*FRANKLIN TEMPLETON TRUSTEE SERVICES
PRIVATE LIMITED AND ANOTHER VERSUS AMRUTA GARG AND OTHERS*

Forum -Supreme Court of India

Date-12/02/2021

*Sub-Whether winding up of the schemes of the Franklin Templeton based on the consent of the unit holders in the e-voting was valid or it required consent of all the Unit Holders* .

An interesting issue arose in the above case regarding the manner in which the consent of Unit holders was required i.e., whether of majority of all the unit holders or majority of the unit holders who had opted to vote. The court dealt with in detail the meaning of the word “ consent” . Also the court was dealing with a question whether the consent given by majority of unit holders will become binding on the other unit holders or not who had not participated in the voting. The court after examining the provisions of the Companies Act, 2013, judicial decisions in this regard, dictionaries and Halisbury’s law of England held that for the purpose of clause (c) to Regulation 18(15), consent of the unitholders would mean consent by majority of the unitholders who have participated in the poll, and not consent of majority of all the unitholders of the scheme. In view of the findings and reasons as given , the objections to poll results was rejected and it was held that the unitholders of the six schemes have given their consent by majority to windup the six schemes.

An important judgement which highlights the need for the shareholders/ unit holders to participate in the Polls whenever they are not satisfied. This judgement will be helpful not only in interpretation of disputes in the context of companies act , Sebi act but in other legislation as well.

Ramesh Patodia
12-02-2021