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TMI Blog2012 (4) TMI 46X X X X Extracts X X X X X X X X Extracts X X X X ..... ther since the respondent Company when faced with the objections had further increased the said valuation to Rs. 1,500/- but nevertheless find that there can be no better indice of valuation than the market forces - The acceptance by all the other public shareholders except the appellant of the price of Rs. 1,500/- clearly establishes that though the price of Rs. 940/- offered may not have been the correct price but the price of Rs. 1,500/- clearly was - Appeal is dismissed - CO. APP. No. 1 of 2012 - - - Dated:- 7-3-2012 - RAJIV SAHAI ENDLAW, J. Sandeep Sethi and Rohan Dheman for the Respondent. JUDGMENT Rajiv Sahai Endlaw, J. The appellant impugns the judgment dated 3rd October, 2011 of the Learned Company Judge of thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. However the Board of Directors of the respondent Company in the meeting held on 3rd March, 2010 while approving such reduction in the share capital, enhanced the payment from Rs. 836/- to Rs. 940/-per share. M/s Reckitt Benckiser Plc being the largest shareholder expressed intent to retain its share holding. The Extraordinary General Meeting (EOGM) of the shareholders of the respondent Company held on 24th April, 2010 by a special majority also approved such reduction. The appellant voted against the said resolution. 4. Upon the respondent Company thereafter filing the petition aforesaid for approval of its action of reduction of share capital, initially 24 shareholders including the appellant filed objections. However upon the respo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t company including the appellant had been wrongly clubbed for the purposes of reduction, with the subsidiary of the promoter company and which had resulted in the special resolution being passed; he contended that the public shareholders holding 0.11% shares constituted a separate class and had a meeting of the said class only been held, the special resolution for extinguishing the shares would not have succeeded; I. that an earlier attempt by the respondent Company to extinguish the shares of such public shareholders had failed and in the year 2005 the respondent Company had then agreed to let the public shareholders continue; the principle of res judicata was sought to be applied; J. that the reduction was in effect a buy-back o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bstantial Acquisition of Shares and Takeovers) Regulations, 1997. ( v ) Section 100 of the Act required passing of a Special Resolution by equity shareholders and does not require passing of a separate class resolution as provided for under Section 391 r/w Rule 61 in the case of a Scheme of Arrangement; that the procedure prescribed for sanction of a Scheme of Arrangement could not be applied to reduction of share capital; thus the resolution of the majority under Section 100 was of the entire body of shareholders of the company and not minority public shareholders; ( vi ) the fact that the minority shareholders are Indian and the majority promoter shareholders are foreigners is of no relevance as long as the mandate of law is complie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d reduction, having agreed to allow the public shareholders to continue; ( xiii ) that the objection to the validity of the form of representation was untenable as the principles of notarization as applicable to proxy form were not attracted; ( xiv ) Section 77A was a facilitating provision enabling a company to buy-back its shares without approaching the Court and had no application to a proceeding under Section 100; ( xv ) that the Court could not interfere with the economic policy which was in the domain of the executive; ( xvi ) that the reduction in share capital was a commercial and business decision approved by 99.999% of the equity shareholders of the respondent Company and did not require any interference. 7. The ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the share capital. Though we were a little anxious as to the valuation of the shares, since the Board of Directors of the respondent Company itself had not accepted the valuation at Rs. 836/- per share of the Accountants engaged by the respondent Company and had increased the valuation to Rs. 940/- and further since the respondent Company when faced with the objections had further increased the said valuation to Rs. 1,500/- but nevertheless find that there can be no better indice of valuation than the market forces. The acceptance by all the other public shareholders except the appellant of the price of Rs. 1,500/- clearly establishes that though the price of Rs. 940/- offered may not have been the correct price but the price of Rs. 1,50 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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