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2015 (4) TMI 685 - RAJASTHAN HIGH COURTFailed to listing of shares in the stock exchanges - Breach of directions issued under scheme of arrangement approved under section 391(2) read with section 394 of the Companies Act, 1956 - Minority shareholder seeking exit option - Held that:- In the case of Babu Singh [2007 (11) TMI 589 - SUPREME COURT], the Hon’ble Apex Court has observed that even though the inherent powers of the Court are very wide their exercise must emanate logically from the underlying legal findings and the “judicial result must be seen to be principled and supportable on those findings” (underlining mine).The Hon’ble Apex Court in the case of Karan Singh [2002 (3) TMI 910 - SUPREME COURT],has held that the inherent powers of the Court cannot be invoked for reopening settled matters as the Court cannot act as an appellate or revising authority. As far as compulsory listing of the shares of the respondent company is concerned, in the context of the order dated 7.8.2008 passed by the Company Court, it is evident that the Court visualized the possibility of non-listing of the shares of the respondent company for the obvious reason that the jurisdiction of a company Court is limited under section 391(2) read with section 394 of the Act of 1956 to ensuring statutory compliance in the decision making process relating to a scheme ensuring that the scheme is not contrary to public interest. It does not extend to directing autonomous authorities such as SEBI and the Stock Exchanges to exercise their discretion in a particular way / manner. It has been held in the case of the Bombay Stock Exchange [2006 (10) TMI 244 - HIGH COURT OF MADRAS],that both SEBI and Stock Exchanges have the exclusive jurisdiction to allow or disallow listing of a company’s shares based on their lawful conclusions as to whether the statutory requisites mandated for listing have been satisfied/ fulfilled or not. A direction as to listing in the exercise of powers under section 391(2) and section 394 of the Act of 1956 or otherwise under Rule 9 of the Rules of 1959 as sought would be excess of the jurisdiction of the Company Court. Aside of the above, listing of the respondent company's shares on the Stock Exchange/s within a specified time cannot be to my mind held to the raison d’ ^etre of the sanctioned scheme dated 8.5.2006. And it has not been even so argued. A scheme sanctioned by the Company Court has its main object / purpose and “basic structure” (if one may borrow the expression from another context) on the one hand and ancillary / peripheral matters on the other in respect of which delayed implementation or even non-implementation would not make the sanctioned scheme incapable of “working satisfactorily”. The respondent company is however on record with the averment that the shares would be listed on the Stock Exchanges no sooner it would be appropriate and in the interest of all its shareholders with better business, profits, improved market condition and favourable macro-economic environment. The Hon’ble Madras High Court in Pentamedia Graphics Limited [2006 (10) TMI 244 - HIGH COURT OF MADRAS] has held that merely because the shares of the company are not listed as provided for in the sanctioned scheme, it would not render it bad or entail the violation of the Court’s order. The enunciation of the Madras High Court is premised on the unquestionable legal position that sanctioning of a scheme under section 391(2) read with 394 of the Act of 1956 is a jurisdiction wholly distinct, separate and unrelated to the powers of the Stock Exchanges /SEBI to demand statutory compliances before granting listing permission. In the instant case the issue in the application under consideration is with regard to the applicants being allowed “exit option” with the price of the shares to be sold in the exercise of such “exit option” to be determined as per the claim of the applicants either at ₹ 220/-, 156/- or 49.31. There is evidently no remedy provided under the Act of 1956 for the relief claimed by the applicants by resort to a particular Court or Forum by invoking any particular machinery. In the circumstances I am of the considered opinion that the applicants would be well within their rights to approach the jurisdictional Civil Court for ventilating their grievance with regard to the share price for their exit, if so advised. In my considered opinion no direction for listing of shares of the Company with reference to Clause 3.7 of the sanctioned scheme dated 5.8.2006 within a given time frame can therefore be issued by this Court. - Decided against the appellants.
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