The National Company Law Appellate Tribunal (NCLAT) in Chennai on Tuesday issued an interim order to maintain the status quo on the transfer of shares of former CM YS Jagan Mohan Reddy, Bharathi Reddy and Classic Realty in the names of YS Vijayamma and Chagari Janardhan Reddy. It ordered that YS Vijayamma’s 99.75 percent stake should continue after the transfer of shares.
But it directed both parties not to take any action like transfer of shares. It recorded the assurance given by the lawyer for Jagan and Bharathi Reddy that no contempt of court action will be taken against the implementation of the NCLT’s order to amend the names of the members in the register.
Jagan, Bharathi Reddy and Classic Realties had filed a petition in the Hyderabad NCLT challenging the resolution passed by the Saraswati Power Board transferring shares in the names of Vijayamma and Janardhan Reddy and the change in the names of the members in the register accordingly, and the court issued a verdict on July 29 cancelling the transfer of shares and restoring the names of Jagan and others.
Saraswati Power Limited and YS Vijayamma had filed separate appeals in the Chennai NCLAT, claiming that the verdict was illegal and seeking an order to stay its implementation. A bench comprising Justice N. Seshasai, judicial member of the NCLAT, and Jithindranath Swain, technical member, took up the matter on Tuesday.
He sought an interim order to restore the shares of Jagan, Bharathi Reddy and Classic Realty in Saraswati Power and amend the names in the register and stay the execution of the judgment. He said that if this is not done, Jagan and Bharathi Reddy are likely to take contempt of court action.
He said that notices have already been issued stating that the NCLT orders should be implemented or contempt of court action will have to be taken. He said that on July 26, 2021, Jagan and Bharathi Reddy made a gift deed, and by approving this, Vijayamma got full rights over the shares.
He said that in the context of the letters of Vijayamma and Janardhan Reddy, the board of directors of Saraswati Power Limited passed a resolution to transfer the gift deed given by Jagan and Bharathi Reddy and the shares sold by Classic Realty to the names of Vijayamma and Janardhan Reddy as per the law.
He said that the transfer of shares took place on July 6, with Vijayamma holding 99.75 percent and Chagari Janardhan Reddy holding 0.25 percent. He said that several agreements were reached between family members for the transfer of shares in the company. He said that now the love has diminished and the gift deed has not been completed, therefore, the transfer of shares is invalid.
