2016 (11) TMI 1502 - HC - Companies Law

Modification in order seeked - applicants states that inadvertently they failed to inform this Court that the transferee company has 28 equity shareholders and not 27 equity shareholders, as averred in the first motion petition - Held that - The requisite No Objection Certificate on behalf of the said equity shareholder, namely, ICICI Prudential Asset Management Company Limited is annexed to the present application. In view of the foregoing, the present application is allowed. Paragraph 20 of the order dated 26.09.2016 shall now be read as under - 20. That the Transferee Company has 28 equity shareholders. All the equity shareholders have given their consents/no objections in writing to the proposed Scheme. Their consents/no objections have been placed on record. They have been examined and found in order. In view thereof, the requirement of convening the meeting of the equity shareholders of the Transferee Company to consider and, if thought fit, approve, with or without modification, the proposed Scheme is dispensed with.

Summary

Issues Involved:
Modification of paragraph 20 of the order dated 26.09.2016 passed by the Court due to incorrect information regarding the number of equity shareholders in the transferee company.

Analysis:
The present application filed by the petitioners sought modification of paragraph 20 of the order dated 26.09.2016 passed by the Court. Counsel for the applicants acknowledged that they inadvertently failed to inform the Court that the transferee company had 28 equity shareholders instead of the previously stated 27. The mistake was considered bona fide, and it was highlighted that the 28th shareholder held only 0.19% of the equity by value, indicating that the modification would not impact the proposed merger scheme. An affidavit by the Director of the transferee company supported the application. The No Objection Certificate from the 28th equity shareholder, ICICI Prudential Asset Management Company Limited, was also provided with the application.

The Court allowed the present application and modified paragraph 20 of the order dated 26.09.2016 to reflect the correct information about the 28 equity shareholders of the transferee company. All equity shareholders had given their consents or no objections in writing to the proposed scheme, which were examined and found in order. Consequently, the requirement of convening a meeting of the equity shareholders of the transferee company to approve the scheme was dispensed with. The applicants were directed to deposit a sum of ?25,000/- with the Common Pool Fund of the Official Liquidator attached to the Court within a week from the date of the judgment.

In conclusion, the Court granted the modification sought by the applicants regarding the number of equity shareholders in the transferee company, ensuring that all necessary consents and objections were duly considered and recorded. The judgment emphasized the importance of accurate information in legal proceedings and provided a mechanism for rectifying inadvertent errors to maintain the integrity of the merger scheme proposed by the parties involved.