TMI Blog2014 (1) TMI 1166X X X X Extracts X X X X X X X X Extracts X X X X ..... e details mentioned in present petition it comes out that the said transferor company fall within the purview of the terms “body corporate” which is defined under Section 2(7) read with Section 394(4)(b) of the Act and the petitioner transferee company is incorporated, registered and situated in India. In light of the provisions in the scheme, it would be necessary for the transferor company to fulfill all requirements under the laws applicable in Mauritius and it would be obligatory for the transferor as well as the petitioner - transferee company to obtain, before the scheme can be implemented from all concerned and appropriate authorities, all types and categories of permission, approval, consent etc. as may be necessary under the relevant and applicable laws, for implementation of the scheme - subject to diligent and strict compliance of the conditions mentioned hereinabove there is no objection against proposed scheme and it does not appear to be prejudicial to the interest of the shareholders of the petitioner company, and therefore it transpires that there is no reason or justification to not sanction the proposed scheme of amalgamation, but of course on the condition tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder clause 5 of the scheme, no shares of the petitioner company shall be issued as consideration for the said transfer or undertaking of the transferor company. It is also claimed that it was not required to take out separate proceedings for the sanction of the scheme of amalgamation. However, since the transferor company is based in Mauritius, the order passed in the petition shall be filed with the competent authority in Mauritius. The petitioner company has also claimed that the respective Board of Directors of the petitioner company and the respondent company have approved the scheme of amalgamation. 4. The petition was admitted vide order dated 2nd September 2011. The notice has been duly advertised in the newspapers The Time of India and Gujarat Samachar and Loksatta Marathi daily, and no one has come forward with any objections to the said petitions even after the publication. The said aspect has been further confirmed by the additional affidavit dated 11th October 2011. 5. Pursuant to the said order dated 2.9.2011 admitting the petition and upon service of the petition, the Regional Director has entered appearance. Mr.Shaikh, learned Standing Counsel for the th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ritius) with the petitioner transferee company here in this present petition and registered in India and the scheme does not, prima facie appear to be prejudicial to the interest of the shareholders of the petitioner transferee company and the public at large. 5.1 It is noticed from the affidavit of the Regional Director that one of the observation / objection which has been raised is to the effect that since the transferor company is registered under the Laws of Mauritius it is not liable to be dissolved without winding up order by this Court and another objection / observation is that the petitioner transferee company must ensure that name of the transferor company based in Mauritius is struck off, after the scheme is sanctioned. 6. The petitioner company has filed additional affidavit dated 11.10.2011 in response to the Regional Director's report dated 5.10.2011. In the said affidavit it is stated that any objection against the scheme has not been received by the petitioner or its advocate after publication of the advertisement. The deponent has also given response to the report of the Regional Director, particularly the observations made in para 2A and it is inter al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the scheme ultimately provided that it was subject to it being approved by the respective requisite majorities from the shareholders and the creditors and such other provisions as may be required under the provisions of the Foreign Exchange Management Act, 1999. The Court with such observations, granted sanction to the scheme. 7.1 The said issue had also come up for consideration and decision before the Court in case of Essar Shipping Port and Logistic Limited in Re wherein the Court in the decision dated 16.1.2009 in Company Petition No. 280 of 2008 in Company Application No.490 of 2008 considered similar objection and relying on the decision Bombay High Court in case of Zenta P. Limited, in Re, the Court rejected the objection in light of the provisions contained under Section 394 (4)(b) holding that since the provisions contained under Section 394 (4)(b) includes terms body corporate the transferor company situated outside India can be amalgamated with transferee company situated in India and the only condition would be that amalgamation should not be in violation of provisions contained under the companies act prevailing in such foreign Country or any laws prevailing and a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or which is not incorporated and registered in India and is not a company as defined and contemplated under Section 2(10) of the Act, can be amalgamated with such transferee company, provided such amalgamation does not violate any statutory restriction and fulfills the requirements contained under applicable laws including Reserve Bank of India Act and the provision contained under the Foreign Exchange Management Act. A similar position came up for consideration earlier, before Bombay High Court in the case of Zenta Private Limited, In re; reported in [2009 (149) Comp. Cas 413 (Bom)] wherein three transferor companies were registered outside India (i.e. in Mauritius) while the transferee company was formed and registered under the Act, in India. The scheme presented before the Court for amalgamation of the three transferor companies formed and registered in Mauritius was taken up for consideration in the petition filed by the transferee company wherein similar issue was raised by the respondent and the Court, upon taking into account the said provision under Section 394(4)(b) observed that:- the moment transferor company is an Indian company, it is not necessary that transfe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red and situated outside India i.e. in Mauritius and under the provisions of the laws prevailing and applicable in Mauritius. From the proposed scheme and the details mentioned in present petition it comes out that the said transferor company fall within the purview of the terms body corporate which is defined under Section 2(7) read with Section 394(4)(b) of the Act and the petitioner transferee company is incorporated, registered and situated in India. 8.1 On perusal of the proposed scheme, it comes out that in Clause 15 of the Scheme it is provided that:- 15. CONDITIONALITY OF THE SCHEME Notwithstanding any other provision of this Scheme, this scheme is conditional upon and subject to the following: 15.1 The requisite consent, approval or permission of the appropriate authority, which by applicable law may be necessary for implementation of this scheme. 15.2 Approval of the scheme by the requisite majority of the shareholders and such other class of persons of the transferor company and / or transferee company as may be required under the applicable law or as may be directed by the Gujarat High Court. 15.3 The certified copies / authenticated copies of the or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is incorporated. The transferee company shall furnish necessary orders / certificate on sanctioning the scheme. 4.6 As per paragraph 4(4) of the Fourteenth Schedule of the Mauritius Act, since the surviving company is incorporated under the laws of a jurisdiction other than that of Mauritius, the merger will be effective as provided for by the laws of that jurisdiction, i.e. that of the High Court. Thus, the transferor company entering into an agreement and giving the irrevocable appointment to the ROC Mauritius as their agent to accept service of process in proceedings and the passing of the order by the High Court sanctioning the scheme shall be sufficient for the ROC Mauritius to take cognizance of the merger and thereupon the ROC Mauritius shall strike off in their register, the transferor company without the need for winding up. The scheme shall take effect in Mauritius on such date as is stated in this scheme and upon fulfilling the aforesaid requirements under the Mauritius Act. 8.2 Thus, in light of the said provisions in the scheme, it would be necessary for the transferor company to fulfill all requirements under the laws applicable in Mauritius and it would be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e below mentioned directions, the cause or basis for the objection would not survive. Therefore, it is clarified and directed that:- (a) If necessary as per the relevant and applicable laws of Mauritius, the transferor company shall obtain appropriate orders sanctioning the proposed scheme from the competent Court. (b) Board of Directors, through one of the Directors of the petitioner company, shall file an undertaking on affidavit that there is no violation of and there shall not be any violation of any provisions under any of the applicable laws, particularly and including the provisions under RBI Act and FEMA. Such undertaking shall be filed within two weeks. (c) A certificate to such effect by solicitor / counsel shall be filed within two weeks. (d) All permission, sanction, approval etc. as may be required in India and in Mauritius shall be obtained from all competent authorities and the scheme shall become effective only upon and subject to issuance of such approval, sanction, permission etc., (e) Upon compliance of all requirements and subsequent implementation of the scheme, transferee company shall ensure that the name of the transferor company Mauritius is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e being approved by the respective requisite majorities of the members and the creditors of each of the amalgamating companies and the amalgamated company under Section 391 of the Act, and (b) such other provisions, if any, as may be required under the provisions of the Foreign Exchange Management Act, 1999. Thus, the company has undertaken to comply with the provisions of the FEMA. The Court therefore is of the view that the scheme is neither prejudicial to their interest nor to the public interest. The Court therefore grants its sanction to the scheme and prayers made in paragraph 34 of the petition are hereby granted. 10. In para 2(b) of tis affidavit the Regional Director has, on the basis of the report of the Registrar of Companies, declared that any complaint and / or representation against the proposed scheme of memorandum has not been received and that prima facie the scheme does not appear to be prejudicial to the interest of shareholders and the public at large. 10.1 Thus, the Regional Director and / or Registrar of Companies have not raised any objection, other than objection mentioned in para 2(a) of the affidavit, against the proposed scheme and on perusal of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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