TaxTMI 
TaxTMI 
TaxTMI 
2017 (3) TMI 1422
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....and RIO namely IDBI Trusteeship Services Ltd. (hereinafter referred as "Debenture Trustee") with the reliefs as follows: (a) To pass reliefs u/s.241 & 242 of the Companies Act 2013 (b) To direct that the Articles of Association of Vinca be modified and be substituted by the Articles as set out in Table - F of Schedule - I of the Companies Act, 2013. (c) To restrain the Nominee Directors of FMO from acting as Directors of Vinca and restrain them from giving any further instructions to the Debenture Trustee, whose Trusteeship has been validly terminated by Vinca. (d) To declare and direct that Board of Directors of Vinca are not bound to act in accordance with instructions of the Nominee Directors of FMO, the same being illegal and unlawful. (e) To remove the Nominee Directors of FMO from the Board of Vinca. (f) To declare all the actions taken by IDBI Trusteeship Services Ltd., in its capacity as Debenture Trustee at the instance of the Nominee Directors of FMO as illegal, null and void. (g) To direct that the OPCDs (optionally partly convertible Debentures) issued in favour of Vinca by Amazia (100% subsidiary of Vinca) and Rubix (100% subsidiary of Vinca) be converted into E....
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...., hence we brief it as below. 4. The above appeal before Apex Court arises out of a Summons for Judgment No. 39 of 2013 in a Summary Suit filed on the original side of the Bombay High Court, by the debenture trustee (RIO), to enforce rights that arise out of Corporate Guarantee executed by Hubtown (R5). 5. The case of the Petitioners is that Vinca was incorporated in the year August 2008 for carrying real estate business; later Amazia Developers Pvt. Ltd. (herein referred as "Amazia") incorporated on 4.6.2006 and Rubix Trading Pvt. Ltd. (incorporated as "Rubix" in the year 2009) have become wholly owned subsidiaries of Vinca. The Petitioners are shareholders of Vinca holding 20.50% of Class-A Equity Shares each and 50% of Class B Equity Shares each whereas FMO holds 10% Class-A Equity Shares i.e. 0.01% of the total Share Equity Capital of Vinca and 3-CCDs convertible over a period of 60 months into 99% of Class-A Equity Shares in Vinca. Whereas Hubtown holds 49% of Class-A equity shares amounting to 0.05% of the total issue and paid up equity of Vinca. 6. The Petitioners submit that they started Vinca by investing Rs. 12.50 crores, thereafter through a subscription Agreement dat....
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....by the individual promoters of Hubtown, who are none other than Hemant Shah and Vyomesh Shah (petitioners) entitling them to 41% of the voting rights and economic interest in Vinca. These petitioners together also own 100% of Class B equity shares of Vinca, which carry with them collective voting rights and dividend entitlement not exceeding 0.01%. Upon conversion, the 3 CCDs in Vinca will entitle FMO to 99% of the equity of Vinca (by allotment of additional Class A shares), thereby entitling FMO to 99% of the voting rights of Vinca. The said monies invested by FMO into Vinca were then used by Vinca to subscribe to certain optionally partially convertible debentures (OPCDs) issued by Vinca subsidiaries namely Amazia and Rubix by execution of Debenture Subscription and Debenture Trustee Agreements in the year 2009 making IDBI Serviceship Services Ltd (R10) as Trustee. As per the Trust Deeds, Vinca subscribed to the OPCDs carrying a variable coupon and a back ended coupon to ensure internal rate of return of 14.75% per annum. This money came through subscription into Amazia and Rubix were to be applied towards infrastructure projects as provided under Debenture Trustee Agreements. In....
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....he judgment in ImmamiAppa Rao's case would be attracted only if the illegal purpose is fully carried out, and not otherwise. 39. Based on the aforesaid, it cannot be said that the defendant has raised a substantial defence to the claim made in the suit. Arguably at the highest, as held by the learned Single Judge, even if a triable issue may be said to arise on the application of the FEMA Regulations, nevertheless, we are left with a real doubt about the Defendant's good faith and the genuineness of such a triable issue. Rs. 418 crores has been stated to be utilized and submerged in a building construction project, with payments under the structured arrangement mentioned above admittedly being made by the concerned parties until 2011, after which payments stopped being made by them. The defence thus raised appears to us to be in the realm of being 'plausible but improbable'. This being the case, the plaintiff needs to be protected. In our opinion, the defendant will be granted leave to defend the suit only if it deposits in the Bombay High Court the principal sum of Rs. 418 crores invested by FMO, or gives security for the said amount of Rs. 418 crores, to the sati....
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....iscuss any Reserved Matters inter alia including matters pertaining to OPCDs as a consequence of which the decisions remained pending on account of want of their affirmative vote, and obstructing working of the company. They further submit numerous cross suits are pending before various judicial authorities in respect to conversion of CCDs issued to FMO by Vinca, if such conversion is effectuated, FMO would become 99% shareholder of Vinca which ultimately become detrimental to the interest of the Petitioners and Vinca. The Petitioners further submit that the Nominee Directors of FMO consistently refused to co-operate with Vinca in conducting Board meetings and AGM despite notices have been sent to them. 12. The petitioners further illustrated that on the Notice dated 10.9.2016 issued for holding Board meeting on 27.9.2016, the Nominee Directors of FMO opposed to holding such meeting by sending a letter on 13.9.2016 stating that they received only on 16.9.2016 by which they could not make their travel plans, therefore, re-scheduling for the meeting to 6.10.2016, failing which to provide video conferencing or skype facility to attend the meeting if held on 27.9.2016. The Petitioners....
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....nca, followed by notices dated 2.5.2012 by the Debenture Trustee to Amazia and Rubix, at the instance of Nominee Directors of FMO and FMO itself calling for payment of interest on the OPCDs allegedly due and payable to Vinca under rectification of the other alleged defaults. For the Nominee Directors of FMO having given instructions to the Debenture Trustee for redemption OPCDs, the Debenture Trustee issued Early Redemption Notices dated 27.6.2012 to Amazia and Rubix calling upon them to redeem the OPCDs and pay the redemption amount along with interest computed at 171.22 cr. for Amzaia and 305.92 cr for Rubix thereafter, the Debenture Trustee served a demand certificate dated 3.8.2012 on Hubtown purportedly invoking the Corporate Guarantee and calling upon Hubtown, who is 49% shareholder of Vinca, to pay Early Redemption amount. The Counsel further submits that in terms of the mandate given by the Board of Directors vide its Resolution dated 19.5.2012, Vinca terminated on the appointment of Debenture Trustees vide its letter dated 6.8.2012 (this letter is also not annexed to this CP) and further the Board of Directors of Vinca passed a resolution on 8.8.2012 for discharge of Corpo....
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....ion against Hubtown for invoking Guarantee given by it and legal action against its subsidiaries for protecting interest to ensure that the proceeds come to Vinca as acts prejudicial to the Vinca. The fact of the matter is, these Petitioners on their own showing that they only invested Rs. 12.8 crores, whereas FMO invested Rs. 418 crores in the year 2009, since then nothing has gone as return to Vinca as per the agreements in between them. It is also not the case of the Petitioners that its subsidiaries are not owed to pay interest to Rl company as agreed in the Debenture Agreements. In fact, the Hon'ble Apex Court has given direction to R5 in the Civil Appeal to deposit principal sum with the Honourable High Court of Bombay. 19. It is a settled proposition of law that any Court, for that matter even NCLT, can dismiss Company Petition at threshold if the cause of action for invoking respective section has not been reflected in the Company Petition and if the material facts placed before this Tribunal do not constitute a case under the respective section of law. 20. As to amendment of Articles, it is not the case that the Respondent managing the company and misusing the Articl....
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....ely shut out FMO from realising Rs. 418 crores invested in Vinca. Moreover, since this conversion of OPCDs into shares being a reserved matter, unless the Nominee Directors of FMO exercise their right for such conversion, the Petitioners cannot impose such an obligation upon the Nominee Directors of FMO to exercise their affirmative of vote for conversion of OPCDs into shareholding. Now the relief sought by the Petitioners is for direction to the Nominee Directors of FMO to convert those OPCDs into shareholding so that the Petitioners wriggle out from the direction given by Hon'ble Supreme Court of India to deposit Rs. 418 crores with Vinca before putting up their defence in Civil Suit pending before Bombay High Court. 22. On having this Bench observed that either seeking a direction not to convert CCDs into shareholding of Vinca or seeking a conversion of OPCDs into shares of Amazia and Rubix will ultimately nothing but taking away the rights of FMO and its Nominee Directors by the Petitioners themselves through Hubtown, therefore, this Bench, having believed such orders could not be passed citing the affirmative right given to the Nominee Directors of FMO as unfair, does not....