The court, while making such a suggestion also asked the parties to propose a date and name of some neutral chairperson to conduct the EGM.
The court was hearing a civil suit filed by ZEE, seeking to declare the requisition notice sent by Invesco invalid.
However, the court, while hearing the matter, refused to proceed based on assumptions that the resolutions will be passed.
The single judge bench of Justice GS Patel observed that if the company convenes the EGM and the resolution is passed, it can be kept in abeyance for a week till coming into effect, giving time to the company to approach courts.
“Such neutral chairperson to conduct EGM can be someone from the corporate world, a former judge or a senior counsel,” said Justice Patel. “It is premature to assume that the resolution will be passed or not.”
“The order that Zee seeks is in the teeth of a statutory provision (provisions of the Companies Act, 2013). I can’t see if the resolution is going to be passed and I don’t see why I should presume it will be passed. If the resolution is passed, the best we can do is ask that it should not acted upon for a week,” observed the court while asking ZEE to consider the requisition notice.
Gopal Subramanium, senior advocate appearing for the ZEE said that the lawyers will seek instruction from the company and will inform the court by Friday on the suggestion.
The court suggested that while calling for the EGM, Zee’s right to contest the validity of the resolutions post the EGM can be reserved.
Senior advocate Kapil Sibal, appearing for ZEE MD & CEO Punit Goenka, sought to file his response in the case and made a remark, saying that please don’t assume that the requisitionists are innocent. “I will show all the genesis,” said Sibal.
Janak Dwarkadas, senior counsel, appearing for the Invesco, submitted that so far ZEE was arguing that they (Invesco) need approval from the MIB before voting (at the EGM). “We are saying that it will require before the appointment. Our resolution says it is subject to MIB’s approval,” argued Dwarkadas.
Countering this, Subramanium argued that the guideline says the prior approval and not the ‘subject to approval’. The counsel for ZEE further said the offshore shareholders are seeking to appoint six independent directors and not nominee directors without any such mention in the Article of Associations.
The offshore shareholders are being represented by Senior Advocate Janak Dwarkadas and Gaurav Mehta along with Bhavik Mehta of Dhruve Liladhar & Co. While law firms Trilegal and the Economic Laws Practice (ELP) are representing ZEE and Goenka.
If the company announces a date for the EGM, Invesco may withdraw its case from the National Company Law Tribunal (NCLT), where the offshore investor was seeking a direction to the company to convene the EGM.
Invesco, on September 11, had first sent a requisition notice to the ZEE board, seeking removal of Goenka, along with two other directors, from the company’s board.
Invesco also sought induction of six new independent directors in the board.
While the two other director – Manish Chokhani and Ashok Kurien – have since resigned, the ZEE board, on October 1, declined the requisition notice, calling it invalid due to multiple legal infirmities and filed a civil suit in the Bombay high court.
Parallelly, hearing on Invesco’s petition, the Mumbai-bench of the NCLT had given ZEE time till October 22
nd to file its reply in the matter and the case was up for hearing on October 26
th.
The NCLT, which had originally given less than two days to the company to file its reply, had to settle for two weeks after ZEE approached the National Company Law Appellate Tribunal (NCLAT), challenging the initial order of the tribunal.
