TaxTMI 
TaxTMI 
2017 (7) TMI 373
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....ons of the Companies Act, 1956. The Registered office of the Petitioner Company is situated at Plot No.lND-5, Sector I, East Calcutta Township, Kolkata-700 107, within the jurisdiction of this Hon'ble Bench. The authorized capital of the Petitioner Company is Rs. 12 Crore. The issued subscribed and paid up capital of the Petitioner Company is Rs. 7,70,71,110/- made up of 77,07,111 equity shares of Rs. 10/- each fully paid up. The present business of the Petitioner Company is the manufacture and sale of rectified spirit, country liquor, IMFL, marine products, carbon dioxide gas. The Petitioner Company is a listed company and its shares being quoted on the Mumbai, Kolkata, Delhi and National Stock Exchanges. The respondent No.1, SICGIL India Ltd, a company incorporated under the provisions of the Companies Act, 1956 and having its registered office at, Dhun Building, 84 (Old No.827), Annasalai, Chennai-600002. The R-2 is the Managing Director of the R-1 and is the principal person in control of the management and affairs of the R-1 Company. The respondent Nos. 3 to 6 are relatives of the R-2 within the meaning of Section 6 of the Companies Act, 1956. The R-3 is the wife of the R....
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....ecame entitled to a further 0.008% of the voting rights in the Petitioner Company and the combined shareholding strength and/or voting rights of the R-1 Company, as at the date of issuance of the said letter stood at 5.003%. Following the receipt of the said letter of January 16, 2004, the Petitioner Company cause enquiries to be made and discovered that the shareholding strength and/or voting rights of the Respondents in the Petitioner Company as on January 16, 2004 was 4.988%. It is further submitted that the Respondents were acting in concert and/or as a combined entity, the Petitioner Company, in the usual course, cause the quantum of shareholding jointly held by the Respondents to be monitored on a regular basis thereafter and come to learn that the shareholding of the R-1 and/or the Respondents in the Petitioner Company has been gradually increasing after January 20, 2004. It was only on or about June 4, 2004 that the Petitioner Company came to learn that the R-1 himself had purported to increase its own shareholding and/or voting strength in the Petitioner Company from 3.131% of the paid-up capital as at January 16, 2004 to over 5% of the paid up capital of the Petitioner Co....
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....n the C02 market. Thereafter, on 4 June, 2004 the BENPOS further indicated that the R-1 Company had individually acquired holding more than 5% of the equity shares in the Petitioner Company. This was also in violation of both Takeover Regulations and Insider Regulations. On 9 July 2004, the Respondents held approximately 8.22% equity shares of the Petitioner Company. In view of the above, on 19 July 2004, the Petitioner Company filed the Company Petition under Section 111A of the Companies Act, 1956 before the then Company Law Board, Kolkata Bench praying inter alia for the following reliefs:- a. Declaration that such acquisition of shares by the R-1 to 6 as illegal, null and void and of no effect; b. Necessary direction be given for rectification of the register of records by deleting the names of the Respondent Nos. 1 to 6; c. Permanent injunction restraining the Respondents from exercising any rights or receiving any benefits in respect of shares held by Respondents in the Petitioner Company in any manner whatsoever. As per the BENPOS dated 13 August 2004, the R-1 was holding 6.38% equity shares of the Petitioner Company. Upon intimation to the Respondents about the Pet....
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....tions 1997 and 2011. The Petitioner also brought the following facts on record that a. The Respondents had taken advantage of the pending matter and without paying heed to the order continued to acquire shares of the Petitioner Company and taking their holding to 15.020%; b. The disclosures does not specify the individual shareholding and neither states the facts that 0.933% of the shareholding stood frozen vide the Order of Learned CLB dated 27 August 2004; c. The Respondents had completely suppressed the fact that Pure Industrial Gases Pvt Ltd (PIGPL) which is the family company of the R-2 to 6 was holding 16200 equity shares constituting 0.20% of the shareholding in the Petitioner Company which is evident from the shareholding pattern of PIGPL as on 01/11/2014. The combined holding of the Respondents along with PIGPL had triggered the open offer on 17 July 2009 which was also in violation of Regulation 10 of the Takeover Regulation. d. The Petitioner did not intimate to the Petitioner Company about acquisition of shares in the Petitioner Company as required under relevant laws; e. None of the disclosures of shareholding by the Respondents record the frozen shares as wa....
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....the Petitioner Company under Regulation 13(1) to SEBI vide its letter dated 24/08/2004 and attached to the reply and marked as Annexure as R-6. It is further submitted that the Petitioner Company cannot seek to prevent the Respondents from exercising any rights or receiving any benefit in respect of shares held by the Respondents in the Petitioner Company in any manner. The R-1 further stated that the malafide intentions of the present management of Petitioner Company is further borne out by the fact that they have deliberately been attempting to deny the Respondents of their legitimate rights as shareholder to participate in the meetings of the Company and vote on resolutions there. The Ld. Counsel denied that the present Petition has been filed within the period of limitation. The present Petition has been filed beyond a period of 2 months as prescribed under Section 111A (3) under the Companies Act, 1956. The R-1 Company's shareholding exceeded 5% of the total paid up capital of the Petitioner Company on June 2, 2004 and the present Petition has been filed beyond a period of 2 months from the said date and it is, therefore, clearly barred by limitation. The Respondents al....
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..... Counsel for the Respondents relied on the two judgments of Hon'ble Supreme Court Cases Union of India v. Shiv Dayal Soin & Sons Pvt Ltd & Ors and Anand Nivas (Private) Ltd. v. Anandji Kalyanji Pedhi and Ors. In view of the above facts, the Ld. Counsel for the Respondents prayed that the Company Petition be dismissed. On the basis of the pleadings of the parties following question arises for the decision of the case: 1. Whether the acquisition of shares by the Respondents without complying with the statutory provisions of disclosure norms under SEBI Regulations is valid? According to the Petitioner's contention, IFB Agro Limited had received intimation under SAST Regulation 7(1) from SICGIL along with F.L. Dadabhoy and relatives, about acquiring of 600 shares on 19th January 2004, leading to holding of more than 5% equity share capital of the Petitioner Company. Although the Petitioner went on to contend that the declaration so made by the Respondents was not as per the prescribed format and was incomplete under Regulation 7(1), the Petitioner additionally also pointed out that there were no disclosures made under Regulation 7 (2) of the SAST 1997 either. Additionally,....
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....etitioner Company came to know that R1 had exceeded 5% of the paid-up capital of the Company as early as 4th June, 2004, the Petitioner had failed to file the present petition within two months from the date of such acquisition and therefore the present petition is barred by time under Section 111A (3) of the Companies Act, 1956. Even though R2 to R6 qualified as relatives as has been indicated in the Securities and Exchange Board of India Prohibition of Insider Trading Regulations, 1992 and the Companies Act, 1956; they cannot be brought under the purview of the term "person" as has been contemplated in Regulation 13 of the Securities and Exchange Board of India Prohibition of Insider Trading Regulations, 1992. Regulation 2 (i) of the Securities and Exchange Board of India Prohibition of Insider Trading Regulations, 1992 states: (i) "relative" means a person, as defined in section 6 of the Companies Act, 1956(1 of 1956); Regulation 13 of the Securities and Exchange Board of India Prohibition of Insider Trading Regulations, 1992 lays down: (13) Disclosure of interest or holding by directors and officers and substantial shareholders in listed companies - Initial Discl....
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....tion on the 19th July, 2004. The declaration so filed at a later point of time on 24th August, 2004, is in violation of the SEBI Prohibition of Insider Trading Regulation, 1992 and is not valid for the reason that the said declaration had to be filed within four working days of the receipt of intimation of allotment of shares or the acquisition of shares or voting rights, as the case may be, as per the SEBI Prohibition of Insider Trading Regulation, 1992. Additionally, the term person in the SEBI Prohibition of Insider Trading Regulation, 1992 under Regulation 13 can be construed to mean and include all other Respondents besides R1 as "persons acting in concert". The reason for this is the exercise of control in the management of the Petitioner Company which would be done jointly by all the Respondents. If the aforementioned concept of control in the management of the Petitioner Company is to be viewed, all the Respondents could be made jointly liable to serve a declaration under Regulation 13 along with R1. 38. In conclusion, it clearly indicates that R1 was in default for not having served the declaration under the SEBI Prohibition of Insider Trading Regulation, 1992, when its ....
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....n application made by a depository, company, participant or investor or the Securities and Exchange Board of India, if the transfer of shares or debentures is in contravention of any of the provisions of the Securities and Exchange Board of India Act, 1992 (15 of 1992), or regulations made thereunder or the Sick Industrial Companies (Special Provisions) Act, 1985 (1 of 1986), or any other law for the time being in force, within two months from the date of transfer of any shares or debentures held by a depository or from the date on which the instrument of transfer or the intimation of transmission was delivered to the company, as the case may be, after such inquiry as it thinks fit, direct any depository or company to rectify its register or records. (4) The Company Law Board while acting under sub-section (3). may at its discretion make such interim order as to suspend the voting rights before making or completing such enquiry. (5) The provisions of this section shall not restrict the right of a holder of shares or debentures, to transfer such shares or debentures and any person acquiring such shares or debentures shall be entitled to voting rights unless the vot....