9911796707
TMI Blog2003 (1) TMI 553X X X X Extracts X X X X X X X X Extracts X X X X ..... 2001, dispensed with the requirement of the advertisement in holding of meeting of shareholders. Thereafter, by an order dated July 13,2001, the scheme of arrangement was sanctioned and a decree was drawn up in accordance with the said order as per annexure A. The relevant portion of that scheme of arrangement which was sanctioned by this court was 38,73,342 shares of face value of US $ 0.001 each held by the applicant-company in Zhone Technologies Inc., as on February 20, 2001, was permitted to be transferred in the name of principal shareholders of the applicant-company. This arrangement was based upon the premise that shares would be freely transferable consequent upon the public offering, which was then proposed by Zhone Technologies In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ke the scheme workable. The tenth respondent, who would be beneficiary of such transfer, has expressed its willingness on the scheme. Respondents Nos. 1 to 9 are the shareholders of both the applicant-company as well as the tenth respondent-company. Along with the petition, the consent letters have been filed giving their consent for modification of the scheme as proposed. Thereafter, notice was ordered to the respondents. All of them have appeared through their counsel. On December 4, 2002, notice was ordered to the Central Government as required under section 394A. In pursuance of the said notice, the Registrar of Companies, Karnataka, on behalf of the Regional Director, Department of Company Affairs, Southern Region, Chennai, has fil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is no substance in that objection. Learned counsel for the petitioner submits that there are in all nine shareholders in the transferor-company whereas only four shareholders in the transferee-company. Now, the five shareholders of the transferor-company who were not shareholders in the transferee-company, have become shareholders in the transferee-company by way of allotment and transfer of shares in their favour. Thus, the objection of the RBI is complied with. This fact is evident from the extract of the Registrar of Companies. Learned counsel for the Registrar of Companies submits that the said facts now brought on record are not in dispute. Explaining the scope of section 392 of the Companies Act, the Supreme Court in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 391. The power under the section is of the widest amplitude, but is not unlimited and can be exercised only for the purpose of determination or adjudication of any right or interest claimed. Sub-section ( l )( a ) confers power on the court to supervise the carrying out of the compromise or arrangement. Sub-section ( l )( b ) confers a discretion on the court to issue such directions in regard to any matter or make such modifications in the compromise or arrangement as it may consider necessary for the proper working of the compromise or arrangement either at the time of making such order or at any time thereafter. Similarly, sub-section (2) expressly gives the court the power to modify a compromise or arrangement. Parliament has con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was sanctioned by the court subject to the permission to be obtained by several authorities while implementing the scheme, the applicant-company found it not possible to work the scheme in view of the regulation of the Reserve Bank of India. In terms of the Reserve Bank of India Regulations, the modification sought for is that in the original scheme the transfer of the shares was agreed to be in the name of the individual shareholders. As there is a prohibition in law for transfer of shares in individual names and to satisfy the legal requirement, it has to be transferred in the name of company whose shareholders would be the same as that of the transferor-company. With the proposed modification, shares are to be transferred in the name of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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