Gujarat High Court
Essar Ports Limited vs Respondent(S) on 26 April, 2016
Author: Abhilasha Kumari
Bench: Abhilasha Kumari
O/COMA/189/2016 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
COMPANY APPLICATION NO. 189 of 2016
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ESSAR PORTS LIMITED....Applicant(s)
Versus
......Respondent(s)
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Appearance:
MR SAURABH SOPARKAR, SENIOR ADVOCATE WITH MRS SWATI
SOPARKAR, ADVOCATE for the Applicant(s) No. 1
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CORAM: HONOURABLE SMT. JUSTICE ABHILASHA KUMARI
Date : 26/04/2016
ORAL ORDER
1. A Composite Scheme of Arrangement is proposed amongst Vadinar Oil Terminal Limited, Vadinar Ports & Terminals Limited, Essar Ports Limited, Essar Power and Minerals Limited, Hazira Coke Limited and Yash Hotels Private Limited under Sections391 to 394 read with Sections100 to 103 of the Companies Act, 1956 and Section52 of the Companies Act, 2013.
2. In this regard, the present application is filed by Essar Ports Limited, the Applicant Resulting Company1 and Demerged Company2. In the Judges' Summons taken out, dated 19th April 2016, it has prayed (i) for seeking directions for convening Page 1 of 9 HC-NIC Page 1 of 9 Created On Sat Apr 30 00:57:09 IST 2016 O/COMA/189/2016 ORDER separate meetings of the Equity Shareholders and Unsecured Creditors of the Applicant Company, for the purpose of considering and approving the proposed Scheme of Arrangement, there being no Secured Creditors of the Applicant Company as on date and (ii) dispensation from the procedure prescribed under Section 101(2) of the Companies Act, 1956 and under rules 48 to 65 of the Companies (Court) Rules 1959 with regard to the proposed Restructure of Share Capital in form of Utilisation of Security Premium Account as well as Reduction of Issued, Subscribed and Paid up Capital of the Applicant Company.
3. Heard Mr.Saurabh Soparkar, learned Senior Advocate appearing with Mrs.Swati Soparkar, learned advocate for the Applicant Company.
4. The attention of the Court is drawn to paragraph 12 of the Affidavit in support of the Judges' Summons. It has been pointed out that pursuant to clause 25.2, 38.2, & 51.2 of the Scheme, the utilisation of Securities Premium Reserve Account and pursuant to clause 78 of the Scheme, the reduction of the existing Equity Share Capital of the Applicant Company is Page 2 of 9 HC-NIC Page 2 of 9 Created On Sat Apr 30 00:57:09 IST 2016 O/COMA/189/2016 ORDER envisaged. The same is consequential in nature and is proposed as an integral part of the proposed 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. 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 been further submitted that the approval granted to the present Scheme by the Equity Shareholders of the Applicant Company at the Court convened meeting shall be treated as the Special Resolution as required under Section 100 of the Companies Act, 1956. It is further submitted that, the interests of the creditors of the Applicant Company are not in any way affected by such reduction. In view of the facts and circumstances and considering the submissions advanced, dispensation is sought from the procedure prescribed under Section 101(2) of the Companies Act, 1956 and under rules 48 to 65 of the Companies (Court) Rules 1959 and the same is hereby granted.
IT IS ORDERED:
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5. That separate meetings of the Unsecured Creditors and Equity Shareholders of the Applicant Company shall be convened and held at the Refinery Administrative Building, Essar Refinery Site, Okha Highway (SH - 25), Khambalia, Jamnagar 361305, in the State of Gujarat on Wednesday, the 25th day of May 2016 respectively at 2.00 p.m. and 2.45 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 Demerger and Transfer of "Demerged Undertaking 1" or "Identified Business Undertaking 1" comprising the tankage business of Vadinar Ports & Terminal Limited (VPTL), including VPTL's strategic investments in (i) Essar Dredging Limited; (ii) Essar Bulk Terminal Limited; and (iii) Essar Bulk Terminal (Salaya) Limited respectively to Essar Ports Limited, Demerger and Transfer of De merged Undertaking 2 or "Identified Business Undertaking 2" comprising the tankage business division of EPL, including strategic investment, directly and indirectly in: (a) VOTL; and (b) VPTL to Essar Power and Minerals Limited (EPML), Demerger and Transfer of "Demerged Undertaking 3" or "Identified Page 4 of 9 HC-NIC Page 4 of 9 Created On Sat Apr 30 00:57:09 IST 2016 O/COMA/189/2016 ORDER Business Undertaking 3" viz. the business undertaking comprising of floating crane named Nand Shakti, a flat bottom crane barge of EPL, including EPL's strategic investment in Essar Bulk Terminal (Salaya) Limited to Hazira Coke Limited, (HCL), Demerger and Transfer of "Demerged Undertaking 4" or "Identified Business Undertaking 4" viz. the business undertaking comprising of the floating crane named Nand Siddhi, a Barge Unloader No. 5 and Tug Persistence of EPL, including EPL's strategic investment in Essar Bulk Terminal Limited to Yash Hotels Private Limited (YHPL), and consequential restructure of the share capital in the form of Utilization of Security Premium Account of EPL, as well as Reduction of Issued and Paid up Equity Share Capital of the Applicant De merged Company, as proposed between the company and its Equity Shareholders and Unsecured Creditors.
6. 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 the time as aforesaid, together with a copy of the Scheme of Arrangement, copy of the Explanatory Page 5 of 9 HC-NIC Page 5 of 9 Created On Sat Apr 30 00:57:09 IST 2016 O/COMA/189/2016 ORDER Statement required to be sent under Section 393 of the Companies Act, 1956 and the prescribed Form of Proxy shall be sent by a Courier / Registered post / Speed post or through Email (to those shareholders whose email addresses are duly registered with the Applicant Company for the purpose of receiving such notices by email), addressed to each of the Equity Shareholders and Unsecured Creditors of the Applicant Company, at their last known addresses. The complete lists of the 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 confirming the total number of dispatches so made.
7. 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 Page 6 of 9 HC-NIC Page 6 of 9 Created On Sat Apr 30 00:57:09 IST 2016 O/COMA/189/2016 ORDER the Applicant Company and/or at its Advocate's office i.e. 301, Shivalik10, Opp. SBI Zonal Office, S. M. Road, Ambavadi, Ahmedabad380015, shall be published once each in the English daily newspaper 'Indian Express', Ahmedabad Edition and the other in the Gujarati daily newspaper 'Sandesh', Rajkot Edition.
8. Mr.Rajiv Agarwal, the Director of the Applicant Company, and failing him Mr.K.K.Sinha, the Director of the Applicant Company, and failing him Mr.P.K. Srivastava, the Director of the Applicant Company, shall be the Chairman of the aforesaid meetings to be held on 25th May 2016 and in respect of any adjournment or adjournments thereof.
9. That the Chairman appointed for the aforesaid meetings shall 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 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, Page 7 of 9 HC-NIC Page 7 of 9 Created On Sat Apr 30 00:57:09 IST 2016 O/COMA/189/2016 ORDER 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 meetings on a poll.
10. That the quorum for the said meetings shall be 15 (Fifteen) for the meetings of the Equity Shareholders and 5 (Five) for the meeting of Unsecured Creditors, of persons present in person, or through authorized representative or through proxy.
11. 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 meetings, or by his authorised representative, is filed with the Applicant Company at its registered office at Jamnagar not later than 48 hours before the said meeting.
12. That 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 entries in the books of accounts of the Applicant Company and where the entries in the records are disputed, the Chairman of the meetings shall determine the value for the Page 8 of 9 HC-NIC Page 8 of 9 Created On Sat Apr 30 00:57:09 IST 2016 O/COMA/189/2016 ORDER purposes of the meetings and his decision in that behalf would be final.
13. That the Chairman appointed for the meetings 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.
14. The application is disposed of.
15. Mr.Soparkar, learned Senior Advocate has further submitted that for commercial reasons having substantial long term repercussions, there is an urgency to obtain the sanction of the Court at the earliest. In view of this, it is prayed that the Applicant may be permitted to move the substantive petition seeking sanction of the Court during the High Court vacation for the purpose of the admission of the petition. Considering the submissions, permission to do so is hereby granted.
(SMT. ABHILASHA KUMARI, J.) Gaurav+ Page 9 of 9 HC-NIC Page 9 of 9 Created On Sat Apr 30 00:57:09 IST 2016