In the hearing which took place on October 7, 2021, NCLAT opposed the judgment passed by NCLT in not granting more time to Zee to file reply to Invesco’s petition.
NCLAT (National Company Law Appellate Tribunal) has reportedly granted more time to Zee Entertainment Enterprise to reply to the petition filed by its shareholder Invesco Development Marketing Funds which asked to convene an extraordinary general meeting (EGM).
Zee’s one of the largest shareholders, Invesco and OFI Global China Fund had proposed for calling an EGM to the board where Invesco, holding 18 percent stake in ZEEL, asked the company to oust the Zee’s CEO (Chief Executive Officer) and Managing Director Punit Goenka from the board and appoint six of its nominees on the board.
Zee, in turn, disapproved the requisition of EGM which led to the shareholder Invesco taking the situation to the court. On the proposal of removing Goenka, his family is reported to be battling with the situation and also have requested the government to probe Invesco’s credentials.
In the hearing which took place on October 7, 2021, NCLAT opposed the judgment passed by NCLT in not granting more time to Zee to file reply to Invesco’s petition. The former said NCLT had mistaken and disclosed that not granting reasonable time is a violation of the tribunal’s rules and goes against the basic principles of natural justice. Hence, considering the circumstances, NCLAT came to a conclusion of allowing sufficient and reasonable time to Zee to file its reply and said, “…and after hearing both the parties, NCLT should proceed further.”
After the order passed by NCLAT in favor of Zee, the company’s spokesperson said, “The decision of the NCLAT justifies our complete faith in the Indian judicial system.” He added that the law’s due process bestows everyone an opportunity to exhibit their case. NCLAT granted reasonable opportunity to the company to file its reply to Invesco’s plea. Zee will undertake all the required steps which would be in best interests of its shareholders, also conforming to the applicability of law.
NCLT on October 5, 2021, granted minimum opportunity to Zee as confirmed by the tribunal’s Bhaskara Pantula Mohan and Narendra Kumar Bhola. The tribunal said that the dispute is on the matter if the requisition of the EGM is valid or not and therefore, it cannot grant extended time requested by Zee to file its reply.
Zee opposing the order of NCLT said on October 7, 2021, that as per Section 100 of the Companies Act, the time limit to Zee’s board to convene the meeting is 3 months; however, the request for reasonable time grant was not approved by the tribunal.
Despite the requests and arguments put forward for granting appropriate time limit to Zee, NCLT passed its order granting time only till October 7, 2021 to Zee in order to file its decision to Invesco’s petition which NCLAT portrayed as unjust as the time given was not reasonable. The NCLT will conduct its hearing on the matter on October 8, 2021.
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