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TMI Blog2006 (12) TMI 237X X X X Extracts X X X X X X X X Extracts X X X X ..... nd unsecured creditors from the appointed date 16-10-2005 and for passing appropriate orders regarding vesting of assets liabilities between the companies in accordance with the scheme of arrangement. 2. The Resulting Company was duly incorporated under the Companies Act, 1956 as Vast Textiles Ltd. on 22-5-2001 vide certificate of incorporation No. 17-017036 of 2001-02. The company was incorporated with its registered office in State of Rajasthan. 3. The position authorized issued, subscribed and paid up capital of the Resulting Company as on 15-10-2005 is detailed out in para No. 4 of the petition filed by the Resulting Company and para 9 of the petition filed by the Demerged Company. 4. The main objects of the Resulting Comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ara 17 of the petition. 10. The proposed scheme of arrangement, it is averred that it would result in the mining and manufacturing activities being carried on by two independent and separate companies. This would enable the management of the two companies to focus on their individual operations, result in reduction in overall costs of management and operations and permit strategic investors to invest in both the businesses directly. 11. The proposed scheme of arrangement is divided into three parts. The proposed scheme of arrangement also provides for various other matters consequential or otherwise integrally connected therewith. 12. The Demerged company and the Resulting Company in their respective Board meetings have approved ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... following the procedures prescribed under the relevant provisions of the 1956 Act and the payment of requisite fees to the Registrar of Companies and Stamp duty to the State Government and this aspect may be considered. It was also submitted that on perusal of Chairman s report of the meeting of the secured creditors of the Transferee Company held on 15-7-2006 none of the secured creditors attended the meeting. The transferee company has received consent from all the 4 secured creditors. The shares of the transferor company are listed at Jaipur Stock Exchange and Bombay Stock Exchanges, but they have failed to submit the no objection to the scheme of arrangement obtained from Bombay Stock Exchange. 17. In the course of argument letter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nation should not have been contrary to law and that it was not unfair to the shareholders of the company which was being merged. The Court s obligation is to be satisfied that valuation was in accordance with law and it was carried out by an independent body. But since admittedly more than 95 per cent of the shareholders who are the best judges of their interest and are better conversant with market trend agreed to the valuation determined it could not be interfered by courts as, certainly, it is not part of the judicial process to examine entrepreneurial activities to ferret out flaws. The Court is least equipped for such oversights. Nor, indeed is it a function of the Judges in our constitutional scheme. We do not think that the inter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petition." (p. 22) 20. In Compact Power Sources (P.) Ltd., In re/HBL Nife Power Systems Ltd., In re [2005] 125 Comp. Cas. 289 1 (AP), it was observed as under : "...I am of the considered opinion that the consent of the stock exchange is not compulsorily required to be obtained, and it would suffice if the company files the scheme/petition before the stock exchange a month before it presents the scheme/petition before the court or Tribunal for its approval, and more so when the company under sub-clauses ( g ) and ( h ) of clause ( 24 ) of the Listing Agreement, had agreed that the scheme of arrangement/amalgamation/merger/reconstruction/reduction of capital, etc., to be presented to any court or Tribunal does not violate, override ..... X X X X Extracts X X X X X X X X Extracts X X X X
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