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2025 Supreme(Online)(NCLT) 1491
NATIONAL COMPANY LAW TRIBUNAL
Chitra Ram Hankare, J, Kaushalendra Kumar Singh, T
Rajesh Agrawal alias Raju Agrawal & Ors – Appellant
Versus
Makhija Construction & Engineering Pvt Ltd & Ors – Respondent
CP/9(MP)2021
For the Applicants/Petitioners: Mr. Pratik Tripathi, Mr. Rajesh Agrawal, Mr. Mukesh Agrawal
For the Respondents: Mr. Rajat Lohia
Share application money must be allotted as shares within 60 days or refunded; failure to comply undermines shareholder rights.
Headnote:(A) Companies Act, 2013 - Sections 213, 241, 242, 244, 42(6) - Oppression and mismanagement - Petitioners sought relief against alleged fraudulent conversion of share application money into unsecured loans and non-allotment of promised shares - Respondents argued compliance issues - Court held allotments were not done within legal timelines, directing repayment of application money or issuance of shares. (Paras 12, 14, 17, 18)
(B) Legal standing and eligibility - The court examined shareholding status and requirements under the Companies Act, concluding that petitioners had standing to file under current provisions despite opposition claims on limitations. (Paras 15, 20)
Facts of the case:
The petitioners, all relatives and shareholders, alleged oppression by respondents who converted share application money to unsecured loans without allotting promised shares, thus depriving petitioners of their equity rights.
Findings of Court:
The court found merit in petitioners' claims, stating that the conversion of share application money was invalid as it was done without proper legal procedures. It ordered that either the amount be refunded with interest or shares be allotted in accordance with the initial investments.
Issues: Validity of share application money conversion, timing for share allotment, eligibility of petitioners under the Companies Act.
Ratio Decidendi: The court highlighted that legal provisions mandate timely allotment of shares and stated shareholders’ rights cannot be altered retrospectively without adherence to due process.
Result: The Company Petition CP 9 of 2021 is partly allowed & disposed of.
| Table of Content |
|---|
| 1. petitioners' eligibility to file under companies act provisions. (Para 1 , 5 , 15) |
| 2. claims of oppression and mismanagement due to fraudulent share application money conversion. (Para 2 , 3 , 4 , 6 , 12 , 17) |
| 3. court's orders for refunds or share issuance based on legal compliance. (Para 14 , 20) |
JUDGMENT
1. The present application was filed on 20.08.2021 by petitioners namely Mr. Rajesh Agrawal, M/s Cemacon Infrastructure Private Limited, Dr. Yogesh Agrawal, Mr. Mukesh Agrawal, Mr. Naresh Agrawal (Petitioners) under Section 241 -242 of the Companies Act, 2013 against M/s Makhija Construction & Engineering Pvt Ltd, its directors and other respondents for various acts of oppression & mismanagement in the affairs of the company against the petitioners.
2. The reliefs along with the interim reliefs sought by the petitioners in the present petition are as under:
a) Pass an appropriate orders, relief’s, directions under section 241 an 242 of the Companies Act, 2013 to bring to an end the aforesaid acts of oppression and mismanagement perpetrated by the respondents and for necessary orders and reliefs in respect thereto, including as prayed for therein;
b) To declare of conversion of Share Application Money Pending for Allotment into unsecured loan as null and void;
c) To give direction to issue and allot the 47,609 equity shares to the Petitioner No. 1 to 5 against their respective share application money lying with the Respondent No. 1 Company;
d) Scheme be regulated to run and manage the affairs of the Respondent No. 1 Company by the Hon’ble Tribunal;
e) Remove Respondent No. 2 to 8 as Directors of the Respondent No. 1 Company and declare him disqualified as per the section 164(1)(e) and/or 167(1)(e) of the Companies Act, 2013 ;
f) order investigation into the books of accounts and the affairs of the Respondent No.1 Company under section 213 of the Companies Act, 2013 and issue necessary directions to Performa Respondent No.4;
g) Direct Respondent No. 2 and 8 to provide inspection of records and registers of the Respondent No. 1 Company and provide certified copies thereof to the Petitioners;
h) Restrain the Respondent No. 2 to 8 from relinquish, sell, alienate, mortgage, charge or create third party right on the rights to acquire the educational plot situated at Sector E, Sch. No. 94, Indore held in the Respondent No. 1 Company;
i) Restrain the Respondent No. 2 to 8 from taking any action which is prejudicial to the interest of the Respondent No. 1 Company and Petitioners;
j) Pass an order declaring the Annual General Meetings held on 30.09.2015, 30.09.2016, 29.09.2017, 30.09.2018, 30.09.2019 and 31.12.2020 as null and void as no notice calling such AGMs were ever served;
k) Pass an order declaring balance sheets for FY 2013-14, 2014- 15, 2016-17, 2017-18, 2018-19 and 2019-20 as null and void as it contains material false information and does not reflect the true and fair view of the transactions;
l) To pass appropriate order against the Respondents for various non compliances under the Companies Act, 2013 as disclosed under this petition including;
m) Pass an appropriate order under the sections invoked herein including Section 447 and 448 of the Companies Act,2013 against the Respondents for filling of false and misleading information with Ministry of Corporate affairs;
n) and pass such other/further order/directions, which this Hon’ble Tribunal may deem fit and proper in the facts and circumstances of the present case.
Interim Reliefs
a) restrain the Respondents from relinquishing, selling, parting with, transferring, mortgaging, alienating or encumbering the right in leasehold land educational plot situated at Sector E, Sch. No. 94, Indore of the Respondent No. 1 Company or creating any third party interest in it till the disposal of the present petition;
b) Restrain the Respondent No. 2 to 8 from taking any action which is prejudicial to the interest of the Respondent No. 1 Company and Petitioners;
c) Take over the con
