Karnataka High Court: The instant appeals challenged the common judgment of the Single Judge Bench dated 02-07-2024 whereby which the order of National Company Law Tribunal (NCLT) in MIH Edtech Investments B.V. v. Think & Learn (P) Ltd., 2024 SCC OnLine NCLT 2889, was set aside and the matter was remitted to the NCLT for reconsideration. The Division Bench of NV Anjaria, CJ* and KV Aravind, J., directed the parties to maintain the status quo vis-a-vis the subject matter of the dispute till a final decision is made by the NCLT during the remand proceedings. The Court further directed that respondents shall not make allotment of shares in the interregnum.
The Court directed that the exercise of deciding as per the remand order by Single Judge must be completed expeditiously and before 31-07-2024.
The appellant (General Atlantic) is one of the shareholders of Think and Learn Private Limited (Company).
The main proceedings before the NCLT, which are pending, were filed under Sections 241 and 242 of the Companies Act, 2013 in which it was alleged that Think and Learn Pvt. Ltd., committed various acts of oppression and mismanagement. Under Section 241 of the Companies Act, application was filed seeking 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.
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.
The appellant stated that on 02-03-2024, without increasing the authorised Share Capital of the Company and seeking any clarification of the NCLT order dated 27-02-2024, the Company proceeded to allot 18,14,887 shares which was again an illegal allotment.
On 29-03-2024, 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 the viewing of the Register of Members of the Company.
The afore-stated developments led to NCLT’s order in MIH Edtech Investments B.V. (supra) wherein NCLT restrained Think and Learn Pvt. Ltd. from proceeding with the second rights issue and ordered the preservation of the current shareholding status quo until the main petition is adjudicated.
Perusing the dispute and NCLT’s order in MIH Edtech Investments B.V. (supra), the Court expressed it non-inclination to go into the merits of arguments presented by both the parties, including whether the impugned order of the NCLT was reasoned order or not.
The Court directed the parties to maintain status quo until the NCLT decides on the issue. The Court also passed the following directions-
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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 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.
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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 the 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.
The Court clarified that it did not go into the merits of the case of the appellant and has not expressed any opinion on merits.
[General Atlantic Singapore TL PTE Ltd., v. Byju Raveendran, 2024 SCC OnLine Kar 62, decided on 05-07-2024]
*Judgment by Justice N.V. Anjaria, Chief Justice
Advocates who appeared in this case :
For appellants- UDAYA HOLLA, SENIOR ADVOCATE A/W SHANKH SENGUPTA, MANASA SUNDARRAMAN and MOHAMMED SHAMEER, ADVOCATES
For respondents: DHYAN CHINNAPPA, SENIOR ADVOCATE A/W SAIRAM SUBRAMANIAN, SALONI SHAH, ASHIKA JAIN AND VIKARAM UNNI RAJAGOPAL, ADVCOATES FOR CAVEATORS-RESPONDENTS NOS.1 & 13 TO 15
