Jindal Poly Films Limited Vs Ankit Jain & Ors (NCLAT Delhi)
The National Company Law Appellate Tribunal (NCLAT), Delhi, dismissed an appeal challenging an order of the National Company Law Tribunal (NCLT) that had admitted a class action petition under Section 245 of the Companies Act, 2013 and directed issuance of public notice to shareholders under Rule 87 of the NCLT Rules, 2016. The appeal arose from objections raised by a listed company against the maintainability of a petition filed by shareholders collectively holding 4.99% of its share capital.
Read SC Judgment in this case: SC Refers Section 245 Class Action Dispute to Arbitration on Parties’ Consent
The shareholders had questioned three transactions involving related entities. The first concerned the sale of Redeemable Preference Shares (RPS) and Optionally Convertible Preference Shares (OCPS) held by the company in group entities. The petitioners alleged that these investments, after benefiting from debt settlements and improved valuations, were sold to promoter-related entities at significantly undervalued prices, causing substantial losses to the company and minority shareholders. The second transaction involved the write-off of a loan advanced to a group company, followed by the extension of fresh loans despite the earlier write-off. The third transaction related to the sale of an investment held by the company’s wholly owned subsidiary in another group entity at a price alleged to be substantially below its value.
