-1- IN THE HIGH COURT OF BOMBAY AT GOA COMPANY APPEAL NO. 12 OF 2009 Morgan Ventures Limited Having its Registered Office at: 53, friends Colony (East), New Delhi – 110 065. …... Appellant V e r s u s 1. Blue Coast Hotels and Resorts Ltd. Having its registered office at 263C, Arossim Cansaulim Goa, 403 712. Corporate office at : 415-417 Antriksh Bhawan 22, Kasturba Gandhi Marg New Delhi – 1. 2. Mr. P. L. Suri, C/o. Blue Coast Hotels and Resorts Limited 263C, Arossim, Cansaultim Goa 403 712. 3. Mrs. Sunita Suri, C/o. Blue Coast hotels and Resorts Limited 263/C, Arossim, Cansaulim Goa, 403 712. 4. Mrs. Mamta Suri, C/o. Blue Coast Hotelds and Resorts Limited 263/C, Arossim, Cansaulim Goa 403 712. 5. Mr. B. K. Goswami C/o. Blue Coast Hotelds and Resorts Limited 263/C, Arossim, Cansaulim Goa 403 712. 6. Mr. K. S. Mehta, C/o. Blue Coast Hotelds and Resorts Limited 263/C, Arossim, Cansaulim Goa 403 712. 7. Dr. V. M. Kaul C/o. Blue Coast Hotelds and Resorts Limited -2- 263/C, Arossim, Cansaulim Goa 403 712. 8. Mr. Ashoka Kini, C/o. Blue Coast Hotelds and Resorts Limited 263/C, Arossim, Cansaulim Goa 403 712. 9. M/s. Morepen Laboratories Limited Having its office at Village Masul Khana Parwanoo, Tehsil Kasuali District Solan Himachal Pradesh. 10. Laxmi Vilas Bank Registered Office at: Salem Road Kathaparai Karur Tamil Nadu – 639 006. 11. Dombivali Nagari Sahkari Bank Ltd Registered Office at : Madhukunj, Plot No. P/162 MIDC, Phase-II, Kalyan – Shil Road Sonarpada, Dombivali (East) – 421 204 12. Scope Credits & Financial Services Pvt. Ltd Registered Office at: 3, Todarmal Lane, 1st Floor Bengali Market New Delhi – 110 001. 13. Seed Securities & Services Pvt. Ltd. Registered Office at: 3, Todarmal Lane, 1st Floor Bengali Market New Delhi – 110 001. 14. React Investment & Financial Services Pvt. Ltd. Registered Office at: 3, Todarmal Lane, 1st Floor Bengali Market New Delhi – 110 001. 15. Liquid Holdings Pvt. Ltd. Registered Office at: 3, Todarmal Lane, 1st Floor -3- Bengali Market New Delhi – 110 001. 16. Epitome Holdings Pvt. Ltd. Registered Office at: 3, Todarmal Lane, 1st Floor Bengali Market New Delhi – 110 001. 17. Ebony Traders Pvt. Ltd. 1008, Sector – 19 B Chandigarh – 160 019. 18. Blue Coast Hospitality P Limited 263C, Arossim, Cansaulim, Goa, 403 712. (Registered Addresses) …... Respondents Mr. S. K. Kakodkar, Senior Advocate with Mr. Ajit Sukla, Mr. M. S. Sonak and Mr. R. G. Rivonkar, Advocate for the Appellant. Mr. S. G. Dessai Senior Advocate with Mr. Saurabh Kalia, Advocate for Respondent no.1. Mr. Kailash Vasdev, Senior Advocate with Mr. Rahul Srivastava, Advocate for Respondent nos. 2 to 8. CORAM: A. H. JOSHI, J. DATE : 5 th October, 2009. ORDER Heard the Parties. 2. At the outset, learned Senior Advocate Mr. Kakodkar, prays for amendment of the prayers. Draft amendment is produced. Perused the draft amendment. Heard the parties on the amendment. Prayer for amendment is -4- granted. Amendment to be carried out forthwith. 3. Heard Advocates appearing for the parties at length for admission hearing of appeal. 4. Appellant's grievance is that in the Extraordinary General Body Meeting of the respondent no.1-Company was scheduled to be held and has been held on 30.09.2009. Inter alia, item no. 8 of agenda of said meeting pertained to conversion of 40,00,000 Cumulative Preference Shares into 1% Equity Shares of Rs.100/- each. 5. It is then urged that the said resolution is said to have been adopted and it is about to be sent to SEBI, where the Company is seeking approval of reconstruction. 6. According to learned Senior Advocate, Mr. Kakodkar, forwarding of the Resolution to the SEBI is an empty formality for the reasons namely : (1) That the initial allotment of Shares and further actions are abinitio, as issue thereof is in violation to take over Rules framed by the SEBI. (2) The Resolution for conversion of Preference Shares into Equity Shares operates automatically and, therefore, the Resolution operates soon after passing. -5- 7. The Appeal and prayer for interim relief is opposed by the respondents and it has been urged that: (a) The figure appearing in the Annual Report of the Company, copy whereof is on record at page 249 onwards of paper-book which pertains to the year 2008-2009, shows the status of holding of promoters which would be after conversion of 94.55% and the holding of non- promoters would be 5.45%. (b) The percentage of holding of the non-promoters few amongst whom the appellant claims to represent was earlier far low and even now on the appellant's admission, it is only 4.9%. (c) The conversion of Shares has not really affected the percentage of holding of non- promoters alleged minority share holders due to the transfer of Shares to the promoters by financial and other institutions in the process of reconstruction and the conversion. 8. The appellant does not dispute that the holding of minority share holders is less than 4.9% and increase in holding of the group of promoters and their alliances who are in majority is hardly by 2%. 9. In this background, whatever is the legality of the actions of the respondent-Company would be governed by the Orders as would be passed by statutory fora such as Company of Boards, SEBI, etc., and the decision of -6- the Company arrived in its Extraordinary General Body Meeting held on 30.09.2009 would always stand subject to the decision of the statutory fora. 10. In this background, prima facie, no injustice is seen to have been suffered by the appellant due to impugned Orders. 11. The appeal, therefore, does not warrant any indulgence and deserves to be rejected. It would, however, be appropriate and parties agreed for it namely that the application no. 226/2009, which is pending before the Company of Boards, Mumbai bench, be heard and decided expeditiously. 12. Parties agree that they would appear before the Board on 07.10.2009. The Board to take up the application no. 226/2009 for hearing and dispose off the same according to law, within 15 days thereafter. Respondents are free to file their reply if they wish, within one week. 13. Observations contained in this Order are as to what appears prima facie and other for a shall decide causes coming before them in accordance with law and facts approved. 14. Appeal is disposed off with above directions. A. H. JOSHI, J. arp/*