TaxTMI 
TaxTMI 
2021 (3) TMI 1126
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....nder Ganda, learned Senior Counsel appearing for the Appellant submitted that the Appellant is a Director and shareholder of the Respondent No. 1 Company. The Respondent No. 1 was incorporated on 04.10.2018 and the Appellant was appointed as a Director in July, 2019 and allotted 12 lakhs equity shares of the Respondent No.1 Company which constitutes 30% of the total paid share capital. 3. Learned Senior Counsel for the Appellant further submitted that the Respondent Nos. 2,4,5 & 6 are directors and shareholders of the Company. Father of the Appellant is having vast experience in pharmaceutical industry and the 2nd Respondent approached the father of the Appellant to overcome major hindrances. Before investment in the Respondent No. 1 Company Appellant and Respondents entered an Memo of Understanding (in short MOU). Basing on MOU, Appellant became a shareholder of the Respondent No. 1 Company. In view of financial difficulty faced by the Respondents, they approached the Appellant and requested for short term loan, which they assured to be repaid within 30 days. In view of the request made by the Respondents, father and mother of Appellant granted an unsecured loan of Rs. 6 ....
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....nst the Respondents and the Appellant with a malafide intention and to settle the personal score against the Respondents, filed the Company Petition before the Hon'ble NCLT. He submitted that South India Bank sanctioned Term Loan and the bank insisted the Directors to provide Bank Guarantee or else the collateral security. However, the Appellant was not inclined to provide Bank Guarantee nor collateral security, causing hindrances by writing letters to the Bank thereby the Bank stopped further disbursal of loan. Therefore, the Respondents had no option except to increase authorised share capital. The Respondents have provided personal Guarantee and collateral security as insisted by South India Bank for obtaining term loan. The Bank also insisted for unsecured loan which was provided by the Directors of the Company and could not be repaid. In view of non-disbursal of loan from Bank, the Company faced financial crunch and having no option, decided to increase the authorised share capital and issue shares to the existing shareholders in proportion of their shareholding. However, the Appellant refused to subscribe to the offer made by the Company. The Respondents decided to provide an....
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....ed with the rights issue. The apprehension of the Appellant that if the Appellant would not subscribe to the rights issue, then his shareholdings would get diluted. 15. Learned Senior Counsel for the Appellant vehemently contended that upon rights issue, money has credited to the Company's account and the shareholder's/the Respondents have withdrawn the same. Therefore, the learned Senior Counsel for the Appellant vehemently opposed the rights issue. The Appellant filed Interlocutory Application being I.A. No. 237 of 2021 before this Tribunal in the Appeal praying this Bench to stay the EOGM of the Respondent No. 1 Company and to take on record the pleadings from this Application and stay on the operation of the impugned order passed by learned NCLT and set aside the allotment of shares to the Respondent pursuant to the rights issue. 16. Before dealing with the contents as made in the Application and the Bank Statement filed along with this Application, we intend to give factual matrix of the case. 17. The Respondents along with their Reply Affidavit filed Memorandum of Understanding (in short MOU) on 22.07.2019 entered between the Respondent No. 1 ....
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....Crore 60 lakhs equity shares of Rs. 10 each by creating additional 1 Crore 20 lakhs equity shares of Rs. 10/- each ranking Pari Passu in all respect with the existing equity shareholder of the Company. However, the Appellant dissented the said resolution vide note dated 13.05.2020. However, the Board passed the resolution offering 1 Cr. 20 lakhs equity shares to the existing shareholders in proportion of their existing shareholding as on the date. 22. The Respondents have issued an Offer Letter by way of mail dated 27.06.2020 annexed at page 332 of Vol. 2 of the Appeal Paper Book. The said e-mail reads as under: "You are hereby informed that the Board of Director of Puerto Life Sciences Limited (Company) in their meeting held on 09.05.2020 granted approval for right issue aggregating to Rs. 1 Cr. 20 lakhs equity shares of Rs. 10/- each at par of the existing shareholders of the Company. Based on the above decision of the Board, this Offer is made to issue 36,00,000 equity shares to you, under the right issue being as an existing equity shareholder of the Company on June 15, 2020(Record date) on proportionate basis and conditions as laid down, intera....
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....ve come and gone. Learned Senior Counsel for the Appellant submitted that the Respondents failed to demonstrate the benefits of rights issue in favour of the Respondent No. 1 Company rather it is a clear intention of reducing the Appellants' shareholding to below 10%. In support of his contention, the Learned Senior Counsel relied upon judgment of the Hon'ble Supreme Court. 27. Per Contra, learned Counsel for the Respondent submitted that the rights issue was made in the interest of the Company. He submitted that the Appellant has not raised a single plea that there is any infirmity legally in the rights issue. He submitted that the increase of authorised capital and allotment of shares is in the interest of the Company for the reason that South India Bank did not disburse the full term loan to the Respondent No. 1 Company for the reason that the Appellant created hindrances. The Appellant refused to contribute in the Company. Further, the Appellant started writing e-mail to lender bank portraying that there is management dispute. However, the Respondent Company clarified many times to the Bank that the except Appellant's non-cooperation there is no management disput....