Warranties); Clause 12 (Indemnity); Clause 13 (Non-Compete and Non Solicitation); Clause 14 ( Confidentiality), Clause 15 (Governing Law); Clause 16 (Dispute Resolution); Clause 17 (Notice) and Clause 18 (Miscellaneous) shall cease to have effect (so that no party shall have any liability under them) and no Party hereto shall be entitled to make any Claim against any other party, save and except in relation to a previous breach and such accrued rights of Parties shall survive the termination of this Agreement pursuant to this sub-clause. From the above, it is clear that waiver, extension, relaxation of conditions precedent to the Asset Transfer Agreement are at the instance of the purchaser i.e, Respondent No.2 herein and in case the purchaser agrees for the said waiver, the Agreement may be carried forward by the parties concerned. 8. The Petitioners herein have not been able to establish in all their pleadings and oral arguments as to how their interest have been prejudiced with the said three transactions relating to transfer of land as mentioned in the prayer Clause (2) of their petition. The petitioners also have not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on to set aside transfer of the following assets in favour of Respondent No.2 Company and sought other reliefs as under:- (i) Ac 1-17 1/2 guntas of Land with built up are admeasuring 3520 square feet there on etc, registered on 03.11.2016 as document number 7540/2016; (ii) Ac 1-00 guntas of land with built up area admeasuring 11424 square feet, registered on 03.11.2016 as document No. 7541/2016 (iii) Ac. 4-30 guntas of land with built up area admeasuring 28853 square feet registered on 03.11.2016 as document No. 7542/2016. (iv) To set aside the transfer of machinery and affixtures to the godown more specifically mentioned in the schedule annexed to this Petition. (v) To pass an interim order restraining the Respondents from creating 3rd party interest over the schedule mentioned property. (vi) To order enquiry into the affairs of 1st Respondent Company and the 2nd Respondent Company under the provisions of Section 210 and 213 of the Companies Act, 2013, especially in relation to the transaction of sale and purchase of the assets of 1st Respondent Company undertaken by the majority shareholders in an illegal and oppressive manner and in a manner contrary to law and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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