TaxTMI 
TaxTMI 
2019 (10) TMI 4
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....rom 01.10.2015 till the date of repayment, by not redeeming Non-Cumulative Non-Convertible Redeemable Preference Shares ('NCRPS') during the agreed time period. 2. Brief facts of the case, as mentioned in the Company Petition, are as follows: (1) M/s. Shan Global Manufacturing and Trading Private Limited ('Petitioner/Financial Creditor') is a Private Limited Company incorporated on 08.02.2008 under the provisions of Companies Act, 1956 with CIN: U29253KA2008PTC045229 and having its registered office at No.2005, Anand Bhavan - II Floor, 100 Feet Road, Indiranagar, HAL II Stage, Bangalore-560038 and has changed its name from 'Shan Technology Services Private Limited' to 'Shan Global Manufacturing and Trading Private Limited' and has accordingly been issued a fresh Certificate of Incorporation by the Registrar of Companies, Karnataka. (2) M/s. C L N Properties Private Limited ('Respondent/Corporate Debtor') is a Private Limited Company incorporated on 24.04.2008 under the provisions of Companies Act, 1956 with CIN: U45200KA2008PTC046246 and having its registered office at Door No.478, Ground Floor, HMT Layout, 5th Main Road, Srinivasa Nilaya, Ananda Nagar, Bangalore-560024. The N....
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....ondent Company has in no way treated such investment as Preference Shares by complying with the provisions of Section 55 of the Act as well as the terms of the SSA, the amounts advanced may only be treated as debt legally owed to the Applicant, thereby making the Applicant a Financial Creditor. The Respondent Company cannot claim protection of Section 55 of the Act when it has itself not complied with the provisions contained therein. (8) Further, Rule 9(6) of the Companies (Share Capital and Debenture) Rules, 2014 states that a Company may, if so authorised by the Articles, issue Preference Shares subject to certain conditions set out in the Rules. Rule 9(6) further states that a Company may redeem its Preference Shares only on the terms on which they were issued or varied or as varied after due approval of Preference Shareholders under Section 48 of the Act and the Preference Shares may be redeemed: (a) at a fixed time or on the happening of a particular event; (b) any time at the Company's option; or (c) any time at the shareholder's option. As per the terms of the SSA, the NCRPS were not redeemed on the terms they were issued. (9) Indian Accounting Standards (IndAS 32) clas....
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.... Shan Technology Services Private Limited, and on this ground alone, the Application deserves to be dismissed in limine. (3) It is further stated that the present application is barred by limitation and is hence not maintainable. It is stated that the Applicant has not enforced its rights and remedies within the time prescribed under law, as a result of which, its rights and remedies are no longer enforceable. It is stated that the present application suffers from delay and laches and is liable to be dismissed in limine. (4) It is stated that the provisions of the SSA clearly evidence that the redemption of the NCRPS was at the sole option of the Company. Under the circumstances, the amount claimed by the Applicant in terms of the present Application does not constitute a "financial debt" as contemplated under the provisions of IBC. (5) It is stated that the issue and redemption of preference shares is dealt in Section 55 of the Companies Act, 2013. Section 55 of the Companies Act read with Rule 9 of the Companies (Share Capital and Debentures) Rules clearly states that redemption of preference shares shall only be from (a) "out of the profits of the company which would other....
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....r the arbitration proceedings to be conducted by the arbitrator in order to enable the arbitrator to resolve the dispute. In the event the Company fails to appoint an arbitrator within the time frames specified in this clause, any other Party shall be entitled to make an application to the relevant court (i.e. Bangalore) in accordance with the Arbitration and Conciliation Act, 1996 for appointment of an arbitrator (at the cost of the defaulting party) and the arbitrator so nominated shall be deemed to be the arbitrator nominated by the defaulting party. 10.3 The decision of the sole arbitrator shall be final and binding on the Parties. The venue of arbitration shall be Bangalore, India. 10.4 The proceedings of arbitration shall be in the English language and the Courts in Bangalore shall have the exclusive jurisdiction to hear any matters that may be initiated by any one of the Parties against the other. 10.5 The Parties hereto shall submit to the Arbitrator's award and the award shall be enforceable in the competent court of law." Post the due date for redemption, Petitioner had requested for the redemption of NCRPS by way of written and oral communications to Respondent. D....