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TMI Blog2016 (1) TMI 548X X X X Extracts X X X X X X X X Extracts X X X X ..... e possible for the Court to examine as to whether the object sought to be achieved by the first part in the scheme has, in fact, been achieved or not. After the implementation of part one of the scheme, shareholding pattern, the business, the profits etc. of the transferor and the transferee company will certainly have a change. Those figures are required to be presented before the members and shareholders of the resultant company and the other companies, which are sought to be merged or demerged with the resultant company. Merely because, as is sought to be claimed by learned counsel for the petitioners that, there may be some delay in the process of sanctioning the scheme will not be a good ground to approve a composite scheme involving different companies and different aspects having no relations inter-se. If a composite petition is to be filed, it should be arrangement between two or more companies not different arrangements involving different companies. No doubt, the Court will not examine the business principles or commercial wisdom of the members of the companies at the time of sanctioning of scheme, but still compliance of procedural requirement is within the domain and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... austern India Sales Private Limited after Scheme of Arrangement becoming effective will be re-named as Talbros International Limited. CP No. 112 of 2015 8. The petition has been filed for approval of the Scheme vide which demerger of FPO Business (Demerged Undertaking-I) of Quatrro Business Support Services Private Limited (Petitioner Company I / Demerged Company 1) into Quatrro Global Services Private Limited (First Resulting Company/ Demerged Company 2/ Petitioner Company II). This is one part of the Scheme. 9. The second part provides for demerger of QGS FPO Business (Demerged Undertaking-II) of Quatrro Global Services Private Limited (First Resulting Company/ Demerged Company 2/ Petitioner Company II) into Quatrro Business Support Solutions Private Limited ( Second Resulting Company/ Petitioner Company III). 10. Meaning thereby in first part of the Scheme, Quatrro Business Support Services Private Limited is the Transferor Company and Quatrro Global Services Private Limited is the Transferee Company, whereas in the second part of the Scheme, Quatrro Global Services Private Limited is the Transferor company, whereas Quatrro Business Support Solutions Private L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vate Limited, Pearl Tile Marketing Private Limited and Cheri Ceramics Private Limited are the Transferor Companies and Kajaria Securities Private Limited is the Transferee Company, whereas in the second part of the Scheme, Kajaria Securities Private Limited is the Transferor company, and Kajaria Portfolio Private Limited is the Transferee Company. Arguments 17. Learned counsel for the petitioners submitted that the composite scheme has been prepared as all the issues have been examined in detail by the consultant. All the companies belong to one group. The Scheme has been approved by the shareholders/ creditors of the companies, hence, the petition at the second stage should not be dismissed only on the ground of maintainability that a composite petition was not maintainable. 18. While referring to the provisions of Section 394 of the Companies Act, 1956 (for short, 'the 1956 Act'), it was submitted that the words used therein are not in singular rather in plural. Hence, it cannot be opined that a composite petition was not maintainable. The provision provides that a petition for sanctioning of a compromise or arrangement between a company and any such persons, can be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot come to the rescue of the petitioners, as no such law has been laid down. General principles have been laid down therein providing for guidelines as what is to be examined by the Company Court for the purpose of approval of a Scheme as sanctioned by the shareholders/ creditors. He further submitted that in none of the judgments cited by the petitioners, the Schemes were such as are sought to be approved by the petitioners. As in all cases only two or more companies were involved, which were part of one scheme and not different schemes. 20. In terms of provisions of Section 394 of the Act, there could be amalgamation of any number of companies in one company but not that part of business of one company 'A' is to be merged in company 'B' and other companies are sought to be merged with Company-A. Both the schemes independently have no connection whatsoever as these are independent schemes. Balance-sheets, figures and financial of all the companies would be different. The shareholders sitting in the Board rooms may approve or disapprove anything but it is ultimately for the Company Court to see as to whether the process followed can be approved or not. 21. Hea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 391 sub-Section (1). 5. That all the requisite material contemplated by the proviso of sub-Section (2) of Section 391 of the Act is placed before the Court by the applicant concerned seeking sanction for such a scheme and the Court gets satisfied about the same. 6. That the proposed scheme of compromise and arrangement is not found to be violative of any provision of law and is not unconscionable, nor contrary to public policy. For ascertaining the real purpose underlying the scheme with a view to be satisfied on this aspect, the Court, if necessary, can pierce the veil of apparent corporate purpose underlying the scheme and can judiciously X-ray the same. 7. That the Company Court has also to satisfy itself that members or class of members or creditors or class of creditors, as the case may be, were acting bona fide and in good faith and were not coercing the minority in order to promote any interest adverse to that of the latter comprising of the same class whom they purported to represent. 8. That the scheme as a whole is also found to be just, fair and reasonable from the point of view of prudent men of business taking a commercial decision beneficial to the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the paid up capital to the extent of ₹ 70/- for every preference share of ₹ 100/- each to the extent of ₹ 8/- for every ordinary share of ₹ 10/- each and to the extent of ₹ 4/- each for every deferred share of ₹ 5/- each (c) for consolidation of the shares and for issue of fully paid up ordinary shares of ₹ 10/- each in lieu of preference, ordinary and deferred shares and for allotment of 3 fully paid up ordinary shares of ₹ 10/- each in lieu of one preference share of ₹ 100/- each including the arrears of dividend thereon (d)- for reduction of the authorized capital of the company to ₹ 37,50,000/- divided into 3,75,000 ordinary shares of ₹ 10/- each (e) for further issue of ₹ 2,83,142/- ordinary shares of ₹ 10/- each subject to the sanction of the Controller of the Capital Issues out of which 1,20,000/- ordinary shares are to be allotted to the Managing Agents or their nominees in part satisfaction of their dues from the company to the extent of ₹ 12 lacs, 66, 858 ordinary shares are to be offered to the existing shareholders of the company and the remaining 96,284 ordinary shares are to be d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpany. The secured creditors are to be paid in full in the manner set out in the scheme. The balance of 50 per cent. of the claim of the unsecured creditors are to be frozen for a period of two years and thereafter the said claims are to be satisfied as provided in the scheme. The dues of the workers are to be paid by certain stages. Some of the detailed features of the scheme will be examined while considering the objections raised by those contesting the scheme. 31. In Vodafone Essar Gujarat Limited's case (supra), the Scheme envisaged demerger of part of business of A company and merger thereof with other. It provided for demerger of passive infrastructure assets of the transferor companies and vesting with transferee companies. 32. In Hindustan Lever's case (supra), as well, the scheme provided for arrangement between two companies only. 33. In PMP Auto Industries Limited's case (supra), the Scheme involved three companies, in terms of which Company A was to be amalgamated with Company B and immediately thereafter company B was to be amalgamated with Company C but it was not part of a single petition filed before the Company Court, as for sanct ..... X X X X Extracts X X X X X X X X Extracts X X X X
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