Case Law Details
Radhakrishnan Babu Nirmala Vs Precise Limbus Eye Care Private Limited (NCLAT Chennai)
Introduction: In the recent judgment by the NCLAT Chennai in the case of Radhakrishnan Babu Nirmala Vs Precise Limbus Eye Care Private Limited, the complexities of shareholder rights and the importance of attending board meetings were highlighted. The ruling has provided clarity on several issues regarding company operations, shareholder rights, and procedural protocols.
Share Capital Enhancement & Memorandum of Association (MOA): One of the critical issues in contention was the enhancement of the authorized share capital from Rs.1 lakh to Rs.20 lakhs on 31.03.2016 and the subsequent amendment to the MOA. The appellant contended that this increase was not in compliance with Section 61(1) of the Companies Act, 2013. However, evidence showed that both the petitioner and the 2nd respondent had acknowledged this enhancement, thus validating its legality.
Board Meetings & Shareholder Attendance: A crucial point of debate was the validity of several board meetings, especially given the appellant’s assertion that no such meetings took place. The evidence suggested that the petitioner was informed about the meetings but failed to attend. Consequently, decisions, including the induction of the 3rd and 4th respondents as Directors, were made without the petitioner’s presence.
Question of Fraudulent Activities: The appellant argued that certain actions, like the convening of the Extraordinary General Meeting (EGM) and the allotment of shares, amounted to fraud under the Companies Act, 2013. Despite these allegations, the NCLAT found no substantial evidence to support these claims.
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