Rajeswara Rao Vittanala, Member - (1.) The Company Petition bearing CP No.51 of 2016 (TP No.45/HDB/2016) is filed by Dr. Jayaram Chgurupati and two others, against Zenotech Laboratories Limited and others, U/s. 397 & 398 r/w sections 402 & 403 of Companies Act, 1956 by inter-alia seeking to declare the acts of the Respondent No. 2 to 8 are prejudiced to the interest of Respondent No.l Company, and are oppressive against petitioners; order Respondent No. 2 to 8 not to interfere in affairs of the Company; to order to protect the interest of the minority shareholders; to direct the petitioners group to have at least equal representation in the Board and in respect of affairs of Respondent No.l Company and then-consent be made mandatory for all policy decision affecting the Respondent No.l Company.
(2.) Brief facts, leading to the filing of present petition, are as follows: (a) Zenotech Laboratories Limited (Respondent No.l Company) is incorporated under the provisions of Companies Act, 1956, and it is a public listed Company. The Authorized Share Capital of the Company is Rs.35,00,00,000/- (Rupees Thirty Five Crores Only) divided into 3,50,00,000 (Three Crores Fifty Lakhs only) equity shares of Rs.10/- (Rupees Ten only) each and the issued, subscribed and paid-up capital of the Company is Rs.34,42,50,000/- (Rupees Thirty Four Crores Forty two Lakhs Fifty Thousand only) divided into 3,44,25,000 (Three Crores Forty Four Lakhs Twenty Five Thousand only) equity shares of Rs.10/-. (b) Dr. Jayaram Chigurupati, the Petitioner is Managing Director and Shareholder of Rl Company by holding 33,96,396 (Thirty Three Lakhs Ninety Six Thousand Three Hundred and Ninety Six only) equity shares of Rs. 10/- each fully paid. Similarly Mrs. Padmasree Chigurupati second petitioner is a shareholder of Rl Company by holding 30,60,500 (Thirty Lakhs Sixty Thousand Five Hundred only) equity shares of Rs.10/- each fully paid. (c) Zenotech, LLC (Petitioner No.3) is a Limited Liability Company, is a shareholder of Rl Company by holding 24,12,500 (Twenty Four Lakhs Twelve Thousand Five Hundred only) equity shares of Rs.10/- each fully paid. (d) The three Petitioners together are holding 25.76% of the total share capital in the Respondent No.l Company. Therefore the present petition is maintainable under the Company Law. (e) The Ranbaxy Laboratories Limited is the Respondent No.6 Company carrying on amongst several business in the field of Bio-pharmaceuticals similar to that of Respondent No.l Company. Accordingly the Respondent No.l and Respondent No.6 entered into an agreement on 31.01.2007 for development of Granulocyte-Colony Stimulating Factor (GCSF) for European Union (EU), United States and other Regulated markets. Subsequently Respondent No.6 was allotted 20 lakh shares equivalent to 6.94% shares of the Respondent No.l through preferential allotment. (f) The Respondent No.6 had approached the petitioners with an offer to buy strategic stake in the Respondent No.l Company. Accordingly, the Respondent No.6 had entered into a share purchase agreement for 78,78,906 equity shares (in Respondent No.l Company) (equivalent to 27.35%) of Rs. 10/- each fully paid for a consideration of Rs. 160/- per equity shares. (g) In June 2008, the Respondent no.5 company has entered into an agreement with promoters of Respondent No.6 Company for acquiring the entire promoter's shareholding of 12,99,34,134 shares (34.81%) in Respondent No.6 Company. Accordingly, Respondent No.5 is holding 63.92% shares in Respondent No.6 Company and have become subsidiary of Respondent No.5 Company. (h) It is alleged that the ability of the petitioners in turning the fortunes of Respondent No.l Company is severely affected in view of the restrictive covenants in the share purchasing agreement entered into between them and Respondent No.6 Company in October 2007. The petitioners have accepted restrictive conditions in good faith and in furtherance of the interest of the Company. (i) As per para 7.3 of share purchase agreement dated 03.10.2007, the Respondent No.6 was holding pre-emptive right of first refusal in respect of 85,75,000 shares held by the petitioners, in addition to the pre-emptive rights, the Respondent No.6 imposed Lock-in of 51,00,000 equity shares in order to achieve Respondent No.l Company's launch of Granulocyte- Colony Stimulating Factor (GCSF) in European Union, so the petitioners were not allowed to sell their shares either directly or indirectly to any company or entity which is against in the business of Bio-technology and pharmaceuticals etc., unless a written consent obtained from Respondent No.6. Several conditions were imposed on the petitioners on the shares held in the Respondent No.l Company. By putting several restrictions, the petitioners realized the irresponsible actions of the Respondent No. 2, 3 and 4 are caused enormous damages to shareholders of Respondent No.l Company.
(3.) We have heard Mr.Vivek Reddy along with Mr.Ashwin Reddy, Advocates for the Petitioner No. 1 to 3 and Mr. Manik Dogra along with Mr. Rohan Jaitley, Advocates for the Respondent No. 1; Mr. Akshat Hansari, Mr. Avinash Desai and Mr. Nikhil, Advocates for the Respondent Nos. 2,3,5, 16 & 23; Mr. Aditya Chibber, Advocate for the Respondent No.4 and Mr. Rajiv Nayar, Senior Counsel along with Mr. Shyam Kumar, Mr. Subanshu Gupta, Advocates for the Respondent No.6 and carefully perused of all the pleadings along with material papers filed by them in support of their case.;