2001 (7) TMI 1235 - HC - Companies Law

Summary

Issues:
Joint application under sections 391 and 393 of the Companies Act, 1956 for a Scheme of Arrangement between two companies.

Analysis:
The Company Application was jointly filed by M/s. P. Devi Properties Pvt. Ltd. and Shree Jagannath Coal Co. Pvt. Ltd. under sections 391 and 393 of the Companies Act, 1956. The first applicant, M/s. P. Devi Properties Pvt. Ltd., was incorporated on July 28, 1971, with a registered office in Dhanbad. The second applicant, Shree Jagannath Coal Company Pvt. Ltd., was incorporated on January 24, 1991, with a registered office in Calcutta. The scheme aimed at transferring assets and liabilities of the first applicant to the second applicant, with approval obtained from the respective Board of Directors of both companies.

The Scheme of Arrangement detailed the transfer of assets, employees, contracts, and legal proceedings from the first applicant to the second applicant. It also outlined the issuance of shares by the second applicant to the first applicant. The Court ordered a meeting of equity shareholders of the first applicant to approve the scheme, with specific instructions on the conduct of the meeting, quorum requirements, and voting procedures. The Chairperson was tasked with determining the value of equity shares and reporting the meeting's outcome to the Court.

The Chairperson reported the acceptance of the scheme by the equity shareholders, satisfying the stipulations under section 391 of the Companies Act, 1956. The applicants provided affidavits regarding the financial position of the companies and the absence of pending legal proceedings. The Court, after reviewing the facts and materials presented, sanctioned the compromise/arrangement between the two companies as per the enclosed Scheme. The applicants were granted liberty to obtain a certified copy of the order for filing with the Registrar of Companies, and the Company Application was disposed of with the stated observations and directions.