Gujarat High Court
Deep Industries Limited vs Respondent(S) on 9 December, 2015
Author: Abhilasha Kumari
Bench: Abhilasha Kumari
O/COMA/376/2015 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
COMPANY APPLICATION NO. 376 of 2015
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DEEP INDUSTRIES LIMITED....Applicant(s)
Versus
......Respondent(s)
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Appearance:
MR. BANDISH SOPARKAR, ADVOCATE FOR MRS SWATI SOPARKAR,
ADVOCATE for the Applicant(s) No. 1
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CORAM: HONOURABLE SMT. JUSTICE ABHILASHA
KUMARI
Date : 09/12/2015
ORAL ORDER
1 This application is filed by the abovenamed Applicant company by Judges Summons dated 4th December 2015, under Sections 391 to 394 read with Sections 100 to 103 of the Companies Act, 1956, in a proposed Composite Scheme of Arrangement in the nature of Amalgamation of five Transferor Companies viz. Kanvel Finance Private Limited and Kanvel Oil and Gas Private Limited and Prabhavati Properties Private Limited and Savla Enterprise Private Limited and Yash Organochem Private Limited with Deep Industries Limited, the Applicant Transferee Company and Restructure of Share Page 1 of 10 HC-NIC Page 1 of 10 Created On Sat Dec 12 01:20:36 IST 2015 O/COMA/376/2015 ORDER Capital of Deep Industries Limited.
2 Mr. Bandish Soparkar, learned advocate appears for Smt. Swati Soparkar, learned advocate for the applicant Company and has made the submissions for seeking directions for convening separate meetings of the Equity Shareholders and Secured Creditors of the Applicant Company. He has further prayed for the dispensation of the meeting of the Unsecured Creditors of the Applicant Company and sought dispensation of the procedure under sections 101(2) of the Companies Act, 1956 and Rule 46 to 65 of the Companies (Court) Rules 1959.
3 It has been stated in paragraph 14 of the affidavit in support of the Judges' Summons that the proposed Scheme does not envisage any compromise with the Creditors of the company. It has been further submitted that the Transferee Company has a substantially positive net worth. The Net worth of the Applicant Company, as on 30th September 2015, in both the prescheme and postscheme scenario, is Rs.222.09 Crores. The said contention is substantiated by a certificate from the Chartered Accountant. Hence, the Page 2 of 10 HC-NIC Page 2 of 10 Created On Sat Dec 12 01:20:36 IST 2015 O/COMA/376/2015 ORDER rights and interests of the Creditors of the Company are not likely to be prejudicially affected as a result of the proposed Scheme. However, in compliance with the contractual terms with its Secured Creditors, the Companoy has sought directions to convene the meeting of its Secured Creditors. It has been submitted that, since the Applicant has undertaken to fulfill all its liabilities towards the creditors in the regular course of business, the approval of the unsecured creditors of the Applicant Transferee Company is not essential for the consideration and sanction of the said Scheme.
4 Considering the said submissions, and in view of the facts and circumstances, it is hereby held that the meeting of the unsecured creditors for considering and approving the proposed Scheme is not necessary and the same is hereby dispensed with.
5 The attention of the Court is drawn to paragraph 16 of the affidavit in support of the Judges' Summons. It has been pointed out that the reduction of the capital envisaged under the Scheme is consequential, Page 3 of 10 HC-NIC Page 3 of 10 Created On Sat Dec 12 01:20:36 IST 2015 O/COMA/376/2015 ORDER arising on cancellation of shares held in the Applicant Company by the Transferor Companies. The same is proposed as an integral part of the Scheme of Arrangement. It has been further pointed out that the proposed reduction does not involve either diminution of liability in respect of unpaid share capital or payment to any shareholder of any paidup share capital and the order of the Court sanctioning the Scheme shall be deemed to be an order under Section 102 of the Companies Act, 1956, confirming the reduction. It has also been clarified that considering the issue of new shares of the Transferee Company to be issued to the shareholders of the Transferor Companies, as envisaged in Clause 10 of the Scheme, there shall not be any Net Reduction in the Paid Up Share Capital of the Applicant Company. However, out of abundant caution, the approval granted to the present Scheme by the Equity Shareholders of the Applicant Company at the meeting proposed to be convened, shall be treated as the Special Resolution as required under Section 100 of the Companies Act, 1956. It is further submitted that, the interest of the creditors of the Applicant Company is not, in any Page 4 of 10 HC-NIC Page 4 of 10 Created On Sat Dec 12 01:20:36 IST 2015 O/COMA/376/2015 ORDER way, affected by such reduction. Learned Counsel for the applicant has placed reliance upon a judgment of this Court 05.03.2015, passed in Company Petition No. 264 of 2014 in Company Application No. 268 of 2014 and cognate matters in the case of Grace Castings Limited. 6 In view of the above facts and circumstances and considering the above submissions and the judgment relied upon on behalf of the applicant, dispensation is sought from the procedure prescribed under Section 101(2) of the Companies Act, 1956 and under rule 46 to 65 of the Companies (Court) Rules, 1959, and the same is hereby granted.
7 The attention of the Court has been further drawn to paragraphs 12 and 13 of the affidavit in support of the Judges' Summons. It has been pointed out that being a listed public limited company, the Applicant has obtained the requisite prior approval of SEBI through the concerned stock exchanges viz. BSE Limited and National Stock Exchange of India Limited and the observation letters are already placed on record. It has been further pointed out that as compliance of Page 5 of 10 HC-NIC Page 5 of 10 Created On Sat Dec 12 01:20:36 IST 2015 O/COMA/376/2015 ORDER clause 5.16(a) of SEBI circular No. CIR/CFD/DIL/5/2013 dated February 4,2013 read with SEBI circular No. CIR/CFD/DIL/8/2013 dated May 21,2013, the requisite procedure shall be undertaken, in order to obtain the approval of the public shareholders through Postal Ballot and evoting.
8 Whereas, upon reading of the affidavit dated 2nd December 2015, filed in support of the Judges' Summons for directions and other relevant annexures attached thereto in support of the contents of the affidavit filed by the deponent, (Exhibit 'C' being a copy of the proposed scheme of Arrangement), IT IS ORDERED:
9 That separate meetings of the Equity Shareholders and Secured Creditors of the Applicant Company shall be convened and held at Hotel Planet Landmark, Ambli Bopal Road,Off S.G.Road, Ahmedabad, in the State of Gujarat, on Wednesday, the 20th January 2016, respectively, at 10:00 a.m. and 11:30 a.m., for the purpose of considering and if thought fit, approving with, or without modifications, the proposed Composite Scheme of Arrangement in the nature of amalgamation of Page 6 of 10 HC-NIC Page 6 of 10 Created On Sat Dec 12 01:20:36 IST 2015 O/COMA/376/2015 ORDER five Transferor Companies viz. Kanvel Finance Private Limited and Kanvel Oil and Gas Private Limited and Prabhavati Properties Private Limited and Savla Enterprise Private Limited and Yash Organochem Private Limited with Deep Industries Limited, the Applicant Transferee Company and Restructure of Share Capital of Deep Industries Limited, as proposed between the Applicant Transferee Company and its Shareholders. 10 That at least 21 clear days before the meeting to be held as aforesaid, Notice convening the said meetings, indicating the day, the date, the place and the time as aforesaid, together with a copy of the Scheme of Arrangement, copy of the Explanatory Statement required to be sent under Section 393 of the Companies Act, 1956 and the prescribed Form of Proxy shall be sent by a prepaid letter posted under Book Post, addressed to each of the Equity Shareholders and Secured Creditors of the Applicant Company, at their last known address. The lists of shareholders and secured creditors with their names and addresses shall be placed on record by the Applicant Company. A certificate shall be obtained from the Postal Dept. confirming the total number of dispatches so made.
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O/COMA/376/2015 ORDER
11 That at least 21 clear days before the meetings to be held as aforesaid, Notice convening the said meetings indicating the day, the date, the place and time as aforesaid be published, stating that copies of the Scheme of Arrangement, the Explanatory 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 and/or at its Advocate's office i.e. 301, Shivalik10, Opp. SBI Zonal Office, S.M. Road, Ambavadi, Ahmedabad 380015 once each in 'Indian Express', English daily and 'Sandesh' Gujarati daily (both Ahmedabad editions).
12 Mr. Paras Savla, Director of the Applicant Company and failing him Mr. Rupesh Savla, the Director of the Applicant Company, shall be the Chairman of the aforesaid meetings to be held on 20th January 2016 and in respect of any adjournment or adjournments thereof. 13 That the Chairman appointed for the aforesaid meetings do issue advertisements and send out notices of the said meetings referred to above. It is further directed, that the Chairman of the meetings shall have Page 8 of 10 HC-NIC Page 8 of 10 Created On Sat Dec 12 01:20:36 IST 2015 O/COMA/376/2015 ORDER all powers under the Articles of Association of the Applicant Company and under the Companies (Court) Rules, 1959 in relation to conduct of meetings, including an adjournment of the meetings, and/or an amendment to the Scheme or resolution, if any, proposed at the meetings by any person(s) and to ascertain the decision of the meeting on a poll. 14 That the quorum for the said meetings shall be 15 (fifteen) for the meeting of the Equity Shareholders and 3 (Three) for the meeting of the Secured Creditors, present in person or through authorized representative or through proxy.
15 That voting by proxy is permitted provided that the proxy in the prescribed form and duly signed by the person entitled to attend and vote at the aforesaid meeting, or by his authorised representative, is filed with the Applicant Company at its registered office at Ahmedabad, not later than 48 hours before the said meeting.
16 That the value of the vote of each Equity Shareholder of the Company shall be as per the entries in the Registers of the company and that of the Page 9 of 10 HC-NIC Page 9 of 10 Created On Sat Dec 12 01:20:36 IST 2015 O/COMA/376/2015 ORDER Secured Creditors as per the books of accounts of the Applicant Company and where the entries in the records or registers are disputed, the Chairman of the meetings shall determine the value or number for the purposes of the meeting and his decision in that behalf would be final.
17 That the Chairman shall report to this Court, the result of the said meetings within 14 days of the conclusion of the meetings and the said Report shall be verified by his affidavit. The Applicant Company shall also place on record the result of the Postal Ballot and evoting by the public shareholders. 18 The Application is hereby disposed off.
(SMT. ABHILASHA KUMARI, J.) Bimal Page 10 of 10 HC-NIC Page 10 of 10 Created On Sat Dec 12 01:20:36 IST 2015