 Good evening to one and all. And understand we all keep on understanding what is share and share market, et cetera. But as to what is the share holder's litigation is a different issue altogether. And as a professional one would always like to understand because as a lawyer or a student of law, this aspect does creep in the mind of any person because sometimes it comes, the client comes in a normal post when we are discussing and more so especially after the one who has seen Scam 1992 with respect to what is the scope of the litigation of both. And what is the shareholder, how does the company work? What are the documents to be taken across? Because there are certain aspects in these issues itself as to when the client offhand comes and asks you that there is a shareholder litigation to be discussed. And what documents do you take? Because normally a person who has not understood these aspects, normally what happens is one understands somewhat what is the share, what is the venture, what share holding could be. But what are the legal avenues while the client comes because they say if you do not know yourself, the array where you have to move in that direction. You are yourself in groping in the dark and at the same time, you will also not be able to inform your client what are the aspects as to whether he has to file a civil suit, whether he has to go to the NCLT. Keeping in these aspects we requested. Now, of course, we connected on a virtual platform. Now a dear friend of ours, Ajay Jay Nandilike who has created his own niche within the various aspects of commercial law and civil law and he's also writing a book as such. So we keep on discussing and while we were discussing we thought that rather than having a monologue session, why not have an interactive session so that the lawyers, students of law or for that matter, one who you can say is on the wrong side, that is who feels that there could be a litigation against him, why not have certain interactive session, interactive questionnaire form. We have shared few questions itself on the social media but be that as it may, we will be taking since we have divided these session into two parts. Today we will be taking four questions and those who had connected earlier with Ajay Nandilike. Sometimes the lawyers do a monologue but Ajay has his own style. I'm just reminded like Sunny Deol quite often used to have his name as Ajay in his movie and they would make mega heads. Same as when we take Ajay on the board, he has his own style and flair to connect the dots what he normally says in the form of a storytelling. And storytelling is always informatic. Creates more, not dots, but it clears the space and vacuum which one has regarding different aspects. So without taking much time, Ajay first of all, welcome to this platform and to all those participants who are encouraging us for taking sessions on different issues, we keep on telling them kindly like, share, subscribe to the YouTube channel as well as on our social media platforms of Instagram as well as LinkedIn. And you can also text us on what issues we can take the session forward. And even if you have a speaker, we can take and connect with him. Without taking much time, I will ask Ajay to just give a brief background of what we intend to do. And then once he says, we'll take upon the four questions which we have formulated, which we feel will actually not only put the present session into motion, but at the same time, will help us as they say, the right catalyst to give the mind, the right, what we can say, forward to the mind so that we have a good food for thought. Over to you Ajay. Thank you Vikas. Good evening. It seems to be an echo. Okay. Yeah, so good evening to everybody. Just to start, I just want to give a background as to how company litigation works, but to understand that, we actually need to understand how a company works. So it's like this, a mechanic cannot really repair the car unless and until he knows how to drive the car. So to be able to drive the car and to be able to understand how the entire system works, we get into how a company works. So we'll first deal with that. Once we deal with how a company works, next we'll go into what is a shareholder litigation? How do these things arise? See, the idea here is to make sure that, when a client comes to you with a shareholder litigation, you will be able to identify it as a shareholder litigation because in a company, hundreds of issues will arise. So how do you identify it as a shareholder litigation? And even in that, how in which subset do you put that issue? So that is the next set of questions which we will deal with. Then we will also deal with, suppose if a client comes to you and he says, I have a problem and you don't know where to start because company law is not something which most of us are very familiar with and we don't deal with it on a day-to-day basis. The situation will change over the future as companies become the more preferred mode of carrying on business. So if when companies become the more preferred mode of carrying on business, it becomes more and more imperative for us to understand how a company works and we will be able to then identify what kind of documents we'll need. So the next question we'll deal with all kinds of documents that we need to face and what are the difficulties that you face in getting a lot of these documents? So and what are the practical solutions for these things? Then we will go into what are the different modes of shareholder litigation. So this will be in the first session. The second session will deal with actually how to draft the operation mismanagement. How do you draft a suit? What are the things you keep in mind in a suit? What are the things which you keep in mind in arbitration? How arbitration is evolving into that thing? And then you will look at it from the defendant's perspective. So assume not all the time, 50% of the clients are plaintiffs and 50% of the clients are defendants. So from a defendant's perspective, what are the things you need to keep in mind? How do you strategize and make your litigation successful? From that end, few things we'll know. And then we'll get into how exactly a company litigation actually ends. And that's a very interesting thing. There are a lot of stories around that as to how it ultimately has to end with one party succeeding and one party failing. But how does it actually impact the company's functioning and how the courts have evolved certain systems around it and certain solutions around it? So that is basically what we will be dealing with in the second session. So in the first session, we'll get into how a company works and how shareholder litigations arise and where do you go for a shareholder litigation and how do you start? What is basically the starting point? So that is something we will deal with in the first session. As Ajay has said that they always say that their three Cs basically to understand the litigation. Who, what and when? Who is relevant? What is relevant? And when it is relevant? This what we say by drafting the list of dates and events as they say that to understand the crispiness just like what we did in the preceding is the same way if one understand the style of writing of the list of dates and events, one can able to put the things across because that is the way the funneling of things is crossed. Ajay, like what you gave a peep into it, everybody would like to understand who is a shareholder and how does the company work? So why, first of all, to get into how a company works first thing we need to understand is why even do a company? Why incorporate a company? Just understand what are the complications involved in a company? You have to go, you have to incorporate. Once you incorporate a company, next thing you have to go is you have to have a memorandum of objects which will restrict you to what are the things that you can do in a company. After that you have your articles of association which is strict as to how a governance has to happen. Then you have to file returns before the ROC you'll have to obtain a DIN that is a director identification number. There are so many formalities, so many things which you need to do. Basically you're giving employment to a company secretary or giving employment to a charity accountant. You're doing so many things just to carry out business. Why? That's the question. And to understand why a company, why a company, there are several things which you get into. So before getting into why a company, basic thing will start into what are the things involved in a company? So basically when you start a company, the reason why you start a company is because you want to have a separate and a distinct legal identity from yourself. So assuming that you have five different businesses. Now one business is doing very well. Four other, two of them are doing average and three are not doing or two are not doing well at all. Then you don't want to mix, you don't want to mix everything together and create more liabilities for yourself. So the best thing to do is to separate these businesses. Now if you're a partner, then you are personally liable to the extent of your share in that partnership. Whereas if it's a company, you are not liable for any losses. So to that extent, you can make yourself distinct and separate. Now, there's a very interesting to really understand how complex a company can be and how incorporation of multiple companies are very important. There's a very beautiful Supreme Court judgment in the case of Vodafone versus Union of India. It was a very famous judgment because it subsequently resulted in arbitration, resulted in an amendment to the income tax act. I'll just shorten the details. I'll just briefly explain as to how that litigation arose. And this is very interesting to understand from a company standpoint. Now there was this company called Hutchinson Warm Power. Now this company was basically a Singapore based company. Now this Singapore based company had several companies which were holding portion to portion of shares in another company called as Hutchinson SR, which was a joint venture company which was carrying out operations in India. So Hutchinson was holding 67%, SR was holding 33%. So that was the requirement of law at that point in time. SR as you know, people may remember belongs to the Ruyas who are basically steel magnets and Ruyas SR steel, the liquidation of the SR steel has resulted in so many litigations and so many amendments to the IBC that itself is a separate story by itself. So SR and Hutchinson, they wanted to separate a motor phone which is basically a London based company. They wanted to purchase the shares and they wanted to get into the market. So what happened? The way the shares were structured where the way the company was structured was there was an Indian company. The Indian company is 67% was held by several Singapore based companies. Singapore based companies were held again by some Mauritius based companies. Mauritius based companies shares were held by Cayman Island based company. Kailan Island based company shares were held by one company in Isle of Man, which is again a tax haven. So ultimately what happened is Hutchinson, Hutchinson, just sold one share of that Cayman Island, of that Isle of Man company and by selling that one share, motor phone became the owner. Now when motor phone became the owner of crores of rupees of assets in India, tax authority said this is a sale which has happened in India. This is a sale of a capital asset which has happened in India. So therefore the tax liability is there and they asked motor phone to be. So at this point in time, so they said that entering into all of these, all of these multiple companies, you're seeing so many companies, seven or eight layers of companies. All of this was just a facade to avoid tax. So that was the argument which was made. And the Supreme Court had to understand this argument better and had to understand whether this argument made sense or not. Now Mr. Salve was leading the arguments for motor phone. And what he did was he went into the entire gamut of how a company works and why these kinds of arrangements are there and why these kinds of exit clauses are there and how a company functioning of a company actually is for business and tax efficiency reasons. And you cannot interfere with it nearly because you cannot go beyond and pierce the corporate veil merely because you feel that there's some taxable event there. So there were two judgments which were written. One by Justice Kappadia on behalf of himself and Justice Swatantra Kumar. And then there was a judgment by Justice Radhakrishnan. The judgment by Justice Kappadia is a very beautiful understanding of income tax law. But if you really want to see how a company works and how shareholding in a company works, you should really look into what Justice Radhakrishnan writes. And Justice Radhakrishnan writes that look, this is the way in which a company works when somebody starts a business, you invest in capital, you invest in stocks, you have this employees and all of this forms part of your capital. So you're either a full owner or you're a part owner if it's a partnership. So you obtain statutory registrations, you obtain loans, et cetera. All of this are in your name. Now assuming you want to get out of that business, how do you get out of that business and you sell your shares to somebody else? I mean, how do you even sell that business to somebody else? When you sell everything, everything has to again get transferred. So assuming that everything is in my name and I want to sell it to Vikas, I have to get everything from labor registration to tax registration, to everything I have to change it to Vikas's name for that business. Now this is a very painful process to start and to end business. Whereas if I have a company and the company will have all the registrations in its name and that company can be sold by just me selling my shares to Vikas. So it's as simple as that. So that is something, it saves a lot of start and end business if you want to, it has a lot of assets with you. Second is, assuming Vikas and I are in a partnership and in that partnership, we want to, I hold 50%, he holds 50%. Now I want to get rid of my 50%. Then I have to find somebody who will purchase my shares or Vikas has to purchase my shares and at what value, how do you value it? So assuming that we are not able to value it, we again get into a situation where we have to divide the business and Vikas takes his shares and then I have to look at selling my shares. Again, it becomes a very, very cumbersome process. So that again is a problem. Assuming you're a foreign company and this is where Vodafone came in. You can't go and start taking registrations for tax, labor, et cetera, in every company that you want to establish your business. So you'll establish a subsidiary. Once you establish a subsidiary, that subsidiary will take care of getting its own registrations and everything and you will appoint directors who are employees. This is where a crucial difference between a company and a partnership happens. And this is something you all of us have to remember when it comes to litigation because as a shareholder, I'm owning a part of the company. But I may not necessarily be involved in the governance of the company. That is how a company runs may not entirely depend on me. To give an example, if you see Tata's, Tata's entire shareholding of Tata's is held by Tata Trust and Tata Trust not a single member is involved in the running of the company. There are companies run by professionals. They're appointed by the Tata's in general body meetings and they give votes and they work on that basis. And I'll come to that in a little bit. Why this is important to understand is because there is a distinction between the person who's owning the company and the person who's running the company. This distinction often results in distance because the person who's running the company may not necessarily act according to what you want. So this is where a lot of disputes arise and you need to understand in such a situation if you are a person who's running the company, who's invested in the company and who's running the company as Sylas Mystery was. Sylas Mystery was a director in the company. He was a director and then he became the chairman of the Tata Group of Companies. But ultimately, as a Supreme Court held, he was only a director and that director can be removed. Removal of a director does not result in a shareholder dispute. Removal of a director is the prerogative of all shareholders. You cannot merge both rules. So this is something which very beautifully is explained in the Vodafone case as well. And they get into how exactly the whole foreign investment policy system works. In fact, the whole foreign investment policy works on the basis that a person is going to form a company because you can hold only 74% of a company. How do you hold 74% of a partnership? I mean to form a partnership and then to hold 74% of that, partners are individually liable, but if you're a foreigner, you don't become liable. So again, there are set of complications. So that is where it becomes very important to have a company and that company to run the entire. Second thing is you also form corporate structures to hedge the risk of businesses failing. You invest in one business, that business invests in another business and so on and so forth. So one business who makes some money and that money that you will invest in another business. So this is a way in which business transactions are happening and as these business transactions keep happening, it becomes very complicated. And when it becomes very complicated, how do you really decide how the company must be run? How do you decide as to what needs to be done from a perspective of, how do you decide as to what needs to be done from a perspective of a company to make sure that your rights in the shareholder. So this is where you have something called as Articles of Association and Memorandum of Association. Memorandum of Association is something which states the objects of the company, which gives the registered address of the company, which tells you where exactly the company is going to be located, what will it do? What are the businesses it will do? And what will be the share capital of the company? These are the things which are there in the, these are the things which are there in that particular Memorandum of Association. Then come the Articles of Association. Articles of Association provide the way in which governance works, how exactly you control the company. So for example, Vikas and I are both directors in a company. Now, both of us have to decide, the shareholding may be held by somebody else. So Vikas and I have to work according to that person's dictum. So therefore Vikas and I will be told these are the way in which you will invest. You will not, if you have to invest more than 50 lakhs, you will call for a shareholder's meeting. As directors, you have no power to do certain things. So this is the way in which the relationship between a director and a shareholder are defined. Certain things, all shareholders have to consent. Certain things, all directors have to consent. In closely held companies, directors and shareholders' roles are mixed. So directors and shareholders' roles are mixed. There are another series of complications that arise because of that. So these are the associated problems or complications around a company which result in litigation. And this is something you need to be aware of. So this is why, if you incorporate a company, there are benefits as I just said, there are also certain complications. Now, these complications which are there, I just want to take another five or 10 minutes to explain as to how articles of association works and what is a board meeting and what is a general meeting. So board meeting is essentially meeting of only the directors. Directors are people who are appointed by shareholders for the purpose of running the company because each and every shareholder cannot be involved in running of the company. To give an example, reliance has more than 40 lakh shareholders. Each and every shareholder will have a way in which he won't want the business to run. But you will not be able to run a company if 40 lakhs of a person was deserve it. So what you do is you appoint a series of, you appoint one or two directors, you appoint people who are experts in that area and those people will look at how to run the company. So in these situations, when these directors are appointed, articles of association provides as to how a board meeting is going. The board meeting is held once every three or four months and in that board meeting, all the agendas are put forward. Why this agenda you need to remember is because these are the agendas on which decisions are taken and these decisions may result in this. So you need to understand the procedure as to how you bring out an agenda. You need to give 21 days. Notice, if you're not given a notice, you need to give an explanation as to why notice is not given. And then you need to work from there and you need to bring past a resolution. Once the resolution is passed, then you will file it in the register of companies and then so on and so forth, things move from there. So these are the things which happen how a company works. Now, when the accounts of the company, finances of the company, there is a lot describes a statutory auditor to be appointed, that statutory auditor will go into the affairs of the accounts of the company, he will go into how the finances of the company work. And on that basis, they will arrive at whether the company is functioning properly or not. And this again becomes very important when we deal with the fourth question relating to what are the documents that we need to get in. So these are broadly the contours within which you need to understand how a company works. Now we come into what are the rights of a shareholder? A shareholder has basically four rights. First right he has is he has a right in the affairs of the company subject to his voting percentage. Second right that he has is the right to dividend. Third right that he has is the right to participate in AGMs in all the meetings of the company, wherever the finances are being discussed and he has a right to understand the finances, ask for a copy of the finances and so on. Fourth is in the event of winding up, he has a right to claim the surplus of whatever is left in pro right share. Assuming that the company is bound up, its assets are 10 lakhs and 10 lakhs you sell, you get the value of your share and again, five lakhs is remaining. If that five lakhs you get a value of, go rate a value of your share. So assuming you hold shares with one lakh, then five lakhs is left in that five lakh you may get pro rate of that one lakh. One lakh shares which is maybe another one lakh with the total shareholders of five. So this is basically the rights of a company. Now what is happening in today's world and this is very important for us to understand is that articles of association is basically a contract between the company and its shareholders. Now in this contract of the company and its shareholders, there are a lot of clauses which are being added and these clauses result in potential disputes. I will deal with a few of those clauses. First set of clauses which are put in are clauses relating to reserve matters. So what happens in a company assuming that there are five shareholders. Now two of them belong to one group, three of them belong to another group. Now obviously the three of them will have being the majority, will have a say, will have a more controlling say over what happens. As a minority, the two people may not have a say. So when those two don't have a say, how do they control the company or how do they make sure that their wishes are carried? So they can put a clause in the articles which say that these are the two, that these are the two things reserve matters in respect of this without my affirmative vote, the resolution cannot pass. Assuming that I put such a kind of a clause, it's basically like, I don't know how many people have played the trump cards, WWF and all of those things, there's something called as a trump card. So if you put a trump card, then the other person has to agree. So basically you pull out a trump card. So that is something called as reserve matters. Now another set of issues which arise is when people try to sell their shares, when people are trying to sell their shares, then there are in a closely held companies, the complications which arises assuming that I send my share to a total third party. Now I am out of the picture, but Vikas, if he's a shareholder in the company, he doesn't know that third person. If he doesn't know that third person, then how does he even work with that third person? How does he ensure that the company functions? And the third person will have 100 different ideas. So Vikas would want to have some amount of control. So what he will say is, Ajay, fine, you want to sell your shares, I have no problem, but you must give me the right of first refusal. That is that assuming that you have an option, assuming that you get an offer to sell your shares to somebody, you will first offer them to me. And if I offer the same price that fellow is offering, then you have to sell it to me only. So this ensures that the control is there with Vikas. But there's another concept, which is a side concept around that called as right of first offer. Right of first offer means, assuming that I want to sell the shares, I should not go to anybody else. I should go to Vikas and say Vikas, I want to sell my shares. Vikas will say, Ajay, I will offer you 100 rupees per share. Once Vikas makes the offer, I can sell the shares only if I get a better offer than what Vikas is. Now this particular clause, and here's where the very interesting, see right of first refusal is favorable to Vikas as the purchasing. Right of first offer is favorable to me because I will get an offer from Vikas and even if I get something at 1 rupee more than that I can sell. So when people are drafting these agreements, we are of course, I'm looking at it from a litigation lawyer's standpoint. We are of course working as if we have, we are working from a standpoint that people come to us much after the agreement is drafted. So therefore, we will not be able to advise the client on all of these things. So from looking at it from there, we need to see, okay, there is a right of first offer which is there. So therefore I cannot sell my shares to this person. Then what is the legal strategy that I need to adopt? And I'll come to that when I'm looking at the third question as to what documents are there and how we can look into other aspects of it. Then there is something called as a drag-along right and a tag-along right. Drag-along right is basically that, if we both are shareholders in the company, Vikas is holding 45%, I'm holding 55%. Assuming that I sell my shares in the company. Now Vikas can put a clause saying, assuming you find a buyer for your shares, Ajay, that buyer must purchase my shares and also at the same price he's paying for it. So what it does is it allows Vikas also a safe exit from the company. Now if there are parallel clauses, that means that assuming that both of us want to get out of the company, I find a buyer, Vikas is not able to find a buyer, then Vikas is stuck with the company. Whereas if there is a binding obligation on me, then I will have to enforce it. Now these are all contractual rights. I want you guys to remember it very clearly that these are all contractual rights and not company law rights. And I'll make the differentiation between the two in the short term. Then there is something called as a preemption rights. Preemption rights is, I can call upon you to exit the company at any point of time. I can call upon the company to issue more shares to me at any point, which means I have complete control over what I want the company. Now you at first plus, it appears like these clauses are so unfair. If such a clause is there in a company, what does your client do? Unfortunately, the law is that once you sign such a contract and once there is such a clause in the article or in the contract, you are bankrupt. You cannot escape it. There are ways and means in which people try to escape it and I will come to that also and I will explain the pitfalls around it and how you have to draft your petition to get out of it. Then there is something called as a call option and put option. Call option is I have the option to call upon you to sell your shares to me. Put option is I have the option to put my shares for sale to you and you'll have to buy it when I put it. Now this happened in the Tata-Docomo case where Docomo had a put option where Docomo could say that you have to purchase my shares at this rate. Now what happened Tata-Docomo was a loss-making company because it was a loss-making company. The RBI had certain guidelines as to how much see you cannot pay more than the fair value of the shares. So the value of the share because it's a loss-making company, a 100 rupees share will be worth only 10 rupees. If it is worth only 10 rupees, you cannot pay 100 rupees for the share and merely because your contract should be bound. So this was the problem. So how they overcame it is they went into arbitration. They got an arbitral award in which that 90 rupees was called as damages. Once that 90 rupees was claimed as damages and it was awarded as damages. The award became very clear and then the money had to be put. RBI came before the Delhi High Court, it filed an objection but the objection was rejected by the Delhi High Court and said it's damages, they have to pay, it's a contractual transaction, you have nothing to do. So then there is subscription option also, which also I have a right to subscribe, there are anti-dilution rights and so on and so forth. Now, next we come to something called as voting rights of a shareholder. Voting rights of a shareholder is something, as a shareholder, I have a block of rights. Now this in Facebook, for example, Mark Suthabar, he holds lesser number of shares but he has a higher amount of voting rights. Similarly in Google, the founders of Google, they own a very miniscule percentage of shares but their shares have special rights. So as a shareholder, you can create special rights in a share. And if your shares have special rights, then you get correspondingly, you get certain strengths in an litigation and if the other party doesn't want to recognize it, then again, the other party has to go through heaven and earth to be able to nullify it because it's a contractual transaction which strengthens you. So this is broadly how a company works and how shareholding rights work and how contractual rights around the share can exist. So board meetings are held, there are certain aspects which are decided by shareholders, there are certain aspects which are decided by directors. Relating to functioning of a company is decided by directors, relating to how excess financing get issuing more shares, et cetera, decided by the shareholders. So this is how it is divided across the domain and litigations arise across both the spectrums. So this is broadly the answer to the first question as to how a company works and how a shareholder works. First question they say that as we say that well-begunner is half done. So I would not say that we have half done because we have found four questions but once you put up the right momentum for taking up the question, then the answer to that is a perfect case. Then we take up on the second question that what kind of shareholder litigations arise normally in a company? Along with discussion as to we would like to also understand the legal journey in these aspects. So I'm sure that you will take it across with the story as such. So Indian company law is broadly based on the English company law. So in the company law, the leading judgment for the first judgment of the point is a judgment called a sparse versus hardcore. Now this was a case where there was some kind of a, there were two shareholders and one of the shareholders got a case against the other and the case against the other was essentially that if that you are causing some kind of loss to the company by entering into certain kinds of contracts and the court held that case, you can bring a litigation on behalf of a company and once you bring such a litigation group of company, you have to look at it and then there can be an exit. Then the law evolved in England in the case of Ibrahimi versus Westbourne Gambis. Now what happened in that case was that there were two directors, two friends who were directors who were only 50, 50%. So what one of the friend did was he brought his son in as a director. Once he brought his son in as a director, then there was a dispute between the two people and since there were three directors and majority is two is to one. One of the directors kicked the other out and there were disputes. So then what the court evolved there is, court evolved at the concept of a quasi-partnership. Quasi-partnership is something basically in a company, your peers see in a company, I hold shares. You hold shares and I hold shares. There's no concept of partnership. But the court said that if there are only two groups of shareholders, that means it's a quasi-partnership. It is not a partnership in a legal sense, but it is a partnership nevertheless because there are two sets of shareholders and if there are two sets of shareholders and here's where the law evolved very practical, just see the practical things. There are two sets of shareholders. They have disputes between each other. Now obviously that if there are disputes, the company cannot function. Ultimately the company will have to be wound up because it is going to run out. So therefore if it reaches such a situation where the company has to be wound up, then the court can give a direction for one person to purchase the other person out at fair range. This rule in Ibrahim became a starting point for people to initiate litigation because assuming that company is not at all able to function, then it becomes a situation of a deadlock. If there's a deadlock in the partnership, then it can't happen. I'll just give you an example. If Vikas and I are not even on talking terms to each other, Vikas will give one instruction to our manager assuming they're selling cricket bats. Vikas will tell that person, go and purchase English below bats from a particular place or go and purchase them, but I will tell that person, don't purchase from there, purchase it from here. Assuming I give two different places to purchase from. The manager will not know what the hell to do. If he purchases from there, Vikas will kill him. If he purchases from here, Ajay will kill him. What does he do? Company is not going to run. This is what will happen. And once this happens, it becomes a situation where company cannot function. So in such a situation, it is better to wind up the company. But rather than winding up, ask one person to purchase the shares of the other so that the company is kept as a going concern. So this was the theory which was about this. Now one of the first judgments which went into this aspect was the judgment of Shanti Prasad Jain versus Kalinga troops. Well, there were three groups there and all the three groups had certain disgroups. So one party said allotted to people, there was something relating to allotment, allotting more shares. Now you need to understand, as an litigation lawyer, what is this big deal about allotting more shares? That's very important for you to understand because if I allot more shares to myself, I get control of the company. It's not just a question of dividend. Assuming I have control of a company, just think about it. I can give contract to, I can purchase from anywhere I want. I can tell my manager, purchase it only from XYZ. That person will purchase from XYZ only. From there, I can probably get a kickback also. I can say, do this in only this manner. I have the ability to control the fortunes of the company merely because I'm 51% owner. Now in a company as diversely held or a public listed company, even if you hold a block of 20, 30 shares, that is enough. To give you an example regarding us, about 11% of the company, he had almost 30% sorry, he had almost 30% of the company. The remaining was held publicly by everybody, by all the members of the public. So when all of these people were holding the shares, they didn't really buy the shares because it was 30,000. So then he didn't know what to do. He sold it to L&T. L&T and in the olden days, there was no concept of variation of shareholder rights. What I explained to you about how Google works and how Facebook works very well. Even if I hold companies now, they're applying to introduce it for public listed companies. But the point is that in these situations, it becomes very difficult unless and until you have such a high value, because share value is so high because only certain amount of shares are available for transaction. So coming back to Shanti Prasad Jain, which is a 1965 Supreme Court judgment. So one party said allotted to people within the group. Other party said allotted to other people at a discount. So then basically the idea was that they, one party wanted to increase their share capital and keep control of the company. So then what happened was they restrained the other fellow from selling it. And he said that, look, this is a conduct which is only to oppress the minority of shareholders because they, under the articles of the pre-instruction, giving more shares to another person does not necessarily result in oppressive conduct. Merely because you don't have a say in the affairs of the company, doesn't make it oppressive. My partnership. So quasi-partnership meaning that there are different groups of shareholders. There were, before itself, you have an agreement where you say, achha, my family or my share, my group will have X amount of shares. If we have X amount of share, without taking our permission, you cannot do XYZ. Unless and until such a point to allow you to exercise such a right and claim such a right, it has to be contractually agreeable. Second thing the court said, law has more or less stood the test of time with a few minor variations. And I will come to those variations and I'll come to how lawyers evolved better principles around this. So to come back to the issue, Shanti Prasad and after Shanti Prasad, Hindu versus court. So what it means is you are very restricted set of rights. So now in this context, to understand what are the kinds of dispute that typically arise between shareholders, bring his other family members, he'll bring his sons and all of them. Now between the brothers, they're not going to be much of a problem. And then ultimately, even after settlement, litigations are still going on on various aspects. Very recently, there was a suit in the Delhi High Court saying that one person cannot use the word hero, because he's restricted under the settlement agreement and so on. Between sets of family members. So when there are sets of family members, there are multiple kinds of problems that can arise. One is what happens is percent of the shares, it became a very complicated issue and there were multiple litigations around it, ultimately it got settled. Now there was this lady called Priyambadha Birla. Priyambadha Birla, who was a former chairman of the Birla Group of Congress, she had developed a chartered accountant, one Mr. Luna. So then the Birla Farah was born into this group. So this is another type of dispute which arises. Another type of dispute which arises is, so these are basically the typical strategy which is used is to say that look, it's a quasi partnership. We both hold a certain amount of shares. We are not able to function. So when he says that give me an exit from the company, it becomes a very complicated issue. And then typically what the CLB, the CLB at that point in time, which is the thing. Now,