TMI Blog2005 (8) TMI 385X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. It is, inter alia , prayed in the Company Application that a meeting of the equity shareholders of the applicant-company be held for the purpose of considering, and if thought fit, approving with or without modification the proposed scheme of arrangement. 4. The Company Application is supported by an affidavit of Santosh Kumar Poddar, stated to be the Secretary of the applicant-company, sworn on 8-4-2005. 5. At the outset, it may be mentioned that by the order dated 15-4-2005, the Company Application was directed to be put up as fresh on 19-4-2005. 6. Again, by the order dated 19-4-2005, the Company Application was directed to be put up as fresh on 5-5-2005. 7. When the case was taken up on 5-5-2005, a supplementary affidavit, sworn by the aforesaid Santosh Kumar Poddar on 4-5-2005, was filed on behalf of the applicant-company. 8. Along with the said supplementary affidavit, a list of Equity Shareholders of the applicant-company as on 30-4-2005 has been filed as Annexure-A to the said supplementary affidavit. 9. By the order dated 5-5-2005, the said supplementary affidavit was taken on record, and the case was directed to be put up as fresh on 6-5-2005. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 17. Coming now to the averments made in the said affidavit accompanying the Company Application, it is, inter alia , stated in the said affidavit that New India Sugar Mills Limited was incorporated on the 4th day of May, 1933 as a Company limited by shares under the provisions of the Indian Companies Act, 1913; and that New India Sugar Mills Limited is an existing public company within the meaning of the Companies Act, 1956; and that the Registered Office of New India Sugar Mills Limited is situated at 9/1, R.N. Mukherjee Road, Kolkata-700001 within the jurisdiction of the High Court at Calcutta. 18. It is, inter alia , further stated in the affidavit accompanying the Company Application that the Authorised Share Capital of New India Sugar Mills Limited is Rs. 7,00,00,000 divided into 50,00,000 equity shares of Rs. 10 each and Rs. 2,00,000 perference shares of Rs. 100 each; and that the issued, subscribed and paid-up share capital of New India Sugar Mills Limited is Rs. 1,35,88,069 divided into 13,57,115 equity shares of Rs. 10 each fully paid up and a sum of Rs. 16,919, being the amount originally paid-up on forfeited equity shares. 19. It is, inter alia, further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gar Mills Limited excepting those arising or resulting from the usual course of business. 28. It is, inter alia, further stated in paragraph 4( g ) of the Affidavit accompanying the Company Application that in accordance with the listing agreement with the Stock-Exchange, New India Sugar Mills Limited has also published its results for the quarters ended on 30-9-2004 and 31-12-2004. 29. Copies of the said financial results for the said quarters have been annexed collectively and marked as Annexure-D to the Affidavit accompanying Company Application (appearing at page 163 of the Paper Book of the Company Application). 30. As regards the applicant-company, namely, Upper Ganges Sugar and Industries Limited, it is, inter alia, stated in the said Affidavit accompany-ing the Company Application that the applicant-company was incorpo-rated on the 10th day of August, 1932 as a Company limited by shares under the provisions of the Indian Companies Act, 1913 by the name and style of Upper Ganges Sugar Mills Limited; and that with effect from the 3rd day of September, 1984, the name of the applicant-company was changed to its present one; and that the applicant-company is an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is , inter alia , further stated in paragraph 5( f ) of the Affidavit accompanying the Company Application that the applicant-company has maintained proper books of account, as required by law. 38. It is, inter alia, further stated in paragraph 5( f ) of the Affidavit accompanying the Company Application that the applicant-company had issued 7,00,000 16 per cent non-convertible Debentures of Rs. 100 each on which a sum of Rs. 4,67,00,000 was outstanding as on the said date. 39. The financial position of the applicant-company, as per its aforementioned audited accounts as on 30-6-2004, has been summarised in paragraph 5( f ) of the Affidavit accompanying the Company Application. 40. It is, inter alia, stated in paragraph 5( g ) of the Affidavit accompanying the Company Application that subsequent to the date of the aforesaid audited accounts, there has been no substantial change in the financial position of the Applicant-company excepting those arising or resulting from the usual course of business. 41. It is, inter alia, further stated in paragraph 5( g ) of the Affidavit accompanying the Company Application that in accordance with the listing agreement with t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with New India Sugar Mills Limited; and that apart from such remaining business, New India Sugar Mills Limited will acquire the entire undertaking of Saran Trading Company Limited under a separate Scheme of Arrangement for amalgamation of Saran Trading Company Limited with New India Sugar Mills Limited (as mentioned in sub-paragraph ( b ) of paragraph 6 of the Affidavit accompanying the Company Application); and that Saran Trading Company Limited is a wholly owned subsidiary of the applicant-company; and that in consideration of the amalgamation, New India Sugar Mills Limited will issue and allot shares credited as fully paid-up in New India Sugar Mills Limited to the shareholders of Saran Trading Company Limited, i.e. , to the applicant-company. 47. It is , inter alia, further stated in paragraph 3 of the Second Supplementary Affidavit that meeting of the Equity Shareholders of New India Sugar Mills Limited to consider the said Scheme of Arrangement for amalgamation of Saran Trading Company Limited with New India Sugar Mills Limited (as mentioned in sub-paragraph ( b ) of paragraph 6 of the Affidavit accompanying the Company Application) has also been separately convened an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the proposed Scheme of Arrangement shall rank pari passu in all respects with the existing equity Shares of the Applicant Company; and that such equity shares shall, subject to applicable regulations, be listed and/or admitted to trading on the Relevant Stock Exchange( s ) where the equity shares of the applicant-company are listed and/or admitted to trading. 54. In paragraph 11, of the Affidavit accompanying the Company Application it is , inter alia, stated that under the proposed Scheme of Arrangement, the applicant-company will issue and allot equity shares credited as fully paid-up in the applicant-company to the shareholders of New India Sugar Mills Limited in the entitlement ratio provided in the proposed Scheme of Arrangement; and that such entitlement ratio of shares has been fixed on fair and reasonable basis and on the basis of Valuation Report of M/s. N.M. Raiji and Company, a firm of Chartered Accountants, and fairness opinion of Ernst and Young Private Limited, a Management Consultancy Concern. 55. It is pertinent to note that under the proposed Scheme of Arrangement, the Sugar Division of New India Sugar Mills Limited is proposed to be demerged and transfe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or calling meetings of its shareholders and creditors for the purposes of considering and approving the scheme. Once that has been done, a further application will be required to be made before the Learned Company Judge. That would be the appropriate time for the Learned Company Judge to consider the Scheme." (p. 641) 61. In view of the said decision of the Supreme Court and in view of the submissions made by Shri Bharat Ji Agrawal, learned Senior Counsel appearing for the applicant-company, the consideration of the aforementioned question, which has arisen during the course of hearing of the Company Application, is postponed till the stage of consideration of the petition for confirmation of the Scheme of Arrangement. 62. Another question, which has arisen during the course of hearing of the Company Application, is as to whether the proposed Scheme of Arrangement, which involves de-merger and transfer of the Sugar Division of New India Sugar Mills Limited from New India Sugar Mills Limited to the applicant-company, will attract the requirements of registration under the Registration Act, 1908 and the payment of stamp duty under the Indian Stamp Act, 1899, as amended in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eedings pending under sections 235 to 251 of the Companies Act, 1956 against New India Sugar Mills Limited or the applicant-company 70. It is, inter alia, stated in paragraph 12 of the Affidavit accompanying the Company Application that New India Sugar Mills Limited and the Applicant-company have filed the proposed Scheme of Arrangement with the Stock Exchanges pursuant to the listing agreement entered into with them by New India Sugar Mills Limited and the applicant-company; and that the Stock Exchanges have given their no objection to the proposed Scheme of Arrangement. 71. As noted above, copies of no-objection letters issued by the Calcutta Stock Exchange Association Limited, The Stock Exchange, Mumbai and National Stock Exchange of India Limited have been filed collectively as Annexure-A to the Third Supplementary Affidavit, and appear at pages 4, 5 and 6, respectively of the Paper Book of the Third Supplementary Affidavit. 72. It is ,inter alia, stated in paragraph 13 of the Affidavit accompanying the Company Application that the Instant Scheme of Arrangement is proposed to be made between New India Sugar Mills Limited and the Applicant-company and their respe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pany Application that the Registered Office of New India Sugar Mills Limited being situated at Kolkata, New India Sugar Mills Limited had filed a similar application before the Calcutta High Court for obtaining its orders/directions under section 391(1) of the Companies Act, 1956 in respect of the proposed Scheme of Arrangement; and that by an order passed on 28-3-2005 in such Application (Company Application No. 232 of 2005) filed by New India Sugar Mills Limited, the Calcutta High Court has directed only a meeting of the Equity Shareholders of New India Sugar Mills Limited to be held on 27-4-2005 for the purpose of the said shareholders considering, and, if thought fit, approving the Proposed Scheme of Arrangement under section 391(1) of the Companies Act, 1956. 78. Copy of the said order dated 28-3-2005 has been filed as Annexure-I, to the Affidavit accompanying the Company Application, and appears at page 326 of the Paper Book of the Company Application 79. It is relevant to mention that during the course of hearing of the Company Application, reference was made to Schedule-I to the Proposed Scheme of Arrangement appearing at page 41 of the Paper Book of the Company App ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ong with the Notice under section 393(1)( a ) of the Companies Act, 1956. 85. It is, inter alia , stated in paragraph 20 of the Affidavit accompanying the Company Application that the Company Application is made bona fide and in the interests of justice. 86. It is, inter alia , stated in paragraph 21 of the Affidavit accompanying the Company Application that no one will be prejudiced if orders are made and/or directions are given as prayed for. 87. It is, inter alia , stated in paragraph 16 of the Affidavit accompanying the Company Application that it is necessary that a meeting of the Equity Shareholders of the applicant-company be called to consider, and if thought fit, to approve the said proposed Scheme of Arrangement with or without modification. 88. I have heard Shri Bharat Ji Agrawal, learned Senior Counsel assisted by S/Shri Piyush Agrawal and Ankit Agrawal, learned counsel for the applicant-company and perused the record. 89. It is submitted by Shri Bharat Ji Agrawal that in view of the facts as disclosed in the Company Application and its accompanying affidavit as well as in the various Supplementary Affidavits, the prayers made by the applicant-c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the statement required to be furnished pursuant to section 393 of the Companies Act, 1956, and the prescribed form of proxy, shall be sent by pre-paid letter post under certificate of posting, addressed to each of the Equity Shareholders/Members of the applicant-company aforesaid at their respective registered or last known addresses. That, in addition, at least 21 clear days before the day appointed for the meeting of the Equity Shareholders/Members of the applicant-company, as aforesaid an advertisement convening the said meeting and stating that copies of the said scheme together with the copy of the statement required to be sent under section 393 of the Companies Act, 1956 and the prescribed forms of proxy can be obtained free of charge at the Registered Office of the applicant-company, shall be published in the daily National newspapers, Economic Times, published in English from Delhi, Hindustan Times, published in English from Lucknow in its Edition having circulation in the District Bijnor and in Dainik Jagran published in Hindi from Meerut in its Edition having circulation in the District Bijnor. That the Explanatory Statement required to be furnished pursuant to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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