N. Kasthur Reddy vs Prakjyothi Constructions Pvt. Ltd

NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI Company Appeal (AT) No. 148 of 2017

IN THE MATTER OF:

N. Kasthur Reddy ...Appellant Vs Prakjyothi Constructions Pvt. Ltd. ..Respondent

Present: For Appellant:- Mr. G. Ramakrishna Prasad and Mr. Mohd. Wasay Khan, Advocates.

For Respondent: - Mr. Nikhil Nayyar, Mr. Tvsraghavendra Sreyas and Mr. Venkateshwar, Advocates.

ORDER

29.05.2017- This appeal has been preferred by Appellant against

order dated 20th March, 2017 passed by National Company Law Tribunal

(hereinafter referred to as "Tribunal"), Hyderabad Bench, Hyderabad,

whereby and whereunder the Tribunal while accepted oppression against

the appellant and ordered to restore the membership of Appellant, not

granted any relief in so- far it relates to allotment of shares, increase in

the authorised share capital, sale deeds etc. issued during the period the

Appellant was illegally thrown out.

2. The grievance of the Appellant is limited to the extent that the

Tribunal has not passed any order about the share capital which were

raised during intervening period and the subsequent allotment of shares,

increase of the authorised share capital, sale deeds etc. as were issued.

3. We have heard Ld. Counsel for the Appellant and Respondents. -2-

4. On hearing the parties, we find that the Appellant was illegally

thrown out from the company by removal of his name from the Register

of members of the Company on 22nd March, 2013. For the said reason,

the Tribunal by impugned order has set aside the transfer of shares

certificates of 4th and 5th Respondents and restored the membership of

the Appellant. Thereby the Appellant has been brought back to the

position which he was holding and status quo ante was restored. In this

background, we are of the opinion that the Tribunal should have granted

consequential relief to the appellant by declaring the subsequent

allotment of shares, increase in the authorised share capital, sale deeds

etc. issued or executed without notice to the Appellant during the

intervening period, particularly when the Appellant has questioned all

such transactions in his Company Petition.

5. In the result, we modify the impugned order dated 20th March,

2017 passed by Tribunal, Hyderabad Bench and in addition to set aside

the transfer of shares dated 22nd March, 2013 which were made in favour

of Respondent Nos.4 & 5, also set aside all the allotments of shares and

increase in the authorised share capital which were made in favour of

Respondents 6 to 13 during the intervening period with liberty to

Respondent Company to increase the authorised share capital after

giving opportunity to all the members/ shareholders in accordance with

law. The judgment dated 20th March, 2017 passed by Tribunal stands

modified to the extent above.

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6. The respondents are directed to make necessary consequential

rectification in the register of members of the company within one month

from the date of receipt of this order.

7. We make it clear that the relief aforesaid as granted is in addition

to the relief already granted by the Tribunal. The appeal stands disposed

of with aforesaid observations and directions. No cost.

(Justice S.J. Mukhopadhaya) Chairperson

(Mr. Balvinder Singh) Member(Technical) Ar