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Issues Involved:
1. Sanction of the scheme of arrangement and amalgamation. 2. Compliance with statutory requirements under Section 391 of the Companies Act. 3. Objections raised by creditors regarding notice and protection of their interests. 4. Fairness and legality of the proposed scheme. Detailed Analysis: Issue 1: Sanction of the Scheme of Arrangement and Amalgamation The petitioner sought the court's sanction for a scheme of arrangement and amalgamation involving multiple companies, including J.K. Industries Limited (Transferee-Company), J.K. Agri-Genetics Limited (JKAL), J.K. Sugar Limited (JKSL), and Vikrant Tyres Limited (petitioner). The objective was to consolidate and segregate different business undertakings to enhance growth, attract capital, and maximize shareholder value. The scheme proposed the transfer of the Agri-Genetics Undertaking to JKAL and the Sugar Undertaking to JKSL, while amalgamating the petitioner with J.K. Industries Limited. Issue 2: Compliance with Statutory Requirements under Section 391 of the Companies Act The petitioner complied with the statutory requirements by filing an application under Section 391 seeking permission to convene meetings of shareholders, secured creditors, and unsecured creditors. The meetings were duly convened, and the scheme was approved by the requisite majority. Notices were served individually, and public notices were published in newspapers. The Official Liquidator and a Chartered Accountant confirmed that the petitioner maintained proper books of account and conducted affairs in a manner not prejudicial to the members or public. Issue 3: Objections Raised by Creditors Two creditors, Rawel Singh and Technoexport Foreign Trade Company Ltd., raised objections. Rawel Singh contended that his decree for a sum of Rs. 55,08,689 was not provided for in the scheme, and he was not served notice of the meeting. The petitioner responded that the decree was an ex parte decree under appeal, and Rs. 25 lakhs had been deposited in court. Technoexport Foreign Trade Company Ltd. argued that it was not served notice despite having an award in its favor, which the petitioner disputed. The court held that non-issue of notice to a creditor whose debt is disputed and subject to litigation does not vitiate the scheme if the overwhelming majority of creditors approve it. The scheme provided for the transferee-company to assume all liabilities, including those under litigation, thus protecting the creditors' interests. Issue 4: Fairness and Legality of the Proposed Scheme The court examined whether the statutory procedure was followed, if the scheme was approved by the requisite majority, and if it was just and fair to the class as a whole. The scheme was found to comply with all legal requirements, and the exchange ratio of shares was deemed fair. The court noted that the scheme aimed to achieve size, scale, integration, and financial strength, benefiting shareholders, creditors, and employees. The Calcutta High Court had already sanctioned the scheme for the transferee-company. The court concluded that the scheme was in the interest of all stakeholders and public, and accordingly, sanctioned the scheme. Conclusion: The court sanctioned the scheme of arrangement and amalgamation, finding it in compliance with statutory requirements, fair, and beneficial to all stakeholders. The petitioner-company was ordered to be dissolved without being wound up, and the scheme was made binding on all parties involved.
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