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TMI Blog2002 (3) TMI 822X X X X Extracts X X X X X X X X Extracts X X X X ..... largely complement the products and services offered by ICICI and other transferor-companies. The ICICI group, which comprises ICICI, its subsidiaries and other affiliate companies, is a diversified financial services group. ICICI was formed in1955 at the initiative of the World Bank, the Government of India and representatives of Indian industry. It was created to develop a financial institution for providing medium-term and long-term project financing to Indian businesses. With the liberalization of the financial sector in India from 1991 onwards, ICICI diversified in financial services. Particulars about the activities ICICI and the other transferor-companies are given in para 16 of the petition. ICICI Bank is a wholly owned subsidiary of ICICI. In conformity with the directives of the Reserve Bank of India, ICICI had reduced its shareholding in ICICI Bank to approximately 46 per cent of the equity share capital. In view of the benefits of transformation into a bank and the Reserve Bank of India s pronouncements on universal banking, ICICI explored various corporate structuring alternatives for its transformation into a universal bank. ICICI Bank also identified a large capita ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2002, as stated in the affidavit dated February 19, 2002, of Mr. Anil C. Dave. The petitioner-company also sent individual notices to the equity shareholders and ADR holders regarding the hearing of this petition. In response to the aforesaid notices, the responses/objections were received from the following persons : Sl. No.Name of the objectorParticulars of objections 1.Mr. B. Srinivas BaligaNo objection to reverse merger share exchange ratio, 2.Ms. Beena AgrawalQueries raised in respect of different schemes, i.e., FDRs, Children Growth Fund, Tax Saving Bonds, etc., 3.Ms. C. Pappa AmmalConcern shown over dividend income on merger (future), 4.Mr. Tehmtan DavarRequest made that head office of merged entity to continue in Mumbai, 5.Mr. Janak MathurdasObjection to the share exchange ratio, 6.Mr. H.P. GidwaniWritten to RBI based on wrong reporting in newspaper (Janu- ary 26, 2002) that two meetings were held (Ahmedabad and Vadodara), 7.Mr. Rajiv AgarwalPetition filed by ICICI Bank be dismissed in view of the crimi- nal complaint filed before the Chief Judicial Magistrate, Jaipur, Sl. No.Name of the objectorParticulars of objections 8.Mr. Mukesh KumarComp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mer Forum. The matter is, therefore, now pending before the Consumer Forum at Ahmedabad being Consumer Complaint No. 1053 of 2000. It is further submitted that the objector has made a claim of Rs. 66,435.18 and other vague claims which are the subject-matter of the complaint before the Consumer Forum. It is submitted that the said grievance cannot be ventilated in the present proceedings as the same have nothing to do with the issue of amalgamation, because even if the objector were to succeed before the Consumer Forum, the order of the Consumer Forum can be enforced against the petitioner-company because the petitioner-company is the transferee-company and there is no question of any alleged liability of the petitioner-company being affected by the proposed amalgamation. As stated above, Mr. D.J. Shah had earlier filed objections, but at the hearing of the petition, he appeared in person and made it clear that he was withdrawing all his objections. Even so he made a passing reference to the previous amalgamation of Bank of Madura Ltd. with the ICICI Bank without any orders of this court. Mr. Soparkar thereupon drew the attention of the court to the provisions of section 44A of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provision of law and is not contrary to public policy. For ascertaining the real purpose underlying the scheme with a view to be satisfied on this aspect, the court, if necessary, can pierce the veil of apparent corporate purpose underlying the scheme and can judiciously X-ray the same. 7.That the company court has to satisfy itself that members or class of members or creditors or class of creditors, as the case may be, were acting bona fide and in good faith and were not coercing the minority in order to promote any interest adverse to that of the latter comprising the same class whom they purported to represent. 8.That the scheme as a whole is also found to be just, fair and reasonable from the point of view of prudent men of business taking a commercial decision beneficial to the class represented by them for whom the scheme is meant. 9.Once the aforesaid broad parameters about the requirements of a scheme for getting sanction of the court are found to have been met, the court will have no further jurisdiction to sit in appeal over the commercial wisdom of the majority of the class of persons who with their open eyes have given their approval to the scheme even if in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roaches the Consumer Forum for expeditious hearing of the complaint, this court has no manner of doubt that the Consumer Forum will give due consideration to such request and take up the complaint for expeditious hearing and disposal. This direction is given in view of the fact that learned counsel for the petitioner-company states that the petitioner-company has already filed its reply and that it will extend utmost co-operation for expeditious hearing and disposal of the complaint before the Consumer Forum. Coming to the stand of the Central Government, Ms. P.J. Davawala, learned additional standing counsel for the Central Government has placed on record a copy of the letter dated February 26, 2002, from the Registrar of Companies, Gujarat State, stating that the petition has been examined by the Central Government and that it has been decided to leave the matter to this court to decide on the merits subject to the following observations : ( a )As the resolution for increase in authorised share capital of the transferee-company forms part of the scheme, it needs compliance with the provisions of section 97 of the Companies Act, 1956. ( b )As the company has proposed to incr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ollowing article 126 : "126. Until otherwise determined by a general meeting, the number of directors shall not be less than three or more than 21 excluding the Government Director (referred to in article 128A) and the debenture director [referred to in article 129 (if any)]." In view of the above, it is clear that the second objection is also taken care of. As far as section 258 referred to in the letter of the Registrar of Companies is concerned, the same reads as under : "258. Subject to the provisions of sections 252, 255 and 259, a company in general meeting may, by ordinary resolution, increase or reduce the number of its directors within the limits fixed in that behalf by its articles." Since the scheme itself provides for the aforesaid amendment to the articles of association and the scheme is approved by an overwhelming majority of more than 96 per cent of the equity shareholders, there is no justification for requiring the company to follow the procedure all over again for increasing the number of directors. However, section 259 provides that in the case of a company which came into existence after July 21, 1951, the increase in the number of directors beyond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s states that it has been decided to leave the matter to this court. In the facts and circumstances of the case, even otherwise, there is no reason for the Central Government not to accord approval to the increase in the number of directors of the transferee-company when its capital is being substantially extended and three transferor-companies are merging into one transferee-company which is the petitioner before this court. Clause 21 of the scheme as also the Banking Regulation Act would require the approval of the Reserve Bank of India. Hence, the sanction being granted by this court is conditional upon the Reserve Bank of India granting the requisite statutory approvals. Since the transferor-companies are having their registered offices in the State of Maharashtra, this court is not required to consider the other formalities which are applicable to the transferor-companies, but it is made clear that the sanction being granted by this court in the present petition is subject to the sanction being granted by the Bombay High Court in respect of the scheme filed by the transferor-companies and also subject to approval being granted by the Reserve Bank of India in accordance w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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