NCLAT Returns Aakash's AoA Amendment Case To NCLT
NCLAT Returns Aakash's AoA Amendment Case To NCLT
Grants a week to file the application, directing the tribunal to decide the matter within three weeks
The Chennai bench of the National Company Law Appellate Tribunal (NCLAT) has junked the petitions filed by Manipal Health Systems and Aakash Educational Services, and ordered them to file applications with the National Company Law Tribunal (NCLT) to vacate the 20 November 2024 order.
The two-member bench of the appellate tribunal refused to lift the stay on the NCLT order, barring amendment of the Articles of Association (AoA) of Aakash, a subsidiary of the debt-ridden ed-tech major Byju’s.
The 14-page NCLAT order stated that the status quo would continue as directed by the Supreme Court.
An extraordinary general meeting (EGM) of Aakash was to be held on November 20 to consider and approve alteration in the AoA, which was objected to by the minority shareholders.
However, on the same day, the Bengaluru bench of the NCLT stayed the resolution on the amendment in the AoA, allegedly seeking to dilute the rights of minority shareholders, including Blackstone-backed Singapore VII Topco I Pte Ltd.
This was later challenged by Aakash before the High Court of Karnataka, which stayed the NCLT order. But on 29 November, the top court prevented the amendment of AoA.
The apex court directed Akash to approach the NCLAT within seven days, stating that the stay on implementing the EGM resolution over alteration in the AoA would remain in effect until the appeal was heard.
On the appeal filed by Aakash and Manipal, the NCLAT has now observed that while passing the stay order, it had "not considered the arguments.”
The appellate tribunal held, "Assigning the reason is the basic guiding principle for the court to justify the logic on what transpired to pass an order, which impeaches the rights of the parties.”
It added, "If it is filed within the time frame, the tribunal is requested to decide the Stay Vacation Application considering all contentions, including the company’s appeal, within three weeks.”
The NCLAT clarified that its observations would not have any effect while deciding on the NCLT order.
The NCLT had stayed the alteration of AOA after a petition by Singapore VII Topco and others under Sections 241, 242 and 244 of the Companies Act, which protects minority shareholders’ rights. They had requested to direct Aakash not to take up agenda item No.8 in the EGM for ‘alternation’ of the AoA.
The petitioners, including Singapore VII Topco, holding a 6.97 percent stake in Aakash, alleged that their rights were oppressed.
