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TMI Blog2022 (2) TMI 1178X X X X Extracts X X X X X X X X Extracts X X X X ..... panies. This tribunal is of the view that the NCLT miserably failed to exercise the power and its jurisdiction as vested in it. Further the NCLT ought to have considered on the factual aspect of the inadvertent error and the appellant company bonafidely informed the RBI and its Regulators with regard to the inadvertent error / bonafide mistake crept in and sought permission to rectify the mistake by cancelling the excess shares. Even the R1 company also through its Board Resolution expressed their No Objection for cancellation of excess shares. This Tribunal comes to a resultant conclusion that the appellant has made out a prima facie case to allow the appeal - matter is remanded back to the NCLT and the learned NCLT is directed to consider cancellation of 51,889 equity shares allotted to Respondent No.1 and direct the ROC to carry out necessary rectification of records relating to share capital and share premium account - appeal allowed by way of remand. - Company Appeal (AT) (CH) No. 16 of 2021 - - - Dated:- 24-2-2022 - [Kanthi Narahari] Member (Technical) And [Justice M. Venugopal] Member (Judicial) For the Appellant : Mr. Antony R. Julian, Advocate For the Resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ir value of the equity shares of the appellant company was valued at ₹ 8,112/- per share on the date of issue Series-A CCPS. 6) Subsequently, on 25.04.2014 the appellant company issued Series-B CCPS shares to the entities as per the tabular column in para-14 page-6 of appeal paper Book. The respondent No.1 was issued 2,880 Series-B CCP shares at ₹ 27,788 per share. 7) The investment made in Series-A CCPS and Series-B CCPS were reported to RBI by filing Form on 03.07.2014. The fair value of the shares of the appellant company 4,827 per equity shares as per the valuation report prepared as per RBI guidelines dated 24.12.2013. The documents have been filed before the RBI and the RBI acknowledged vide letter dated 26.05.2014. 8) The formula for conversion of Series-A CCPS and Series-B CCPS into equity shares as per the pricing guidelines in FEMA Regulations issued by the RBI in Master circular dated 01.07.2011. As per the applicable pricing guidelines, wherever the Series-A CCPS and Series-B CCPS worked out to be converted into equity shares, the conversion price could not be less than the fair value of the equity shares of the appellant company as on the date of i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... set aside the impugned order and permit the appellant company to cancel the excess equity shares allotted to R1 on erroneous conversion of Series-A CCPS and Series-B CCPS. Respondent s Submission: 16) The learned counsel appearing for the Respondent No.1 filed a short reply and at para-3 it is stated that the answering respondent has already given its consent to the cancellation of the excess shares allotted to it vide letter dated 13.12.2019 along with a copy of Minutes of the Meeting of the Board of the answering respondent dated 13.12.2019 . The respondent prayed to allow the Company Appeal. 17) Heard the learned counsels appearing for the respective parties perused the pleadings and documents filed in their support. Analysis / Appraisal: 18) The Appellant filed the Company Petition before the NCLT, Bengaluru U/s.59 of the Companies Act, 2013 read with rule 70 of NCLT Rules 2016 by seeking rectification of register of members of the appellant company by cancelling the excess 51,889 equity shares allotted to Respondent No.1 herein on 20.03.2013 and sought direction to the ROC, Bengaluru to effect the cancellation of 51,889 equity shares excess allotted to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Book) and sought permission to cancel / reduce the excess 51,889 equity shares allotted on conversion to said Zephyr Peacock India Fund II Ltd (Respondent No.1). However, the RBI vide its letter dated 26.11.2019 (page-242 of appeal paper Book) replied and stated that the cancellation of excess shares allotted will not come under purview of RBI and hence, you may approach Registrar of Companies for cancellation of shares. Further, the RBI advised the appellant to intimate them with documentary evidence after cancellation of excess shares to enable them to acknowledge the concerned FC-GPR pending with them. 23) Even the respondent No.1 vide its letter dated 13.12.2019 addressed to the Board of Directors of the appellant company stated that they have no objection for cancellation of excess 51,889 equity shares. The content of the said letter is extracted here at. we hereby give our no objection for rectification of register of members by way of cancellation of excess 51,889 equity shares allotted to us by E to E Transportation Infrastructure Pvt. Ltd. On 20.03.2019 pursuant to conversion of Series-A CCPS and Series-B CCPS held by the company, which were not in accordance with r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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