TMI Blog2008 (1) TMI 619X X X X Extracts X X X X X X X X Extracts X X X X ..... d to pay costs assessed at 200 GMs to the Central Government. - C.P. NO. 288 OF 2007 C.A NO. 556 OF 2007 - - - Dated:- 28-1-2008 - PATHERYA, J. JUDGMENT 1. This is an application for sanctioning the scheme of arrangement between the transferor and transferee-companies. Advertisements were issued in the respective dailies fixing the date of the meeting and meetings of the shareholders of both the transferor and the transferee-companies were held under the chairmanship of chairpersons appointed by this Hon ble Court. The schemes of arrangement were put to vote and were passed unanimously, without any modification. This will appear from the report of the chairpersons filed in respect of the transferor and transferee- companies. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the majority shareholders as will appear from the chairperson s report. No shareholder has challenged the said scheme of arrangement. There is no allegation of violation of any statutory provision. There has been compliance of sections 391, 392 and 394. The objection raised regarding avoidance of capital gains is not material as these are commercial matters and are best left to the wisdom of the shareholders who are astute businessmen. For the said proposition reliance has been placed on A.W. Figgis Co. (P.) Ltd., In re [1980] 50 Comp. Cas. 95 (Cal.) and Miheer H. Mafatlal v. Mafatlal Industries Ltd. [1996] 87 Comp. Cas. 792 1 (SC); Reliance has also been placed on Highway Cycle Industries and Sunbeam Auto Ltd., In re [1999] 9 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... panies Act. Its main objection is in respect of consideration and terms on which the license will be given being not specified. Consideration per se cannot invalidate the scheme as avoidance by the company of its tax liabilities will attract the provisions of the Income-tax Act and the companies cannot escape from their respective liabilities. It must not be forgotten that a scheme of arrangement is between shareholders of the transferor and transferee-companies. The scheme of arrangement is an arrangement to conduct the business of a company by its shareholders. The shareholders having agreed to conduct the management and the affairs of the company in a particular way must be honoured. The reason for doing so is that the shareholders tod ..... X X X X Extracts X X X X X X X X Extracts X X X X
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