Share Allotment After Missed Deadline Not Oppressive to Minority | NCLT

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  • Last Updated on 24 July, 2025

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Share allotment under AoA

Case Details: Sri Veera Bhoga Vasanta Rayalu Sabbavarapu v. Sunray Green Space (P.) Ltd. - [2025] 176 taxmann.com 498 (NCLT-Amaravati)

Judiciary and Counsel Details

  • Umesh Kumar Shukla, Technical Member & Kishore Vemulapalli, Judicial Member
  • Vikram Pooserla, Sr. Adv., R.S. Phani & Ms Praneetha, Counsels for the Petitioner.
  • Amir Bavani, Naresh Kumar Sangam, Advs. & P.H. Arvindh Pandian, Sr. Adv. for the Respondent.

Facts of the Case

In the instant case, Respondent Nos. 6 and 7, being majority shareholders of the company ‘S’, had sent a notice to the board of directors of the company notifying their intention to dispose of Equity Shares standing in their name, as per the requirement of Article 10(b) of the AoA of the Company.

Pursuant to the notice, the board of directors of the company convened its Meeting. During the meeting, the board passed a resolution to send a letter of offer to all shareholders of the company, including the petitioners (minority shareholders).

The Board also informed the petitioners that each of them was entitled to only 6,454 shares on a pro rata basis under the presumptive right and requested them to make payment of a certain sum on or before the specified date; failing which, their entitled shares would be offered to other shareholders.

The petitioners had expressed their willingness to acquire their entitled equity shares; however, despite being given various opportunities, they had failed to make payment to complete the process of share transfer. Thus, their right to receive said equity shares under Article 10 of the AoA of the Company had lapsed.

Thereafter, the company offered these additional shares to Respondent Nos. 2 to 5, from whom it had received payment in respect of their entitled shares as well as the additional shares offered to them.

NCLT Held

The NCLT held that the Company’s action of offering shares to other shareholders i.e., Respondents Nos. 2 to 5 was in order. Thus, instant petition by the petitioners to declare acts of respondents as oppressive and to declare the share transfer process as illegal and ultra vires was to be dismissed.

List of Cases Referred to

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Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied