Gujarat High Court
Gokul Refoils And Solvent Limited vs Respondent(S) on 21 November, 2014
Author: N.V.Anjaria
Bench: N.V.Anjaria
O/COMA/289/2014 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
COMPANY APPLICATION NO. 289 of 2014
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GOKUL REFOILS AND SOLVENT LIMITED....Applicant(s)
Versus
.....Respondent(s)
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Appearance:
MRS SWATI SOPARKAR, ADVOCATE for the Applicant(s) No. 1
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CORAM: HONOURABLE MR.JUSTICE N.V.ANJARIA
Date : 21/11/2014
ORAL ORDER
A composite Scheme of Arrangement in the nature of de-merger of and transfer of Gandhidham Undertakings (Gandhidham Undertaking and Gandhidham Windmill Undertaking) of Gokul Refoils and Solvent Limited to Gokul Agro Resources Limited; transfer of Sidhpur Undertaking (Sidhpur Undertaking and Sidhpur Windmill Undertaking) of Gokul Refoils and Solvent Limited to Gokul Agri International Limited and consequential restructure of the share capital in form of Utilization of Security Premium Account of Gokul Refoils and Solvent Limited, is proposed under Sections 391 to 394 read with Sections 100 to 103 of the Companies Act, 1956.
2. In this regard, the applicant-Gokul Refoils and Solvent Limited-the De-merged Company has filed this petition. In the judge's summons taken out dated 20th November, 2014, it is prayed (i) for seeking directions for convening seperate meetings of equity shareholders, secured creditors and unsecured creditors of Gokul Refoils and Solvent Limited, Page 1 of 9 O/COMA/289/2014 ORDER
(ii) for seeking dispensation from service of notice of meetings on small creditors, and (iii) for seeking dispensation of the procedure under Section 101(2) of the Companies Act, in relation to the proposed restructure of capital.
3. Heard learned advocate Ms. Swati Soparkar for the applicant company.
4. It was submitted that the applicant-De-merged Company is a listed public limited company. The company has placed on record the requisite approval from the concerned stock exchanges pursuant to the approval of the Scheme by SEBI.
5. As regards prayer for convening seperate meeting of equity shareholders, secured creditors and unsecured creditors, following directions are issued:
5.1 Separate meetings of the equity shareholders and unsecured creditors of the applicant company shall be convened and held at the registered office of the applicant company at State Highway No.41, Nr.
Sajanpur Patia, Sidhpur-384 151 in the State of Gujarat on Tuesday 23rd December, 2014 respectively at 11.00 a.m. to 3.00 p.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 de-merger of and transfer of Gandhidham Undertakings (Gandhidham Undertaking and Gandhidham Windmill Undertaking) of Gokul Refoils and Solvent Limited to Gokul Agro Page 2 of 9 O/COMA/289/2014 ORDER Resources Limited; transfer of Sidhpur Undertaking (Sidhpur Undertaking and Sidhpur Windmill Undertaking) of Gokul Refoils and Solvent Limited to Gokul Agri International Limited and consequential restructure of the share capital in form of Utilization of Security Premium Account of Gokul Refoils and Solvent Limited, as proposed between the applicant company and its equity shareholders and unsecured creditors.
5.2 A meeting of the secured creditors of the applicant company shall be convened and held at Hotel Sheraton, opp. Gujarat College, Ellisbridge, Ahmedabad-380 006 in the State of Gujarat on Monday 22nd December, 2014 respectively at 12.00 noon for the purpose of considering and if thought fit, approving with or without modifications, the proposed composite Scheme of Arrangement in the nature of de-merger of and transfer of Gandhidham Undertakings (Gandhidham Undertaking and Gandhidham Windmill Undertaking) of Gokul Refoils and Solvent Limited to Gokul Agro Resources Limited; transfer of Sidhpur Undertaking (Sidhpur Undertaking and Sidhpur Windmill Undertaking) of Gokul Refoils and Solvent Limited to Gokul Agri International Limited and consequential restructure of the share capital in form of Utilization of Security Premium Account of Gokul Refoils and Solvent Limited, as proposed between the applicant company and its secured creditors.
5.3 At least 21 clear days before the meeting to be held as aforesaid, notice convening the said meeting, Page 3 of 9 O/COMA/289/2014 ORDER 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 pre-paid letter posted under book post, addressed to each of the equity shareholders and creditor of the applicant company, at their last known address. The complete lists of equity shareholders, secured creditors and unsecured creditors to whom the service of notice is effected, with their names and addresses shall be placed on record by the applicant company. A certificate shall be obtained from the postal department confirming the total number of dispatches so made.
5.4 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 by 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 its Advocate's office i.e. 301, Shivalik-10, Opp. SBI Zonal Office, S.M. Road, Ambavadi, Ahmedabad 380 015 one each in the "Indian Express", English daily and "Divya Bhaskar"
Gujarati Daily, both Ahmedabad editions.
5.5 Mr. Mahesh Agrawal, Group CEO & CFO of the
Page 4 of 9
O/COMA/289/2014 ORDER
applicant company failing him, Mr. Atul Shah-
President-Directorate office and Strategy, shall be the Chairman of the aforesaid meetings to be held on 22nd and 23rd December, 2014 and in respect of any adjournment or adjournments thereof.
5.6 The Chairman appointed for the aforesaid meeting shall issue advertisement and send out notices of the said meetings referred to above. It is further directed, that the Chairman of the meetings shall have all powers under 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 and amendment to the Scheme or resolution, if any, proposed at the meeting by any person(s) and to ascertain the decision of the meetings on a poll.
5.7 The quorum for the said meetings shall be 15(Fifteen) for the meetings of the equity shareholders and unsecured creditors and shall be 3(Three) for the meeting of the secured creditors present in person, through authorized representative or through proxy.
5.8 Voting by proxy is permitted provided that proxy in the prescribed form and duly signed by the persons entitled to be and vote at the aforesaid meetings, or by his authorized representative, is filed with the applicant company at its registered office at Sidhpur not later than 48 hours before the said meetings.
5.9 The value of the vote of each shareholder of the Page 5 of 9 O/COMA/289/2014 ORDER company shall be as per the records of the applicant company and that each creditor of the company shall be as the entires in the books of accounts of the applicant company and where the entries in the records are disputed, the Chairman of the meeting shall determine the value for the purposes of the meetings and his decision in that behalf would be final.
5.10 The Chairman appointed for the meetings shall make report to this Court about 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.
6. The attention of the court was drawn to the contention taken vide paragraph-13 of the affidavit in support of the judge's summons. The requisite approval from the concerned stock exchanges has been placed on record at Exhibit-E. Further, it was pointed out that though the applicant company is a listed public limited company, clause 5.16(a) of the SEBI circulars dated 4th February, 2013 and 21st May 2013, is not applicable to the applicant company, so far as the proposed Scheme is concerned. The same therefore does not need to be complied with. Reliance was placed on the undertaking and the auditor's certificate submitted to the SEBI. A copy thereof is produced at Annexure-F. On perusal of the same and considering the facts and circumstances, this court does not issue any further directions to the applicant company to undertake the procedure of Page 6 of 9 O/COMA/289/2014 ORDER postal ballot and e-voting for seeking approval from the public shareholders.
7. With regard to prayer for dispensing with services of notice of meetings of the small creditors is concerned, the facts were stated to press the said prayer in paragraph-11 of the petition.
7.1 A submission is made on the basis of the tabular information giving the break up of the secured creditors in terms of the value of the individual debt being less than Rs.2 Lacs and Rs.1 Lac. It was submitted that approximately 70% of the number of the creditors have value of individual debt at less than Rs.2 Lac and in terms of value they constitute approximately 0.2% of the total value of debt. It was alternatively submitted that approximately 62% of the number of the creditors have value of individual debt at less than Rs.1 Las and in terms of value, they constitute approximately 0.12% of the total value of debt.
7.2 The aforesaid prayer regarding permission for not sending notices to this segment of unsecured creditors does not find favour with the court. Firstly, because the applicant company is going to hold and convene the meeting of the unsecured creditors as directed above, therefore, it would be in the fitness of things that the notices are given with respect to the proposed meeting and for consideration of the Scheme therein, to all the unsecured creditors irrespective of the extent of Page 7 of 9 O/COMA/289/2014 ORDER their dues. Secondly, the total number/percentage of above segment of unsecured creditors are in any case about 1/3 of the total number, as well in terms of representation of the total debt and therefore, the said prayer is not granted and it is directed that the applicant company shall send the notices to all the unsecured creditors irrespective of the value of the dues so that they are informed about the Scheme and the meeting proposed to be convened. This prayer is therefore not granted.
8. Reverting to the prayer about dispensation of procedure under Section 100 and 101(2) of the Companies Act, 1956 in paragraph-14 of the affidavit in support of the judge's summons, it has been submitted by the applicant company that the consequential restructure of share capital in form of the Utilization of Security Premium Account of the applicant company is proposed as an integral part of the proposed Scheme of Arrangement and the same does not involve either diminution of liability in respect of unpaid share capital or payment to any shareholder of any paid-up 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 confirming the reduction. It has been submitted that the approval granted to the present Scheme by the equity shareholders of the applicant company at the meeting convened as directed herein, shall be treated as the Special Resolution as required under Sections 78 and 100 of the Companies Act, 1956. It was stated that the interest of the creditors of the applicant Page 8 of 9 O/COMA/289/2014 ORDER company are not in any way affected by such reduction.
8.1 In view of above facts and position, the procedure prescribed under Sections 100 and 101(2) of the Companies Act, 1956 as well as prescribed under Rule 48 to 65 of the Companies (Court) Rules, 1959, are hereby dispensed with.
9. The application is hereby allowed and disposed of, as above.
(N.V.ANJARIA, J.) chandrashekhar Page 9 of 9