JUDGMENT :

S.J. Kathawalla, Milind N. Jadhav, JJ.

INTRODUCTION :

1. This Appeal impugns the judgment dated 26th October, 2021 passed by the Ld. Single Judge (“Impugned Judgment”). This Appeal is adjudicated under two sections viz. Section A and Section B. Section A pertains to the arguments and our decision on jurisdiction and whether or not the learned Single Judge was correct in restraining the shareholders of Zee Entertainment Enterprises Limited from calling for and holding an Extra Ordinary General Meeting as requisitioned by them. Section B pertains to the arguments and our decision on the alleged illegalities in the resolutions proposed under the aforesaid requisition. As set out hereinafter, we have ruled in favour of the Appellants in both sections.

FACTS

2. For adjudication of this Appeal, it would be necessary to set-out the following facts :

2.1 The Appellants collectively hold 17.88% of the total paid up share capital of Respondent No.1 / Zee Entertainment Enterprises Limited (“Zee”). Zee is a publicly listed Company.

2.2 On 11th September, 2021, the Appellants issued a Requisition (“Requisition”) to Zee in terms of Section 100(2)(a) of the Companies Act, 2013 (“Act”) calling for an Extra Ordinary General Meeting (“EGM”). By this Requisition, the Appellants requisitioned the convening of an Extraordinary General Meeting to inter-alia remove 3 (three) non-independent directors of the Company, viz. one Mr. Ashok Kurien, Mr. Manish Chokhani and Mr. Punit Goenka / Respondent No.2. The Requisition further sought the appointment of 6 (six) Independent Directors on the Board of Zee “subject to the approval of the Ministry of Information and Broadcasting”.

2.3 On 13th September, 2021, Zee intimated the Stock Exchanges that it had received resignation letters from Mr. Chokhani and Mr. Kurien.

2.4 On 22nd September, 2021, by a disclosure to the Stock Exchanges, Zee announced the approval and execution of a non-binding term sheet with Sony Pictures Networks Private Limited in relation to a potential transaction involving a composite scheme of arrangement for the merger of Zee and Sony India.

2.5 On 23rd September, 2021, the Appellants addressed a letter to Zee calling upon it to comply with the Requisition.

2.6 On 29th September, 2021, the Appellants filed a Company Petition under Section 98 (1) read with Section 100 of the Act before the National Company Law Tribunal, Mumbai Bench (“NCLT”) seeking the following reliefs (“NCLT Petition”) :

“a. that this Hon'ble Tribunal be pleased to order an extraordinary general meeting of the Respondent No. 1 company Zee Entertainment Enterprises Limited to be called held and conducted on or before 28 October 2021 or soon thereafter as maybe practicable, in pursuance of requisition dated the 11 September 2021, in such manner as this Tribunal thinks fit and proper and that for the purposes of the same, such ancillary and consequential directions be given as this Tribunal may think necessary or expedient including directions regarding the time and place of the meeting to be held, appointment of an independent Chairman for the meeting, deposit of proxies with such Chairman and all such other directions modifying or supplementing the operation of the provisions of the Companies Act, 2013 and of the Articles of Association of the Respondent No. I Company, relating to the calling, holding or conducting of the meeting, by exercise of its powers under Section 98 of the Companies Act, 2013;

b. for interim and ad-interim reliefs in terms of (a) above;”

2.7 We have been informed that the NCLT Petition was mentioned on 29th September, 2021 and circulation was granted for 30th September, 2021. We have been further informed that on 30th September, 2021, the NCLT directed Zee to consider the Requisition and listed the NCLT Petition for hearing on 4th October, 2021.

2.8 On 30th September, 2021, Zee’s Board concluded that the Requisition was invalid / illegal and accordingly, recorded its inability to convene the EGM.

2.