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TMI Blog2018 (3) TMI 1438X X X X Extracts X X X X X X X X Extracts X X X X ..... On 02.08.2000, as there was a mis-merge between the asset and equity capital, a Scheme was sought for. The merger was between Sterlite Industries (India) Limited viz., the appellant as it was known earlier and the resultant company Sterlite Optical Technologies Limited. This was done in pursuant to the order dated 02.08.2000 by the High Court of Judicature at Bombay in Company Petition No.595 of 2000 connected with Company Application No.257 of 2000. A subsequent order was passed by the said Court on 19.04.2002 in Company Petition No.203 of 2002 connected with Company application No.18 of 2002, which includes the Scheme of Arrangement between the first respondent and the equity shareholders. The following are the relevant paragraphs. "4. PURCHASE OF SHARES:- 4.1.The Company shall on a date fixed by the Board following the Record Date, purchase not more than 2,79,96,278 Equity Shares (representing approximately 50%(fifty percent) of its issued, subscribed and paid-up equity share capital) from the Shareholders excluding the Equity Shares of those Shareholders from whom the Company receives a written intimation (in the relevant form provided for the purpose) within the stipulated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e highly unjust to allow the Central Government to raise an objection of this nature at the appellate stage. The draft order of the learned company Judge records that the Central Government has submitted to the order of the court. The learned Judge specifically recorded in the minutes of order that the Central Government has no objection tot he scheme. As indicated earlier a vast majority of shareholders have exercised their option in accordance with the scheme. The value of the cheques deposited and realised by the shareholders in response to the option is more than Rs. 158 crores. In these circumstances, in our opinion it would be wholly inequitable to entertain this objection at such belated stage Although we are not inclined to accept the submission that a deemed or negative consent should not be permitted, we wish to make it clear that our order should not be understood to mean that we have approved such a provision. We have been told that several such schemes containing provisions of deemed or negative consent have been filed before the Company Judge. It will be open for the Central Government to raise objection to such schemes and if such objection is raised we are sure that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ement made by Mr Chagla as indicated above. 5. There appears to be some fraud committed, resulting in falsification of records without the knowledge of the actual investors. One such case involves the first respondent, whose address was changed without her knowledge, though she did not give any change of address. Thus, she did not receive any dividend on the shares nor any notice either from her Agent or from the appellant. 6. The first respondent sought issuance of share certificates from the Sterlite Optical Technologies Limited and also sought to know the procedure on the issuance of duplicate certificate to Sterlite Industries (India) Limited. The holding of the first respondent was accordingly confirmed by the second respondent. 7. The order dated 19.04.2002 passed by the High Court of Bombay speaks about reduction of capital shares from Rs. 10 to Rs. 5 as stated above. The scheme also contemplated buyback of shares from those who are willing. The first respondent did not make any endeavour to express her willingness. It is to be noted that no offer of buyback was given. The first respondent sought an advice on buyback. Thereafter, the first respondent wrote to the appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other to the Bombay Stock Exchange. 12. Despite having no relief, the first respondent pursued the matter once again before the SEBI through a complaint dated 05.03.2009. The SEBI wrote a letter on the complaint to the Registrar of Companies on 18.09.2009. Thereafter, the first respondent issued legal notice and sought remedy by invoking Section 111A read with 111(4) of the Companies Act, 1956 with the following prayers. "1. Direct the respondent No.1 to reinstate 87,330 equity shares in the name of the petitioner or in the alternative Direct to assess and pay the value of the impugned 87,330 equity shares after valuing the shares based on the highest price quoted in the Stock Exchange during the period of the alleged lodgement of the application/Consent for buyback by the Petitioner and the date of effecting the registration of the buyback. 2. Direct the Respondent No.1 to pay the dues for an amount of Rs. 12,36,795.50 (rupees Twelve Lakhs Thirty Six Thousand Seven Hundred ninety Five and Fifty Paisa only) to the petitioner being dividends declared by Respondent No.1 from 1996 till date. 3. and grant such other and further reliefs as the honourable Court deems fit and prop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iginally there were two Schemes contemplated. One is with respect to buying share in the resultant company and the other is selling the shares in the erstwhile appellant company. Admittedly, the first respondent was not put on notice. Therefore, there is no invitation to offer and then acceptance as required under Section 7 of the Indian Contract Act, 1872. There is absolutely no material to hold that the first respondent was put on notice, received the intimation and accepted or refused the offer expressed. As the primary facts are not in dispute, the Company Law Board has rightly decided that the negligence and the fraud committed would make the appellant liable. As the issues have been considered at length, no interference is required. 17. After hearing the arguments, this Court wanted to explore the possibility of making payment to the first respondent by the appellant in lieu of the shares. Though both the counsels do not have any serious objection with respect to the alternative prayer being considered, there appears to be difference in terms of quantification of value of the shares with reference to the reckoning date of such valuation. 18. In the light of the above narrat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... D OTHERS ((1998) 7 Supreme Court Cases 105) actually helps the case of the first respondent. "So we conclude the principle of law as decided by the High Court that jurisdiction of Court under Section 155 is summary in nature cannot be faulted. reverting to the second limb of submission by learned counsel for the appellant that court should not have directed for seeking permission to file suit only because a party for dispute sake states that the dispute raised is complicated question of facts including fraud to be adjudicated. The court should have examined itself to see whether even prime facie what is said is complicated question or not. Even dispute of fraud, if by bare perusal of the document or what is apparent on the face of it on comparison of any disputed signature with that of the admitted signature the Court is able to conclude no fraud, then it should proceed to decide the matter and not reject it only because fraud is stated. Further on the other hand learned counsel for the respondent totally denies any share having been purchased by the appellant-company or any amount paid to it. No transfer of any such share was ever approved by the Board of Director. It is urged t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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