Rajeswara Rao Vittanala, Member - (1.) The Company Petition bearing CP No.83 of 2009 (TP No. 45/HDB/2016) is filed by M/s. Sun Pharmaceutical Industries Limited (erstwhile Ranbaxy Laboratories Limited) against Dr. Jayaram Chigurupati and 4 others, U/s. 397 & 398 r/w sections 402 & 403 and other provisions of Companies Act, 1956 by inter-alia seeking to declare the acts of the Respondent No. 1 to 3 are prejudiced to the public interest and oppressive to the shareholders of Respondent No.4 Company; Respondent No.l has resulted in mismanagement of the affairs of Respondent No. 4 Company; Respondent No.l has failed in discharge of his fiduciary duties and statutory duties and responsibilities towards Respondent No.4 Company and his conduct has resulted in mismanagement of the affairs of Respondent No.4 Company; Restrain Respondent No.l from acting as the Managing Director of Respondent No.4 Company; Order Respondent No.l to 3 not interfere in the affairs of Respondent No.4 Company and declare that they are oppressors; Any other consequential, incidental or other order(s) as this Hon'ble Board may deem fit.
(2.) Brief facts, leading to the filing present petition, are as follows: (a) M/s. Sun Pharmaceutical Industries Limited (erstwhile Ranbaxy Laboratories Limited) (Petitioner Company) is the company incorporated under the provisions of Companies Act, 1956, and it is a major shareholder of Respondent No-4 Company holding 1,61,27,293 Equity Shares of Rs. 10/- each fully paid up, amounting to 46.85% equity shareholding of Respondent No.4 Company. (b) Dr. Jayaram Chigurupati & Mrs. Padmasree Chigurupati are shareholders of Respondent No. 4 Company. Respondent No.l is the Managing Director and Shareholder of Zenotech Laboratories Limited by holding 33,96,396 equity shares of Rs.10/- each fully paid up. (c) The Respondent No.l and 2 are originally promoters of the Respondent No.4 Company by holding 1,64,53,906 equity shares equivalent to 57.11% of the total issued and subscribed paid up share capital of the Respondent No. 4 Company. (d) The Petitioner entered into share purchase agreement on 03-Oct-2007 with Respondent No.l for purchasing 78,78,906 equity shares (in Respondent No.4 Company) which is equivalent to 27.34% shares of Rs. 10/- each fully paid up for a consideration of Rs. 160/- per equity share. Accordingly, the petitioner made public announcement on 05.10.2007 as per SEBI Takeover Regulations for acquiring further 20% shares of the Respondent No. 4 Company. (e) On October, Respondent No.5: (i) completed acquisition of 81,913,234 equity shares of petitioner from the sellers; (ii) was issued and allotted 46,258,063 equity shares along with 23,834,333 warrants by Petitioner; and (iii) together with the shares acquired pursuant to the Petitioner's Offer, held 220,690,423 equity shares in Petitioner, representing in the aggregate 52.5% of the issued, subscribed and fully paid up equity share capital of Petitioner. As a result of this, on 20lh October, 2008, petitioner became a subsidiary of Respondent No.5. The remaining 48,020,9000 equity shares held by the sellers were acquired by Petitioner No.5 on November 7, 2008, Respondent No.5 held a total of 63.92% of the equity share capital in Petitioner. (f) During all this events the Respondent No.l had misused his office as Managing Director of Respondent No.4 and has been promoting and safeguarding his own interests and has initiated various frivolous litigation with an oblique motive to pressurize and to coerce the Petitioner and Respondent No.5 to purchase and acquire his 26% equity interest in Respondent No.4 at a price of Rs. 160/-, which the petitioner and Respondent No.5 did not agree or accept. (g) The petitioner submits that Respondent No. 1, for his own personal gain, wanted to sell his 26% equity stake and had been requested Respondent No.5 and the Petitioner to enter into a share purchase agreement for purchase of the equity stake held by him in Respondent No.4. In his e-mail dated February 11, 2009, Respondent No.l expressly mentioned that since the share purchase agreement was not signed on 161'1 January, 2009 by Respondent No.5, no Board meeting would take place, which clearly proves that signing of the Agreement for divestment of equity stake by Respondent No.l which to the knowledge of the Petitioner, Respondent No.5 had neither accepted nor agreed was being linked with the holding of the Board meeting of Respondent No.4 and was being made an essential pre-condition to the holding of a Board meeting of Respondent No.4. (h) Pursuant to exercise of all futile efforts by Respondent No.l to coerce Petitioner and Respondent No.5 to purchase the equity stake of Respondent No.l, a petition for oppression and mismanagement was filed against the petitioner herein, Respondent No.5, Respondent No.4, and others being C.P. 51 of 2009. In the said Company Petition, Respondent No.l had made allegations against petitioner herein that after assuming control over Respondent No.4 Company, Petitioner exercised its control in a manner which was allegedly prejudicial to the interest of Respondent No.4 Company, its creditors and other stakeholders and also in a manner oppressive to Respondent No.l and 2. (i) Respondent No.l has spent and continues to spend his time predominantly in the United States of America. It is submitted that Petitioner has reasons to believe that Respondent No.l is extensively involved in setting up other projects, such as blood plasma collection centers in the United State of America, resulting in the neglect of his duties towards Respondent No.4 herein with the result he is distracted and ignores the needs of Respondent No.4 herein and remains focused on the matters unrelated to the business and operations of Respondent No.4 herein. (j) Respondent No.l has never allowed the holding of a Board Meeting or the AGM of Respondent No.4. It is evident from the mail dated 4lh October 2008 of Respondent No. 1 to Mr. Atul Sobti, Wherein Respondent No.l has admitted that he has been postponing the AGM of Respondent No.4 from September, 2008 to December, 2008 in order for everyone to complete the transaction for purchase of shares by Respondent No.5. It is manifest from the said mails of Respondent No.l that the post of the Managing Director of Respondent No.4 has been misused by Respondent No.l to serve his own ends and that there was never any intention on part of Respondent No.l to hold an AGM of the Company for the purpose of making compliance of the provisions of the Act or the Listing Agreement. The sequence of events clearly establish that the Respondent No.l is acting with the one point agenda of coercing the Petitioner and Respondent No.5 to buy him out at Rs. 160/- per share.
(3.) The case was initially instituted before the then Company Law Board, Chennai. Subsequently transferred the case to this NCLT Bench, Hyderabad and it was listed before this Bench on various dates viz., 25.07.2016, 27.10.2016, 10.11.2016, 11.11.2016, 05.12.2016, 07.12.2016, 16.12.2016, 19.12.2016, 04.01.2017, 20.01.2017, 25.01.2017, 30.01.2017, 07.02.2017, 23.02.2017, 15.03.2017, 31.03.2017, 20.04.2017, 28.04.2017, 06.07.2017, 07.07.2017, 01.08.2017.;