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Showing 341 to 360 of 590 Records

• 2004 (4) TMI 326
  
  Issues Involved:
  1. Inclusion of metallised films in the anti-dumping investigation.
  2. Acceptance of price undertaking by M/s. Al Khaleej Polypropylene Products Company.
  3. Appropriateness of the Designated Authority's injury analysis.
  
  Issue-wise Detailed Analysis:
  
  1. Inclusion of Metallised Films in the Anti-Dumping Investigation:
  The contention raised by M/s. Paper, Film & Foil Converters' Association and M/s. Al Khaleej Polypropylene Products Company was that the investigation should pertain only to BOPP films and not include metallised films. The appellants argued that metallised films, being distinct commodities, were wrongfully included in the scope of the investigation. However, the Designated Authority had initiated the investigation based on a complaint from the domestic industry, which included manufacturers of metallised films. Throughout the investigation, the Designated Authority had disclosed to the interested parties that metallised films were part of the investigation. This was evident from the disclosure statement and the responses from the interested parties, including objections from M/s. Al Khaleej. The Tribunal found merit in the Designated Authority's inclusion of metallised films, as it was consistently communicated and objected to during the investigation process.
  
  2. Acceptance of Price Undertaking by M/s. Al Khaleej Polypropylene Products Company:
  M/s. Al Khaleej contended that once their price undertaking was accepted by the Designated Authority, further investigation into injury and causal link should have ceased. However, the Tribunal noted that the investigation was not limited to M/s. Al Khaleej alone but included other exporters as well. The Designated Authority was required to determine the injury, causal link, and dumping margin for all exporters. The acceptance of the price undertaking did not prejudice M/s. Al Khaleej, and the Tribunal found no grounds to halt the investigation solely based on the price undertaking. Consequently, the appeal by M/s. Al Khaleej was rejected.
  
  3. Appropriateness of the Designated Authority's Injury Analysis:
  The domestic industry argued that the Designated Authority erred in accepting a single price undertaking from M/s. Al Khaleej for various grades and qualities of BOPP films, which could potentially harm the domestic industry. The Tribunal agreed, noting the significant price difference between metallised and non-metallised films and the various grades of BOPP films. The Designated Authority had specifically requested separate schedules for each grade in their questionnaire, but the exporters and importers failed to provide this information. Therefore, the Designated Authority relied on the domestic industry's data to determine the normal price and assess the injury. The Tribunal found that the Designated Authority had thoroughly examined factors such as production, capacity utilization, market share, profitability, and return on investment to arrive at a non-injurious price. As a result, the Tribunal set aside the acceptance of the price undertaking and modified the rates of anti-dumping duty as indicated in the revised table.
  
  Conclusion:
  The Tribunal allowed the appeal by the domestic industry, modifying the anti-dumping duty rates, while rejecting the appeals filed by M/s. Paper Films Foil Converter Association and M/s. Al Khaleej Polypropylene Products Company.

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• 2004 (4) TMI 325
  
  Issues:
  1. Eligibility of products for exemption under Notification No. 5/99-C.E., dated 28-2-1999.
  
  Analysis:
  The appeal before the Appellate Tribunal CESTAT, New Delhi involved the question of whether the products manufactured by M/s. Sonic Biochem Extractions Pvt. Ltd. were eligible for exemption under Notification No. 5/99-C.E., dated 28-2-1999. The Appellant contended that their products, Textured Soya Protein namely "Mealmaker" Soya Chunks and protein-rich Soya granules, fell under the partial exemption provided by the notification for "Preparations in the nature of instant food mixes for consumption after processing." The central issue was whether the impugned products met the criteria set out in the notification for exemption.
  
  The Appellant's Advocate argued that the impugned products qualified for the exemption as they were pre-cooked and could be consumed without further cooking. The Advocate highlighted that the products contained multiple ingredients and could be consumed as is or mixed with other ingredients according to consumer preference. Reference was made to a previous decision where a similar product was held eligible for exemption under a different notification.
  
  On the other hand, the Respondent's representative contended that the impugned product, "Mealmaker," required additional items to be added to make it edible, indicating that it was not an instant food mix eligible for exemption. A precedent case was cited to support this argument.
  
  After considering the arguments from both sides, the Tribunal analyzed the provisions of Notification No. 5/99-C.E. and noted that the impugned product fell under Heading No. 21.08, which was covered by the notification. The Tribunal found that the product was pre-cooked and could be consumed as instant food after cooking. The Tribunal emphasized that the addition of spices and salt after boiling did not change the product's nature as a preparation in the form of instant food mixes. Consequently, the Tribunal set aside the previous order and allowed the appeal in favor of the Appellant, ruling that the impugned product was eligible for the exemption under the notification.
  
  In conclusion, the Tribunal's decision clarified that the impugned product manufactured by M/s. Sonic Biochem Extractions Pvt. Ltd. met the criteria for exemption under Notification No. 5/99-C.E. as it qualified as a preparation in the nature of instant food mixes for consumption after processing, as specified in the notification.

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• 2004 (4) TMI 324
  
  Issues: Appeal against confirmation of duty, confiscation of goods, and penalty imposition.
  
  Confirmation of Duty:
  The appeal was filed against the order-in-appeal confirming duty, confiscation of goods, and penalty imposition. The appellant argued that proper verification of raw material was not conducted by Central Excise officers, and duty could not be confirmed without allegations of clandestine removal. The JDR supported the impugned order, stating duty was rightly confirmed due to Modvat credit on the short raw material. The tribunal noted that no enquiry was made about raw materials in the process, and no allegations of clandestine removal were in the show cause notice. The statement of the firm's partner did not conclusively prove clandestine removal. The tribunal held that duty confirmation based on alleged raw material shortage was unsustainable as the process raw material was not considered, setting aside the duty confirmation.
  
  Confiscation of Goods and Penalty Imposition:
  Confiscation of finished goods was not contested, but the redemption fine was challenged as excessive. The tribunal reduced the redemption fine from Rs. 4,240 to Rs. 1,500. A penalty of Rs. 30,000 was imposed under various rules, which the tribunal found not applicable to the case. The penalty was reduced to Rs. 2,000, considering only the goods seized from the tempo. The redemption fine for the confiscated tempo was reduced to Rs. 5,000. The tribunal modified the impugned order, reducing the penalty and redemption fine accordingly. The appeal was disposed of in light of the discussions and modifications made.

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• 2004 (4) TMI 323
  

  Whether the order dated August 23, 1989, was in respect of the sale, use or supply of goods or for the provision of services?

  Held that:- Appeal allowed. The finding of the Commission that the practice forbidden by the earlier order dated August 23, 1989, also covered the housing scheme as advertised by the appellant is erroneous for the additional reason that ‘service’ in connection with real estate was brought within the parameters of the Act only by an amendment of the definition of services in section 2(r) with effect from September 27, 1991. Therefore the order dated August 23, 1989, could not have related to advertisements pertaining to real estate. Besides the advertisement in question was made much prior to the amendment. Therefore, allow the appeal and set aside the order of the Commission without any order as to costs.

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• 2004 (4) TMI 322
  
  Issues Involved:
  
  1. Maintainability of the petition due to non-registration under the Money Lenders Act, 1934.
  2. Dispute over liabilities and claims made by M/s. Jain Hardware Stores.
  3. Consideration of the Assam Co-operative Apex Bank's claim in the winding-up proceeding.
  4. Determination of the commercial insolvency of the Company and its liability to be wound up.
  
  Issue-wise Detailed Analysis:
  
  1. Maintainability of the petition due to non-registration under the Money Lenders Act, 1934:
  
  The petitioner-firm, engaged in the business of banking, filed the petition under sections 433 and 434 of the Companies Act, 1956, for winding up the respondent-company. The respondent-company challenged the maintainability, arguing that the petitioner-firm was engaged in money-lending without registration under the Money Lenders Act, 1934. The court noted that section 7D of the Assam Money Lenders Act, 1934, prohibits money-lending without a valid registration certificate. The petitioner-firm admitted to not holding such a certificate, asserting that it was not engaged in regular money-lending. However, the court found that the petitioner-firm had been regularly advancing money to the respondent-company at an interest rate of 24%, indicating a money-lending business. Thus, the petition was deemed not maintainable due to the lack of registration under the Money Lenders Act.
  
  2. Dispute over liabilities and claims made by M/s. Jain Hardware Stores:
  
  M/s. Jain Hardware Stores claimed that the respondent-company defaulted on a payment of Rs. 12,37,741.35 for hardware goods and filed Money Suit No. 46 of 1997 for realization of Rs. 20,06,601.75 with interest and costs. The respondent-company denied the liability, arguing that the claim was sub judice and barred by limitation. The court observed that the respondent-company had filed a written statement denying the debt and the claim's existence. Since the debt was disputed and the matter was pending in a money suit, the court concluded that the winding-up petition could not be maintained as a means to secure payment of a disputed debt.
  
  3. Consideration of the Assam Co-operative Apex Bank's claim in the winding-up proceeding:
  
  The Assam Co-operative Apex Bank, a secured creditor, claimed an outstanding amount of Rs. 4,70,06,198.64 and had initiated a Bakijai proceeding for recovery. The respondent-company challenged the Bakijai proceeding in W.P. (C) No. 5230 of 1999, leading to a stay by the court. The court noted that the loan was secured by hypothecation/mortgage of the respondent-company's assets. Given the pending legal challenge and the secured nature of the loan, the court found it premature to conclude that the respondent-company was unable or had neglected to pay the debt.
  
  4. Determination of the commercial insolvency of the Company and its liability to be wound up:
  
  The court examined whether the respondent-company was commercially insolvent and liable to be wound up. The petitioner-firm argued that the company failed to liquidate a debt of around Rs. 12 lakhs, indicating insolvency. However, the respondent-company presented balance sheets showing profitability and the ability to manage its affairs despite a change in ownership. The court emphasized that a winding-up order should consider the interests of both creditors and the company, including its employees. The court found that the respondent-company was not insolvent, as it was earning profits and paying its employees regularly. Therefore, the requirements of section 434 of the Companies Act were not met, and the petition for winding up was dismissed.
  
  Conclusion:
  
  The court dismissed the petition for winding up the respondent-company, concluding that the petition was not maintainable due to non-registration under the Money Lenders Act, 1934, and the disputed nature of the debts. The court also noted that the respondent-company was not commercially insolvent and was capable of managing its affairs and earning profits. The interests of the company's employees and the ongoing legal proceedings further supported the decision to dismiss the petition.

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• 2004 (4) TMI 321
  
  Issues Involved:
  1. Erroneous finding by the Magistrate regarding the property being in the custody of the Court Receiver.
  2. Failure to prove wrongful possession of the property by the accused.
  3. Permissibility of the accused to continue occupation based on alleged assurances.
  4. Impact of civil suits and orders on the criminal proceedings under Section 630 of the Companies Act.
  
  Issue-wise Detailed Analysis:
  
  1. Erroneous Finding by the Magistrate Regarding the Property Being in the Custody of the Court Receiver:
  The appeal challenges the Magistrate's decision, which concluded that the property being in the custody of the Court Receiver prevented the Magistrate from ordering the restoration of the property to the complainant. The Magistrate held that the rights of the parties, being civil rights, should be decided by a competent Civil Court in a suit filed by both parties. The High Court upheld this view, emphasizing that the Magistrate did not have the authority to order possession restoration when the matter was sub judice before a competent Court.
  
  2. Failure to Prove Wrongful Possession of the Property by the Accused:
  The complainant argued that the Magistrate erred in concluding that the complainant failed to prove the wrongful possession of the property by the accused. The evidence presented included testimonies of prosecution witnesses and various exhibits. However, the High Court found that the accused were under a bona fide impression that they had the right to continue in the flat until they received another flat as per the agreement. The High Court noted that the accused's occupation could not be deemed wrongful, especially since the property was in the custody of the Court Receiver.
  
  3. Permissibility of the Accused to Continue Occupation Based on Alleged Assurances:
  The accused claimed they were permitted to stay in the flat based on assurances from Mr. Goenka, the non-executive Chairman of the Board of Directors. The High Court noted that the accused had reiterated these assurances in their correspondence and testimonies. The Court found no specific denial from the complainant company or Mr. Goenka regarding these assurances. The High Court concluded that the accused had made out a probable and plausible defense that they were allowed to occupy the flat until the other flat was made available, thereby negating the claim of wrongful possession.
  
  4. Impact of Civil Suits and Orders on the Criminal Proceedings Under Section 630 of the Companies Act:
  The High Court considered the ongoing civil suits and the orders passed therein, including the appointment of a Court Receiver and the injunction preventing dispossession except by due process of law. The Court emphasized that Section 630 proceedings being penal in nature could not be considered the due process of law for recovering possession. The High Court upheld the Magistrate's view that the civil rights and the outcome of the civil suits should determine the possession issues, not the criminal proceedings under Section 630.
  
  Conclusion:
  The High Court affirmed the Magistrate's order acquitting the accused, finding no reason to interfere with the decision. The appeal was rejected and dismissed, reiterating that the accused's occupation of the flat was not wrongful given the assurances and the ongoing civil litigation.

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• 2004 (4) TMI 320
  
  Issues:
  Approval of Minutes to Transfer of Capital Reserves to Profit and Loss Account under sections 100, 101, and 102 of Companies Act, 1956.
  
  Analysis:
  The petitioner, M/s. Allianz Capital and Management Services Ltd., sought approval for transferring the balance in the Share Premium Account and Debentures Forfeited Account to the Profit and Loss Account. The resolutions passed in the extraordinary general meeting authorized these transfers. The company's Articles of Association were altered to facilitate the reduction of Share Capital. The registered office of the petitioner is within the territorial jurisdiction of the High Court of Delhi.
  
  The petitioner provided various documents supporting the petition, including the Memorandum and Articles of Association, shareholding pattern, income tax returns, list of creditors, Balance Sheet, and Profit and Loss Account. The company's financial details were outlined, showing the authorized share capital, paid-up capital, outstanding debts, and losses incurred over time. The losses were attributed to various factors like the recession in the investment sector and business losses.
  
  The petitioner-company unanimously passed a special resolution to transfer the balances of the Share Premium Account and Debentures Forfeited Account to the Profit and Loss Account, thereby moving the 'Capital Reserves' to the Profit and Loss Account. The transfer was considered a 'Deemed Reduction of Capital' despite not involving an actual reduction of capital or cash outflow to shareholders. The Registrar of Companies had no objections to this transfer.
  
  The High Court allowed the petition, approving the Form of Minutes for the transfer of Capital Reserves to the Profit and Loss Account. The approved minutes were to be registered under section 103(1)(b) of the Companies Act, and a copy was to be filed with the Registrar of Companies within six weeks. The petitioner was directed to publish a notice of registration in 'Hindustan Times' and 'Nav Bharat Times'. The petition was disposed of accordingly.

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• 2004 (4) TMI 319
  
  Issues Involved:
  1. Determination of whether the sale certificate issued by the official liquidator is a conveyance or a sale certificate under the Indian Stamp Act.
  2. Assessment of the applicability of Article 18 or Article 23 of Schedule IB to the Indian Stamp Act to the instrument in question.
  3. Evaluation of the authority of the official liquidator to issue a sale certificate.
  4. Consideration of whether the sale by inviting tenders constitutes a public auction.
  5. Analysis of the Chief Controlling Revenue Authority's direction for valuation of plant and machinery and its implications.
  
  Issue-wise Detailed Analysis:
  
  1. Determination of whether the sale certificate issued by the official liquidator is a conveyance or a sale certificate under the Indian Stamp Act:
  The court examined whether the sale certificate issued by the official liquidator should be classified as a conveyance or a sale certificate under the Indian Stamp Act. The Assistant Commissioner (Stamp) had determined that the instrument was a conveyance and thus dutiable under Article 23. The court noted that a sale certificate, unlike a conveyance, does not itself transfer title but is merely evidence of the sale. The court concluded that the sale in liquidation is a sale by the liquidator and not by the court, as the title to the property is transferred by the act of the liquidator.
  
  2. Assessment of the applicability of Article 18 or Article 23 of Schedule IB to the Indian Stamp Act to the instrument in question:
  Article 18 applies to instruments where property is sold in a public auction by an officer empowered by law, with duty payable on the purchase money shown in the instrument. Article 23 applies to conveyances, with duty payable on the higher of the sale consideration or market value. The court found that the official liquidator, while empowered to sell the property, does not have the statutory authority to issue a sale certificate. Consequently, the instrument in question was deemed a conveyance under Article 23.
  
  3. Evaluation of the authority of the official liquidator to issue a sale certificate:
  The court examined whether the official liquidator has the authority to issue a sale certificate. It was determined that the liquidator acts as an agent of the company and can execute deeds on behalf of the company under Section 457(2)(i) of the Companies Act. However, the power to issue a sale certificate must be specifically conferred by statute, which is not the case here. Therefore, the liquidator does not have the authority to issue a sale certificate.
  
  4. Consideration of whether the sale by inviting tenders constitutes a public auction:
  The court analyzed whether the sale by inviting tenders qualifies as a public auction. It was concluded that a sale by sealed tenders is distinct from a public auction. The court referenced Rule 273 of the Companies (Court) Rules, which differentiates between public auctions and sales by inviting sealed tenders. The court held that the sale by inviting tenders in this case did not constitute a public auction, thus Article 18 was not applicable.
  
  5. Analysis of the Chief Controlling Revenue Authority's direction for valuation of plant and machinery and its implications:
  The Chief Controlling Revenue Authority had directed the valuation of the plant and machinery sold. The court noted that the authority had not addressed the petitioner's contention that the plant and machinery, sold as separate lots, should not be clubbed together for determining the market value. The court set aside the order and directed the Chief Controlling Revenue Authority to first decide whether the value of the plant and machinery can be combined with the land's value before proceeding with the valuation. The court also allowed the petitioner to raise additional contentions before the authority.
  
  Conclusion:
  The court partially allowed the writ petition, setting aside the order of the Chief Controlling Revenue Authority and directing it to decide the matter afresh in accordance with the law, considering the issues raised by the petitioner. The court emphasized the need for an expeditious decision within six months.

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• 2004 (4) TMI 318
  
  Issues Involved:
  1. Dispensation of Meetings for Secured Creditors
  2. Dispensation of Meetings for Shareholders
  3. Dispensation of Meetings for Unsecured Creditors
  
  Issue-Wise Detailed Analysis:
  
  1. Dispensation of Meetings for Secured Creditors:
  The Transferee Company sought to dispense with the meeting of secured creditors for the proposed Scheme of Amalgamation under sections 391(1) and 394 of the Companies Act, 1956. It was submitted that there are only four secured creditors, each of whom had provided Letters of Consent and notarised affidavits indicating no objection to the Scheme, subject to the condition that the charge in their favour is continued post-amalgamation. The court examined Clauses 2.1, 2.2, 2.3, and 2.4 of the proposed Scheme, which ensured the transfer of assets and liabilities without affecting the security interests of the creditors. The court concluded that the conditions set by the secured creditors were satisfied by the Scheme's provisions. Therefore, the requirement for holding the meeting of the secured creditors was dispensed with.
  
  2. Dispensation of Meetings for Shareholders:
  The Transferee Company requested to dispense with the shareholders' meeting, citing that 89.85% of its shares were held by promoter companies, which had resolved to support the Scheme and filed notarised affidavits indicating no objection. However, the court noted that 10.15% of the shares were held by minority shareholders, who had not provided consent. To safeguard the interests of these minority shareholders, the court deemed it necessary to convene a meeting of the shareholders/members of the Transferee Company for consideration of the proposed Scheme of Amalgamation as per sections 391(1) and (2) read with section 393 of the Companies Act, 1956.
  
  3. Dispensation of Meetings for Unsecured Creditors:
  The Transferee Company also sought to dispense with the meeting of unsecured creditors, stating that the interest of deposit holders (small individuals and corporate entities) would not be affected by the Scheme. It was noted that individual depositors, who had made deposits amounting to Rs. 246.73 lakhs, and four corporate entities, which had made deposits amounting to Rs. 20.38 lakhs, had not given their consent. The court emphasized the necessity to protect the interests of these unsecured creditors. Consequently, the court ordered the convening of a meeting of the unsecured creditors for consideration of the proposed Scheme of Amalgamation.
  
  Conclusion:
  1. The meeting of the secured creditors of the Transferee Company for consideration of the proposed Scheme of Amalgamation is dispensed with.
  2. The meeting of the shareholders/members of the Transferee Company is necessary and ordered to be held.
  3. The meeting of the unsecured creditors of the Transferee Company is necessary and ordered to be held.
  
  Order:
  The court ordered the convening of separate meetings for the shareholders/members and unsecured creditors of the Transferee Company on 15th May 2004, with specific instructions regarding the notice period, advertisement, quorum, and the appointment of a Chairman and alternate Chairman for the meetings. The Chairman was directed to report the results of the meetings to the court within two weeks of their conclusion. The case was listed for further orders on 5th July 2004.

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• 2004 (4) TMI 317
  
  Issues:
  1. Application for recalling winding up order based on default in commitments and payments.
  2. Compliance with conditions imposed in the order dated 10-8-2000.
  3. Failure to make payments and demonstrate bona fides.
  4. Misuse of discretion under section 466 of the Companies Act.
  5. Decision on vacating the order dated 10-8-2000 and reviving the winding up order dated 16-8-1999.
  
  Analysis:
  1. The case involved an application for recalling the winding up order of a company due to default in commitments and payments made by the company. Initially, the winding up order was passed on 16-8-1999, but subsequently, an order dated 10-8-2000 was issued under section 466 of the Companies Act, keeping the winding up order in abeyance subject to certain conditions. The company had made arrangements with creditors for phased payments, but a secured creditor, Syndicate Bank, filed an application stating that the company had defaulted on commitments, leading to the current situation.
  
  2. The compliance with the conditions imposed in the order dated 10-8-2000 was questioned as the company failed to honor its commitments and make payments as agreed with the creditors. Despite multiple opportunities and extensions granted by the Court for demonstrating bona fides and making substantial payments, the company did not comply. The Court noted that the company was not interested in repaying debts and was only delaying the process for vested reasons, indicating a lack of genuine intention to fulfill obligations.
  
  3. The Court found that the company had failed to make any fresh payments, and the excuses provided for non-payment, such as the earthquake in Gujarat and high interest rates demanded by creditors, were not considered sufficient reasons for non-compliance. The Court emphasized that the focus should be on whether the company was adhering to the conditions set in the order and fulfilling its obligations to creditors. The lack of new investments from investors further indicated a lack of commitment to revive the company's financial situation.
  
  4. Considering the misuse of discretion under section 466 of the Companies Act and the company's failure to demonstrate genuine efforts to repay debts and revive the company, the Court decided to vacate the order dated 10-8-2000 and revive the winding up order dated 16-8-1999. The Official Liquidator was directed to take charge of the company's assets immediately, highlighting the Court's decision to prioritize the interests of creditors over granting further leniency to the company.
  
  5. In conclusion, the Court allowed the application for vacating the order dated 10-8-2000, leading to the revival of the winding up order dated 16-8-1999. The decision was based on the company's failure to meet its commitments, demonstrate bona fides, and show genuine efforts to repay debts, ultimately prioritizing the interests of creditors and the need for decisive action to address the company's financial situation.

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• 2004 (4) TMI 316
  
  Issues Involved:
  1. Arbitrability of the dispute under clause 15 of the contract.
  2. Applicability of Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) to the arbitration proceedings.
  3. Award of interest for the pre-reference period.
  4. Conflict of the arbitral award with public policy.
  
  Issue-wise Detailed Analysis:
  
  1. Arbitrability of the Dispute:
  The dispute arose regarding the unpaid price of bamboo transportation. The contractor claimed Rs. 6,12,902.25 with interest, while Nepa Limited denied the claim, arguing that the arbitration clause was not applicable as the transportation was completed. The arbitrator found that clause 15 of the agreement, which provided for arbitration, was still applicable even after the completion of the work. The court upheld this finding, stating that the dispute was indeed arbitrable under clause 15 of the contract.
  
  2. Applicability of Section 22 of SICA:
  Nepa Limited argued that the arbitration proceedings were barred under Section 22 of SICA, as the company was declared a sick industry and proceedings were pending before the BIFR. Section 22 suspends legal proceedings for recovery of money or enforcement of security against a sick industrial company without the consent of the BIFR. However, the court held that Section 22 did not apply to the recovery of transportation charges, as these were essential for running the factory. The court emphasized that the object of SICA is to facilitate rehabilitation, not to obstruct the functioning of the industrial undertaking. The court cited several precedents, including Shree Chamundi Mopeds Ltd. v. Church of South India Trust Association and Rishabh Agro Industries Ltd. v. P.N.B. Capital Services Ltd., to support its conclusion that Section 22 did not bar the arbitration proceedings in this case.
  
  3. Award of Interest for Pre-reference Period:
  The arbitrator awarded interest @ 6% per annum from 1-1-1997 till the making of the award. The court found that the award of interest for the pre-reference period was just and proper. The contractor was not entitled to the benefit of the Interest Act, 1978, but was entitled to interest under Section 34 of the Code of Civil Procedure for the pre-reference period. The court upheld the arbitrator's decision on this matter.
  
  4. Conflict of the Arbitral Award with Public Policy:
  Nepa Limited contended that the arbitral award was in conflict with public policy and that the dispute was not capable of settlement by arbitration. The court rejected this contention, finding that the award was neither in conflict with public policy nor was the subject matter incapable of arbitration. The court emphasized that the object of SICA is to facilitate rehabilitation or winding up of sick industrial companies, and an interpretation that jeopardizes rehabilitation cannot be adopted.
  
  Conclusion:
  The court dismissed the appeals, upholding the arbitral award and finding no merit in the arguments presented by Nepa Limited. The court concluded that Section 22 of SICA did not bar the arbitration proceedings, the award of interest for the pre-reference period was proper, and the arbitral award was not in conflict with public policy. The appeals were dismissed, and parties were ordered to bear their own costs.

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• 2004 (4) TMI 315
  
  Issues Involved:
  1. Legality of retention of documents and currency seized under the Foreign Exchange Regulation Act (FERA).
  2. Requirement of pre-decisional or post-decisional hearing before extending the retention period.
  3. Applicability of precedents from other Acts like the Customs Act to FERA.
  4. Whether the retention of documents beyond the statutory period without proper extension is permissible.
  
  Detailed Analysis:
  
  1. Legality of Retention of Documents and Currency Seized under FERA:
  The petitioner deposited Rs. 1,05,70,000 in response to a notice under section 33(2) of FERA. The Enforcement Directorate seized Indian currency and documents from the petitioner and others on July 17, 1996. The petitioner argued that the retention of documents beyond six months without proper extension violated section 41 of FERA. Section 41 allows retention for six months, extendable by another six months with reasons recorded in writing. The court noted that the documents were furnished by January 2, 1997, and the initial six-month period expired on June 30, 1997. Since the notice under section 51 was issued on July 16, 1997, after the expiry of the six months, the retention was deemed illegal.
  
  2. Requirement of Pre-decisional or Post-decisional Hearing:
  The petitioner contended that the extension of the retention period required a pre-decisional or post-decisional hearing. The court found that the order dated January 7, 1997, was not an extension order as per the proviso to section 41. The six-month period started on January 2, 1997, and expired on July 1, 1997. The notice under section 51 issued on July 16, 1997, was beyond this period, making the extension invalid. Therefore, the question of a hearing did not arise.
  
  3. Applicability of Precedents from Other Acts:
  The petitioner relied on precedents from the Customs Act and other Acts. The court distinguished FERA from the Customs Act, noting that section 41 of FERA does not include a provision for returning documents if proceedings are not initiated within the specified period, unlike section 110 of the Customs Act. The court cited various judgments, including Union of India v. Rai Bahadur Shreeram Durga Prasad (P.) Ltd., which emphasized the need for strict interpretation of penal provisions and the importance of adhering to statutory time frames.
  
  4. Retention of Documents Beyond Statutory Period:
  The court acknowledged that while the retention beyond the statutory period was not permissible, the petitioner was not entitled to a mandamus for the return of documents. The court referred to the Supreme Court's decision in Nilratan Sircar's case, which allowed retention of documents by the Director of Enforcement despite procedural lapses. The court emphasized the importance of balancing individual rights with societal interests, particularly in cases involving economic offences. The court directed the respondents to conclude the adjudication proceedings within twelve weeks.
  
  Conclusion:
  The court dismissed the writ petition, holding that the retention of documents and currency beyond the statutory period without proper extension was illegal. However, considering the broader public interest and the ongoing adjudication proceedings, the court refrained from issuing a mandamus for the return of documents. The respondents were directed to complete the adjudication process within twelve weeks.

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• 2004 (4) TMI 314
  
  Issues Involved:
  1. Interpretation of 'annual turnover' for calculating registration fees.
  2. Application of the principle of res judicata.
  3. Validity and legality of SEBI's method for calculating registration fees.
  4. Impact of the Bhatt Committee and Modi Committee reports on the interpretation of 'annual turnover.'
  
  Detailed Analysis:
  
  1. Interpretation of 'annual turnover' for calculating registration fees:
  The petitioner, a stockbroker, challenged the demand for registration fees levied by SEBI based on the interpretation of 'annual turnover' under Schedule III of the SEBI (Stock Brokers and Sub-Brokers) Regulations, 1992. The petitioner argued that 'annual turnover' should be interpreted as the net position of sales and purchases, i.e., the difference between the amounts received and receivable by the stockbroker and the amounts paid and payable. SEBI, however, calculated the fees based on the aggregate value of all sales and purchases during a financial year. The court found that the definition of 'annual turnover' in Schedule III is clear and means the total of sale and purchase prices of securities received and receivable by the stockbroker, thus rejecting the petitioner's interpretation.
  
  2. Application of the principle of res judicata:
  SEBI contended that the issues raised by the petitioner had been previously adjudicated by the Supreme Court in the case of BSE Brokers Forum v. SEBI, and thus, the principle of res judicata applied. The court agreed, stating that the Supreme Court had already addressed the validity and interpretation of the 'annual turnover' for the purpose of levying registration fees. Although the petitioner argued that the Supreme Court had not specifically dealt with the interpretation of 'annual turnover,' the court held that the principle of constructive res judicata barred re-litigation of issues that could have been raised earlier but were not.
  
  3. Validity and legality of SEBI's method for calculating registration fees:
  The court examined whether SEBI's method of calculating registration fees based on the aggregate value of sales and purchases was valid and legal. The court referred to the Supreme Court's acceptance of the Bhatt Committee's recommendations, which supported SEBI's method. The Bhatt Committee had concluded that the total volume of business, i.e., the price paid or received for securities, constituted turnover and that this method was reasonable and consistent with international practices. The court found SEBI's method lawful and reasonable, dismissing the petitioner's challenge.
  
  4. Impact of the Bhatt Committee and Modi Committee reports on the interpretation of 'annual turnover':
  The Bhatt Committee had recommended changes to the definition of 'annual turnover' and the quantum of fees, which were accepted by the Supreme Court and SEBI. The court noted that the Bhatt Committee's interpretation of 'annual turnover' as the total of sale and purchase prices was binding. The Modi Committee's recommendations, which suggested a different method, were not accepted by the Supreme Court for implementation. The court emphasized that SEBI had amended its regulations in line with the Bhatt Committee's recommendations, and the petitioner's interpretation was inconsistent with these accepted recommendations.
  
  Conclusion:
  The court dismissed the writ petition, upholding SEBI's interpretation of 'annual turnover' and the method for calculating registration fees. The principle of res judicata barred the re-litigation of issues already decided by the Supreme Court. The Bhatt Committee's recommendations, accepted by the Supreme Court and SEBI, were deemed binding, and SEBI's method was found lawful and reasonable.

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• 2004 (4) TMI 313
  
  Issues:
  1. Challenge to the order passed by the Debt Recovery Tribunal under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993.
  2. Interpretation of the provisions of The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.
  3. Legality and jurisdiction of the respondent-bank to take possession of the mortgaged property.
  4. Validity of conditions imposed by the Tribunal for granting interim stay.
  
  Issue 1: Challenge to the order passed by the Debt Recovery Tribunal under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993.
  The petitioner challenged the order passed by the Debt Recovery Tribunal (DRT) seeking a writ of certiorari to quash the order passed in connection with a loan default case. The petitioners borrowed money from a bank for export business, defaulted on payments, and faced legal action from the bank. The DRT granted a stay on taking possession of the mortgaged property upon a condition to deposit a specific amount, leading to the challenge in the High Court.
  
  Issue 2: Interpretation of the provisions of The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.
  The respondent-bank invoked the provisions of The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. The Supreme Court upheld the Act's Section 13, emphasizing safeguards for borrowers. The Act allowed for a notice period before taking action, an appeal process, and safeguards against oppressive conditions. The Court struck down a provision requiring a substantial deposit for appeals.
  
  Issue 3: Legality and jurisdiction of the respondent-bank to take possession of the mortgaged property.
  The respondent-bank issued notices under the Act to take possession of the mortgaged property, leading to an appeal by the petitioners challenging the bank's jurisdiction over agricultural land. The High Court analyzed the legality of the bank's actions and the jurisdiction under the Act, emphasizing that the Act does not apply to security interests in agricultural land. The Court noted that the bank's actions must align with the Act's provisions and declared the condition imposed by the Tribunal as irrational and against the petitioners' rights.
  
  Issue 4: Validity of conditions imposed by the Tribunal for granting interim stay.
  The High Court examined the conditions imposed by the Tribunal for granting an interim stay on taking possession of the property. The Court found the condition of depositing a substantial amount as irrational and against the petitioners' rights, emphasizing that such conditions could deprive the petitioners of their property rights. The Court allowed the writ petition, declared the condition illegal, and directed the petitioners not to alienate the property during the appeal proceedings.
  
  In conclusion, the High Court's judgment focused on upholding the rights of the petitioners, ensuring that the bank's actions were within legal boundaries, and striking down oppressive conditions imposed by the Tribunal.

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• 2004 (4) TMI 312
  

  Winding up - prayer under section 536(2) was to allow the company to execute documents creating a first charge over the company’s properties in favour of the appellants - Held that:- Appeal partly allowed. The company’s properties as of today are not properties belonging to the company. Apart from it being a practical impossibility to allow the appellant’s prayer at this stage, the Division Bench did not err in rejecting the application of the appellant at least insofar as it pertained to the loan transactions prior to 10-7-1986. There is no explanation forthcoming from the appellant as to how these advances were made for over a period of ten years without obtaining any security. The appellant ultimately sought to create securities in respect of these transactions only in 1990. The Division Bench was also correct that the grant of leave under section 536(2) would not be appropriate after this delay.

  The High Court erred in setting aside the learned Single Judge’s order even in respect of the post 10-7-1986, loans on the simple ground that this was beyond the scope of the appellant’s appeal. The appellant could not be in a worse position by having preferred the appeal from the order of the learned Single Judge.

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• 2004 (4) TMI 311
  
  Issues Involved:
  1. Adjustment of share premium against permanent loss in investment.
  2. Applicability of sections 78 and 100 of the Companies Act, 1956.
  3. Requirement of court approval for adjusting share premium.
  4. Legal interpretation of share premium account and reserve funds.
  5. Authority provided by Articles of Association for reduction of share capital.
  
  Issue-wise Detailed Analysis:
  
  1. Adjustment of Share Premium Against Permanent Loss in Investment:
  The petitioner company sought confirmation to adjust the share premium against the permanent loss in investment made in Nepal Metal Company Limited (NMCL). The company argued that this adjustment would align with accounting standards and not prejudice creditors or shareholders.
  
  2. Applicability of Sections 78 and 100 of the Companies Act, 1956:
  The court examined whether the application under section 78 read with section 100 of the Companies Act, 1956, was appropriate for seeking approval to adjust the share premium account against the loss. The court noted that section 78(1) deems the share premium account as paid-up share capital, and sections 100 to 105 outline the procedure for reducing share capital, which must be followed when applying the share premium account for purposes other than those specified in section 78(2).
  
  3. Requirement of Court Approval for Adjusting Share Premium:
  The court emphasized that any adjustment of the share premium account must follow the procedure under sections 100 and 105, which includes obtaining court approval. The court also highlighted that any misrepresentation in obtaining court approval is a penal offense under section 105.
  
  4. Legal Interpretation of Share Premium Account and Reserve Funds:
  The court distinguished between share premium accounts and reserve funds. It clarified that while share premium accounts can be used for specific purposes outlined in section 78(2), they cannot be equated with reserve funds for writing off losses. The court referred to authoritative texts and previous judgments to support this interpretation, concluding that the share premium account cannot be used to write off losses unless it involves a reduction of share capital.
  
  5. Authority Provided by Articles of Association for Reduction of Share Capital:
  The court examined the Articles of Association of the petitioner company, particularly Article 15, which allows for the reduction of share capital by special resolution and court confirmation. However, the court noted that the Articles did not specifically authorize the use of the share premium account for writing off losses. The court concluded that without specific authorization in the Articles of Association, the company could not utilize the share premium account for purposes other than those specified in section 78(2).
  
  Findings and Conclusion:
  The court found that the petitioner's application did not fall within the purview of sections 78 and 100 of the Companies Act, 1956. The court held that the petitioner company was not entitled to an order confirming the minute of the company dated 25-9-2003, and the petition was rejected. The court emphasized that any adjustment of the share premium account must be authorized by law and the Articles of Association, and must follow the procedure for reduction of share capital.

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• 2004 (4) TMI 310
  
  Issues:
  1. Scheme of Amalgamation under sections 391 to 394 of the Companies Act, 1956.
  2. Approval of the Scheme by the Directors.
  3. Compliance with legal formalities and objections.
  4. Judicial review of the Scheme.
  5. Affidavits and reports submitted by Official Liquidator and Regional Director.
  
  Analysis:
  1. The judgment pertains to a Scheme of Amalgamation under sections 391 to 394 of the Companies Act, 1956 between two companies, referred to as the Transferor-Company and Transferee-Company. The purpose of the scheme is to combine their resources, management, and operations for better efficiency and cost reduction. The Directors of the Transferor-Company approved the scheme, covering aspects like transfer of assets, debts, liabilities, and staff. The scheme aims at business expansion and development by utilizing shared resources and expertise.
  
  2. The Scheme of Amalgamation was found to be in the interest of both companies, shareholders, and employees. It was noted that both companies were not under investigation, and all necessary consents were obtained from equity shareholders and creditors. Meetings of shareholders and creditors were dispensed with due to the consent received. The necessary notices were duly issued and published, and the petition was admitted for final disposal.
  
  3. The Official Liquidator submitted a report confirming that the affairs of the Transferor-Company were not prejudicial to its members or public interest. The Regional Director also affirmed that the scheme was not detrimental to the interest of creditors and shareholders. No objections were raised during the hearing, and all legal formalities were complied with, with no objections on record.
  
  4. The Court emphasized that unless the scheme is unfair, unreasonable, contrary to law, or public policy, judicial review in such matters is limited. As all competent authorities endorsed the scheme and no objections were raised, the Court found no reason to interfere with the approved Scheme of Amalgamation. The Court highlighted the importance of respecting the decisions of shareholders, creditors, and experts involved in the process.
  
  5. Affidavits and reports submitted by the Official Liquidator and Regional Director supported the approval of the scheme. The Court allowed the Company Petition in terms of the prayer clauses, with costs to be paid to the Regional Director and Official Liquidator. The judgment emphasized the importance of following legal procedures and respecting the decisions made by relevant parties involved in the amalgamation process.

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• 2004 (4) TMI 309
  
  Issues:
  Petition under sections 391 to 394 of the Companies Act for sanction of Scheme of Amalgamation with another company.
  
  Analysis:
  
  1. The petitioner-company, a Private Limited Company, sought sanction for a Scheme of Amalgamation with another company. Both companies decided to merge based on their business strategies and commercial interests. The scheme included all aspects of assets, liabilities, reserves, investments, and employee-related matters, with the petitioner-company to be dissolved without winding up.
  
  2. The petitioner-company applied to dispense with convening meetings of shareholders and creditors, which was approved by the High Court. The Court noted that as the petitioner-company was a wholly owned subsidiary of the transferee-company, no separate application from the transferee-company was required, following a similar judgment in Mahamba Investment Ltd. v. IDI Ltd.
  
  3. The scheme was found to be fair, reasonable, and in the interest of all parties involved. The financial position of the transferee-company was strong, and the merger would increase its net worth. No investigation proceedings were pending under relevant sections of the Companies Act, and individual notices to unsecured creditors were dispensed with.
  
  4. Affidavits were filed to prove service and publication of the petition. The Regional Director of the Department of Company Affairs and the Official Liquidator found no objections to the scheme, stating it was not prejudicial to creditors or shareholders. No adverse material was presented by any party during the hearing.
  
  5. The Court emphasized that unless a scheme is unfair, unreasonable, contrary to law, or public policy, judicial review in such matters is limited. In this case, as there were no serious objections or prejudice, the Court granted sanction to the Scheme of Amalgamation as prayed for.
  
  6. The Court allowed the Company Petition in terms of the prayer clauses, with costs to be paid to the Regional Director and Official Liquidator by the petitioner within a specified timeframe.

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• 2004 (4) TMI 308
  
  Issues:
  1. Scheme of Arrangement under sections 391 to 394 of the Companies Act between companies and shareholders.
  2. Approval and execution of the restructuring agreement by the Board of Directors.
  3. Objective of the restructuring and acquisition of management control.
  4. No Objection letters from Bombay Stock Exchange and National Stock Exchange.
  5. Dispensing with meetings of equity shareholders and unsecured creditors.
  6. Sanction of the Scheme by the High Court.
  7. Objections raised by shareholders and activists.
  8. Compliance with statutory provisions and fairness of the Scheme.
  
  Analysis:
  
  1. The petitioner-company, a subsidiary, sought sanction for a Scheme of Arrangement under sections 391 to 394 of the Companies Act between itself, Larsen & Toubro Limited (L&T), Grasim Industries Limited, and Larsen & Toubro Employees Foundation Trust. The Scheme involved the demerger of the cement business to the petitioner-company, with L&T holding 20% equity and the remaining 80% distributed among L&T shareholders. The restructuring aimed at enhancing shareholder value, size, and global competitiveness, as explained by senior counsel Mr. I.M. Chhagla.
  
  2. The Board of Directors approved the draft Scheme after due deliberation, leading to the execution of a restructuring agreement involving the acquisition of management control and exit of Grasim and Samruddhi from the demerged company. The Scheme's rationale included integration, financial strength, and business strategy alignment, with detailed provisions for share acquisition and open offers.
  
  3. The Bombay Stock Exchange and National Stock Exchange issued No Objection letters, supporting the Scheme. The High Court dispensed with the meetings of equity shareholders and unsecured creditors based on their consents, while L&T held separate meetings where the Scheme was approved by a majority of shareholders and creditors.
  
  4. The Regional Director, after examining the Scheme, did not oppose it but suggested addressing objections related to capital clause amendments and stock exchange listing before an open offer. Shareholder objections were raised by Mr. Raaste, but no specific affidavit was filed in the present petition, and no other interveners were recorded.
  
  5. The High Court, after considering compliance with statutory provisions, fairness, and absence of public policy violations, granted sanction to the Scheme. The court found the Scheme fair, just, and in the interest of shareholders and creditors, leading to the absolute approval of the Company Petition with costs to be paid to the Regional Director.
  
  In conclusion, the judgment detailed the process and rationale behind the Scheme of Arrangement, highlighting compliance with legal requirements, shareholder approvals, and the absence of substantive objections, ultimately resulting in the High Court's sanction of the Scheme.

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• 2004 (4) TMI 307
  

  Compromise and arrangement - Scheme of Arrangement under Sections 391 to 394 of the Companies Act, 1956 - Compliance with Statutory Provisions - Objections by Shareholders - Reduction of Share Capital - Valuation of Shares - HELD THAT:- It is settled law that the party who alleges must prove its allegations. Majority decisions on significant aspects, unanimous and/or overwhelming, in the meetings dated 3rd February, 2004 cannot be skate over while approving the scheme of arrangement. The law itself requires to submit such company petition under sections 391 to 394, after getting more than 75 per cent majority of votes. It means at the threshold itself, need of law has been complied with. Therefore, presumption in favour of the scheme cannot be rebutted by a few shareholders, in the present case 4 objectors, by making bald and vague allegations at such a stage. Having given consideration to whole aspect of the scheme of arrangement including statutory compliances, objectors failed to discharge their burden to prove demerits of the scheme in question. Nothing has been placed on record to prove illegality, unfairness, unrecommendableness of the scheme. Merely giving unsupported and baseless views cannot be accepted specially when merits of the scheme of arrangement has been recognised and approved by all others. In this case, the above conclusion turns upon the material placed by the parties.

  First and foremost issue is meaning, scope and purpose of ‘arrangement’. The scheme of arrangement in question falls within the ambit of the provisions of sections 391 to 394 of the Companies Act and the Rules made thereunder. The word ‘arrangement’ is not specifically defined under the Companies Act. This scheme of arrangement has the ingredients of demerger and reduction of share capital and scheme of arrangements with the concerned companies and Trust, cannot be said to be beyond the purview of sections of the Companies Act, the scheme of arrangement in question, therefore, is maintainable. The word ‘arrangement’, though not defined specifically, has a wide range and ambit. The present scheme of arrangement is between the petitioner-companies and its shareholders, and/or creditors and a Trust. By that itself it cannot be said that the scheme of arrangement in question is not maintainable or not sustainable. The scheme is affecting the shareholders and the creditors as Cement Division of the petitioners is being transferred to the transferee-company. There is no objection raised even by the Regional Director about the maintainability of the scheme of arrangement. It is difficult to reject the whole scheme of arrangement like this, which has definitely an element of demerger and reduction of shares which are permissible mode of various schemes under the provisions of sections 391 to 394 merely on technical grounds.

  The scheme of arrangement, in absence of any specific bar or limitation, falls within the ambit of sections 391 to 394 of the Companies Act and is maintainable. These company petitions were already admitted and parties have already acted on that basis and further all legal formalities have also been completed. Therefore, now there is no reason to accept any objection to the effect that the present scheme of arrangement cannot be sanctioned under the provisions of sections 391 to 394 of the Companies Act.

  Conclusion - (a) All the legal and essential and necessary formalities have been complied with by the companies and the petitions were filed within the framework of law.

  (b) Requisite and essential materials and documents mere made available and notified, published and available with the requisite details and documents, before to all concerned, including the shareholders, creditors and competent authorities. No objections were raised about the non-disclosure of materials or documents.

  (c) All the resolutions have been passed unanimously and/or by overwhelming majority in proportion [00.01 × 99.99] and the scheme of arrangement has been approved accordingly with due deliberation and discussion on all issues, including the suggested modifications.

  (d) The Regional Director, Company Registrar - all these authorities have after due verification of the record of the company, endorsed and re-confirmed that the scheme is not against public interest, prejudicial to shareholders and all actions of the companies are within the framework of law. There is nothing illegal, unjust, unsound or against public policy or interest. No other department have raised any objection.

  (e) All the experts/professionals submitted their report and opinion and accepted the scheme. These experts/professionals include financiers, auditors, chartered accountants, bankers, creditors, financial institutions and above all company managements, apart from unanimous majority decisions to support the scheme.

  (f) Once creditors, financial institutions, expert in respective business and professionals, approved the scheme (of arrangement) unanimously by overwhelming majority of shareholders in proportion to 99.99 × 00.1, and also approved the scheme after due and effective deliberation on all issues and satisfied by all the classes, in my view also, such determination and/or commercial merits of the scheme need not be gone into or interfered with as a fault finder and/or to pick holes in it, merely because some objections have been taken or raised by some shareholders. There are no strong and cogent reasons made out and pointed out by any one, to disapprove such scheme. No other objectors have pressed their objections or appeared in court to support such objections.

  (g) No illegality of any other law has been placed and proved with supporting material, in reference to the scheme in question. Companies are bound to comply with all legal formalities.

  (h) The objections are frivolous, unfair and mala fide and are not within the framework of the law. No evidence or material have been placed to justify to show that the scheme is illegal, unjust or against public policy or interest. Such objectors are estopped from raising such frivolous objections. Their whole object is to halt and to hinder the scheme for ulterior purpose.

  (i) In the present case, no other alternative or possible view was explained or suggested, on any material issues, including the share of ratio. In my opinion, any view should not be given or expressed, as it will amount to thrusting and imposing decision against unanimous and majority decisions of the shareholders, creditors. Financial institutions, such imposition is out of the court’s domain.

  (j) In this competitive market, the corporate world with exhaustive strategies is a must. Companies know-how to make or arrange and adjust their business to run with the national and international markets. Third person may not be in a position to provide them business strategies and above all, companies know their respective shareholders’ need, may not be bound by the views expressed by the third persons. Unless there is apparent illegality, unfairness, unreasonableness where it is essential to pierce the veil of corporate strategies. Otherwise, it is difficult to have judicial review of this aspect of globalisation and utility of material sources by the businessman or experts in the field. Business strategy is not the court’s domain. It is difficult for the courts to express their opinion on such matters. Business adjustments or arrangements cannot be decided or trusted or imposed by the court specially when such arrangement or adjustment or such scheme is within the framework of the law.

  (k) Scheme has taken care of all significant aspects of law, public policy and it is based on need and time of particular business and market. Scheme is fair, sound, reasonable and takes into consideration interest of shareholders, creditors, workmen and employees.

  (l) The scheme of the Companies Act cannot be overlooked in such a matter. Shareholders carry on business through the medium of company and cannot act alone or in minority and democratic procedure of resolutions and decisions are well accepted even in company affairs and action.

  Result - In view of the above, the sanction of the scheme, as prayed, is granted. The Company Petition No. 120 of 2004 is made absolute in terms of the prayer clauses (a) to (k ) with liberty. Parties to proceed in accordance with law.

  Costs of Rs. 2,500 to the Regional Director be paid by the petitioner within a period of four weeks from today.

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