Heard Mr.Mihir Thakore, learned Senior Advocate for the applicant Company. Mr.Mihir Thakore, learned Senior Advocate tenders consent letter of preference Creditor, Secured Creditor as well as Certificate of Chartered Accountant in original, which are taken on record.
In this Company Application, the applicant Company, Mafatlal Industries Limited, has prayed for holding a meeting of the Equity Shareholders of the applicant Company for the purpose of considering and, if thought fit, approving with or without modification(s), the arrangement embodied in the scheme of Arrangement and Amalgamation of Mishapar Investment Limited and Mafatlal Denim Limited with Mafatlal Industries Limited (Scheme) and for issuing appropriate directions incidental for holding of such meeting.
The applicant has prayed for dispensing with the meeting of the sole Preference Shareholder in view of the consent letter to the scheme received from the sole preference Shareholder of the Applicant Company. The Applicant has also prayed for dispensing with the meeting of the sole Secured Creditor in view of the consent letter to the scheme received from the sole secured Creditor of the Applicant Company.
4. The applicant has also prayed for dispensing with the meeting of the unsecured creditors of the applicant-Company in light of the fact that the rights and interests of the Unsecured Creditors of the Applicant Company are not affected by the Scheme.
5. By the present Scheme there would be a reduction of the share capital in the form of utilization of the Securities Premium Account of the Applicant Company and which under the scheme shall be effected as an integral part of the Scheme to which the Applicant Company has prayed for dispensing with following a separate procedure for reduction of the share capital. In the circumstances, the Applicant Company has also prayed that no meeting of the Creditors of the Applicant Company is required to be called for considering the aforesaid reduction.
6. Having gone through the application and the supporting affidavit of Shri Ramakant Patel dated 19th December,2012, and the Annexures therein referred to (Annexure-G being a copy of the Scheme) and having heard Mr.Mihir Thakore, learned Senior Counsel for the Applicant Company, I pass the following order:-
1. That the convening and holding of the meeting of the sole preference Shareholder of the Applicant Company, seeking approval to the Scheme is dispensed with in view of the Consent Letter given by the preference Shareholder of the Applicant Company which is annexed at Annexure-M to the affidavit in support of the summons for Directions.
2. That the convening and holding of the meeting of the sole Secured Creditor of the Applicant Company, seeking approval to the Scheme is dispensed with in view of the Consent Letter given by the Secured Creditor of the Applicant Company which is annexed at Annexure-O to the affidavit in support of the summons for Directions.
3. That a meeting of the Equity Shareholder of the Applicant Company shall be convened and held at Thakorebhai Desai Hall, Near Law Garden, Ellis bridge, Ahmedabad-380 006, on Friday, the 1st Day of February, 2013 at 10.30 a.m. (10:30 hours), for the purpose of considering, and if thought fit, approving with or without modification (s), the arrangement embodied Scheme of Arrangement and Amalgamation of Mishapar Investments Limited and Mafatlal Denim Limited with Mafatlal Industries Limited (Scheme).
4. That at least 21 clear days before the day appointed for the meeting to be held as aforesaid, advertisement convening the said meeting indicating the day, the date, the place and time aforesaid and stating that copies of the said Scheme and of the Statement required to be furnished pursuant to Section 393 of the Companies Act,1956, and Form of Proxy can be obtained free of charge at the Registered Office of the Applicant Company or at the office of its Advocates, i.e. Mr.Apurva Vakil, Rashmi , 24, Saurabh Society, B/h. Bungalow No.1, Vijay Char Rasta, Manav Mandir Road, Opp. University Ground, Ahmedabad-380009 and M/s.Singhi & Co. 7-8 Premchand House Annexu, Ashram Road, Old High Court Way, Ahmedabad-380009, be instead once in each of Indian Express , Ahmedabad Edition and Sandesh , Ahmedabad Edition. Publication of the advertisement in the Gujarat Government Gazette is dispensed with.
That, in addition, at least 21 clear days before the date of the meeting to be held as aforesaid, a notice convening the said meeting, indicating the day, the date, the place and time aforesaid, together with a copy of the said scheme, a copy of the Statement required to be furnished pursuant to Section 393 of the Companies Act, 1956 and the prescribed Form of Proxy, shall be sent by ordinary post addressed to each of the Equity Shareholders of the Applicant Company at their respective registered or last known addresses. The notice shall be sent to the Equity Shareholders of the the Applicant Company with reference to the list of the persons appearing on the record of the Applicant Company and its registered as on 21.12.2012.
That the settling and/or approval of the advertisement, the form of Notice and the Statement to accompany the Notice by the Registrar of this Court is dispensed with.
That Mr. Hrishikesh A. Mafatlal, the Chairman and Managing Director of the Applicant Company, and in his absence Mr.Praful R. Amin, the Director of the Applicant Company, and in his absence Mr.A.K. Srivastava, the Director of the Applicant Company shall be the Chairman of the aforesaid meeting to be held on Friday, the 1st day of February, 2012, and in respect of any adjournment or adjournments thereof.
That the Chairman appointed for the aforesaid meeting do issue the advertisement and send out the notices of the meeting referred to above. The Chairman are free to avail the services of the Applicant Company or any agency for carrying out the said direction. It is further directed that the Chairman of the meeting shall have all powers under the Articles of Association of the Applicant Company and under the Companies (Court) Rules, 1959 in relation to conduct of meeting including an amendment to the aforesaid Scheme or resolution, if any, proposed at the aforesaid meeting by any person(s) and to ascertain the decision of the aforesaid meeting on the poll.
That quorum for the meeting of the Equity Shareholders shall be 5 persons present in person.
That voting by proxy be permitted, provided that the proxy in the prescribed form duly signed by the person entitled to attend and vote at the meeting, is filed with the Applicant Company at its registered office at Asarwa Road, Ahmedabad-380016, Gujarat, not later than 48 hours before the meeting.
That the value of each member shall be in accordance with the books of the Applicant Company and where the entries in the books are disputed, the Chairman shall determine the value for purposes of the meeting and his decision in that behalf shall be final.
It is further ordered that the Chairman do report to this Court the result of the said meeting within 14 days of the conclusion of the meeting, and the said report shall be verified by his affidavit.
Mr.Mihir Thakore, learned Senior Counsel, submits that the meeting of the Unsecured Creditors of the Applicant Company is not required to be called for as there is no compromise or arrangement offered to any of the Unsecured Creditors and neither any liability of the Unsecured Creditors under the Scheme is being reduced or extinguished. Mr.Thokore, Ld. Senior Counsel, has stated that as per the financial position as on 30.9.2012, there is an excess of assets over liabilities in the case of the Applicant/Transferee Company. He has further stated that the combined excess of assets over liabilities (after taking into account cancellation of balances of inter-company investments and loan of companies) of the Transferor Companies and the Applicant/Transferee Company as on 30.9.2012 is about Rs.428.74 Crores. Mr.Thakore, learned Sr. Counsel has relied upon the order dated 31.5.2003 passed in Company Application N.30 of 2003 to substantiate his submission that when the interest of the creditor is in no way affected by the scheme, it is not obligatory to call a meeting of the creditors to obtain their views on the scheme.
Mr.Thokore, learned Senior Advocate, submits that there would be a reduction of Share Capital in the form of utilization of the Securities Premium Account which shall be effected as an integral part of the Scheme itself from this Court. Mr.Thakore, further submitted that the Equity Shareholders of the Applicant Company are to consider the Scheme in the meeting which includes the said reduction. As the procedure under section 100 of the Companies Act, 1956 being para material with the present proceedings no separate procedure for reduction of Share Capital is required to be followed. Further Mr.Thakore, learned Senior Advocate, submitted that the reduction of Share Capital does not in any manner affect the interests of the Creditors of the Applicant Company as such reduction does not involve either diminution of liability in respect of unpaid Share Capital or payment to the shareholder of Paid-up Share Capital. In this regard, Mr.Thakore, learned Sr. Counsel referred to Sections 100 and 101 of the Companies Act, 1956. Mr.Thakore relied upon the orders dated 31.1.2003 passed by this Court in Company Application No.30 of 2003 and the order dated 29.7.2008 passed by this Court in Company Application No.426 of 2008, wherein this Court has dispensed with the following a separate procedure for reduction of capital.
Hearing the submissions of Mr.Thakore and the orders cited above, I am of the view that meeting of the Unsecured Creditors for considering the aforesaid Scheme which includes reduction of Share Capital is not required to be called for as the rights of the creditors of the Applicant Company are in no manner affected by the Scheme. Further, I hold that no separate procedure is required to be followed for reduction of Share Capital in the form of utilization of the Securities Premium Account as the same is part and parcel of the Scheme.
This Company Application is disposed off accordingly.
(R.M.CHHAYA, J.) Suchit Page 8 of 8