TaxTMI 
TaxTMI 
2008 (5) TMI 431
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....any got listed in the year 1956 with the Ahmedabad Stock Exchange. It is one of the largest exporters in India, also one of the largest manufacturers of denim in the world. It also produces a range of premium cotton shirting and knits. The petitioner demerged company has been rapidly expanding its operations in garments. The turnover of the petitioner demerged company during the last financial year, i.e., 2006-07 has been Rs. 1,844.91 crores including the export turnover and the profit is Rs. 119.56 crores. 3. The petitioner demerged company had started its PMRTS Division in the year 1995-96 when it decided to venture into telecom business. The company was granted the operating licences to provide public mobile radio trunking service (PMRTS) in several cities in India, viz., Delhi, Mumbai (including Vashi), Faridabad, Chennai, Bangalore Ahmedabad, Vadodara and Surat. The company as on today holds valid licences in all the cities and is rendering the services of PMRTS to its many subscribers. It collects airtime charge from its customers. However, considering from the viewpoint of the company as a whole, at present, the PMRTS .division forms a very, small part of the business of Ar....
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....assed in the board meeting dated May 12, 2007, resolved that subject to such approvals of both equity and preference shareholders and subject to such directions and sanctions of the appropriate court, as may be required in law, and subject to such consents and permissions of the Central Government and other authorities as may be necessary, the scheme of arrangement be made between ARVIND and AORTSPL on the broad basis referred to in the scheme of arrangement. 7. This court vide its order dated September 19, 2007, directed the petitioner demerged company to convene separate meetings of the equity shareholders and preference shareholders of the company for the purpose of considering and if thought fit, approving with or without modifications, the said scheme of arrangement and the said order directed that Shri Sanjay S. Lalbhai, the director of the petitioner demerged company and failing him Shri Jayesh K. Shah, the director of the petitioner demerged company and failing him Shri Anang Lalbhai, the authorised officer of the petitioner demerged company be appointed as chairman of the meetings and to report the result thereof to this court. The notice of the meetings was sent individu....
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.... that out of the equity shareholders present at the meeting, nine shareholders abstained from voting. The vote of one equity shareholder, holding shares of Rs. 1,000 having voted in favour of the resolution was found to be invalid as the poll paper was not signed. Votes often equity shareholders are having no balance in the register of the company. All the remaining 103 shareholders present and casting valid votes having the value of their shares of Rs. 73,43,39,620 being 7,34,33,962 equity shares of Rs. 10 each voted in favour of the proposed scheme. Thus, the resolution approving the scheme of arrangement was carried unanimously, i.e., 100 per cent, in number and 100 per cent, in value of the equity shareholders present and voting at the meeting. 9. Since the proposed scheme of arrangement has been duly approved unanimously by the equity shareholders and preference shareholders, the petitioner demerged company is required to move this court for seeking sanction to the scheme of arrangement as and by way of this petition. 10. This court after hearing Mr. S. N. Soparkar, learned senior counsel appearing with Mrs. Swati Soparkar for the petitioner demerged company, on December 7, ....
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....IT Department of Telecommunications. The said licence being not transferable, the undertaking could not have been sold or transferred as envisaged under section 293(1)(a) of the Companies Act. Under the circular issued by the Ministry of Communication and IT Department of Telecommunications on June 2, 2003, some relaxation was given for the transfer of an undertaking with such a licence. It is specifically provided that such a licence can be transferred when the undertaking is being transferred under a scheme under section 391/394 of the Companies Act, when the same is sanctioned by this court. Considering the precondition attached to the said licence under which the company carries on the said activity, the company could not have followed the provisions of section 293(1)(a) of the Companies Act, for the proposed transfer of the undertaking, viz., PMRTS Division. The petitioner demerged company has also annexed the latest financial statement of the company in the form of the provisional balance-sheet as at December 31, 2007, along with the affidavit of the company secretary. 14. After the objections raised by the Deputy Registrar of Companies and after the reply affidavit filed by....
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....trum digital technology and shall be directed to transfer their network positively within a period of two years from the date of letter of confirmation in this regard and in such cases, licence agreement of these operators would be extended so as to make the total license period of 20 years. While this is done, these guidelines are contained in the letter No. 311-80/2000-VAS dated November 1, 2001 of the Licensing Cell (Value Added Service Group), Department of Telecommunications, Government of India. 15. M. Chhaya has further submitted that the said letter also simultaneously lays down detailed guidelines. It is laid down that fresh PMRTS licenses shall be granted after assessment of migration of existing operators to digital technology and availability of spare frequency spectrum in a particular service area since implementation of the above policy is solely dependent on the availability of frequency spectrum. It lays down that new licences for operation of PMRTS shall be granted on non-exclusive "first cum first serve" basis. It also lays down that one Mhz. frequency spectrum shall be allotted at the time of grant of licence, the period whereof shall be 20 years and it would bi....
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....cluding Indian Wireless Telegraphy Act, 1933) to the company or any promoter/partner or associate/sister concern thereof. 18. That vide letter No. 311-80/2001-VAS (Vol. II) dated July 14, 2006 of the Department of Telecommunications, Ministry of Communications and IT,. Government of India, there has been amendment in the licence agreements' of PMRTS consequent to migration to new licensing regime under NTP-99. Paragraph 13 of the policy contains the manner of transfer of license. The same reads as under : "13. Transfer of licence.-The licensee may transfer or assign the license agreement with prior written approval of the licensor to be granted on fulfilment of the following conditions : When Transfer or assignment is requested in accordance with the terms and conditions on fulfilment of procedures of Tripartite Agreement if already executed amongst the licensor, licensee and lenders ; or Whenever amalgamation or restructuring, i.e., merger or demerger is sanctioned and approved by the High Court or Tribunal as 'per the law in force ; in accordance with the provisions ; more particularly of sections 391 to 394 of Companies Act, 1956 ; and The transferee/assignee is fully eligi....
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.... Pvt. Limited, a company incorporated under the Companies Act, 1956, is incorporated in the State of Maharashtra in Pune and its paid up share capital is only Rs. 1 lakh. Coupled with the fact that its paid up share capital is Rs. 1 lakh, it is apparent from the figures available that it had sustained loss of Rs. 28,615 as on March 31, 2007. The figures as discernible from the balance-sheet show that it is not business of its own. He has, therefore, submitted that the present scheme is a camouflage to sell/transfer licence to defeat the policy of transfer. The figures placed before this court show that the resulting company AORTSPL has authorised paid up share capital of Rs. 1 lakh with loss of Rs. 28,615 as on March 31, 2007. There are no details as to how the amount of Rs. 600 lakhs would be procured for the purpose of paying up of the consideration. Furthermore, bare perusal of page 14 of the petition clearly shows that any question that may arise as to whether a specified asset or liability pertains to or does not pertain to the PMRTS business division or whether it arises out of the activities or operations of the PMRTS business division shall be decided by the board of direct....
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....ed by the deputy registrar in the further affidavit are an afterthought. None of these issues were raised by the Regional Director vide letter dated March 10, 2008, who has gone into all the relevant details of the petition before issuing the aforesaid letter. The issues raised by Mr. Dalmia on the basis of the further affidavit pertain to the "New Telecom Policy, 1999 (NTP-99)". Close perusal of the causes of the said policy reproduced in the affidavit of Mr. Dalmia shall make it clear that it gives an option to the existing operators to migrate to digital technology from the present analogue system. It very categorically reiterates at number of places that it is only an option and not a direction to migrate to digital technology. After the intimation about the aforesaid policy, the present petitioner has chosen to continue with the present analogue system and chose not to migrate to digital technology at this stage. The exercise of the said option was communicated on August 14, 2006 and the concerned authority has issued license agreements dated December 5, 2007 for the State-wise circles consolidating the old licences which were issued for individual cities. Since the petitioner....
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....ompany is not relevant for the sanction of the scheme by this court. However, in order to explain the factual position, the petitioner, submits that the resulting company, viz., Arya Omnitalk Radio Trunking Services Private Limited is a company incorporated recently specifically for the purpose to carry on the business of telecommunications (including among others, terrestrial, wire-line, wireless, micro-waves, satellite and1 submarine telecommunications), data processing, information technology, data and voice transmission, electronic engineering and communications. Another group of companies which is well known as J. M. Baxi group of companies or Arya group has various companies which are mainly engaged in the business of shipping and cargo transportation. The approximate turnover of these group companies is around Rs. 500 crores. Some of these companies have diversified into the PMRTS business activities on a small scale and has obtained licenses for the same. The list of the companies along with the licences obtained by them for various cities is produced on the record of this petition. Considering the total turnover of the said group, the PMRTS activities form a very small par....
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.... the company and the chartered accountant's certificate is separately produced specifically for this purpose to ensure that the relevant figures are derived on the basis of the books of account of the company which are reflected in balance-sheet in consolidated form. So far as interest of the shareholders is concerned, she has submitted that the scheme as well as the explanatory statement has been served upon each and every shareholder of the company. At the meeting of the equity shareholders of the company convened pursuant to the directions of this court, the shareholders present has consciously considered the proposed scheme and after due deliberations have granted their unanimous approval to the same. Pursuant to the newspaper publication no shareholder has raised any objection to the scheme or questioned the consideration for the transfer of the said division. She has, therefore, submitted that considering the entire facts and circumstances of the case, the petitioner could not have opted for provisions of section 293(1)(a) of the Companies Act, 1956, instead of the scheme of arrangement, under section 391/394 of the Act. Considering the precondition attached to the said licen....