Securitisation and Reconstruction of Financial Assets and Enforcement of Security Act, 2002 – s.9(1) – Companies Act, 2013 – s.62(1)(c) – SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 – Regulation 28: Held: s.9, SARFAESI Act authorizes RARE to convert portion of the debt into shares of the borrower company but such authority is subject to s.62, Companies Act, 2013 which in turn requires a resolution of the shareholders of the company – However, when such a proposal is not by the appellant company, the approval of the shareholders may not be necessary – On facts, the proposal for increasing the subscribed capital of the company by converting part of the debt into equity shares was initiated by the appellant company itself and not actually by RARE – Therefore, the proposal was that of the company only – Accordingly, as contemplated by s.62(1)(c), Companies Act, 2013, the approval of the shareholders would be mandatory before the shares are accepted for listing on the BSE – Furthermore, the approval of the BSE is necessary in view of Regulation 28 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 – No error or illegality committed either by the BSE or the Securities Appellate Tribunal – Statutory appeal u/s.22 F, Securities Contracts (Regulation) Act, 1956 is devoid of merit. [Paras 5, 7-9]
As published in the Supreme Court Reports, Supreme Court of India. Headnotes prepared by: Divya Pandey. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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