Gujarat High Court
Gujarat Gas Company Limited vs Respondent(S) on 20 November, 2014
Author: N.V.Anjaria
Bench: N.V.Anjaria
O/COMA/284/2014 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
COMPANY APPLICATION NO. 284 of 2014
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GUJARAT GAS COMPANY 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 : 20/11/2014
ORAL ORDER
A composite Scheme of Arrangement in the nature of Amalgamation of four group of companies named GSPC Gas Company Limited, Gujarat Gas Company Limited, Gujarat Gas Financial Services Limited and Gujarat Gas Trading Company Limited with GSPC Distribution Networks Limited and consequential restructuring of share capital of GSPC Distribution Limited, the transferee company is proposed and mooted under Sections 391 to 394 read with Sections 100 to 103 of the Companies Act, 1956.
2. In this regard, the applicant-Gujarat Gas Company Limited-transferor company has filed this Company Application, taking out the judge's summons and making the following prayers:
(i) for direction to hold and convene the meeting of the equity shareholders;
(ii) for direction to hold and convene the meeting of the unsecured creditors;Page 1 of 9
O/COMA/284/2014 ORDER
(iii) for dispensing with the sending
individual notice of the meeting of the unsecured creditors whose dues are below Rs.2,00,000/- or alternatively below Rs.1,00,000/-;
(iv) for exclusion of persons who have given security deposits for supply of gas provided by the company from the list of creditors and for dispensing with the requirement of obtaining their approval to the proposed Scheme of Arrangement;
3. In the affidavit dated 17th November, 2014 affirmed by one Rajeshwari Sharma, Company Secretary of the applicant company filed in support of the prayers, the basic details of the applicant company, having its shareholdings, objects about its incorporation etc. are stated. The benefits flowing from the proposed Scheme are set out. The material provisions of the proposed Scheme are also highlighted. The brief details of all the companies in the composite Scheme of Arrangement are also given.
4. Heard learned advocate Mrs. Swati Soparkar for the applicant company.
5. It was stated that the applicant-transferor 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. It has been pointed Page 2 of 9 O/COMA/284/2014 ORDER out that there are no secured creditors of the applicant company. The certificate from Chartered Accountant confirming the status of the secured creditors is placed on record at Exhibit-F. In view of the same, meeting of secured creditors is not required.
6. With regard to first and second prayers to hold and convene the meetings of the equity shareholders and unsecured creditors, following directions are issued:
6.1 At least 21 clear days before the meeting to be held as aforesaid, notice convening the said meeting, 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 all the unsecured creditors of the applicant company, at their last known address. The complete lists of equity shareholders 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.
6.2 At least 21 clear days before the meetings to be Page 3 of 9 O/COMA/284/2014 ORDER 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.
6.3 Shri M. K. Das (IAS), Joint Managing Director of GSPC Gas Company Limited, and failing him Shri Manish Verma, Executive Director of Gujarat State Petroleum Corporation Limited, and failing him Shri Ahmed Khan, General Manager of GSPC Gas Company Limited, and failing him Shri Sandeep Dave, Company Secretary of Gujarat State Petroleum Corporation Limited, shall be the Chairman of the aforesaid meeting to be held on 5th January, 2015 and in respect of any adjournment or adjournments thereof.
6.4 The Chairman appointed for the aforesaid meeting shall issue advertisement and sent out notices of the said meeting referred to above. It is further directed, that the Chairman of the meeting shall have all powers under Articles of Association of the applicant company and under the Companies(Court) Rules, 1959 in relation to conduct of meeting, including an adjournment of the meting, and/or and Page 4 of 9 O/COMA/284/2014 ORDER amendment to the Scheme or resolution, if any, proposed at the meeting by any person(s) and the ascertain the decision of the meeting on a poll.
6.5 The quorum for the said meetings shall be 15(Fifteen) for the meeting of the equity shareholders, as well as unsecured creditors present in person, through authorized representative or through proxy.
6.6 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 meeting, or by his authorized representative, is filed with the applicant company at its registered office at Ahmedabad not later than 48 hours before the said meeting.
6.7 The value of the vote of each shareholder of the company shall be as per the records of the applicant company and that of each creditor of the company shall be as per the entires in the books of accounts of the applicant company and where the entries in the records are disputed, the Chairman of the of the meeting shall determine the value for the purposes of the meetings and his decision in that behalf would be final.
6.8 The applicant shall take necessary steps for and allow the requisite procedure for postal ballot and e-voting for the approval of the Scheme from its public shareholders in compliance with the applicable SEBI circulars.Page 5 of 9
O/COMA/284/2014 ORDER 6.9 The Chairman 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. The said report shall also include the result of the postal ballot and e-voting.
7. The next prayer (iii) of the applicant company and with reference to submission in paragraph-17 of the affidavit is for exemption from issuing individual notice to the unsecured creditors of the applicant company whose dues are below 2 Lacs or Rs.1 Lac by giving break up details of such creditors as on 30 th September, 2014. It was pointed out that approximately, the total number of creditors whose dues are less than Rs.2 Lacs are 262 in number and constitutes approximately 57.45% of the total and 1.08% of the value over the total debt. Similarly, the unsecured creditors having their dues more than Rs.2 Lacs are 194 in number. It is approximately 42.55 % of the total and 98.92% of the value over the total debt. Similarly, the unsecured creditors having their value less than or equal to Rs. 1 Lac are 218 in number which constitutes approximately 47.81% of the total and 0.54% of the value over the total debt. It was further pointed out that the creditors whose dues are more than Rs.1 Lacs are 238 in number and constitutes approximately 52.19% of the total and 99.46% of the value over the total debt.
7.1 The aforesaid prayer regarding permission for not sending notices to this segment of unsecured creditors Page 6 of 9 O/COMA/284/2014 ORDER 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 with respect to the proposed meeting where the proposed Scheme is to be put for consideration that the notices are given to all the unsecured creditors irrespective of the extent of 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. The next prayer (iv) and with reference to submission in paragraph-18 of the affidavit is that the company may be permitted to exclude the persons who have given security deposits for the supply of gas. Following facts are stated in support in paragraph-18 of the affidavit:
"the Unsecured Creditors as reflected in the financial statements of the Applicant Company include different categories, (i) Trade Payable
(ii) Creditors for Capital goods and services and (iii) Security Deposits from Customers for supply of gas or deposit for Minimum Guaranteed Offtake (MGO) or availing gas connection Page 7 of 9 O/COMA/284/2014 ORDER services from the company. It is respectfully submitted that the proposed Scheme does not prejudicially affect the interest of such customers. Upon scheme being effective, all the current activities pertaining to retail gas distribution of the Applicant Transferor Company shall be continued by the Transferee Company and hence the benefits available to the customers are not being hampered at all. The Applicant Company has no financial liability to repay any such deposit so long as the supply contract continues. Considering the said situation, it is prayed that creditors being persons who have given security deposits be permitted to be excluded from the list of Unsecured creditors whose approval is being sought to the proposed scheme.".
8.1 The above class of unsecured creditors are the security depositors and customers being the service taken and though they may be classified as unsecured creditors, in view of what is submitted in paragraph- 18 above and considering the fact that the proposed Scheme is not going to prejudicially affect any of these customers and the above class of customers, the requirement of obtaining their approval to the Scheme would be dispensed with.
8.2 It is accordingly directed that the persons who have given security deposits for the supply of gas provided by the company from the list of the creditors Page 8 of 9 O/COMA/284/2014 ORDER may not be treated as creditors and the requirement of their approval to the proposed Scheme is hereby dispensed with. Prayer (iv) is granted.
9. The present application is allowed and disposed of to the extent above and in the terms above.
(N.V.ANJARIA, J.) chandrashekhar Page 9 of 9