COMPANY LAW BOARD, CHENNAI BENCH
Sharvani Energy (P.) Ltd.
versus
N. VenkateshwarRao
KANTHI NARAHARI, JUDICIAL MEMBER
C.P. No. 82 of 2011
C A No. 154 of 2012
DECEMBER 21, 2012
ORDER
1. The present company application has been filed u/s 403 of the Companies Act, 1956 (hereinafter referred to as “the Act”) r/w Regulation 44 of the Company Law Board Regulations, 1991 by the respondents praying this Bench to permit the Applicant No. l to increase its authorized share capital to Rs. 24.75 crore, allot further shares of a value of Rs. 12.50 crore and restrain the respondents herein from making erroneous, dishonest statements and representations to electricity authorities in Odisha, bankers and machinery suppliers of the Applicant No. 1 Company.
2.Shri S. Ravi, learned counsel appeared for the applicants. He submitted that the respondents herein filed CP No. 82/2011 against the applicants herein under sections 397, 398, 399 and 403 of the Act seeking various reliefs as prayed in the company petition. The applicants herein filed their counter in the above company petition and the Company Law Board was pleased to pass an interim order dated 09.02.2012 holding that the Applicant No. l has to seek permission of the Company Law Board before increasing the authorized capital and allotting its shares. It is submitted that the respondents herein have no interest in the business of the Applicant No. l Company and are doing serious damage to the said Company by meeting electricity authorities in Odisha, and also the bankers and machinery suppliers with a view, to kill the project. As a result of the negative campaigning by the respondents herein, various agencies have been calling upon the Applicant No. l Company to achieve financial closure and also to ensure that the project implementation is not delayed. It is further submitted that the total project cost is expected to be Rs.82.50 crore. The expected loan financing is Rs. 57.75 crore (70% of the project cost) and equity to an extent of Rs.24.75 (30% of the project cost) has to be infused into the Applicant No. l Company for implementation of the project. It is submitted that this applicant has mobilized an amount of Rs. 5.04 crore towards implementation of the project. It may be appreciated that while this Applicant is leaving no stone unturned to implement the project for the benefit of the Applicant No. l Company, the respondents herein are leaving no stone unturned to damage and destroy the Applicant No. l Company. It is submitted that the interest of the Company is paramount and the substratum of the Company has to be safeguarded from being lost.
3. It is submitted that the Applicants have been unable to implement the project at Dumajhori SHEP on River Kolab in Koraput District of Odisha due to the disputes between the applicants and the respondents and the negative campaigning by the respondents herein. The Applicant No. l Company has received a letter dated 23.06.2012 from Engineer-in-Chief-cum-Principal Chief Electrical Inspector, Odisha, Bhubneswar stating that the Applicant has not been able to achieve financial closure and requesting the Applicant to make a sincere effort to obtain financial closure. In the aforesaid circumstances, it is imperative for the Applicant Company to increase its authorized share capital and to issue further shares in the Applicant No. l Company. The Company is badly in need of equity capital and the failure to infuse capital will spell a death knell to the Applicant No. l Company.
4. The Applicant craves permission of the Company Law Board to increase its authorized share capital to Rs. 24.75 crore and its issued, subscribed and to allot further shares of a value of Rs. 12.50 crore to meet the requirements of financial institutions/banks and the Government of Odisha to finance the project on the accepted norms for debt/equity ratio. It is submitted that the interests of the Applicant No. l Company would be adversely affected and irreparable damage would be caused to it if the interim reliefs prayed for are not granted.
5.Shri R. Sankaranarayanan, learned counsel appearing for the respondents herein submitted that the present company application is filed based on frivolous and untenable grounds and is an attempt by the applicants to delay valuation of the shares of the Company as directed by this Bench by an order dated 09.02.2012. It is submitted that the applicants have not handed over the statutory books and accounts of the Company to the auditor appointed by this Bench for the valuation of shares of the Company. It is submitted that the respondents/petitioners were holding 50% shares of the 1st Applicant/Respondent Company and on the date of filing of the company petition they were holding 31.44% shares of the Company. But by the various actions taken by the Applicants/Respondents, the Respondents/Petitioners have been reduced to 21.83% of the paid-up capital of the Company. It is to say that the certificate given by the company secretary dated 25.09.2010 would clearly show that the Respondents/Petitioners were holding 50% shares of the 1st Applicant/Respondent Company. The Respondents/Petitioners submit that the 3rd Applicant/3rd Respondent had already allotted 11,00,000 shares of the 1st Respondent/1st Applicant Company in the following ratio:
