Kolkata: Supreme Court on Tuesday settled a three-decade-old dispute involving Peerless General Finance and Investment Company Limited (PGFI) and Parasmal Lodha-owned Bhagwati Developers Private Limited (BDPL) over change in shareholding pattern by ruling in favour of PGFI.
Currently, the Roy family holds 76% in Peerless and the Lodhas 20%. The dispute involves the issuance of 30,000 equity shares by Peerless board in 1987 through private placement, approved by its shareholders and Board of Directors, and the transfer of 15,626 shares by existing shareholders. PGFI is the holding company of Peerless group, one of the largest home-grown conglomerates in Bengal. The transactions were challenged by some minority shareholders with support from BDPL alleging that they were intended to alter the control of Peerless to the advantage of the Roy family and involved improper routing of funds. The minority shareholders later withdrew and BDPL took over as the main petitioner.
The legal dispute travelled through Calcutta High Court and Supreme Court before reaching National Company Law Tribunal (NCLT), which in an order on July 18, 2022, allowed BDPL petition almost three decades after the date of the transactions.
Arunabha Deb, managing partner of Avijit Deb Partners, said, “The apex court’s dismissal is a strong affirmation of Peerless’ position that decisions taken lawfully, with due corporate approval and in the interests of the company, cannot be kept under challenge indefinitely.” Peerless challenged that decision before NCLAT, which set aside the NCLT order and ruled that corporate decisions taken more than three decades ago are good in law. The apex court upheld the NCLAT order. On behalf of Peerless, the matter was argued in Supreme Court by Harish Salve, assisted by Arunabha Deb and Ashika Daga among others. BDPL was represented by Gopal Subramaniam, assisted by Faraz Anees among others.