TaxTMI 
TaxTMI 
2026 (3) TMI 992
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....l)] The challenge in the instant company appeal, as preferred under Section 421 of the Companies Act, 2013, is to the impugned order dated 31.12.2018, as it was passed by the NCLT Bengaluru, in CP No.599/BB/2018 in the matter of, Mr. Tumkur Vajram Shetty Jayawanth & Another versus M/s. Agile Labs Private Limited & 15 Others, being the proceedings, which were held under Section 241 & 242, to be read with Section 59 of the Companies Act, 2013. The proceedings stood, decided by the Ld. Tribunal, observing therewith that the reliefs, which have been sought by the Appellants, in form of annulment of rights issue of 2015 and 2017 and restraining the company to raise further funds are based on frivolous grounds because the Board of Directors followed by EGM have taken a conscious business decision by majority in which the Tribunal should not interfere and that the relief sought in form of an interim order to restrain the company to remove the Appellants from the status of the promoter of the company is based on a premonition for which no order is needed. 2. Consequently, based upon the aforesaid observation, the Ld. Tribunal came to a conclusion that, the Company Petition at the beh....
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....technology and the software in the USA and was successful in getting the same patented in the year 2013, and that the said software development business with IP and technology was sold to Mr. R.S. Raju, the third founding member, who later resigned as a director of the company of respondent No. 1. 6. Further, the name of the Respondent company was changed from Bluechip Infoway Private Limited to M/s. Agile Labs Private Limited on 12.07.2006, that after the change of the nomenclature, the company allotted 1,67,570 equity shares of Rs. 10 each at a premium of Rs. 65 per share on 01.10.2007 to M.S. Shabarish, Respondent No. 2 and to the Appellant, that the company also raised Rs. 2.5 crore as investment from a group of HNIs Respondents 8 to 14 herein, through preferential offer of 333,334 fully paid-up equity share capital and that further to it, the company executed fresh share subscription and shareholders agreements on 15.10.2007. 7. The shareholding pattern post the execution of the agreement of 15.10.2007, stood as under: - SL. No. Name of the Shareholder No. of Shares 1. M.S. Sabarish 263602 2. T V Jayawanth 378419 3. Beena Sampath 37691....
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....rdance with the SSA/SHA and the size of the rights issue was disproportionate to the present shareholding pattern of the company, which was disregarded, that certain shareholders transferred their shares to Respondent No. 14 M/s. Geetham Share and Securities Limited in violation of SSA/SHA and that the company further allotted, in 2017, a further 6,33,750 shares to the said Respondent No. 14 on rights issue basis without the Letter of offer, on basis of the existing shareholding renouncing the shares offered to them in favor of Respondent No. 14 which made Respondent No. 14 the single largest shareholder. It is contended by the Appellants that it would be an Oppressive Act and it will amount to be an act of mismanagement having enough ingredients in it, to attract Section 241 & 242 of the Companies Act to be read with Section 59 of the Act. 11. The Appellants contend that, the approval of the transfer of shares by various shareholders to Respondent No. 14, i.e., M/s. Geetham Shares and Securities Private Limited so as to make it a shareholder of the company was done with a malafide intention so that it can participate in its future rights issue and that it was in complete violat....
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.... Letters of offer has been fulfilled. The Tribunal has also held that the respective Board Resolutions approving the allotment of the rights shares to the respective persons are in accordance with law. 13. The Ld. Adjudicating Authority has gone through the Letter of the Petitioners, in order to offer for the Rights issue dated 12.10.2015, the objection raised to it by the Appellant on 27.10.2015, and the reply by the company dated 02.11.2015 and on its appreciation, it has come to a conclusion to the effect that, the Appellants objections to the said issue has been suitably dealt with by the company and the Appellants have also been given the offer to subscribe to the Rights Issue in proportion to the shares held by them, and that the decision taken by the company to raise the fund for expansion and growth of the company, with the existing investors and to come out with the rights issue requesting the shareholders including the Appellants to participate to subscribe for their rights cannot be faulted and that the companies as created under the Companies Act, do have the power to increase or decrease their share capital within the permissible limits in accordance with law. 14....
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....e Tribunal, at an appropriate time only, when Appellant No. 1 is actually removed from the register of the company. 17. The Ld. Counsel for the Respondents, while opposing the motion, had made a reliance on the judgment rendered by the Ld. NCLT, Hyderabad Bench in the matters of Mr. Venkat Sudhakar Sattur versus Dictasol (India) Private Limited, 2017 SCC Online NCLT 10367 and particularly he has made reference to Para 15 of the said judgment which is extracted hereunder: - "15. By no stretch of imagination, increasing of Authorized Share Capital of a company in question can be called as oppressive, fraudulent, illegal and malicious acts of Respondents as stated supra, the impugned increasing of Authorized share capital was done in accordance with Articles of Association of the company and extant provisions of Companies Act, 1956/2013. Moreover, the company has offered the newly created shares to the petitioner, and he can purchase those shares so as to retain his majority shareholders status in the company. However, he is not interested to participate in the affairs of the Company. Since, the impugned allotment of shares are made in accordance with Articles of Associati....