ANDHRA PRADESH MILLS LTD Vs. PAMPASAR DISTILLERIES LTD

JUDGEMENT

(1.) THIS is a petition filed under section 111(1) and (2) read with section 111A of the Companies Act, 1956 ('the Act') against Pampasar Distillery Ltd. ('the company') and others seeking registration of 6,32,209 equity shares covered by share certificate No. 31725 of the company in the name of the petitioner in the register of members of the company.

(2.) The petitioner-company had given an inter-corporate deposit of Rs. 1 crore to the third respondent on 12-7-1994 which was repayable by 9-10-1994. Since the same was not repaid, the third respondent pledged the impugned shares of the company held in the name of the second respondent along with duly executed blank transfer forms. Since inspite of repeated requests, the third respondent did not repay the inter-corporate deposit together with interest, the pledged shares were got transferred in the name of the petitioner-company and lodged for registration with the company on 23-2-1996. However, the company has failed to register the transfer of shares in the name of the petitioner and accordingly this petition has been filed.

(3.) WHEN this petition was taken up for hearing, Shri Krishna Srinivasan, advocate appearing for the first and third respondent pointed out that the impugned shares constitute nearly 19.45 percentage shares in the company and, therefore, in terms of regulation 10 of the Takeover Code, 1997, the first petitioner cannot get the shares registered in its name unless and until it makes a public offer, as it exceeds 15 per cent of the voting rights of the company. He also referred to 1994 Regulations to point out that as per this Regulation, acquisition of over 10 per cent shares in the target company, an acquirer should make public offer. He also submitted that even otherwise since the petitioner has tried to foreclose the pledge without notice to the third respondent, the same is also in violation of the relevant provisions of the Act. He also pointed out that as per directions of the Calcutta High Court, the third respondent is negotiating with all its creditors who have given inter-corporate deposits, for a one-time settlement and, therefore, the claim of the petitioner will also be settled in due course. Accordingly, he prayed for dismissal of the petition.