Lakhan Goenka & Anr vs Cardin Health Care Pvt Ltd & Ors

The Respondent No.1 company was incorporated on 24.04.2003 and was involved in the business of manufacturing wheat flour and allied agricultural based products;

In the year 2006, the Respondent No.2 invested in Respondent No.1 company and in return Respondent No.2 and his family members were given 60% shareholding in Respondent No.1 company. Subsequently Respondent No.2 was appointed as a director of Respondent No.1 company and Appellant No.2 had resigned as director;

on 08.10.2018, Respondent No.3 the son of Respondent No.2 was also appointed as a director of Respondent No.1 company with an alleged intention to take over the company. The Respondent even forced Appellant No.1 to resign as a director on 24.06.2020;

between 04.03.2020 to 28.08.2020 the Respondent No.2 issued notices for convening Board Meetings on 06.03.2020 wherein the agenda was to increase the authorised share capital of the company. The Appellant No.1 objected to increase in the authorised share capital of the company as the production activity of the company was under utilized and thus on 14.09.2020 the appellant preferred a Company Petition No.31/2020 under Section 241-242 of the Companies Act, 2013 for oppression and mismanagement qua illegal appointment of directors and increase in the authorised capital;

at the time of filing the petition the appellants were holding 40% of the shares of Respondent No.1 company;

subsequent to the filing of the Company Petition, the Respondents started diluting shareholding of the appellants by raising capital on purported grounds of business expansion but using the money to pay themselves and with the actual sole malafide intention of bringing appellant’s shareholding below 25% and eventually sell Respondent No.1 company.

amendment applications were moved to bring on record the subsequent acts of illegal reduction of appellants’ shareholding and also filed a stay application to seek stay on the letter of offer diluting the shareholding of appellants;

qua the first letter of offer, an IA No.8/2021 was filed and qua the second letter of offer of issue of shares and for third letter of offer, IA No.25/2021 and IA No.22/2023 were filed. After diluting the shareholding of appellant below 25% the Respondent vide notice dated 18.03.2023 decided to convene an EOGM on 18.04.2023 for passing special resolution for selling of the assets, land and building of Respondent No.1. IA No.21/2023 in Company Petition was thus filed for stay on the holding of EOGM dated 18.04.2023 and for restraining the Respondents from disposing of the assets of the company;

the said IA No.21/2023 was, however, dismissed by the Ld. NCLT holding an equal opportunity was given to the appellants herein to subscribe to further issues of share capital and the company as well as the Respondents have duly given the reasons for increase in the share capital. It was further held the Respondent No.1 is a closely held company and though there are differences between the parties but the EOGM was validly called with a relevant notice period for more than 21 days was given as per law and there was no illegality in it and accordingly the said IA No.21/2023 was dismissed.