National Company Law Tribunal, Bengaluru: In applications seeking injunction the against respondents’ actions which are in violation of the NCLT’s order dated 27-02-2024 which prohibited allotment of shares without increasing the Authorized Share Capital and required funds from the rights issue to be kept in a separate Escrow account, a division bench comprising of M. S. S. Sundaram, J., (Judicial Member) and Mr. Manoj Kumar Dubey (Technical Member), restrained the respondents from proceeding with the second rights issue and ordered the preservation of the current shareholding status quo until the main petition is adjudicated.
In the instant matter, a petition was filed under Sections 241 and 242 of the Companies Act, 2013, alleging oppression and mismanagement. The NCLT, vide order dated 27-02-2024, passed an interim order to prevent the allotment of shares without increasing the Authorized Share Capital and to keep funds from the rights issue in a separate Escrow account until the disposal of the matter. The applicant filed an application (C.A. No. 71/2024) under Section 242(4) of the Companies Act, seeking injunction against offer letters dated 11-05-2024 and 13-05-2024 and suspension of corporate actions based on the revised shareholding pattern post-hearing on 27-02-2024. Later, an application (C.A. No. 72/2024) was filed under the same provisions, seeking to set aside actions violating the NCLT’s order dated 27-02-2024, including share allotment on 02-03-2024 and nullify corporate actions based on the revised shareholding pattern.
The applicants contended that the share allotment violated Section 62(1)(a) and (c) of the Companies Act and was without a board resolution as required by Sections 175 and 179 of the Companies Act. The applicant argued that the revised shareholding pattern included preference shareholders is contrary to statutory requirements. However, the respondents asserted that there is no violation of NCLT’s order and that share allotment was within the authorized share capital limits. It was contended that no funds were withdrawn from the escrow account post-NCLT’s order. It was emphasized that the inclusion of preference shareholders in the rights issue was permissible under the Articles of Association.
While acknowledging the complexity of the issue in hand, the NCLT noted that the matters raised in the second application overlap with the pending contempt petition regarding the alleged violation of the NCLT’s order dated 27-02-2024. The NCLT reviewed the respondents’ compliance with the interim order and noted discrepancies in the handling of the rights issue and share allotment.
The NCLT restrained the respondents from proceeding with the second rights issue until the disposal of the main petition alleging oppression and mismanagement and ordered the respondents to maintain the status quo regarding existing shareholders and their shareholding. The NCLT directed the respondents to file detailed information on share allotment and escrow account transactions within ten days. The matter is scheduled for further consideration on 04-07-2024.
[MIH Edtech Investments B.V. v. Think & Learn (P) Ltd., 2024 SCC OnLine NCLT 2889, order dated 12-06-2024]
Advocates who appeared in this case :
Shri Sudipto Sarkar, Sr. Adv., Shri Satish Parasaran, Sr. Adv. With Shankh Sengupta, Sampath Kumar, Tine Abraham, Yogesh Singh, Akshaya R., Aubert Sebastian, Manasa S., Rangam Sharma, Lavanya B. Ananth, Sujoy Sur, Angelika Awasthi, Neha Dhavalikar, Aneeta Mathew, Prarthna Bathija, Subhang N, Counsel for the Petitioners
Shri Dhyan Chinnappa, Sr. Adv. with Manmeet Singh, Dr. Rishab Gupta, Ishu Gupta, Nidhi, Sairam Subramanian, Siddharth Doshi, Saloni Shah, Ashika Jain i/b Saraf & Partners, Counsel for the Respondent No. 1
Shri K.G. Raghavan, Sr. Adv. with Manmeet Singh, Dr. Rishab Gupta, Sairam Subramanian, Siddharth Doshi, Saloni Shah, Ishu Gupta, Ashika Jain, Priyanka i/b Saraf & Partners, Counsel for the Respondent No. 2 – 4
Shri Akshay Manjunath and Ms. Jakhari, Counsel for the Respondent No. 5
Shri Dhananjay Joshi Sr. Adv. with Shri Pavan Srinivas, Counsel for the Impleading Applicant in CAs 76 & 77/2024
Ms. Khusboo Kapur, Counsel for the RBI
