9911796707
TMI Blog2013 (2) TMI 495X X X X Extracts X X X X X X X X Extracts X X X X ..... es, for every fourteen equity of shares of the face value of Rs. 10 each fully paid-up held in ICCL (after derating of share capital of ICCL by 50 per cent.) in consideration of amalgamation of ICCL into IMFA. Thus, under the scheme every shareholder of ICCL was entitled for allotment of one share of IMFA for every 14 equity shares of ICCL held by him/her/it. The aforesaid clause 12.1 of the scheme is reproduced below : "12.1 Upon this scheme becoming effective, IMFA shall, without any further application or deed, issue and allot to every member of ICCL, holding fully paid-up equity shares in ICCL and whose names appear in the register of members of ICCL on the record date, his/her heirs, executors, administrators or the successors-in-title, as the case may be, in respect of every fourteen (14) equity shares of the face value of Rs. 10 each fully paid-up held by him/her/it in ICCL, one (1) equity share of the face value of Rs. 10 each of IMFA credited as fully paid-up equity shares." 4. Before the scheme, IMFA was also a shareholder of ICCL holding Rs. 2,42,17,272 (rupees two crores forty two lakhs seventeen thousand two hundred and seventy two) equity shares of Rs. 10 each const ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... after giving effect to the scheme, shall be made available by the trustees to the small shareholders of IMFA, as on the record date in one or more lots preferably within a period of eighteen months but in any case not later than a period of three years, at a discount of not less than 50 per cent. to the market price prevailing at such time. For this purpose, small shareholders would mean shareholders other than promoters (including persons acting in concert), financial institutions, banks, foreign institutional investors, shareholders who are shareholders of IMFA before giving effect to the scheme. 13.3 The proceeds on realisation as aforesaid shall be utilised by IMFA for discharge of liabilities of secured lenders." 5. Accordingly, after sanction of the scheme by this court, a trust was formed under the name and style of "Erstwhile ICCL Shareholders Trust" and a trust deed was executed in terms of clause 13 of the scheme. The trust deed, inter alia, provided for cancellation of the shares not accepted by the small shareholders. The relevant clause 7.2 of the trust deed is reproduced below : "7.2 Termination of the trust The trust shall terminate upon the occurrence of either ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rms of clause 7.2(c) of the trust deed, the trustees in their meeting held on June 16, 2010, have decided to cancel all the balance 3,49,466 unaccepted equity shares. 10. Learned counsel for the petitioners submit that at the time of propounding the said scheme, this situation that some of the small shareholders will not accept the shares offered to them at a discount of 50 per cent. was not conceived and, therefore, the scheme does not provide for dealing with such unaccepted shares. She submits that the need for modification of the said scheme arose during the implementation of the scheme. She further submits that the cancellation of the said unaccepted shares will result in reduction of paid-up share capital of IMFA. 11. On February 1, 2011, this court fixed the hearing of this petition on March 8, 2011 and also directed the petitioner to advertise the notice of hearing in the English daily The New Indian Express and the Oriya daily The Samaja not less than 10 days before the date fixed for hearing. This court also directed the petitioner to file the said publications in court not less than 10 days before the date fixed for hearing. 12. In compliance to the said directions, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... modification in the compromise or arrangement as it may consider necessary for the proper working of the compromise and/or arrangement . . . When a scheme is being considered by the court in all its ramifications, for according its sanction, it would not be possible to comprehend all situations, eventualities and exigencies that may arise while implementing the scheme. When a detailed compromise and/or arrangement is worked out, hitches and impediments may arise and if there was no provision like the one in section 392, the only obvious alternative would be to follow the cumbersome procedure as provided in section 391(1), viz., again by approaching the class of creditors or members to whom the compromise and/or arrangement was offered to accord their sanction to the steps to be taken for removing such hitches and impediments. This would be unduly cumbersome and time consuming and, therefore, the Legislature in its wisdom conferred power of widest amplitude on the High Court under section 392 not only to give directions but to make such modification in the compromise and/or arrangement as the court may consider necessary, the only limit on the power of the court being that such dir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Gupta's case (supra), the company court has been conferred power of widest amplitude under section 392 not only to give direction but to make such modifications in the scheme as the court may consider necessary and the only limit on the power of the court being that such directions can be given and modifications can be made for the proper working of the scheme. 16. For the above reasons, I am of the view that there is no impediment in allowing the modifications sought in the scheme and I am inclined to allow the petition. 17. Accordingly, the petition is allowed and the scheme sanctioned on October 13, 2006, is modified to the extent that 3,45,466 equity shares of Rs. 10 each of IMFA presently held by the erstwhile ICCL shareholders trust stand cancelled and the consequent reduction of share capital of IMFA to the above extent is confirmed and minute of reduction, annexed as annexure 8 to the petition, is approved. 18. The registry will issue certified copy of the approved minute of reduction and the certified copy of this order to the petitioner within 10 days and within 30 days thereafter, the petitioner shall file the certified copy of this order and the approved minute of ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
