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Fruber Technologies Inc. (“Fruber Tech”), headquartered in San Francisco, California, is an online transportation network company. It was started as a small business by Mr. George Planwell and Ms. Hina Freewell in 1997. Soon it became a success in America with its operations in 528 cities worldwide. Fruber Tech allows consumers to request for car transportation in the form of taxis or commercial vehicles via mobile app called Fruber Tech or the Fruber Tech mobile website. Its model is such that it allows Fruber Tech drivers to earn income from transporting passengers by either use of their personal vehicle or by one bought directly from Fruber Tech. The revenue model of Fruber Tech is such that every time a booking is made through the app or the website, 15% of the price paid by the customer for a trip is retained by Fruber Tech while 85% is retained by the driver. Fruber Tech decides to extend its business in the Indian market with the same model. 
Mr. George and Ms. Hina, attend an investor meeting in India in 2012 where they hear of a small time cab service running in Jaipur, Pola, which is an all women organization. They are highly impressed with the business model and think it is a great opportunity to enter India. They begin their talks with Pola with the intention to acquire it. Pola quotes a high price for its purchase and George and Hina, through an agent in India, obtain a loan of Rs. 6 crores from HSBC Bank for the purchase of Pola. In the meanwhile, Mr. Uppal, director of SJVN India Ltd., an Indian company with its registered office in the state of Himachal Pradesh under the Companies Act 1956, gets to know of Fruber Tech’s intention of entering India and offers to enter into a JVA with the company. 
The deal with Pola is called off, instead Fruber Technologies India Ltd. (“Fruber”) is incorporated in January 2014, under the Companies Act 2013, through a JVA dated October 14, 2013, signed between SJVN India Ltd., and Fruber Tech, with an authorised share capital of rupees twenty crores with 200,000 shares with a face value of Rs. 100/- each. Fruber registers itself in New Delhi and commences its business in March 2014. 
Within a year, Fruber reaches new heights and generates huge profits. However, in May 2015, the media reports of a rape case filed against one of Fruber’s drivers, Satish Pal. It is revealed that Fruber had failed to carry out a verification process of Satish Pal with the Police, due to which the crime was committed. Fruber is made a party to the suit for negligence. Mr. Anirudh Jain, the CEO of Fruber, while defending the company, states a clause from its service contract which reads: “Fruber shall not be liable for any damages, losses, wilful misconduct or negligence resulting in bodily injury or death caused due to any its drivers as they are in the nature of independent contractors”. The State (public prosecutor) however, claims for lifting of corporate veil on the ground that Fruber is trying to avoid its liability.
This fiasco tarnishes the image of the company and several customers become apprehensive of using the services of Fruber. The company begins to face losses which is when the board of the company decides to acquire shares of an already established company, Chakkar Pvt. Ltd., which is carrying on the same business as Fruber in the city of Chennai. Chakkar Pvt. Ltd. puts up a purchase price of Rs. 15 crores and after several rounds of negotiations, Chakkar finally closes the price at 10 crores. Fruber calls for a board meeting of the directors and passes a board resolution for the following: 
(a)	The Company shall raise six crores by effecting the loan amount sanctioned in favour of  Mr. George and Ms. Hina,
(b)	The company shall further issue debentures worth two crores at a rate of 7% fixed to be paid at the end of every financial year, and 
(c)	The company shall issue shares worth two crores by increasing its authorised share capital by the same amount, thereby, making the authorised capital of the company Rs. 22 crores.  
Fruber raises enough money from the above said ways and thereafter, acquires Chakkar Pvt. Ltd. and it becomes a wholly owned subsidiary of the company. Despite several efforts, Fruber is unable to bounce back in the market. It continues to make losses. The little money that it is able to make, it loans it to Chakkar so as to meet the expenses of Chakkar. It hopes that by doing so, it will be able to make Chakkar a success and be able to recover its losses. HSBC has filed a case for default in payment of the loan amount against Fruber and demands the payment. 
Simultaneously, SJVN files for bankruptcy and is declared as bankrupt. SJVN decides to sell its shares in order to pay back its loan, however, Fruber files an injunction against SJVN restraining it from selling its share in contravention of Article II (4)(ii) of the Articles of Association, wherein the first right over the shares of SJVN is of the company. 
Fruber finds itself amidst several problems and thinks it is best to wind up. It files for bankruptcy and is declared as insolvent. An official receiver is appointed who evaluates the assets of the company and has calculated the total asset of the company to be not more than 15 crores. The official receiver decides to pay off the creditors and debenture holders with nothing left for the shareholders. To add to Fruber’s trouble, the shareholders have filed for a class action suit to recover their money. 
In the light of the above facts, identify the relevant issues and address them. Your client is Fruber who has approached your law firm to assess the situation it has managed to get itself into. It wishes to know each and every possible problem that persists and the way to get out of it, if any. 
Below are a few relevant documents you may need to review to advise your client.









Annexures

Annexure A

JOINT VENTURE AGREEMENT

THIS AGREEMENT made at New Delhi on this 14 day of October 2013 by and between: 
1.	Fruber Technologies Inc., a company incorporated under the laws of the United States of America and having its registered office at San Francisco, California (hereinafter referred to as “Fruber Tech” which expression shall be deemed to mean and include its successors and permitted assigns); 
AND

2.	SJVN India Ltd., a company incorporated under the Companies Act, 1956, and having its registered office at Himachal Pradesh (hereinafter “SJVN,” which expression shall be deemed to mean and include its successors and permitted assigns); 

WHEREAS 
1. Fuber Tech is in the business of providing an online transportation network to its customers.
2. Fuber Tech is desirous of extending its business in India for which Fuber Teach and SJVN have caused the Company to serve as their joint venture vehicle for providing online transportation network (“the Project”). 
3. Fuber Tech and SJVN have agreed that their respective rights and obligations as Shareholders in the Company which shall be regulated by the provisions of this Agreement and the Articles. 

IT IS AGREED as follows:- 
1. DEFINITIONS AND INTERPRETATIONS 
“Act” means the Indian Companies Act, 2013. 
“Agreement” means this Agreement and all the Annexures to this Agreement. 
“Articles” means Articles of Association of the Company.  
“App” means the mobile application downloaded from ios or android store. 
“Equity Shares” means the equity shares of the Company, presently having a face value of Rs. 100/- per equity share. 
“Effective Date” means the date of execution of this Agreement. 
“Intellectual Property Rights” (IPR) includes trademarks, trademark registrations, tradenames, and applications therefor, service marks, service names, copyrights, copyright registrations and applications therefor, designs, patents, patent applications, inventions, database rights, trade secrets and know-how, software programs, right to creative or original works and/or any other intellectual property rights in relation to the Products, the Proprietary knowledge, and the Technical Knowhow. 
“Law” includes all statutes, enactments, acts of legislature or parliament, laws, ordinances, rules, bye-laws, regulations, notifications, guidelines, policies, directives and orders of any Government, statutory authority, regulatory agency, tribunals, board, court or recognised stock exchange.  
“Registered Office” means the registered office of the Company in New Delhi.
“Shares” shall include Equity Shares of the Company. 
“Shareholder” means the holder of any Equity Shares. 

2. THE BUSINESS OF THE COMPANY 
2.1 The Company shall carry on the business of car transportation in the form of taxis or commercial vehicles via mobile app called Fruber Tech or the Fruber Tech mobile website to provide convenience to customers. 
2.2 The Parties agree to exercise their respective rights hereunder and as a Shareholder so as to ensure that: - (a) the Company performs and complies with all obligations on its part under this Agreement and complies with the restrictions imposed upon it under the Articles. (b) the Business is conducted in the best interests of the Company on sound commercial principles, in accordance with the Management Policy (or any amendment or modification of the same), in accordance with Law, on arm's length terms and in accordance with the highest standards of corporate governance. 

3. THE MANAGEMENT OF THE COMPANY 
3.1 Board of Directors - The Board shall be responsible for establishing the policy, goals and organisational structure of the Company, for allocating resources and delegating authority to and monitoring the performance of the Company’s management, to take appropriate actions and generally providing business direction to, and approving or disapproving the business strategy of the Company. 
3.2 Number and Appointment of Directors 
3.2.1 The Board shall comprise of seven Directors or such other number as may be decided by the Board from time to time. 
3.2.2 As long as SJVN continues to hold at least 25% of the Equity Shares of the Company, one-third of the total number of Directors (i.e. 2 Directors) shall be nominated by SJVN. 
3.2.3 The Articles shall provide for the appointment of remaining two-thirds of the total number of Directors (i.e. 5 Directors) by the Shareholders in a general meeting according to the principle of proportional representation such that 5 nominees of Fuber Tech are so elected as Directors. 
3.2.4 Any interim casual vacancies shall be filled in accordance with the provisions of S. 262 of the Act. It is clarified for the avoidance of doubt that no Director shall be liable to retire by rotation. 
3.2.5 SJVN and Fuber Tech shall be entitled to nominate alternate directors to each of its Directors in the circumstances permitted by the Act and the Board shall ensure that such Persons are appointed as the concerned Directors’ alternate directors. 
4. Board Meetings 
4.1 Board Meetings shall be held not less than four times in every year and at not more than three monthly intervals. Unless otherwise agreed by the Directors, 7 (Seven) days' written notice shall be given to each of the Directors of all meetings of the Board, at the address notified from time to time by each Director to the Secretary. 
4.2 Any three Directors may require the Secretary to convene a Board Meeting. 
4.3 The quorum for any Board Meeting shall be three Directors present at the commencement of, and throughout the meeting. If no quorum is present, then the meeting shall be adjourned to the same day of the forthcoming week, at the same place and at the same time. 
4.4 All Board Meetings shall be held at such place as may be agreed by all the Directors from time to time and, failing such agreement, shall be held at the Registered Office of the Company. The venue of the Board Meeting shall be detailed in the notice referred to in Clause 4.1 above. Subject to Law, a Director may attend a Board Meeting via a videoconferencing or teleconferencing facility. 
4.5 Notwithstanding anything to the contrary contained in this Agreement, any action, decision or resolution regarding issuing of debentures shall be passed either by the Board or at the Shareholders’ meetings only after SJVN’s affirmative consent has been obtained. 
4.6 Committees of the Board 
4.6.1 The Board may delegate all or any of the Board's authorities and powers in relation to the day-to-day management of the Company (other than those (a) which it is prohibited by Law from so delegating and/or b) the Specified Matters) to a committee or committees consisting of either Directors or a combination of directors and management personnel. 
4.6.2 All committees of the Board shall be constituted in the same proportion as the Board. All meetings of the Committee/s shall be held at the place agreed by the members from time to time and failing agreement at the registered office of the Company. A committee meeting may be held by teleconference/videoconference. 
5. SHAREHOLDER MEETINGS 
5.1 Not less than 21 (twenty one) clear days written notice of every general meeting shall be given to all Shareholders. A meeting of the Company may be called by giving shorter notice in the manner provided in the Act. 
5.2 Every notice convening a meeting of the Shareholders shall set out the agenda in full and with sufficient details of the business to be transacted thereat and no item or business shall be transacted at such meeting unless the same has been stated in full and in sufficient details in the notice convening the meeting. 
5.3 The quorum for all general meetings of the Company shall include at least one authorised representative of SJVN and Fuber Tech. If within half an hour of the time appointed for the meeting, a quorum is not present, the meeting shall be adjourned to the same day 2 (two) weeks later at the same time and place. If at any such adjourned meeting, a valid quorum is not present within half an hour of the time appointed for such adjourned meeting, the members present shall constitute a quorum.
6. FINANCE FOR THE COMPANY 
Equity - The authorised share capital of the Company shall be INR 20 (twenty) crore consisting of two lakh Equity Shares of Rs.100 each which shall be subscribed to for cash, at par, in the following manner:- 
a) Fuber Tech and its individual nominees 40% (forty per cent) aggregating to 800,000 Equity Shares. 
b) SJVN and its individual nominees 32% (twenty-five per cent) aggregating to 6,40,000 Equity Shares (“SJVN Shares”). 
c) Rest of the 28% held by public. 
7. ADOPTION OF ARTICLES 
Within three months from the Effective Date, the Company will hold an EGM, where the Articles (substantially in the form of Annexure E) shall be adopted by the Shareholders. 
8. TRANSFER OF SHARES/LOCK IN PERIOD 
Unless all the Shareholders agree otherwise in writing, no Shareholder shall in any event do any of the following acts (the “Transfer Acts”) at any time for a period of 3 (Three) years from the Commencement Date (“Lock-In Period”): 
8.1.1 create any Security in respect of or otherwise encumber its legal or beneficial interest in its Shares; or 
8.1.2 sell, transfer or otherwise dispose of any of such Shares (or any legal or beneficial interest therein); or 
8.1.3 enter into any agreement in respect of the voting rights attached to the Shares, or do any act or omission which results in any Person other than the Parties and/or their wholly owned subsidiaries acquiring any rights in respect of the Shares. 
8.1.4 agree, whether or not subject to any condition precedent or subsequent, to do any of the foregoing. 
9. PRE-EMPTION RIGHTS 
9.1 Transfer of Shares by Fuber Tech - if Fuber Tech (“Transferor”) wishes to sell or otherwise transfer any of its Shares (“Sale Shares”), but not exceeding 20% (Twenty percent) of the fully paid-up equity share capital of the Company, it shall offer the same to SJVN by notice in writing (“Transfer Notice”) of the number of Sale Shares proposed to be sold or transferred by the Transferor and the terms and conditions of the Transfer, including price (‘Offer Price’). 
9.2 Within 21 days of receipt of such Transfer Notice, the Remaining Shareholder may agree to or refuse to buy the Sale Shares at the Offer Price, and shall communicate the same to the Transferor. Failure by the Remaining Shareholder to communicate its decision to buy the Sale Shares within the said 21 days period shall be deemed to be a refusal to buy the Sale Shares. If the Remaining Shareholder fails to so communicate or otherwise communicate refusal to buy the Sale Shares, the Transferor shall be free and fully entitled to sell and transfer the Sale Shares to a third party at not less than the Offer Price. Such sale and transfer of the Sale Shares to a third party shall be completed within 60 days thereafter. 
9.3 Within 21 days of receipt of such Transfer Notice, if the Remaining Shareholder communicates its agreement to buy the Sale Shares from the Transferor at the Offer Price, the sale of the Sale Shares should be completed by the Transferor within 60 days. The sale shall be subject to applicable approvals of Government of India, Reserve Bank of India, if applicable. 
9A. Transfer of Shares by SJVN
Subject to Clause 9, if SJVN (“Transferor”) wishes to sell or otherwise transfer any or all of its Shares (“Sale Shares”) it shall offer the same to Fuber Tech by notice in writing (“Transfer Notice”) of the number of Sale Shares proposed to be sold or transferred by the Transferor and the terms and conditions of the Transfer, including price (‘Offer Price’). The same procedure mentioned in 9.2 and 9.3 shall apply. 
9B. Notwithstanding anything contained in this Agreement, SJVN shall not transfer or otherwise dispose its Shares to a third party that is directly or indirectly engaged in the similar business, unless the prior written consent of Fuber Tech is obtained for the same. 
10. PROTECTION OF PARTIES INTELLECTUAL PROPERTY RIGHTS 
The Company acknowledges that the parties shall be making available to the Company, valuable Intellectual Property Rights by way of agreements or otherwise. The Company shall make its best endeavours to ensure that no unauthorised Person (including an employee who is not required to have such access on a ‘need-to-know’ basis) gains any access to such Intellectual Property Rights under any circumstances whatsoever. The parties have invested in the Company and agreed to make available such Intellectual Property Rights to the Company relying expressly upon this assurance of the Company. 
11. JURISDICTION 
The courts of competent jurisdiction at New Delhi shall have jurisdiction in relation to this Agreement. 
12. WARRANTIES AND UNDERTAKINGS 
Each Party hereto represents and warrants to the other Party that (1) it has full power and authority to carry on its business; (2) the execution and delivery of this Agreement will not result in breach of any terms and conditions, or constitute default under applicable laws or other obligations to which it is bound or violate any rule, regulation or law of any government or any order, judgment or decree of any court or government body; and (3) the execution and delivery of this Agreement and the other acts/ covenants contemplated hereby have been duly authorised by all necessary board of directors and shareholders’ actions, where applicable. 
13. EXIT AND TERMINATION OF AGREEMENT 
13.1 This Agreement may be terminated by the consent of all the Parties expressed in writing. 
13.2 This Agreement shall stand terminated at the option of Fuber Tech upon SJVN’s aggregate shareholding in the Company reducing below 5% of the paid- up equity share capital of the Company. 
13.3 This Agreement shall stand terminated upon Fuber Tech’s hareholding in the Company reducing below 15 (Fifteen) per cent of the paid-up equity share capital of the Company. 
13.4 If any of the Parties is declared insolvent, the shares held by the respective party shall be taken over the company. If the company commits any act of insolvency and/or the Company goes into liquidation or dissolution or if the Company is placed in the hands of a receiver, trustee, custodian or liquidator, or if a winding up petition is admitted against it, then upon any Party giving written notice of termination, at the option of the Parties, this Agreement shall forthwith terminate. 
14. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the laws of India 
15. ARBITRATION 
15.1 If any dispute arises between the parties in connection with the validity, interpretation, implementation or the purported termination of this Agreement, the parties hereto shall endeavour to settle the dispute amicably. The attempt to bring about an amicable settlement shall be considered to have failed as soon as one of the party after reasonable attempts (which attempts shall continue for not less than 60 days), gives 15 days’ notice thereof to the other Party in writing. 
15.2 In case of such failure, the dispute shall be referred to the arbitration of three arbitrators, one selected by each of SJVN and Fuber Tech and the third selected by the two appointed arbitrators. The arbitration shall be held in New Delhi in accordance with the governing Law, 
15.3 The successful Party in any arbitration proceedings shall be entitled to recover its costs (including, without limitation, its legal costs). 
15.4 Judgment upon any award rendered by the arbitrators may be entered in any court having competent jurisdiction in relation thereto, or application may be made to such court for a judicial acceptance or recognition of the award and an order of enforcement (including specific performance), as the case may be. 
16. DEADLOCK 
In the event that either Fuber Tech or SJVN in good faith considers that as a result of disagreement between them, no satisfactory decision or resolution relating to any of the Specified Matters can be achieved despite good faith negotiations for a period of 30 days from the date of commencement of such disagreement, a deadlock (a “Deadlock”) shall be deemed to have occurred. In the event of such Deadlock occurring, either Party may, at its option, serve upon the other Party a notice of termination (“Notice of Termination”). 
17. EQUITABLE REMEDIES 
The Parties acknowledge that in the event of a breach of the provisions of this Agreement, damages alone shall not be a sufficient remedy and, therefore, each Party shall be entitled to all equitable remedies, including injunctive reliefs and specific performance of this Agreement. 
18. CONFLICT WITH ARTICLES 
18.1 In the event of any conflict between the provisions of this Agreement and the Constitutional Documents, the provisions of this Agreement shall prevail as between the Parties. The Parties shall exercise all voting and other rights and powers available to them so as to give effect to the provisions of this Agreement and shall further (if necessary) procure any required amendment / alteration to the Constitutional Documents. 
19. GENERAL 
(A) No amendment, variation or waiver of this Agreement or any provision of this Agreement shall be effective unless it is in writing and duly executed by or on behalf of all Parties. (B) In giving any opinion, approval, consent or waiver or refusing any opinion, approval, consent or waiver under this Agreement, each Director may act entirely at his discretion and shall have no liability or responsibility whatsoever to any person. 
IN WITNESS WHEREOF the Parties hereto have executed this Agreement the day and year first herein above written. 
Signed and delivered for and behalf of SJVN	Signed and delivered for and behalf of Fuber Tech
Name: ________

Title: Managing Director	Name: ___________ 

Title: Chairman 


Annexure B 
ARTICLES OF ASSOCIATION OF FRUBER TECHNOLOGIES LTD.
Interpretation
I. In these regulations—
(a) “the Act” means the Companies Act, 2013.
(2) Unless the context otherwise requires, words or expressions contained in these regulations shall bear the same meaning as in the Act or any statutory modification thereof in force at the date at which these regulations become binding on the company.
II. Share capital and variation of rights
1. Subject to the provisions of the Act and these Articles, the shares in the capital of the company shall be under the control of the Directors who may issue or allot by passing an ordinary resolution to such persons, in such proportion and on such terms and conditions and either at a premium or at par and at such time as they may from time to time think fit.
2. (i) Every person whose name is entered as a member in the register of members shall be entitled to receive within two months after incorporation, in case of subscribers to the memorandum, one certificate for all his shares without payment of any charges; or several certificates, each for one or more of his shares, upon payment of twenty rupees for each certificate after the first.
(ii) In respect of any share or shares held jointly by several persons, the company shall not be bound to issue more than one certificate, and delivery of a certificate for a share to one of several joint holders shall be sufficient delivery to all such holders.
3. If any share certificate be worn out, defaced, mutilated or torn or if there be no further space on the back for endorsement of transfer, then upon production and surrender thereof to the company, a new certificate may be issued in lieu thereof, and if any certificate is lost or destroyed then upon proof thereof to the satisfaction of the company and on execution of such indemnity as the company deem adequate, a new certificate in lieu thereof shall be given. 
4. (i) The share capital is divided into different classes of shares with different the rights attached to different class, subject to the provisions of section 48. 
(ii) Class A are common shares with a maximum of 3 votes per share and on winding up the shareholders shall be paid along with the unsecured creditors. On shareholder's bankruptcy, the shareholder shall on receiving a transfer notice from the directors, transfer his shares to a manager or assistant at a fair value calculated by the Chartered Accountant of the company. 
(iii) Whether or not the company is being wound up, the rights of class A shareholders to be varied only with the consent in writing of the holders of three-fourths of the issued shares of that class, or with the sanction of a special resolution passed at a separate meeting of the holders of the shares of that class. 
(iv) Class B are special shares with Non-Voting rights. Subject to the provisions of section 55, any preference shares may, further be issued with the sanction of an ordinary resolution, on the terms that they are to be redeemed on such terms and in such manner as the company before the issue of the shares may, by special resolution, determine.
5. The rights conferred upon the holders of the shares of any class issued with preferred or other rights shall not, unless otherwise expressly provided by the terms of issue of the shares of that class, be deemed to be varied by the creation or issue of further shares.
III. Lien
1. (i) The company shall have a first and paramount lien— 
(a) on every share (not being a fully paid share), for all monies (whether presently payable or not) called, or payable at a fixed time, in respect of that share; and
(b) on all shares (not being fully paid shares) standing registered in the name of a single person, for all monies presently payable by him or his estate to the company:
Provided that the Board of directors may at any time declare any share to be wholly or in part exempt from the provisions of this clause.
(ii) The company’s lien, if any, on a share shall extend to all dividends payable and bonuses declared from time to time in respect of such shares.
2. The company may sell, in such manner as the Board thinks fit, any shares on which the company has a lien:
Provided that no sale shall be made—
(a) unless a sum in respect of which the lien exists is presently payable; or
(b) until the expiration of fourteen days after a notice in writing stating and demanding payment of such part of the amount in respect of which the lien exists as is presently payable, has been given to the registered holder for the time being of the share or the person entitled thereto by reason of his death or insolvency.
3. (i) To give effect to any such sale, the Board may authorize some person to transfer the shares sold to the purchaser thereof.
(ii) The proceeds of the sale shall be received by the company and applied in payment of such part of the amount in respect of which the lien exists as is presently payable.
(iii) The residue, if any, shall, subject to a like lien for sums not presently payable as existed upon the shares before the sale, be paid to the person entitled to the shares at the date of the sale.
IV. Calls on shares
1. (i) The Board may, from time to time, make calls upon the members in respect of any monies unpaid on their shares.
(ii) Each member shall, subject to receiving at least fourteen days’ notice specifying the time or times and place of payment, pay to the company, at the time or times and place so specified, the amount called on his shares.
(iii) A call may be revoked or postponed at the discretion of the Board.
2. (i) If a sum called in respect of a share is not paid before or on the day appointed for payment thereof, the person from whom the sum is due shall pay interest thereon from the day appointed for payment thereof to the time of actual payment at 10% per annum or at such lower rate, if any, as the Board may determine.
(ii) The Board shall be at liberty to waive payment of any such interest wholly or in part.
V. Transfer of shares
1. (i) The instrument of transfer of any share in the company shall be executed by or on behalf of both the transferor and transferee.
(ii) The transferor shall be deemed to remain a holder of the share until the name of the transferee is entered in the register of members in respect thereof.
2. The Board may, decline to register—
(a) the transfer of a share, not being a fully paid share, to a person of whom they do not approve; or
(b) any transfer of shares on which the company has a lien.
3. The Board may decline to recognize any instrument of transfer unless—
(a) the instrument of transfer has been approved by the Directors and
(b) the instrument of transfer is accompanied by the certificate of the shares to which it relates, and such other evidence as the Board may reasonably require to show the right of the transferor to make the transfer; and
(c) the instrument of transfer is in respect of only one class of shares.
4. On giving not less than seven days’ previous notice, the registration of transfers may be suspended at such times and for such periods as the Board may from time to time determine:
Provided that such registration shall not be suspended for more than thirty days at any one time or for more than forty-five days in the aggregate in any year.
VI. Transmission of shares
1. (i) On the death of a member, the survivor or survivors where the member was a joint holder, and his nominee or nominees or legal representatives where he was a sole holder, shall be the only persons recognized by the company as having any title to his interest in the shares.
2. (i) Any person becoming entitled to a share in consequence of the death or insolvency of a member may, upon such evidence being produced as may from time to time properly be required by the Board and subject as hereinafter provided, elect, either—
(a) to be registered himself as holder of the share; or
(b) to make such transfer of the share as the deceased or insolvent member could have made.
(ii) The Board shall, in either case, have the same right to decline or suspend registration as it would have had, if the deceased or insolvent member had transferred the share before his death or insolvency.
3. A person becoming entitled to a share by reason of the death or insolvency of the holder shall be entitled to the same dividends and other advantages to which he would be entitled if he were the registered holder of the share.
VII. Forfeiture of shares
1. If a member fails to pay any call, or instalment of a call, on the day appointed for payment thereof, the Board may, at any time thereafter during such time as any part of the call or instalment remains unpaid, serve a notice on him requiring payment of so much of the call or instalment as is unpaid, together with any interest which may have accrued.
2. The notice aforesaid shall—
(a) name a further day (not being earlier than the expiry of fourteen days from the date of service of the notice) on or before which the payment required by the notice is to be made; and
(b) state that, in the event of non-payment on or before the day so named, the shares in respect of which the call was made shall be liable to be forfeited.
3. If the requirements of any such notice as aforesaid are not complied with, any share in respect of which the notice has been given may, at any time thereafter, before the payment required by the notice has been made, be forfeited by a resolution of the Board to that effect.
4. A forfeited share may be sold or otherwise disposed of on such terms and in such manner as the Board thinks fit.
5. (i) A person whose shares have been forfeited shall cease to be a member in respect of the forfeited shares, but shall, notwithstanding the forfeiture, remain liable to pay to the company all monies which, at the date of forfeiture, were presently payable by him to the company in respect of the shares.
(ii) The liability of such person shall cease if and when the company shall have received payment in full of all such monies in respect of the shares.
VIII. Alteration of capital
1. The company may, from time to time, by ordinary resolution increase the share capital by such sum, to be divided into shares of such amount, as may be specified in the resolution.
2. The company may, by special resolution, reduce in any manner and with, and subject to, any incident authorized and consent required by law,—
(a) its share capital;
(b) any capital redemption reserve account; or
(c) any share premium account.
IX. General meetings
1. All general meetings other than annual general meeting shall be called extraordinary general meeting.
2. (i) The Board may, whenever it thinks fit, call an extraordinary general meeting.
3. The Board shall exercise following powers only by means of Board resolution passed in its meeting:
(a) to make calls on shareholders in respect of money unpaid on their shares;
(b) to authorize buy-back of securities under S. 68;
(c) to issue shares as per clause II;
(d) to invest the funds of the company;
(e) to give guarantee for subsidiary company only;
(g) to approve financial statement and the Board’s report;
(h) to diversify the business of the company;
(i) to approve amalgamation, merger or reconstruction;
(j) to take over a company or acquire a controlling or substantial stake in another company;
(k) any other matter which may be prescribed.
X. Voting Rights…………….

……………Note: The Articles shall be signed by each subscriber of the memorandum of association who shall add his address, description and occupation, if any, in the presence of at least one witness who shall attest the signature and shall likewise add his address, description and occupation, if any, and such signatures shall be in form specified below:
Names, addresses, descriptions and occupations of subscribers	Witnesses (along with names, addresses, descriptions and occupations)
A.B. of………….Merchant	Signed before me
Signature…………….
C.D. of………….Merchant	Signed before me
Signature…………….
E.F. of………….Merchant	Signed before me
Signature…………….
G.H. of………….Merchant	Signed before me
Signature…………….
I.J. of………….Merchant	Signed before me
Signature…………….
K.L. of………….Merchant	Signed before me
Signature…………….
M.N. of………….Merchant	Signed before me
Signature…………….
 
Dated the……..day of ………20……
Place: ................................


Annexure C
 
(THE COMPANIES ACT, 1956)
COMPANY LIMITED BY SHARES
MEMORANDUM OF ASSOCIATION
OF SJVN INDIA LIMITED
Name of the Company I. Name of the Company is SJVN India Limited 
Registered Office II. The registered office of the Company will be situated in the state of Himachal Pradesh. 
Objects III. The objects for which the Company is established are: 
Main Objects 
A. Main objects to be pursued by the Company on its Incorporation: Development of Power (Cab service not mentioned) 
1.	a) To plan, promote, develop all forms of power, both renewable as well as non-renewable and all ancillary activities related thereto, in India and abroad including planning, investigation, research, design and preparation of preliminary, feasibility and definite Project reports, construction, generation, comprehensive operation, maintenance, Renovation & Modernisation of power stations and projects, transmission, distribution, sale of power generated at Stations in India and abroad.
b) To undertake, where necessary, construction of transmission lines and ancillary works for proper evacuation and distribution of power. To coordinate the activities of its subsidiaries to determine their economic and financial objectives/targets and to review, control, guide and direct their performance with a view to secure optimum utilisation of all resources placed at their disposal. 
2.	To carry on the business of purchasing, selling, importing, exporting, producing, trading, manufacturing or otherwise dealing in all aspects of planning, investigation, research, design and preparation of preliminary, feasibility and definite Project reports, construction, generation, operation and maintenance, transmission, distribution and sale of power, both from renewable as well as non-renewable sources, ancillary and other allied industries and for that purpose to install, operate and manage all necessary plants, establishments and works.
3.	To design, manufacture, assemble, repair automobiles and all other motors and engines of all kinds and its parts thereof including but not limited to batteries, propellers, air steam, gas water and other gauges, indicators-governors, injectors, high and low pressure and other valves, wheels, carburettors, sparking plugs, clutches, cocks, union, chucks, stocks, dyes, springs, ramps, screws, pistons, chains, stay-roads, wire fans, forges, bolts, nuts, washers, studs, drill pins, rivets, hinges, nails, spikes, variable and other gears, buffers, stops, metal, timber, canes, asbestos, canvas and other fabrics, linen, radiators, pulleys, belts and belt fasteners, canopies, hoods, wind and other screens and shills, pumps, lamps, bulbs, glass, mirrors, bumpers, horns. 
4.	To carry on the business of the agriculturists, planters, cultivators, farmers and to plant, cultivate and purchase all kinds of food grains and food stuffs, oil seeds, vegetables, fruits, grass, timber, bamboo, straw, cotton, jute, rubber, sugarcane, tea, flowers, coffee, coconuts, cashewnuts, tobacco articles that are the products of land or soil and to sell, purchase and deal in the same as principals or and to carry on business of manufacture in dairy, farms and garden produce of all kinds and in particular milk, cream, butter, ghee, cheese, poultry and eggs, fruits and vegetables.

B. Objects incidental or ancillary to the attainment of the main objects. 
1.	To arrange, secure and make available to its subsidiary and other concerned organisations such facilities, resources, inputs and services as may be required. To obtain charters, concessions etc.
2.	To enter into any arrangement with the Government of India or with any other Government or State or any Local or State Government or with authorities, foreign, international, national, local, municipal or otherwise or with any person for the purpose of directly or indirectly carrying out the objects or furthering the interests of the Company or its members and to obtain from any such Government, State authority or person any charters, subsidies, loans, indemnities, grants, contracts, decrees, rights, sanctions, privileges, licences or concessions whatsoever, (whether statutory or otherwise) which the Company may think it desirable to obtain and carry out, exercise and comply with the same. 
3.	To acquire by purchase, lease, exchange, hire or otherwise or to construct and maintain factories, works, buildings and conveniences of all kinds, land, buildings, apartments, plant, machinery and hereditament of any tenure or description, situated in India or any other part of the World and any estate or interest therein and any rights over or connected with land so situated and turn the same to account in any manner as may seem expedient, necessary or convenient to the Company for the purpose of its business.
4.	To acquire, possess and undertake the whole or any part of the business, assets, property, goodwill, rights and liabilities of any person, firm, society, association, corporation or company carrying on any business which the Company is authorised to carry on.
5.	To sell or dispose of the undertaking of the Company or any part thereof for such consideration as the Company may think fit and in particular for shares, debentures or securities of any other association, corporation or company, to promote or aid in the promotion of any other company or partnership for the purpose of acquiring all or any of the properties, rights or liabilities of the Company or for any other purposes which may seem directly or indirectly calculated to benefit the Company.
Limited liability IV. The liability of members is limited. 
Share Capital V. The Authorised Share Capital of the Corporation is Rs. 7000 crore (Rupees Seven thousand crore only) divided into 700,00,00,000 Equity shares of Rs. 10/- each……………

Name	Address, description and occupation	Signature of Subscribers	No. of Shares Equity	Name, address, description and Occupation of witnesses
Dave RS. Aggarwal	Communications Secretary, New Delhi – 110001 Ministry of Communications, Govt. of India		10,000,000	






Anirudh Jain 
	B-6/2013, Vasant Kunj, New Delhi 		3,000,000	


XYZ Pvt. Ltd. 	
………………….		………….	

Dated this Twenty Fourth day of February, 1978. 
Place: Himachal Pradesh
Asked 7 years ago in Business Law

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3 Answers

1)SJVN cannot sell its shares in open market due to clause 9A of its agreement with FUber

2) it needs prior written consent of Fuber

3) Transfer of Shares by SJVN

Subject to Clause 9, if SJVN (“Transferor”) wishes to sell or otherwise transfer any or all of its Shares (“Sale Shares”) it shall offer the same to Fuber Tech by notice in writing (“Transfer Notice”) of the number of Sale Shares proposed to be sold or transferred by the Transferor and the terms and conditions of the Transfer, including price (‘Offer Price’). The same procedure mentioned in 9.2 and 9.3 shall apply.

9B. Notwithstanding anything contained in this Agreement, SJVN shall not transfer or otherwise dispose its Shares to a third party that is directly or indirectly engaged in the similar business, unless the prior written consent of Fuber Tech is obtained for the same.

4) hence court would grant stay for sale of shares by SJVN

5) since Fuber is unable to pay its dues and HSBC has taken recovery proceedings Fuber has righly filed for declaration as an insolvent

6) court Receiver has been appointed for FUber

7) since assets are of Fuber are valued at 15 crores the assets needs to be sold to meet its liability to its secured creditors and debenture holders

8) shareholders are not secured crediotrs of the company . hence the secured creditors have to be paid by sale of company assets to meet its liabilites

Ajay Sethi
Advocate, Mumbai
95208 Answers
7610 Consultations

5.0 on 5.0

1) the borrower ie Fuber is liable to pay the loan to HSBC as per loan agreement signed between parties

2) the JV agreement is binding upon parties . Consent of fuber was necessary for transfer of shares

3) as far as articles of association are concerned on bankruptcy of SJVN the shares of SJVN should be transferred to manager as per articles of association . Prior consent of Fuber would not be necessary in such a case

Ajay Sethi
Advocate, Mumbai
95208 Answers
7610 Consultations

5.0 on 5.0

If George and Hina were borrowers of loan then they are liable to pay the loan to HBC

2) Fuber would do not be liable if it was not incorporated and had not taken the loan

3) in addition bank must have taken personal guarantee of gorge and hina

4) terms of loan agreement would be sacrosanct

5) I there is misappropriation of funds by directors they can be made personally liable

Ajay Sethi
Advocate, Mumbai
95208 Answers
7610 Consultations

5.0 on 5.0

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