TMI Blog1997 (7) TMI 530X X X X Extracts X X X X X X X X Extracts X X X X ..... ty, Chemicals, business of the petitioners including its assets which includes lease right, permits, quota rights, industrial and other licences, trademarks, intellectual property rights, other intangibles and all the privileges and benefits of all contracts, agreements and arrangements and all other rights, licences, powers and facilities of every kind, nature and description whatsoever pertaining to the Undertaking and more particularly defined in clause ( g ) of the Scheme, as stated in and in the manner specified in the Scheme of Arrangement. 3. The petitioners have also prayed for an order under section 394 of the Act for transferring to and vesting in SC Co. without any further act or deed with effect from the Appointed Date, all the debts, liabilities, duties and obligations of the petitioner, pertaining to the Undertaking and identified in Schedule B of the Scheme, so as to become the debts, liabilities, duties and obligations of the SC Co. 4. The petitioners have further prayed for an order under section 394 that each member of the petitioner holding equity shares on a date (Record Date) to be fixed by the board of directors of petitioner in consultation with the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lder present, curiously enough Shri Lakhani has not filed any affidavit of the said shareholder who seconded his proposed amendment. 10. So far as the meeting is concerned, the meeting was held as per the directions of this Court in Judge's Summons taken out on behalf of the Petitioner - Company for directions to convince the meeting under section 391 of the Act. On 1-11-1996 an order was passed in terms of the Minutes of the order and directions were issued for the purpose of convening the meeting of the equity shareholders scheduled to be held on 10-12-1996. 11. As per the Minutes of the Order, the Chairman was directed to submit his report regarding the minutes of the meeting within seven days of the conclusion of the meeting and the said report was to be verified and accordingly the same has been filed. 12. According to the report of the Chairman, 252 equity shareholders of the company attended the meeting and voted in person or by proxy at the said meeting. The arrangement embodied in the Scheme was laid on the table and was explained to the members who attended the said meeting. As per the said report, 10 shareholders spoke at the said meeting and the overall view ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n a decision in Bohoo J. Coyajee v. Shanta Genevieve Prommeret Parulekar [1991] (3) Bom. LR 319 wherein it has been observed : "If the thing complained of is a thing which in substance the majority of the company are entitled to do or if something has been done irregularly which the majority of the company are entitled to do regularly, or if something has been done illegally which the majority of the company are entitled to do legally, there can be no use in having litigation about it, the ultimate end of which is only that a meeting has to be called, and then ultimately the majority gets its wishes". Shri Khambata has also placed reliance on a decision in the case of Miheer H. Mafatlal v. Mafatlal Industries Ltd. [1996] 87 Comp. Cas. 792 (SC) wherein it has been observed: "If Share Exchange Ratio is fixed by Chartered Accountant upon consideration of various factors and approved by majority of shareholders in meeting, the Court will not disturb ratio". 16. It was on this aspect that the Chairman thought it fit to reject the proposed amendment which Shri Lakhani sought to move with regard to the ratio of shares. Reliance has also been placed on behalf of the Petit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowed by many companies including multinational companies. However, when and at what point of time there was an increase in the stake, the objector has not been able to demonstrate the same. Moreover, if the action of the Petitioner - Company was contrary, in that case the Petitioner - Company would have been subject to the litigation or show cause notice which is not the case so far as the Petitioner - Company is concerned. 20. In the arguments advanced by the objector it was urged that the meeting was not properly conducted, there was a challenge to the report of the Chartered Accountant and the Court was called upon to call for the audio tape recording so as to ascertain what exactly transpired at the meeting. However, so far as this aspect is concerned, a perusal of the affidavit filed by objector Shri Dinesh Lakhani reflects that his main objection was to the issue of 1 equity share held in the Petitioner - Company to 2 equity share of SC Co. as he proposed an amendment for changing the swap ratio 1:1 instead of 1:2. Shri Lakhani, in support of his contention, has relied upon a decision in T.H. Vakily v. Bombay Presiden- cy Radio Club Ltd. [1946] 16 Comp. Cas. 8 (Bom. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to oppression of minority shareholders. However, curiously enough, except Shri Lakhani there is no other shareholder forthcoming or recording any objection to this exchange ratio. 24. So far, therefore, as this application of the objector is concerned, in view of the aforesaid rulings more particularly the observations made in Miheer H. Mafatlal's case ( supra ) that if share exchange ratio is fixed by the expert Chartered Accountant upon consideration of various factors and the ratio is approved by the majority of the shareholders in the meeting, the Court will not disturb the ratio, the objector/shareholder in the instant case has not been able to show or attribute any mala fides in the Scheme of Arrangement. 25. Hence, in light of my above discussion, so far as the objections raised by Shri Lakhani are concerned, the same stand rejected. Therefore, in view of the fact that Registrar of Companies has given no objection, petitioner made absolute in terms of prayer clauses ( a ) , ( b ) , ( c ) , ( d ) , ( e ) , ( g ) , ( h ) , ( i ) , ( j ), and ( k ). 26. Shri Khambata, on behalf of the Petitioner - Company states that he does not press for t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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