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2011 Supreme(HP) 148
IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA.
Mr. Justice Rajiv Sharma, Judge.
Sunvision Engineering Company Private Limited.
Versus
Himachal Futuristic Communications Limited.
Co. Pet. No. 14/2010 alongwith Co. Pet. No. 15/2010
Decided on: 5.1.2011
For the petitioner:Mr. Rajiv Nayyar, Sr. Advocate with Mr. Sunil Mohan Goel, Advocate.
For the Respondents: Mr. Janesh Mahajan, Central Government Counsel, for the Registrar of Companies and the Central Government. Mr. Sanjeev Kuthiala, Counsel for the Official Liquidator.
The central legal point established in the judgment is the compliance with mandatory provisions under the Companies Act and Rules, and the approval of the scheme by stakeholders.
Headnote:
Companies Act - Scheme of Arrangement and Amalgamation - Section 391, Section 394-A - Rule 69, Rule 73, Rule 74, Rule 80
Fact of the Case:
The court considered petitions related to the approval of a scheme of arrangement and amalgamation between two companies. The petitions sought directions for dispensing with the requirement of convening meetings of various stakeholders and for convening the meetings to consider the scheme.
Finding of the Court:
The court found that all mandatory provisions under the Companies Act and Rules were complied with. The scheme was duly approved by the stakeholders, and reports from the Regional Director and Official Liquidator were submitted.
Issues: The issues involved the compliance with the Companies Act and Rules, approval of the scheme by stakeholders, and the reports from the Regional Director and Official Liquidator.
Ratio Decidendi: The court's decision was based on the compliance with mandatory provisions, approval of the scheme by stakeholders, and the submission of reports from the Regional Director and Official Liquidator.
Final Decision: The court sanctioned the composite Scheme of Arrangement and Amalgamation between the petitioner companies and directed them to file a copy of the order with the Registrar of Companies. Upon filing the order, the Transferor Company would stand dissolved without the process of winding up.
Rajiv Sharma, J
Since common questions of law and facts are involved in both the petitions, the same are taken up together for hearing and are being disposed of by a common judgment. Whether reporters of the local papers may be allowed to see the judgment? Yes.
2. The Board of Directors of the Transferor Company, i.e. Sunvision Engineering Company Private Limited, approved the scheme on 21.9.2010. The Board of Directors of the transferee company, i.e. Himachal Futuristic Communications Limited, also approved the scheme on 21.9.2010. The National Stock Exchange of India Limited and Bombay Stock Exchange conveyed their ‘no objection’ to the filing of scheme in this Court on 12.10.2010 and 19.11.2010, respectively.
3. Company Petition No. 13 of 2010, instituted by Transferor Company, under section 391 of the Companies Act, 1956 sought directions under rule 69 of the Companies (Court) Rules, 1959 (hereinafter referred to as ‘Rules’ for brevity sake) for dispensing with the requirement of convening the meetings of the Equity Shareholders, Unsecured Creditors and Optionally Convertible Debenture Holder. The Transferee Company instituted Company Petition No. 12/2010 seeking directions under rule 69 of the Rules for convening the meetings of the Equity Shareholders, Preference Shareholders, Secured Creditors and Unsecured Creditors of the Transferee Company to consider the scheme.
4. This Court in Company Petition No. 13 of 2010 dispensed with the requirement of convening the meetings of the Equity Shareholders, Unsecured Creditors and Optionally Convertible Debenture Holder on 22.10.2010. This Court in Company Petition No. 12 of 2010 on 22.10.2010 directed convening of the meetings of the Equity Shareholders, Preference Shareholders, Secured Creditors and Unsecured Creditors of the Transferee Company to consider the scheme. From 25.102010 to 28.10.2010, in terms of rule 73 of the Rules, notices of the meeting of the Equity Shareholders with a copy of the scheme, explanatory statement and form of proxy were issued to the Equity Shareholders of the Transferee Company. On 27.10.2010, notices of the meeting of the Preference Shareholders with a copy of scheme, explanatory statement and form of proxy was despatched to the Preference Shareholders of the Transferee Company. Similarly, on 27.10.2010, under rule 73 of the Rules, notice of the meeting of the Secured Creditors with a copy of the scheme, explanatory statement and form of proxy, was despatched by U.P.C. to the Secured Creditors of the Transferee Company. On 28.10.2010, notice of the meeting of the Unsecured Creditors with copy of the scheme, explanatory statement and form of proxy, was despatched by U.P.C. to the Unsecured Creditors of the Transferee Company. On 27.10.2010, in compliance to rule 74 of the Rules, public notice of the meetings of the Equity Shareholders, Preference Shareholders, Secured Creditors and Unsecured Creditors was published in the Indian Express (English – All India Edition-North), the New India Express (English – All India Edition-South), Indian Express (English-Chandigarh Edition) and Dainik Tribune (Hindi – Chandigarh Edition).
5. The Equity Shareholders of the Transferee Company convened its meeting on 26.11.2010 for approving the scheme, in accordance with the provisions of section 391(2) of the Act. The Equity Shareholders voted in favour of the scheme represented 99.06% in number and 99.84% in value of the Equity Shareholders present and voted. The preference Shareholders of the Transferee Company at the meeting held on 26.11.2010 approved the scheme, in accordance with the provisions of section 391 (2) of the Act. The Preference Shareholders who voted in favour of the scheme represented 100% in number and 100% in value of the Preference Shareholders present and voted. The Secured Creditors of the Transferee Company also approved the scheme, in accordance with the provisions of section 391 (2) of the Act, on 26.11.2010. The Secured Cr
