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TMI Blog2021 (3) TMI 1126X X X X Extracts X X X X X X X X Extracts X X X X ..... cts of oppression and mismanagement into the affairs of the Company. Following the Principle of Natural Justice, we would afford an opportunity a liberty to the Appellant to address the issues before the learned NCLT with regard to the bank statement of the Respondent No. 1 Company for the reasons that the Appellant disputed the payments made by the other Directors. The Appellant may file these documents by way of Additional Documents before the learned NCLT after serving a copy of the same upon the Respondent well in advance. Matter remanded back to the learned NCLT who will decide the Company Petition on merits along with Additional Documents as may be filed by the Appellants. If the Appellant failed to file these documents before the leaned NCLT, learned NCLT may proceed with the records available with it. - Company Appeal (AT) No. 242 of 2020 - - - Dated:- 26-3-2021 - Mr, Jarat Kumar Jain, Member (Judicial) and Kanthi Narahari, Member (Technical) For Appellants : Mr. Virender Ganda, Sr. Advocate with Mr.Vishal Ganda, Mr. Anand Singh Sengar and Mr. Ayandeb Mitra, Advocates. For Respondents : Mr. Saurabh Kalia, Mr. Divendra Singh, Mr. Mohit Chaurasia, Mr. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 377; 4 Crores to ₹ 16 Crores. The sole motive of the rights issue is simply to dilute the shareholding of the Appellant in the Company and curtail his rights. Further, the Board passed resolution not to repay the short term unsecured loan of ₹ 6 Crores 90 lakhs. However, the Respondents forcing the Appellant to invest ₹ 10.70 Crores to secure the sanction of loan from South India Bank. 6. The Company called an Extra Ordinary General Meeting (in short EOGM) on 15.06.2020 to increase the authorised share capital from 4 Crores to 16 Crores. Further, the Company issued the offer letter dated 27.06.2020 for subscribing the rights issue and it is stated that the rights issue offer was made in proportion to the shareholding of the shareholders of the Company. If the Appellant failed to subscribe to the rights issue, the Appellant s shareholding will be reduced. 7. Learned Senior Counsel for the Appellant submitted that they have filed a petition before the NCLT under Section 241, 242 and 213 of the Companies Act, 2013 and sought various reliefs. The Appellant also sought interim reliefs praying the Hon ble Tribunal to stay the process of effecting increase in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... integra that the right issue for genuine purpose and for the benefit of the Company is not illegal until proved otherwise. The petition/minority shareholders have to prove the malafide of the majority in order to get relief against the Rights issue. In the case in hand petitioner himself attended the meeting, submitted his objections against the Rights issue. The petitioner has a chance to purchase/invest more in the company. There is no single instance of oppression or mismanagement by way of further issue of Rights by the directors of the company. 24. In that view of the matter there is no prima facie ground to stay the further issue of rights. Hence the stay on the further issue of Rights has now been vacated subject to the final outcome of the present petition. .. 12. From the perusal of the impugned order, the learned NCLT observed that there is no prima facie ground to stay further issue of rights. Hence vacating the stay, subject to the final outcome of the present petition. 13. It is an admitted fact that the Appellant is a shareholder and Director of the Respondent No. 1 Company holding 12 lakhs equity shares constituting 30% of the paid up share capi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the unsecured loan to the Appellant. 19. In the Board Meeting held on 06.03.2020, the Board discussed and deliberated upon financial obligation to be fulfilled by the Appellant. It is also discussed that the Appellant did not become party to obtain Bank credit facilities and also not provided his personal guarantee in respect of the current sanctioned bank facilities. However, the Board without taking any decision on this aspect decided to take the matter in the next Board Meeting. 20. From the records it is apparent that the Appellant has not provided any guarantee for the credit facilities to avail from the South India Bank. 21. In the Board Meeting held on 09.05.2020 wherein the father of the Appellant was present, the Board took various decisions including the financial status of the project of the Respondent No. 1 Company and fund requirements. It was also discussed that the Company is losing approximately 60 lakhs to 70 lakhs every month due to shortage of working capital fund. It is seen from the minutes of the meeting that the Appellant denied to infuse any further fund into the Company. The Company also took decision to further collecting fund to the tune of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were in fact did not utilised for the project of the Respondent No. 1 Company however the same were used to clear the loan advances provided by the Respondents to the Respondent No. 1 Company. 25. Learned Senior Counsel further contended that the tabular depiction at page-6 of the Application demonstrated that the loan of all the stakeholders of the Respondent No. 1 Company, except the Appellant, has been reduced. At page-7 tabular depiction has been given with regard to unsecured loans as Tally data. 26. Learned Senior Counsel for the Appellant submitted that the tabular depictions make it abundantly clear as to how the funds raised qua the rights issue were being utilised by the Respondent No. 1 Company and the fact that the said rights issue was never given for the benefit or interest of the Respondent No. 1 Company but were in fact a method of fund rotation. Further in the Application at page -89 a Bank Statement of ICICI Bank of the Respondent No. 1 Company from 01.06.2020 to 30.06.2020 has been filed. Further at page -90, the Bank Statement of ICICI Bank of the Respondent No. 1 Company from 01.07.2020 to 31.07.2020 is given. Learned Senior Counsel for the Appellant s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed under Sections 241 242 of the Companies Act, 2013 alleging certain acts of oppression and mismanagement into the affairs of the Company. 29. Though prima facie we are not inclined to deal with any of the issues on merits. Further, following the Principle of Natural Justice, we would afford an opportunity a liberty to the Appellant to address the issues before the learned NCLT with regard to the bank statement of the Respondent No. 1 Company for the reasons that the Appellant disputed the payments made by the other Directors. The Appellant may file these documents by way of Additional Documents before the learned NCLT after serving a copy of the same upon the Respondent well in advance. The Respondents may file their rebuttal/Reply, if any to the pleadings or additional pleadings. CONCLUSION: 30. In view of the aforesaid reasons, we remand the matter back to the learned NCLT who will decide the Company Petition on merits along with Additional Documents as may be filed by the Appellants. If the Appellant failed to file these documents before the leaned NCLT, learned NCLT may proceed with the records available with it. 31. We direct the Respondents that the s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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