2019 (7) TMI 684

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....jointly against the order dated 20th November, 2018 passed by the Adjudicating Authority (National Company Law Tribunal), New Delhi Bench whereby the application under Section 10 preferred by M/s. Astonfield Solar (Gujarat) Private Limited and Anr. (Corporate Debtor and Corporate Applicant) has been admitted, order of moratorium has been passed and the 'Resolution Professional' has been appointed. Learned counsel appearing on behalf of the appellant submitted that the shareholders had no voting right to approve the decision of the Board of Directors for initiation of 'corporate insolvency resolution process' to the 'Corporate Debtor' under Section 10 of the I&B Code. He placed reliance on 'Deed of Pledge of Securities' dated 28th March, 201....

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.... Documents or would otherwise prejudice the interests of any of the Lenders or Security Agent; (b) shall not-vote or abstain from voting, in favour of any resolution which would have the effect of altering the rights of the Security Agent hereunder or under any of the agreements in respect of the Facilities or the terms of the Securities or any rights attaching to the Securities in any way; and All such voting rights of the Pledgor shall cease forthwith upon the occurrence of an Event of Default." Learned counsel for the appellant also placed reliance on clause 5.2.2 whereunder the pledger authorized the Security Agent, upon the occurrence of an event of default, to attend the general meeting of the members or the meeti....

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....may require to exercise such voting and other rights as are granted by this Deed and or available under Applicable Law." From the aforesaid 'Deed of Pledge' while we find that in case of default, the voting rights of the shareholders shall cease to exist upon the occurrence of an event of default, it will not deprive the shareholder to continue to be a shareholder and their shares do not stand transferred to the 'Financial Creditor' and thereby the shareholder, in terms of the 'Deed of Pledge' dated 28th March, 2013 may lose their right to vote but they continue to be shareholder even thereafter. Section 10 relates to 'initiation of corporate insolvency resolution process' by the corporate applicant', reads as follows: "10. I....