Karnataka High Court
General Atlantic Singapore T L Pte Ltd vs Mr. Byju Raveendran on 5 July, 2024
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WA No. 969 of 2024 A/W
WA No. 972 of 2024
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 5TH DAY OF JULY, 2024
PRESENT
THE HON'BLE MR N. V. ANJARIA, CHIEF JUSTICE
AND
THE HON'BLE MR JUSTICE K V ARAVIND
WRIT APPEAL NO. 969 OF 2024 (GM-RES)
A/W
WRIT APPEAL NO. 972 OF 2024 (GM-RES)
IN W.A. NO. 969 OF 2024
BETWEEN:
1. GENERAL ATLANTIC SINGAPORE TL PTE LTD.,
THROUGH ITS AUTHORIZED REPRESENTATIVE
A SHAREHOLDER OF RESPONDENT NO. 14
COMPANY AND A COMPANY HAVING ITS
REGISTERED OFFICE AT 80,
ROBINSON ROAD, #02-00,
Digitally SINGAPORE - 0688982.
signed by ...APPELLANT
AMBIKA H B
Location: (BY SRI. UDAYA HOLLA. SENIOR ADVOCATE A/W
High Court SRI. SHANKH SENGUPTA, MS. MANASA SUNDARRAMAN
of Karnataka & SRI MOHAMMED SHAMEER, ADVOCATES)
AND:
1. MR. BYJU RAVEENDRAN
AGED 45 YEARS
SON OF RAVINDRAN KUNNARUVATH
MANAGING DIRECTOR AND
CHIEF EXECUTIVE OFFICER
OF THE PETITIONER COMPANY
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WA No. 972 of 2024
WORKING AT IBC KNOWLEDGE
K PARK, 4/1 2ND FLOOR TOWER D,
BANNERGHATTA MAIN ROAD, BANGALORE,
KARNATAKA, INDIA-560029.
(THROUDH HIS POWER OF ATTORNEY HOLDER
MR. SHAJI PUTHALATH)
2. MR. RIJU RAVEENDRAN
AGED 42 YEARS
SON OF RAVINDRAN KUNNARUVATH
EXECUTIVE DIRECTOR OF THE PETITIONER
COMPANY WORKING AT IBC KNOWLEDGE
KNOWLEDGE PARK, 4/1 2ND FLOOR, TOWER D,
BANNERGHATTA MAIN ROAD, BANGALORE,
KARNATAKA, INDIA, 560029.
(THROUDH HIS POWER OF ATTORNEY HOLDER
MR. SHAJI PUTHALATH)
3. MS. DIVYA GOKULNATH
AGED 37 YEARS
D/O GOKULNATH,
EXECUTIVE DIRECTOR OF THE PETITIONER
COMPANY WORKING AT IBC KNOWLEDGE PARK,
4/1, 2ND FLOOR, TOWER D,
BANNERGHATTA MAIN ROAD,
BANGALORE, KARNATAKA, INDIA, 560029.
(THROUDH HIS POWER OF ATTORNEY HOLDER
MR. SHAJI PUTHALATH)
4. SOFINA S.A.
A PRIVATE COMPANY FORMED UNDER
LAW OF BELGIUM
A SHAREHOLDER OF PETITIONER COMPANY AND
A COMPANY HAVING ITS REGISTERED
ADDRESS AT 31 RUE DE L'INDUSTRIE BRUXELLES,
1040 BELGIUM, REPRESENTED ITS DIRECTOR.
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5. MIH EDTECH INVESTMENTS, B.V.
A PRIVATE COMPANY FORMED UNDER
LAW OF NETHERLAND
A SHAREHOLDER OF PETITIONER COMPANY AND
A PRIVATE COMPANY RES LIMITED BY SHARES,
FORMED UNDER THE LAWS NETHERLANDS
HAVING ITS REGISTERED OFFICE AT
GUSTAV MAHLERPLEIN 5,
1082 MS AMSTERDAM,
SYMPHONY OFFICES
THROUGH ITS DIRECTOR.
6. PEAK XV PARTNERS INVESTMENTS IV
A PRIVATE COMPANY FORMED UNDER
LAW OF MAURITIUS
A SHAREHOLDER OF THE PETITIONER COMPANY
AND A COMPANY HAVING ITS REGISTERED OFFICE
AT: 5TH FLOOR, EBENE ESPLANADE,
24 CYBER CITY, EBENE, MAURITIUS AND
IFS COURT, TWENTY-EIGHT, STREET,
CYBERCITY, MAURITIUS BANK EBENE,
THROUGH ITS DIRECTOR.
7. PEAK XV PARTNERS INVESTMENTS V
A PRIVATE COMPANY FORMED UNDER
LAW OF MAURITIUS
A SHAREHOLDER OF THE PETITIONER
COMPANY AND A COMPANY HAVING ITS
REGISTERED OFFICE AT 5TH FLOOR,
EBENE ESPLANADE,
24 CYBER CITY, EBENE,
MAURITIUS AND IFS COURT,
TWENTY- EIGHT, BANK STREET,
CYBERCITY, EBENE, MAURITIUS
THROUGH ITS DIRECTOR.
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8. SLP BETA HOLDINGS CAYMAN LTD.
A PRIVATE COMPANY FORMED UNDER
LAW OF ISLAND
A SHAREHOLDER OF THE PETITIONER
COMPANY AND A COMPANY HAVING ITS
REGISTERED ADDRESS AT
MAPLES CORPORATE SERVICES LIMITED,
PO BOX 309, UGLAND HOUSE, GRAND CAYMAN,
KY1-1104, CAYMAN ISLANDS.
THROUGH ITS DIRECTOR.
9. INTERNET FUND V PTE. LTD.
A PRIVATE COMPANY FORMED UNDER LAW OF
SINGAPORE A SHAREHOLDER OF THE PETITIONER
COMPANY AND A COMPANY HAVING ITS
REGISTERED ADDRESS AT 8 TEMASEK
BOULEVARD, 32-02, SUNTEC TOWER THREE,
SINGAPORE, 38988
THROUGH ITS DIRECTOR
10. OWL VENTURES HOLDINGS I, LLC
A PARTNERSHIP COMPANY FORMED UNDER LAW
OF USA, A SHEREHOLDER OF THE PETITIONER
COMPANY AND A COMPANY HAVING ITS
REGISTERED ADDRESS AT 855 EI, CAMINO REAL
STE 13A-354 PALO ALTO CA 94301 USA
THROUGH ITS DIRECTOR.
11. OWL VENTURES III, L.P.
A PRIVATE COMPANY FORMED UNDER LAW OF
USA, A SHAREHOLDER OF THE PETITIONER
COMPANY AND A COMPANY HAVING ITS
REGISTERED ADDRESS AT 855 EI,
CAMINO REAL STE 13A-354 PALO ALTO
CA 94301 USA, THROUGH ITS DIRECTOR
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12. OWL VENTURES OPPORTUNITY FUND I- A, LLC
A PRIVATE COMPANY FORMED UNDER LAW OF
USA, A SHAREHOLDER OF THE PETITIONER
COMPANY AND A COMPANY HAVING ITS
REGISTERED ADDRESS, AT 855 EL CAMINO REAL,
STE 13A-354, PALO ALTO, CA 94301 USA
THROUGH ITS DIRECTOR
13. OWL VENTURES PARTNERSHIP HOLDINGS II, LLC
A PRIVATE COMPANY FORMED UNDER LAW OF
USA, A SHAREHOLDER OF THE PETITIONER
COMPANY AND A COMPANY HAVING ITS
REGISTERED ADDRESS AT 855 EL CAMINO REAL,
STE 13A-354, PALO ALTO, CA 94301 USA
THROUGH ITS DIRECTOR.
14. ARK NCORE EDUTECH 1
A PRIVATE COMPANY FORMED UNDER
LAW OF SOUTH KORIA.
A SHAREHOLDER OF THE PETITIONER
COMPANY AND A COMPANY HAVING ITS
REGISTERED ADDRESS AT 702, SAMSUNG-DONG,
159-6, GANGNAM- GU,
SEOUL KOREA.
THROUGH ITS DIRECTOR.
15. ANITA KISHORE
AGED MAJOR
CHIEF STRATEGY OFFICER, TLPL, WORKING AT
IBC KNOWLEDGE PARK, 4/1 2ND FLOOR TOWER D,
BANNERGHATTA MAIN ROAD, BANGALORE,
KARNATAKA, INDIA - 560 029.
16. THINK AND LEARN PRIVATE LIMITED
A PRIVATE COMPANY LIMITED BY SHARES
INCORPORATED UNDER
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WA No. 969 of 2024 A/W
WA No. 972 of 2024
THE COMPANIES ACT 1956 HAVING ITS
REGISTERED ADDRESS AT IBC KNOWLEDGE
PARK, 4/1, 2ND FLOOR, TOWER D BANNERGHATTA
MAIN ROAD, BANGALORE, BANGALORE,
KARNATAKA, INDIA - 560 029.
...RESPONDENTS
(SRI K.G. RAGHAVAN, SENIOR ADVOCATE A/W
SRI RISHAB GUPTA, SRI MANMEET SINGH, SRI VIKARAM
UNNI RAJAGOPAL, ADVOCATES FOR CAVEATORS -
RESPONDENTS Nos. 1 TO 3)
THIS WRIT APPEAL FILED U/S 4 OF THE KARNATAKA
HIGH COURT ACT PRAYING TO SET ASIDE THE IMPUGNED
ORDER DATED 02/07/2024 PASSED IN WP NO.15788/2024 &
ETC.
IN W.A. NO. 972 OF 2024
BETWEEN:
1. GENERAL ATLANTIC SINGPORE TL PTE LTD
THROUGH ITS AUTHORIZED REPRESENTATIVE
A SHAREHOLDER OF RESPONDENT NO. 1
COMPANY AND A COMPANY HAVING ITS
REGISTERED OFFICE AT 80,
ROBINSON ROAD,
#02-00, SINGAPORE - 0688982.
...APPELLANT
(BY SRI GAURAV CHOPRA, SENIOR ADVOCATE A/W
SRI YOGESH SINGH, SRI TINE ABRAHAM AND
MS. PRARTHNA BATHIJA, ADVOCATES)
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WA No. 972 of 2024
AND:
1. THINK AND LEARN PRIVATE LIMITED
A PRIVATE COMPANY LIMITED BY SHARES
INCORPORATED UNDER THE COMPANIES ACT
1956 HAVING ITS REGISTERED ADDRESS AT IBC
KNOWLEDGE PARK, 4/1, 2ND FLOOR, TOWER D
BANNERGHATTA MAIN ROAD, BANGALORE,
BANGALORE, KARNATAKA, INDIA - 560 029.
2. SOFINA S.A.
A PRIVATE COMPANY FORMED UNDER
LAW OF BELGIUM
A SHAREHOLDER OF PETITIONER COMPANY AND
A COMPANY HAVING ITS REGISTERED
ADDRESS AT 31 RUE DE L'INDUSTRIE BRUXELLES,
1040 BELGIUM
REPRESENTED ITS DIRECTOR.
3. MIH EDTECH INVESTMENTS, B.V.
A PRIVATE COMPANY FORMED UNDER LAW OF
NETHERLAND
A SHAREHOLDER OF PETITIONER COMPANY AND
A PRIVATE COMPANY RES LIMITED BY SHARES,
FORMED UNDER THE LAWS OF NETHERLANDS
HAVING ITS REGISTERED OFFICE AT
GUSTAV MAHLERPLEIN 5,
1082 MS AMSTERDAM, SYMPHONY OFFICES
THROUGH ITS DIRECTOR.
4. PEAK XV PARTNERS INVESTMENTS IV
A PRIVATE COMPANY FORMED UNDER LAW OF
MAURITIUS
A SHAREHOLDER OF THE PETITIONER COMPANY
AND A COMPANY HAVING ITS REGISTERED
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OFFICE AT: 5TH FLOOR, EBENE ESPLANADE, 24
CYBER CITY, EBENE, MAURITIUS AND IFS COURT,
TWENTY-EIGHT, STREET, CYBERCITY,
MAURITIUS BANK EBENE,
THROUGH ITS DIRECTOR.
5. PEAK XV PARTNERS INVESTMENTS V
A PRIVATE COMPANY FORMED UNDER LAW OF
MAURITIUS
A SHAREHOLDER OF THE PETITIONER COMPANY
AND A COMPANY HAVING ITS
REGISTERED OFFICE AT 5TH FLOOR,
EBENE ESPLANADE, 24 CYBER CITY, EBENE,
MAURITIUS AND IFS COURT, TWENTY-EIGHT,
BANK STREET,
CYBERCITY, EBENE, MAURITIUS
THROUGH ITS DIRECTOR.
6. SLP BETA HOLDINGS CAYMAN LTD.
A PRIVATE COMPANY FORMED UNDER LAW OF
ISLAND
A SHAREHOLDER OF THE PETITIONER COMPANY
AND A COMPANY HAVING ITS REGISTERED
ADDRESS AT MAPLES CORPORATE SERVICES
LIMITED,
PO BOX 309, UGLAND HOUSE, GRAND CAYMAN,
KY1-1104, CAYMAN ISLANDS.
THROUGH ITS DIRECTOR
7. INTERNET FUND V PTE. LTD.
A PRIVATE COMPANY FORMED UNDER LAW OF
SINGAPORE
A SHAREHOLDER OF THE PETITIONER
COMPANY AND A COMPANY HAVING
ITS REGISTERED ADDRESS AT 8 TEMASEK
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WA No. 972 of 2024
BOULEVARD, 32-02, SUNTEC TOWER THREE,
SINGAPORE, 38988
THROUGH ITS DIRECTOR
8. OWL VENTURES PARTNERSHIP HOLDINGS I, LLC
A PRIVATE COMPANY FORMED UNDER LAW OF
USA
A SHEREHOLDER OF THE PETITIONER COMPANY
AND A COMPANY HAVING ITS REGISTERED
ADDRESS AT 855 EI CAMINO REAL STE 13A-354
PALO ALTO CA 94301 USA
THROUGH ITS DIRECTOR.
9. OWL VENTURES III, L.P.
A PRIVATE COMPANY FORMED UNDER LAW OF
USA
A SHAREHOLDER OF THE PETITIONER COMPANY
AND A COMPANY HAVING ITS REGISTERED
ADDRESS AT 855 EI CAMINO REAL STE 13A-354
PALO ALTO CA 94301 USA
THROUGH ITS DIRECTOR.
10. OWL VENTURES OPPORTUNITY FUND I-A, LLC
A PRIVATE COMPANY FORMED UNDER LAW OF
USA
A SHAREHOLDER OF THE PETITIONER COMPANY
AND A COMPANY HAVING ITS
REGISTERED ADDRESS AT 855 EL CAMINO REAL,
STE 13A-354, PALO ALTO, CA 94301 USA
THROUGH ITS DIRECTOR.
11. OWL VENTURES PARTNERSHIP HOLDINGS II, LLC
A PRIVATE COMPANY FORMED UNDER LAW OF
USA
A SHAREHOLDER OF THE PETITIONER COMPANY
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AND A COMPANY HAVING ITS REGISTERED
ADDRESS AT 855 EL CAMINO REAL, STE 13A-354,
PALO ALTO, CA 94301 USA THROUGH ITS
DIRECTOR.
12. ARK NCORE EDUTECH 1
A PRIVATE COMPANY FORMED UNDER
LAW OF SOUTH KORIA
A SHAREHOLDER OF THE PETITIONER COMPANY
AND A COMPANY HAVING ITS
REGISTERED ADDRESS AT 702
SAMSUNG-DONG, 159-6,
GANGNAM-GU, SEOUL KOREA,
THROUGH ITS DIRECTOR
13. MR. BYJU RAVEENDRAN
AGED 45 YEARS
SON OF RAVINDRA KUNNARUVATH
MANAGING DIRECTOR AND
CHIEF EXECUTIVE OFFICER
OF THE PETITIONER COMPANY
WORKING AT IBC KNOWLEDGE
K PARK, 4/1 2ND FLOOR
TOWER D, BANNERGHATTA MAIN ROAD
BANGALORE, KARNATAKA, INDIA, 560029
(THROUGH HIS POWER OF ATTORNEY HOLDER
MR. SHAJI PUTHALATH)
14. MR. RIJU RAVEENDRAN
AGED 42 YEARS
SON OF RAVINDRAN KUNNARUVATH
EXECUTIVE DIRECTOR OF THE PETITIONER
COMPANY WORKING AT IBC KNOWLEDGE
KNOWLEDGE PARK, 4/1 2ND FLOOR
TOWER D, BANNERGHATTA MAIN ROAD
BANGALORE, KARNATAKA, INDIA, 560 029
(THROUGH HIS POWER OF ATTORNEY HOLDER
MR.SHAJI PUTTALATH)
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15. MS.DIVYA GOKULNATH
AGED 37 YEARS
D/O GOKULNATH
EXECUTIVE DIRECTOR
OF THE PETITIONER COMPANY WORKING AT
IBC
16. MS. ANITA KISHORE
AGED MAJOR,
CHIEF STATEGY OFFICER
THINK AND LEAM PRIVATE LIMITED
WORKING AT IBC KNOWLEDGE
K PARK, 4/1 2ND FLOOR TOWER D,
BANNERGHATTA MAIN ROAD,
BANGALORE, KARNATAKA, INDIA, 560029.
(THROUDH HIS POWER OF ATTORNEY HOLDER
MR. SHAJI PUTHALATH)
...RESPONDENTS
(SRI DHYAN CHINNAPPA, SENIOR ADVOCATE A/W
SRI SAIRAM SUBRAMANIAN, MS. SALONI SHAH,
MS. ASHIKA JAIN AND SRI VIKARAM UNNI RAJAGOPAL,
ADVCOATES FOR CAVEATORS-RESPONDENTS NOS.1 & 13
TO 15)
THIS WRIT APPEAL FILED U/S 4 OF THE KARNATAKA
HIGH COURT ACT PRAYING TO SET ASIDE THE IMPUGNED
ORDER DATED 02.07.2024 PASSED IN W.P. No.15801/2024 &
ETC.
THESE WRIT APPEALS, COMING ON FOR ORDERS THIS
DAY ORDER/JUDGMENT WAS DELIVERED THEREIN AS
UNDER:
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CORAM : HON'BLE THE CHIEF JUSTICE MR. JUSTICE
N.V. ANJARIA
and
HON'BLE MR. JUSTICE K.V. ARAVIND
ORAL JUDGMENT
(PER : HON'BLE THE CHIEF JUSTICE MR. JUSTICE
N.V. ANJARIA)
Both these appeals arise from the common judgment and
order dated 02.07.2024 passed by learned Single Judge in Writ
Petition No.15788 of 2024 and Writ Petition No.15801 of 2024. In
both the writ petitions, what was challenged was the order dated
12.06.2024 passed by the National Company Law Tribunal,
Bengaluru (NCLT) in Company Application No.71 of 2024 in
Company Petition No.18/BB/2024 pending before the NCLT.
2. Company Application No.71 of 2024 was filed by the
appellant-General Atlantic Singapore TL Pte. Ltd. and one Sofina
S.A.-a company under Section 242(4) of the Companies Act, 2013
read with Rules 11 and 32 of the National Company Law Tribunal
Rules, 2016. Sub-section (4) of Section 242 of the Companies Act
provides that the Tribunal may, on the application of any party to
the proceedings, make any interim order regulating the conduct of
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the company's affairs upon such terms and conditions which may
be imposed as just and equitable.
2.1 The prayer was for injuncting the offer letters dated
11.05.2024 and 13.05.2024; any action pursuant to the offer letters
dated 11.05.2024 and 13.05.2024, any further issuance of shares,
inter alia, in furtherance of the impugned second rights offer letter
dated 11.05.2024 and the revised offer letter dated 13.05.2024. It
was further prayed to direct that any corporate actions taken on the
basis of illegally (as alleged) revised shareholding pattern of
respondent No.1-Company after the date of hearing on 27.02.2024
be kept in abeyance.
2.2 Company Application No.72 of 2024 was also filed to set
aside the actions undertaken by the contesting respondents in
violation of the order of the NCLT dated 27.02.2024 including
allotment of Company's shares to certain shareholders including
respondent No.3.
2.3 The order which was passed by the NCLT on the said civil
applications in its relevant part reads as under,
"16. Therefore, in the present facts and
circumstances of the matter, this Tribunal hereby
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restrains the Respondents from going ahead with
the present rights issue which is in progress till
the disposal of the main CP No.18/BB/2024. The
Respondents are further directed to keep the
amounts collected so far since opening of the
second rights issue in relation to this offer in a
separate account which should not be utilised till
the disposal of the main petition in CP
No.18/BB/2024. Further, status quo with regard
to existing shareholders and their shareholding
shall be maintained till the disposal of the main
petition C.P.No.18/BB/2024.
17. The Respondents are directed to comply
with the directions given in Para-10 and 11
above, regarding the details of allotment of shares
on 02.03.2024 and the details of the Escrow banks
accounts by filing a compliance affidavit with a
memo within a period of 10 days; duly serving the
copy on the otherside.
18. List this matter before regular bench on
04.07.2024 along with main petition i.e. CP
No.18/BB/2024 for further consideration.
1. Heard the Ld. Senior Counsels and Ld.
Counsels appearing for the parties.
2. The Ld. Counsels for the Respondents
accepted notice and requested time to file their
reply. They are permitted to file the same, within a
period of ten days from today, after duly serving
the copy on the other side. The Applicants shall file
rejoinder, if any, within a period of one week
thereafter, after duly serving the copy on the other
side.
3. List the matter on 04.07.2024."
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2.4 When the aforesaid order of the NCLT dated 12.06.2024 was
challenged before learned Single Judge by the respondents herein-
petitioners, learned Single Judge passed the following order, while
allowing the two writ petitions,
"(i) Both W.P.No.15788/2024 and
W.P.No.15801/2024 are hereby allowed.
(ii) The impugned order dated 12.06.2024
passed on C.A.No.71/2024 in
C.P.No.18/BB/2024 by the NCLT, Bengaluru, is
hereby set aside.
(iii) The matter is remitted back to the NCLT for
reconsideration of C.A.No.71/2024 afresh and to
pass a reasoned and speaking order in
accordance with law bearing in mind the
observations made in this order within a period of
two weeks from 04.07.2024.
(iv) All rival contentions on all aspects of the
matter are kept open and no opinion is
expressed on the same."
2.5 Heard learned Senior Advocate Mr.Udaya Holla assisted by
learned advocates Mr.Shankh Sengupta, Ms.Manasa Sudarraman
and Mr.Mohammed Shameer for the appellant in Writ Appeal
No.969 of 2024, learned Senior Advocate Mr.Gaurav Chopra
assisted by learned advocate Mr.Yogesh Singh, Mr.Tine Abraham
and Ms.Prarthna Bathija for the appellant in Writ Appeal No.972 of
2024 and learned Senior Advocate Mr.K.G.Raghavan assisted by
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learned advocates Mr.Rishab Gupta, Mr.Manmeet Singh,
Mr.Vikram Unni Rajagopal who appeared on caveat for respondent
Nos.1 to 3 in Writ Appeal No.969 of 2024 and learned Senior
Advocate Dhyan Chinnappa assisted by learned advocates
Mr.Sairam Subramanian, Ms.Saloni Shah, Ms.Ashika Jain and Sri
Vikram Unni Rajagopal who appeared on caveat for respondent
Nos.1 and 13 to 15.
3. In order to comprehend the controversy arising from the
impugned order, it is necessary to notice the basic facts in the
background. The main proceedings before the NCLT, which are
pending, have been filed under Sections 241 and 242 of the
Companies Act, 2013 in which it is alleged that the respondents
have committed various acts of oppression and mismanagement.
Under Section 241 of the Companies Act, application lies to the
Tribunal for relief in cases of oppression and relation to the
grievance that the affairs of the company have been conducted in a
manner prejudicial or oppressive to public interest or any other
member of the company etc.
3.1 The appellant is one of the shareholders of Think and Learn
Private Limited (hereinafter referred to as 'the Company'). A
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petition under Sections 241, 242 and 244 of the Companies Act
came to be filed by the appellant before the NCLT seeking orders
in respect of regulating the affairs of the company alleging
oppressive acts and mismanagement by the present management
of the Company-the respondents herein. One of the reason for
filing the company petition and to allege the oppressive acts was
the issuance of the letter of offer offering 40,488,546 equity shares
by the Company to all existing shareholders on 27.01.2024. The
appellant described it as the First Illegal Rights Issue.
3.3 It appears that on 27.02.2024, the NCLT passed the
following order,
"Considering all the submissions made by
the Learned Senior Counsels for both the sides
and perusing the materials on record, we hereby
direct the following;
(i.) Since the Ld. Senior Counsel for the
Respondent has already given undertaking that
there will be no allotment of shares without
increasing the Authorised Share Capital of
the Respondent No.1 company as per the
provisions of law and the funds/money
received from the rights offer will be kept in a
separate account and will not be used for
any purposes, the funds received by the
Respondent Company in respect to the
rights issue should be kept in a separate
Escrow account and it should not be
withdrawn till the disposal of this matter."
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3.4 It is the case of the appellant that on 02.03.2024, without
increasing the authorised Share Capital of the Company and
seeking any clarification of the aforesaid order dated 27.02.2024,
the Company proceeded to allot 18,14,887 shares which,
submitted by the appellants, was again an illegal allotment. On
29.03.2024, which was after the aforesaid allotment, the Company
held its Extraordinary General Meeting for increasing the
authorised Share Capital. It is the case of the appellant that the
factum of the said second allotment came to light when one MIH
Edtech Investments B.V allowed viewing the Register of Members
of the Company.
3.5 It was stated that on 04.04.2024, the appellant made
submissions before the NCLT stating that illegal allotment had
taken place. The respondent-Company and the Founders sought
time. The order dated 04.04.2024 came to be passed by the
NCLT, in which it was again directed that the Company and the
Founders would scrupulously follow the order dated 27.02.2024.
3.6 It further appears that the proceedings before the NCLT on
one hand and as per the case of the appellant on the other hand,
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the respondents continued to commit defiance of the order dated
27.02.2024 to perpetuate illegality and yet another Rights Issue
dated 11.05.2024 was made. The Company described the said
Rights Issue as an extension of the First Illegal Rights Issue. The
case of the appellant was that both the Rights Issues were not
lawful and violated the orders of the NCLT.
3.7 The aforesaid developments led the appellants to move
Company Application No.71 of 2024 seeking the relief of injunction
and other reliefs as mentioned above. In the order dated
12.06.2024 passed upon Company Application Nos.71, 72 and 76
of 2024 which were impugned before learned Single Judge and the
operative portion is reproduced hereinabove certain directions were
issued. As contained in paragraphs 10 and 11 of the order, the
proceedings were kept on 04.07.2024. Learned Single Judge, as
could be seen from the impugned order, remanded the case
requiring the NCLT to pass reasoned order.
4. This Court heard learned Senior Counsels for the respective
parties in extenso.
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5. Two main aspects strike for not interjuncting with the
impugned order. Firstly, that the order is interim order. The
proceedings before the NCLT are pending. Secondly, learned
Single Judge has remitted back the case to the NCLT to be
decided within two weeks.
6. Learned advocate for the appellant submitted that despite
the order dated 27.02.2024 and the subsequent order dated
04.04.2024, the respondents have been brazenly committing
breach and have been issuing the shares, which conduct is
unlawful. It was submitted that oral undertaking was given which
was recorded by the NCLT in its orders, but the same was not
abided by. On the other hand, learned Senior Counsels for the
respondents strongly refuted the contentions of the appellants.
6.1 However, the submission of learned Senior Counsels for the
appellant could be countenanced, when it was submitted that if on
one hand, proceedings were decided by the NCLT as remanded
and on the other, if the respondents are permitted to continue to
commit the acts of illegalities and to issue shares and other
transactions, it will generate for them certain rights and create
equities, even as the principal proceedings are pending and that
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the case is remanded. It was submitted that shares are already
allotted from the date of passing of the order of learned Single
Judge which is the Second Rights Issue, though it was prohibited.
6.2 It was submitted that during the remand and pending
decision on remand, further actions by the respondents should not
be permitted. It would not only precipitate the controversy, but will
create new rights and fresh equities for the respondents.
6.3 The Court is not inclined to go into the merits of either side
including whether the order of the NCLT impugned before learned
Single Judge was reasoned order or not for the above two main
reasons.
6.4 Considering the totality of the facts and circumstances and
having regard to the above aspects, the following directions are
issued,
(i) During the proceedings of remand and till the decision which
may be taken by the NCLT, the parties shall maintain status quo
with regard to the subject matter dispute as obtained on today.
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(ii) The respondents shall not make allotment of shares in the
interregnum, to be subject to the final order which may be passed
by the NCLT.
(iii) The transactions which may have taken place of allotment of
shares and other connected transactions between the period from
the date of the order of learned Single Judge that is from
02.07.2024 till the date, shall remain subject to final order which
may be passed by the NCLT and the rights in that regard shall be
governed accordingly.
(iv) The NCLT shall consider the case on remand independently
and on its own merits and without influenced by any of the
observations in its earlier order, without influenced by the
observations in the order of learned Single Judge and any other
order which may have been passed previously to decide the issues
involved, strictly on merits and in accordance with law.
(v) The exercise of deciding as per the remand order by learned
Single Judge shall be completed expeditiously and before
31.07.2024.
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6.5 It is clarified that this Court has not gone into the merits of
the case of the appellant and has not expressed any opinion on
merits. Any observations in this order shall not be construed as an
expression on merits.
7. Both the writ appeals are disposed of in terms of and in
accordance with the aforesaid directions.
In view of disposal of the appeals, the interlocutory
applications would not survive and they stand accordingly disposed
of.
Sd/-
CHIEF JUSTICE
Sd/-
JUDGE
AHB
