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TMI Blog2004 (2) TMI 372X X X X Extracts X X X X X X X X Extracts X X X X ..... n furnace, LD converters and similar such modern equipments etc. Clause 3(B) 16 enables the Transferor Company to amalgamate with any other company or companies having objects altogether or in parts similar to it. 3. The authorized share capital of the Transferor Company is Rs. 36,00,00,000 divided into 3,60,00,000 equity shares of Rs. 10 each. The issued, subscribed and paid up share capital of the Transferor Company is Rs. 36,00,00,000 divided into 3,60,00,000 equity shares of Rs. 10 each fully paid up. It is stated that the equity shares of the Transferor Company are not listed on the Stock Exchange. 4. The Transferee Company was incorporated on 1-11-1991 under the provisions of the Companies Act as a Public Company limited by shares in the name and style of Lanco Ferro Limited. Subsequently, w.e.f. 6-7-1994, the name was changed to the present one. The Transferee Company, as is reflected by its Memorandum of Association, was incorporated with the main objects of carrying on trade and/or produce, manufacture, refine, make, contract, fabricate, shape, treat cure, prepare, import, export, purchase, sell and deal in all types and grades of composition of Iron and Steel incl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Official Liquidator filed his report stating that having perused the books, accounts, records and other papers, he is of the view that the Transferor and Transferee Companies are not conducting their affairs in a manner prejudicial to the interests of their members or the general public. 9. On behalf of the Central Government, the Registrar of Companies, filed common affidavit taking two objections - It is stated that the Transferee Company is a listed company and whereas the Transferor Company is not a listed Company and though the Transferee Company had addressed letters on 1-8-2003 to the Stock Exchanges of Kolkata, Hyderabad and Mumbai for approval of the Scheme of Arrangement, as required under Clause 24 of the Listing Agreement, it had not received the "No Objection" letter from Hyderabad Stock Exchange. The shares have not been valued by the well accepted and known accounting principle, but had been valued by adopting different methods, and weightage had been given to arrive at a fair exchange ratio. The companies have not furnished information how the calculation of the share value adopting different methods had been done, and as such, it is difficult for him to co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heme of Arrangement, as agreed to by them in terms of clause 24( f ) of the Listing Agreement, for their approval, the Stock Exchange of Hyderabad had not given their consent, and unless and until, the Hyderabad Stock Exchange accords its consent, the petitioner cannot prefer the present Company Petition. The learned counsel for the petitioner to negative this contention of the Registrar of Companies, produced copy of the letter dated 1-9-2003 addressed by the Company Secretary of Hyderabad Stock Exchange to the Company Secretary of the Transferee Company stating that the Exchange does not have any objection for the Transferee Company preferring any petition to this Court for approval of the scheme. In view of this letter, the contention of the Central Government that inasmuch as the consent of the Hyderabad Exchange has not accorded its consent, the Transferee Company could not have preferred the Company Petition, cannot be accepted, and it is therefore, rejected. 14. Insofar as the objection taken by the Registrar of Companies to the effect that the shares have not been valued as per the accepted norms and accounting principle, and had been done by adopting different methods, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scheme of compromise or arrangement arrived at between the parties and which might be supported by the requisite majority if the Court finds that it is an unconscionable or an illegal scheme or is otherwise unfair or unjust to the class of shareholders or creditors for whom it is meant. Consequently, it cannot be said that a Company Court before whom an application is moved for sanctioning such a scheme which might have got the requisite majority support of the creditors or members of any class of them for whom the scheme is mooted by the concerned company has to act merely as a rubber stamp and must almost automatically put its seal of approval on such a scheme. It is trite to say that once the scheme gets sanctioned by the Court it would bind even the dissenting minority shareholders or creditors. Therefore, the fairness of the scheme qua them also has to be kept in view by the Company Court while putting its seal of approval on the concerned scheme placed for its sanction. However, Court cannot have jurisdiction like an appellate authority to minutely scrutinize the scheme and to arrive at an independent conclusion whether the scheme should be permitted to go through or not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... angement, including the fair exchange ratio of the share value. Once the shareholders, who have much stake in the affairs of the companies, have in their wisdom agreed to the allotment of shares, no objection can be raised by anyone. This apart, the secured creditors of the Transferor and Transferee Companies, who have advanced huge loans, have addressed letters expressing their "No Objection" to the proposed Scheme of Arrangement. The Official Liquidator has also filed report stating that the Transferor and Transferee Companies have not conducted their affairs in a manner prejudicial to the interests of the shareholders or the general public. Inasmuch as the objections raised by the Central Government stood met by the petitioners and having regard to the report of the Official Liquidator which discloses that the affairs of the Transferor and Transferee Companies have not been conducted in a manner prejudicial to the interests of the shareholders or the general public, and having considered the Scheme of Arrangement, I am of the considered opinion that neither the Central Government nor the Official Liquidator nor this Court, should have any objection, in according approval to the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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