Telangana High Court
Bambino Finance Private Limited vs The Registrar Of Companies on 23 February, 2024
Author: Surepalli Nanda
Bench: Surepalli Nanda
THE HON'BLE MRS JUSTICE SUREPALLI NANDA
W.P. No.33006 OF 2023
ORDER:
Heard Mr. Sanjeev Gillella, learned counsel for the petitioner, and Mr. D.Narender Naik, learned Standing Counsel for respondent No.1.
2. The petitioner approached this Court with the following prayer :
" .....to issue an appropriate Writ, Order or direction more particularly one in the nature of Writ of Mandamus declaring the action of the Respondent Nos. 1 to 3 in not making payment of the amount of Rs.18,06,00,000/- (Eighteen crores Six Lakhs Only) claimed to be ready vide cheque No. 471849, dated 07.03.2023 by the Respondent Nos.2 and 3 in compliance with the Scheme of Arrangement approved by the erstwhile High Court of Andhra Pradesh vide order dated 05.10.2007 in C.P. No. 43/2007 as illegal, arbitrary and pass such other order or orders as are deemed fit and proper in the circumstances of the case."
3. The case of the petitioner in brief is that, the petitioner- Company is shareholder of the Spectrum Power Generation Limited, Hyderabad registered with the ROC, Hyderabad and 2 the respondent Nos.2 and 3 are the Directors and authorized representatives of the said Company and that the petitioner Company has got share certificate No.1292 having 1,80,60,000 shares (each share value is Rs.10/-) since inception of the Company till date. It is further case of the petitioner-Company that vide order dated 5.10.2007 the High Court approved scheme of arrangement, under which the time has been granted under Section 391 of Companies Act, 1956 to the Company and its Directors with appointed date i.e. 13.12.2006 and it was finalized on 5.10.2007 for release of payment to the preference shareholders under the supervision of the respondent No.1. In conformity with the scheme of arrangement, the petitioner has been demanding the respondent Nos.1 to 3 for release of the said amount and addressed a letter dated 3.6.2023 requesting the respondents to release the amount, but the cheques were illegally released in respect of personal shares of the Director's family members, however, the cheques of the Petitioner Company are kept on hold by the respondent Nos.2 and 3 without any 3 reason, which caused severe damage to the petitioner Company. Hence, the present Writ Petition.
4. Learned counsel for the respondent No.1 filed counter affidavit mainly relying on the para Nos. 3, 4 and 5 which reads as under:
"3. It is submitted that the present matter is a private dispute between the Petitioner and the Respondent No. 2 and 3 only, in respect of payment of redemption amount of preference shares of M/s. Spectrum Power Generation Limited. In a dispute between two private parties the Respondent No. 1 does not have a role to perform as it depends on the internal management and working of the company, and as such the Writ Petition is not maintainable and is liable to be dismissed in limine.
4. It is humbly submitted that Section 55 of the Companies Act, 2013 clearly lays down about the procedures regarding a company which is not in a position to redeem any preference shares or to pay dividend. Relevant portion of Section 55 of the Companies Act is reproduced hereunder:
(3) Where a company is not in a position to redeem any preference shares or to pay dividend, if any, on such shares in accordance with the terms of issue (such shares hereinafter referred to as 4 unredeemed preference shares), it may, with the consent of the holders of three-fourths in value of such preference shares and with the approval of the Tribunal on a petition made by it in this behalf, issue further redeemable preference shares equal to the amount due, including the dividend thereon, in respect of the unredeemed preference shares, and on the issue of such further redeemable preference shares, the unredeemed preference shares shall be deemed to have been redeemed;
5. It is humbly submitted that as per Section 55 of the Companies Act, 2013 there is a specific provision on what needs to be done when a company is not in a position to redeem any shares or pay dividend. The Petitioner herein had approached the Hon'ble High Court whereas he should have approached the Civil Court/Commercial Court for recovery of the money which the petitioner believes it is entitled to or the Hon'ble NCLT to initiate proceedings under the Insolvency and Bankruptcy Code, 2016. The Petitioner has an alternative remedy to redress the grievances about the non-payment of the amounts related to the redeemable preference shares by approaching the Hon'ble NCLT and therefore this petition is liable to be dismissed at its outset as this Hon'ble Court cannot entertain this Petition at this stage.
5
6. This Court is not inclined to allow the prayer as sought for in the present writ petition since the respondent No.1 has no role in getting the payments released from the company as the issue is between the petitioner and the unofficial respondents. In view of the fact that transfer of shares takes place between the company and its share holders and between the shareholders, for which the Registrar of Companies functioning under the capacity of an regulatory/administrative authority under the Companies Act, 2013, cannot be made liable as the respondent No.1 has no power or authority to get the payments released with respect to the preference shares as contended by the petitioner.
7. Taking into consideration the aforesaid facts and circumstances of the case and taking into consideration the averments made in paras 3, 4, and 5 of the counter affidavit filed by the 1st respondent, the Writ Petition is dismissed since the same is devoid of merits. However there shall be no order as to costs.
6
Miscellaneous petitions, if any, pending in this writ petition, shall stand closed.
__________________________ MRS JUSTICE SUREPALLI NANDA 23rd February, 2024.
skj 7 THE HON'BLE MRS JUSTICE SUREPALLI NANDA 8 WRIT PETITION No.33006 OF 2023 Dated : 23.02.2024 Skj