Gujarat High Court
Carnation vs Respondent(S) on 13 August, 2008
Author: C.K.Buch
Bench: C.K.Buch
Gujarat High Court Case Information System
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COMA/451/2008 9/ 9 ORDER
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
COMPANY
APPLICATION No. 451 of 2008
=========================================================
CARNATION
NUTRA ANALOGUE FOODS LIMITED - Applicant(s)
Versus
.
- Respondent(s)
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Appearance
:
MR
MIHIR THAKORE, LD.SENIOR COUNSEL WITH MR SANDEEP SINGHI FOR SINGHI &
CO for Applicant(s) :
1,
None for Respondent(s) :
1,
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CORAM
:
HONOURABLE
MR.JUSTICE C.K.BUCH
Date
: 13/08/2008
ORAL
ORDER
Heard Shri Mihir Thakore, learned senior counsel appearing with Shri Sandeep Singhi for Singhi & Co. for applicant.
By way of this application, the applicant has prayed for dispensing with the meeting of Unsecured Creditors of the applicant-Company. It has also prayed for holding a meeting of the Equity Shareholders of the applicant-Company for the purpose of considering and, if thought fit, approving with or without modification(s), the arrangement embodied in the Composite Scheme of Arrangement between Carnation Nutra-Analogue Foods Limited and Cadila Healthcare Limited and Zydus Hospitals and Medical Research Private Limited and their respective shareholders and creditors (Composite Scheme) and for issuing appropriate directions incidental for holding of such meetings.
By the present Composite Scheme there would be reductions of Securities Premium Account. The said reduction is an integral part of the Composite Scheme and the applicant-Company has prayed for dispensing with following a separate procedure for the said reduction.
By the present Composite Scheme there would be an increase in the Authorized Capital of the applicant-Company. The said increase in Authorized Capital is also an integral part of the Composite Scheme and the applicant-Company has prayed for dispensing with following a separate procedure for the increase in the Authorized Capital.
Upon hearing Shri Mihir Thakore, learned senior counsel and upon perusal of the application and supporting affidavit dated 11th August 2008 filed by Shri Dhaval N. Soni and the annexures referred to therein (Annexure-G being the copy of the Composite Scheme) and the affidavit dated 13th August 2008, it is directed as under :
A meeting of the Equity Shareholders of the applicant-Company shall be convened and held at Thakorbhai Desai Hall, Near Law Garden, Ellisbridge, Ahmedabad-380006, on Thursday, the 18th day of September 2008 at 10-00 a.m. (1000 hrs.) for the purpose of considering, and if thought fit, approving with or without modification, the arrangement embodied in the Composite Scheme.
At least 21 clear days before the day appointed for the meetings to be held as aforesaid, an advertisement convening the said meetings indicating the day, the date, the place and the time aforesaid and stating that copies of the Composite Scheme, the 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 or at the office of its Advocates, i.e. M/s. Singh & Co., 7-8, Premchand House Annexe, Ashram Road, Old High Court Way, Ahmedabad-380009, be inserted once in Indian Express, Ahmedabad Edition and Sandesh, Ahmedabad Edition. Publication of the advertisement in the Gujarat Government Gazette is dispensed with.
In addition, at least 21 clear days before the day appointed for the meetings to be held as aforesaid, an advertisement convening the said meetings indicating the day, the date, the place and the time aforesaid and stating that copies of the Composite Scheme, the statement required to be furnished pursuant to Section 393 of the Companies Act, 1956 and Form of Proxy, shall be sent by pre-paid letter post under the Certificate of Posting addressed to each of the Equity Shareholders and Unsecured Creditors of the applicant-Company at their respective registered or last known addresses. The Notice shall be sent to the Equity Shareholders of the applicant-Company with reference to the list of persons appearing on the record of the applicant-Company and its register as on 08th August 2008.
The settling and/or approval of the advertisement, the form of Notice and the Statement to accompany the Notice by the Registrar of this Court is dispensed with.
Mr.Mukesh M. Patel, Director of the applicant-Company, and in his absence Mr.Manubhai K. Patel, Director of the applicant-Company and in his absence Mr.Jitendra R. Patel, Director of the applicant-Company, shall be the Chairman of the aforesaid meeting to be held on Thursday, the 18th day of September 2008 and in respect of any adjournment or adjournments thereof.
The Chairman appointed for the aforesaid meeting shall issue the advertisement and send out the notices of the meeting referred to hereinabove. The Chairmen are free to avail the services of the applicant-Company or their officers or servants or agents or any other agency for carrying out the said direction. 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 meeting including an amendment to the aforesaid Composite Scheme or resolutions, if any, proposed at the aforesaid meetings by any person(s) and to ascertain the decision of the aforesaid meeting on the poll.
The quorum for the meeting of the Equity Shareholders shall be 5 persons present in person.
The voting by proxy be permitted, provided that the proxy in the prescribed form duly signed by the person entitled to attend and vote at the meeting, is filed with the applicant-Company at its Registered Office at ?SZydus Tower??, Satellite Cross Roads, Sarkhej-Gandhinagar Highway, Ahmedabad-380015, not later than 48 hours before the meeting.
The value of each Equity Shareholders shall be in accordance with the books of the applicant-Company and where the entries in the books are disputed, the Chairman shall determine the value for purposes of the meeting and his decision in that behalf shall be final.
It is further directed that the Chairman shall report to this Court the result of the said meetings within 14 (fourteen) days of the conclusion of the meeting and the said report shall be verified by his affidavit.
Shri Mihir Thakore, learned senior counsel appearing for the applicant-Company, submits that the meeting of the Unsecured Creditors of the applicant-Company is not required to be called for as there is no compromise offered to any of the Creditors and neither any liability of the Creditors under the Composite Scheme is being reduced or extinguished. Shri Thakore submitted that there are no Secured Creditors. Shri Thakore also stated that as per the Audited Balance Sheet as 31st March 2008, there is an excess of assets over liabilities of about Rs.24.47 crores in the case of the applicant-Company. Further as on 31st March 2008, there is an excess of assets over liabilities of about Rs.4.73 crores in CPD of Cadila which is to be transferred to the applicant-Company. As on 30th June 2008, there is also an excess of assets over liabilities of Rs.26.28 crores of the applicant-Company. Shri Thakore relied upon the order dated 31st January 2003 passed by this Court in Company Application No.30 of 2003 and order dated 29th July 2008 in Company Application No.426 of 2008 to the effect that when the interest of the Creditors was in no way affected by the Scheme of Arrangement, it is neither obligatory nor desirable to call a meeting of the Unsecured Creditors to obtain their views on the Composite Scheme.
Shri Mihir Thakore has submitted that there would be reduction of Securities Premium Account, which shall be effected as an integral part of Composite Scheme itself by way of a composite order from this Court. Shri Thakore has further submitted that the Equity Shareholders of the applicant-Company are to consider the Composite Scheme in the meeting which includes the said reductions. As the procedure under Section 101 read with Section 78 of the Companies Act, 1956 being parimateria with the present proceedings, no separate procedure for reductions of Securities Premium Account are required to be followed. Shri Thakore has referred to Sections 100 and 101 of the Companies Act, 1956 and submitted that reductions contemplated in the Composite Scheme do not involve either diminution of liability in respect of unpaid share capital or payment to the Shareholders of paid-up share capital and do not in any manner affect the interest of Creditors and no meeting of Creditors is required to consider the said reductions. Shri Mihir Thakore has relied upon the order dated 31st January 2003 passed by this Court in Company Application No.30 of 2003 and the order dated 29th July 2008 passed by this Court in Company Application No.426 of 2008, wherein this Court has dispensed with the following a separate procedure for reduction of capital.
Shri Mihir Thakore has submitted that there would be increase in Authorised Capital of the applicant-Company which shall be effected as an integral part of Composite Scheme itself by way of a composite order from this Court. Shri Thakore has further submitted that the Equity Shareholders of the applicant-Company are to consider the Composite Scheme in the meeting which includes the said increase in the Authorised Capital. As the procedure for increase in Authorised Capital being para materia with the present proceedings, no separate procedure for increase in Authorised Capital is required to be followed.
Upon hearing the submissions of Shri Thakore and upon considering the aforesaid orders cited by him, I am of the view that the meeting of Creditors for considering the aforesaid Composite Scheme which includes reduction is not required. I hold that no separate procedure is required to be followed for reduction of Securities Premium Account and increase in Authorised Capital, as the same is part and parcel of the Composite Scheme.
In view of aforesaid, the present application stands disposed of accordingly.
(C.K. Buch, J) Aakar Top