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TMI Blog2022 (6) TMI 1492X X X X Extracts X X X X X X X X Extracts X X X X ..... T:- Admittedly, in the Special Resolution of the Company dated October 1, 2012 the proceeds were required to be utilized for various purposes as stated in the said Notice to the EOGM. Subsequently, the proceeds which were utilized for other purposes was ratified by the shareholders of the Company by a Special Resolution on September 29, 2017. The shareholders ratified and approved all acts, deed and things done by the Company in entering into and giving effect to the utilization of the proceeds as received in the said preferential issue which was in variation to the objects as stated in the notice of EOGM held on October 1, 2012. Once this Special Resolution dated September 29, 2017 is passed, utilization made by the Company towards purchas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Listing Agreement. The impugned orders passed by the AO cannot be sustained and are quashed. - Hon'ble Judges Tarun Agarwala, J. (Presiding Officer) and Meera Swarup, Member (T) ORDER Tarun Agarwala, J. (Presiding Officer) 1. Three different orders of the same date i.e. April 29, 2020 has been passed by the Adjudicating Officer ('AO' for short) of the Securities and Exchange Board of India ('SEBI' for short), one against the Company, Terrascope Ventures Limited, one against its Director Geeta Manoharlal Saraf and the third order has been passed against another Director Manoharlal Saraf whereby a penalty of Rs. 1 crore has been imposed upon the Company and Rs. 25 lakh each has been imposed upon the Directors under Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uently, a Special Resolution dated September 29, 2017 was passed in the Annual General Meeting (AGM) of the Company whereby majority shareholders ratified and approved all acts, deeds and things done by the Company in entering into and giving effect to the utilization of proceeds pursuant to the preferential issue which was in variance to the original objects of the preferential issue stated in the notice of EOGM held on October 1, 2012. 5. Considering the variation made in the utilization of proceeds, a show cause notice dated April 27, 2018 was issued by the AO alleging that the appellants did not utilize the proceeds of the preferential issue in accordance with the Special Resolution passed under Section 81(1A) of the Companies Act on Oc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e instant case, admittedly, in the Special Resolution of the Company dated October 1, 2012 the proceeds were required to be utilized for various purposes as stated in the said Notice to the EOGM. Subsequently, the proceeds which were utilized for other purposes was ratified by the shareholders of the Company by a Special Resolution on September 29, 2017. The shareholders ratified and approved all acts, deed and things done by the Company in entering into and giving effect to the utilization of the proceeds as received in the said preferential issue which was in variation to the objects as stated in the notice of EOGM held on October 1, 2012. Once this Special Resolution dated September 29, 2017 is passed, utilization made by the Company tow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ber 29, 2017 approved the acts and deeds of the Company which was improperly done or performed in the first instance and, therefore it was incorrect on the part of the AO to hold that passed illegal acts or deeds cannot be legitimized by a subsequent ratification by passing a resolution by the shareholders of the Company. This finding of the AO in paragraph 21 of the impugned cannot be sustained. 12. Once the utilization of the proceeds have been ratified by the shareholders of the Company, the acts and deeds done by the Company becomes valid and authorized and therefore there was no variation of the utilization of the proceeds. The show cause notice alleging variation in the utilization of the proceeds is, thus, erroneous. 13. For the same ..... X X X X Extracts X X X X X X X X Extracts X X X X
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