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TMI Blog2021 (1) TMI 765X X X X Extracts X X X X X X X X Extracts X X X X ..... d allotment of share without proper notice to the petitioner is a wrongful act which has a recurring effect on the rights of the petitioners who are the shareholders - the petition is not barred by law of limitation and is maintainable. The interest of the company is of paramount importance as far as Section 397 398 of the Companies Act, 1956 as also Section 241 242 of the Companies Act, 2013 is concerned. The same purpose in just and equitable manner can be served, if additional shares are issued to the Respondent No.1 2 to bring to their shareholding level to the same level as it was existing as on 07.07.2007 / 30.09.2011 and it will not hurt the company either in the form of additional financial burden or health of their overall business or to the Members/Shareholders for the relief they have sought. The purpose of Section 397 and 398 of the Companies Act, 1956 as also Section 241 and 242 of the Companies Act, 2013, the Tribunal may with a view to bring to an end the matters complained of make such order as it thinks fit for the regulations of Conduct of affairs of the company in future. However, the issue for consideration is whether annulling the allotment of sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Respondent No.1 to 7, 11 and 12 were allotted shares in proportion to their capital sharing in the partnership firm. The companies authorized and subscribed share capital was ₹ 10,00,000/- divided into 1,00,000 equity shares of face value of ₹ 10/-. The authorized share capital of the company was increased in 2006-07 to ₹ 34,00,000/- by way of 3,40,000 of equity shares of ₹ 10/- each. The Respondent No.3 4 resigned from the post of the Directorship of the Respondent No.13 company in the Financial Year 2007-08. The company obtained financial assistance from City Bank Chennai in the form of working capital arrangement etc., to which Respondent No.1 2 stood also as personal guarantors. The Respondent No.1 2 who were personal guarantors of those loans withdraw their guarantee in 2010 and they started their own business around the year 2008 and kept themselves aloof from the Appellant Company till 2015. The company again issued increased authorized share capital to ₹ 1 crore divided into 10,00,000 equity shares of ₹ 10/- in 2009. 3. As per the submission made by the Appellants that they convened AGM on 30.09.2011 after due approval and issued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... L.Balaji(Director ) 2,81,00 0 35.60 10 28,10,00 0 B.Ram Kumar 1,50,00 0 19.00 10 15,00,00 0 B.Adithya kumar 1,59,00 0 20.10 10 15,90,00 0 9 B.Inmai (Director) 1,10,00 0 13.90 10 11,00,00 0 R.Lenin 12,500 1.60 10 1,25,000 L.Desigasigama ni 5,000 0.60 10 50,000 R.Srinivasan R1 60,000 7.60 10 6,00,00 0 S.Krishna Kumar R2 12,500 1.60 10 1,25,00 0 Total 790000 100.00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... impugned order of the Tribunal dated 26.06.2019. Through Oral and Written submissions, the Appellants assuming (on a demurrer) that even if the Respondents are granted relief in their favour, instead of the company going back by 9 years, let the allotment of shares be made to the Respondents in a way that their shareholding as on 30.12.2011 remain unchanged. This will save the Company from Financial and Administrative crisis. 9. While the Respondent No.1 and 2 have alleged that certain new facts have brought in an appeal which should not be considered. They are also shocked to know that their shareholding was diluted heavily without any intimation. They came to know about these irregularities after inspection of documents with RoC. They have alleged that the Appellant have inducted their family members including his wife into the Board thereby converting the Company into his personal fiefdom. They have also raised the issue of creation of charges on the assets of the Company by the Appellants to the Bank. They are challenging the issue of additional shares of 2011. The Company which was the family held company of all the sons of Late A.Rathinasamy. Nadar was converted into a fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibunal is entitled to interfere by passing an appropriate order. The alleged increase of authorized share capital and allotment of share without proper notice to the petitioner is a wrongful act which has a recurring effect on the rights of the petitioners who are the shareholders. Thus, we hold that the petition is not barred by law of limitation and is maintainable. 14. While considering the impugned order, reversal of paid up capital to the level of Financial Year 2011-12 as also setting aside of all filings with the RoC w.e.f. 30.09.2011, the Appellant Company Thangam Metal Cans Private Limited will have several commercial and legal complications including reversal of capital / reduction of capital will reduce the borrowing power of the company which it might have availed of and still to be paid of to the involved Bank of the company. While refiling for all these years w.e.f. 30.09.2011 to till date to the RoC will also involve unnecessary correction cost and refiling cost to the company. The interest of the company is of paramount importance as far as Section 397 398 of the Companies Act, 1956 as also Section 241 242 of the Companies Act, 2013 is concerned. The same p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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