TMI Blog2008 (8) TMI 556X X X X Extracts X X X X X X X X Extracts X X X X ..... oxy at a general meeting of which a notice specifying the intention to pass a special resolution has been duly given. There is no doubt that the resolution in question has been passed as a special resolution which has been passed by 75 per cent of those voting. It was however contended that since what was achieved was a reduction in the share capital. It was necessary for the company to have separately passed a resolution under section 100 of the Companies Act. However, this objection cannot be sustained. In the result, Objections are rejected and the Scheme is sanctioned in terms of prayer clause (a) of the Petition. Petition is allowed. - COMPANY PETITION NO. 953 OF 2007 COMPANY APPLICATION NO. 948 OF 2007 AND COMPANY APPLICATION (L) NO. 1101 OF 2007 - - - Dated:- 21-8-2008 - S.A. BOBDE, J. Virag Tulzapurkar, Ashish Kamat for the Petitioner. Birendra Saraf, Mahesh Patil, Y.N. Adhia, Ms. Shashikala Sharma for the Respondent. C.J. Joy and S.K. Mohapatra for the Regional Director. JUDGMENT 1. Heard. 2. In the course of these proceedings under section 391 of the Companies Act, a meeting of the shareholders has been convened. The Resolution has b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hogap AB which held 1,00,000 shares aggregate value of Rs. 10,00,000. Inclusion of Hoganas Hogap AB in the same clause of members as the others. 7. The contention of the objectors appears to be well founded. Indeed shareholders have been left with no option but to return their shares to the company. However such a clause if not shown to be contrary to any provision of law and if applied uniformly is within the power of the company, particularly when taken by the majority of the members of the company present for voting as required in law. Therefore, though apparently unfair its real validity would depend on whether the decision could be said to have been validly taken under section 391(2) of the Companies Act by the majority of that class of members whose meeting has been convened since it may be safely assumed that the majority knows what is in the best interest of the company. 8. According to the Objectors, the Company ought to have obtained appropriate directions from this Court for convening separate meetings of Hoganas Hogap AB which is a subsidiary of Hoganas AB Sweden, which held 1.82 per cent shares and a separate meeting of other shareholders who held 2.01 per c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n be applied with reasonable certainty is as to the nature of compromise offered to different groups or classes. The company will ordinarily be expected to offer an identical compromise to persons belonging to one clause otherwise it may be discriminatory . At any rate, those who are offered substantially different compromises each will form a different class. Even if there are different groups within a class the interest of which are different from the rest of the class or who are to be treated differently in the scheme, such groups must be treated as separate classes for the purpose of the scheme. Broadly speaking, a group of persons would constitute one class when it is shown that they have conveyed all interest and their claims are capable of being ascertained by any common system of valuation. The group styled as a class should ordinarily be homogeneous and must have commonality of interest and the compromise offered to them must be identical. This will provide rational indicia for determining the peripheral boundaries of classification. The test as stated earlier would be that a class must be confined to those persons whose rights are not so similar as to make it impossible ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g company i.e., Hoganas AB Sweden whose interest may not have been in the trading of shares. Now, ordinarily a company would be expected to offer identical terms to all shareholders otherwise the action could be vitiated as being discriminatory. It is therefore obvious that all those shareholders who were offered the same terms would have to be treated as one class. If different terms would have been offered to different groups of shareholders, they would have to be treated as a different class, which is not the case here. In the company the number of shareholders were 17 that included Hoganas Hogap AB, which held 1.82 per cent of the shares and other members of the public who held 2.01 per cent. All these shareholders were to be relieved of their shareholdings on the same terms. It was incumbent on the company therefore to treat all the shareholders as a one class. As observed by Gujarat High Court in Maneckchowk case the group styled as a class should ordinarily be homogeneous and must have commonality of interests and the compromise offered to them must be identical. It is clear that the shareholders formed a group which was homogeneous and had a commonality of interest and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t appear that the proposed action is manifestly unfair or is being proposed to defraud other shareholders. The decision to reduce the shareholding of the company since shares became untradeable in the market and the corresponding decision of the shareholders to accept payment in such shares and relinquish their shareholding could be well said to be commercially correct and acceptable decision. In that case the Supreme Court settled the broad contours of the jurisdiction of the Company Courts as follows: "...In view of the aforesaid settled legal position, therefore, the scope and ambit of the jurisdiction of the Company Court has clearly got earmarked. The following broad contours of such jurisdiction have emerged : 1. The sanctioning court has to see to it that all the requisite statutory procedure for supporting such a scheme has been complied with and that the requisite meetings as contemplated by section 391(1)( a ) have been held. 2. That the scheme put up for sanction of the Court is backed up by the requisite majority vote as required by section 391 sub-section (2). 3. That, the meetings concerned of the creditors or members or any class of them had the relevant ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oposed arrangement is not violative of any provisions of law nor it is contrary to public policy. It cannot be said that the members or the class of members who voted in favour of the decision coerced the minority to promote any interest adverse to them. In fact 99.66 per cent voted in favour of the Scheme and 34 per cent against the Scheme. 17. As stated earlier, even if the vote of Hoganas Hogap AB is excluded, the number of persons who voted in favour of the Scheme comes to 65.72 per cent and the number of persons who voted against the Scheme comes to 34.28 per cent. There is thus no merit in the contention of the objectors. 18. Mr. Saraf, the learned counsel for the objectors relied on a decision of the English Court Hellenic General Trust Ltd., In re [1975] 3 ALL ER 382. However, the circumstances of that case were different. The court found that one company which held shares i.e., MIT which was a wholly owned subsidiary of Bank Hambros and not to have been allowed participated in the voting because under the proposed Scheme the ordinary shares of the company were to be cancelled and new ordinary shares were to be issued to Hambros with the result that the compan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contains the aforesaid characteristics. It was however contended that since what was achieved was a reduction in the share capital. It was necessary for the company to have separately passed a resolution under section 100 of the Companies Act. However, this objection cannot be sustained in view of the decision of this Court in PMP Auto Industries Ltd. In re [1994] 80 Comp. Cas. page 289 (Bom.) where this court observed as under : ". . . Not only is section 391 a complete code as held by the Court, but .... it is intended to be in the nature of a single window clearance system to ensure that the parties are not put to avoidable, unnecessary and cumbersome procedure of making repeated applications to the court for various other alterations or changes which must be needed effectively to implement the sanctioned scheme whose overall fairness and feasibility has been judged by the court under section 394 of the Act." (p. 299) In this view of the matter, there is no merit in the objection on behalf of the Regional Director, which is hereby rejected. 21. In the result, Objections are rejected and the Scheme is sanctioned in terms of prayer clause ( a ) of the Petition. Petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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