TMI Blog2010 (10) TMI 915X X X X Extracts X X X X X X X X Extracts X X X X ..... objections to a composite scheme of amalgamation and arrangement propounded by the respondents, namely, M/s. Dish TV India Limited; M/s. Integrated Subscriber Management Services Limited; and M/s. Agrani Satellite Services Limited, all of whom have moved a first motion application under sections 391 to 394 of the Companies Act, being CA(M) No. 135/2010, in connection with the said scheme propounded by them. 2. On 4-8-2010, when the first motion application was taken up for preliminary hearing, counsel for the applicant/objector appeared and stated that he wish to be heard with regard to the relief being sought by the respondents. He further stated that he be granted an adjournment to satisfy this Court about his locus standi regarding th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erged company was permitted to place a fresh list of unsecured creditors of the demerged company on record after removing the name of the applicant/objector, M/s. Asia Satellite Telecommunications Co. Ltd., from that list. However, arguments with regard to the objector s claim to be heard at this stage on the instant application were nevertheless addressed by the applicant. 5. In support of his right to be heard at this stage itself, counsel for the objector relies on the judgment of the Bombay High Court in Colaba Land Mills Co. Ltd., In re [CP. No. 165 of 1975, dated 27-1-1976], to support the proposition that merely because Rule 67 of the Companies (Court) Rules, 1959 makes a provision for an ex parte application, it cannot debar a p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the purpose of issuing directions to convene the meetings. 8. Counsel for the objector does not dispute the proposition that the first motion application is to be moved ex parte and that there is no requirement to issue notice as per the Companies (Court) Rules, 1959. He however states that, nevertheless, the judgment of the Supreme Court in Chembra Orchard Produce Ltd. s case (supra) does not hold that even if someone were to approach the Company Court of his own accord, he has no right to be heard at the stage of the first motion application itself, and therefore, his client should be given a hearing and his objections to the Scheme propounded be heard and decided at this stage itself. 9. It is appropriate to reproduce the Apex Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt to a notice issued by the Court. The second is that he comes and stands before the Court on his own. In effect, the issue before this Court is whether a hearing should be granted to a party at the stage when the first motion application is being considered, regardless of how that party comes to stand before the Court. Counsel for the applicant seeks to create a distinction between the granting of a hearing consequent upon a notice being issued by a Court for that purpose, and the granting of a hearing by a Court because that party happens to appear on its own before that Court at the first motion stage, without notice having been issued to it. To my mind, this distinction cannot be drawn between the two aforementioned situations since th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his objection against the proposed scheme after citations calling for objections are published in newspapers. If an objecting party persuades the Court, the proposed Scheme will not survive the second motion stage. With this framework firmly in place, it cannot be said that a party or a creditor is prejudiced by any steps that were taken at the first motion stage. In this case, the objector is, in effect, seeking a hearing as if these proceedings were at the second motion stage and as if all antecedent steps necessary, after the passing of orders on the first motion application, and before the second motion can be considered by the Court, were successfully completed. 13. The issue before this Court is whether it is obliged to hear any ob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heard without previous notice to the other party is that the latter may be adversely affected by the outcome without being afforded an opportunity of being heard before that outcome is arrived at. It is undisputed that every motion with regard to a proposed Scheme under section 391 can only be sanctioned by the Company Court after the second motion petition is heard, with adequate opportunity to all parties likely to be affected thereby to be heard. Consequently, the requirements of the aforesaid universal rule stand satisfied. 15. Reliance by the objector on Cash Carry Wholesale Traders (P.) Ltd. s case (supra) is unfounded, since that decision relates to Rule 68 of the Companies (Court) Rules, 1959, and not Rule 67, which is the rele ..... X X X X Extracts X X X X X X X X Extracts X X X X
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