Gujarat High Court
Torrent Power Limited vs Respondent(S) on 24 February, 2015
Author: Harsha Devani
Bench: Harsha Devani
O/COMA/44/2015 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
COMPANY APPLICATION NO.44 of 2015
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TORRENT POWER LIMITED....Applicant(s)
Versus
......Respondent(s)
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ppearance:
MRS SWATI SOPARKAR, ADVOCATE for the Applicant(s) No.1
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CORAM: HONOURABLE MS. JUSTICE HARSHA DEVANI
Date : 24/02/2015
ORAL ORDER
1. A composite Scheme of Amalgamation of two companies namely, Torrent Energy Limited and Torrent Cables Limited with Torrent Power Limited, the Transferee Company is proposed under sections 391 to 394 of the Companies Act, 1956. The applicant - Torrent Power Limited has taken out a Judges' Summons dated 20th February, 2015 seeking directions for convening the meeting of the equity shareholders of the applicant Company for the purpose of considering and approving the proposed Scheme of Arrangement; and for seeking dispensation of meeting of the unsecured creditors of the applicant Company.
2. Mrs. Swati Soparkar, learned counsel for the applicant invited attention to paragraph 13 of the affidavit in support of the Judges' Summons to point out that the applicant
- Transferee Company is a profit making and dividend paying company and that it is financially very strong and has a very Page 1 of 6 COMPANY APPLICATION/44/2015 26/02/2015 02:16:04 AM O/COMA/44/2015 ORDER high positive net worth. It was submitted that the net worth of the Transferee Company even post scheme scenario is envisaged to be more than Rs.5,600 crores which contention is substantiated by a certificate from the Chartered Accountant. It is accordingly submitted that the rights and interests of the unsecured creditors of the applicant Company are not in any manner prejudicially affected due to the proposed scheme. The applicant - Transferee Company shall be in a position to meet with all its liabilities towards the unsecured creditors of the applicant Company in the regular course of its business and the scheme does not envisage any compromise on the part of these unsecured creditors. In view of the above, the learned advocate has prayed that the meeting of the unsecured creditors be dispensed with.
3. In the light of the facts and submissions noted hereinabove, the meeting of the unsecured creditors is hereby dispensed with. It is, however, clarified that the dispensation with the said meeting shall not take away the right of the creditors to raise objections to the scheme. It shall also not come in the way of considering such objections to the scheme, if any, raised by the creditors before granting the final sanction to the proposed scheme.
4. The learned counsel has also invited the attention of the court to paragraph 14 of the affidavit in support of the Judges' Summons to point out that apart from the contention taken with regard to the positive net worth of the Transferee Company, pursuant to the contractual terms of the loan agreements, approval of the secured creditors is required to be obtained. In compliance of the same, the applicant Company Page 2 of 6 COMPANY APPLICATION/44/2015 26/02/2015 02:16:04 AM O/COMA/44/2015 ORDER has already approached its secured creditors and has undertaken to place on record the approval before the final sanction of the scheme. In the light of the aforesaid facts, no directions are required to be issued as regards convening the meeting of the secured creditors.
5. The applicant further seeks a direction to convene a meeting of the equity shareholders of the company to obtain their approval to the proposed scheme. In the circumstances, the following directions are issued:
6. That a meeting of the Equity Shareholders of the applicant Company shall be convened and held at the J.B. Auditorium, Torrent-AMA Centre, Ahmedabad Management Association, ATIRA, Dr. Vikram Sarabhai Marg, Ahmedabad 380 015, in the State of Gujarat on Thursday, the 30 th day of April, 2015 at 9.30 a.m., for the purpose of considering and if thought fit, approving with or without modifications, the proposed Composite Scheme of Amalgamation of Torrent Energy Limited and Torrent Cables Limited, the Transferor Companies with Torrent Power Limited, the applicant Transferee Company; as proposed between the company and its Equity Shareholders.
7. That 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 a pre-paid letter posted under Page 3 of 6 COMPANY APPLICATION/44/2015 26/02/2015 02:16:04 AM O/COMA/44/2015 ORDER Book Post, addressed to each of the Equity Shareholder of the applicant Company, at their last known address. The complete list of Equity Shareholders 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.
8. That 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 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, Shivalik-10, Opp. SBI Zonal Office, S.M. Road, Ambavadi, Ahmedabad 380 015 once each in the English daily 'Times of India' and the other in Gujarati dailies 'Gujarat Samachar' and 'Sandesh', Ahmedabad Editions.
9. Shri Sudhir Mehta, the Executive Chairman of the applicant Company, and failing him Shri Samir Mehta, the Executive Vice Chairman of the applicant Company, and failing him Shri Markand Bhatt, Whole Time Director of the applicant Company, shall be the Chairman of the aforesaid meeting to be held on 30th April, 2015 and in respect of any adjournment or adjournments thereof.
.10. That the Chairman appointed for the aforesaid meeting do issue advertisements and send out notices of the Page 4 of 6 COMPANY APPLICATION/44/2015 26/02/2015 02:16:04 AM O/COMA/44/2015 ORDER said meeting referred to above. 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 adjournment of the meeting, and/or an amendment to the Scheme or resolution, if any, proposed at the meeting by any person(s) and to ascertain the decision of the meeting on a poll.
11. That the quorum for the said meeting shall be 15 (Fifteen) for the meeting of the Equity Shareholders of persons present in person, or through authorized representative or through proxy.
12. 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.
13 That the value of the vote of each shareholder of the Company shall be as per the records 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 meeting and his decision in that behalf would be final.
14. The attention of the court is drawn to the contention taken vide Para 9 of the affidavit in support of the Judges' Summons. Since the applicant Company is a listed public Page 5 of 6 COMPANY APPLICATION/44/2015 26/02/2015 02:16:04 AM O/COMA/44/2015 ORDER limited company, the requisite approvals from the concerned stock exchanges have been placed on record as Exhibit 'E'. Further, it has been pointed out that the compliance of clause 5.16(a) of the SEBI circulars dated 4 th February, 2013 and 21 st May, 2013 is applicable to the applicant Company and it is obligatory to obtain the approval from the public shareholders through e-voting and postal ballot. Hence, in addition to the above, the applicant shall take necessary steps for and follow the requisite procedure for postal ballot and e-voting for the approval of the scheme from its public shareholders in compliance with the aforesaid SEBI circulars.
15. That the Chairman appointed for the meeting do report to this Court, the result of the said meeting within 40 days of the conclusion of the meeting and the said Report shall be verified by his affidavit. Further, the said report shall also include the result of the postal ballot and e-voting as referred in para 13 hereinabove.
16. The application is hereby disposed of.
( Harsha Devani, J. ) hki Page 6 of 6 COMPANY APPLICATION/44/2015 26/02/2015 02:16:04 AM