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2016 (6) TMI 59 - PUNJAB AND HARYANA HIGH COURT

2016 (6) TMI 59 - PUNJAB AND HARYANA HIGH COURT - TMI - Sanction of the Scheme of Arrangement - Held that:- On the consideration of all the relevant facts, the procedural requirements contemplated under Sections 391 & 394 of the Act and the relevant Rules and on due consideration of the reports of the Regional Director, Northern Region, Ministry of Corporate Affairs, New Delhi and Official Liquidator, the Scheme of Arrangement is hereby sanctioned and as a result thereof, the assets and liabilit .....

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ion of the Scheme be drawn in accordance with law and its certified copy be filed with the Registrar of Companies within 30 days from the date of receipt of the same. - CP No.27 of 2016 (O&M) - Dated:- 3-5-2016 - MR. RAKESH KUMAR JAIN, J. For The Petitioner : Ms.Munisha Gandhi, Sr.Advocate, with Mr.Deepak Suri, Advocate, For The Respondent : Mr.Deepak Aggarwal, Advocate, with Mr.D.K. Singh, Official Liquidator RAKESH KUMAR JAIN, J. This petition is filed under Sections 391 & 394 read with Se .....

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in their respective Memorandum and Articles of Association, which are annexed with the petition as Annexures P-3 and P-6, respectively. The registered office of the Scope e-Knowledge Center Private Limited/Transferor Company and Quatrro Global Services Private Limited/Transferee Company is at Gurgaon. The Board of Directors of Scope e-Knowledge Center Private Limited/Transferor Company and Quatrro Global Services Private Limited/Transferee Company have approved the Scheme of arrangement in their .....

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meeting of Equity Shareholders of the Transferee Company was ordered to be convened, which were to be held on 23.1.2016 for which, the Chairman and Co-chairman were appointed. The Chairman of the said meeting has submitted his report on the basis of which CP No.224 of 2015 was disposed of on 01.02.2016. Notice of the second motion petition was issued on 5.2.2016 to the Regional Director, Ministry of Corporate Affairs, New Delhi and the Official Liquidator. It was also ordered that a notice be pu .....

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Certificate certifying application for Accounting Standard-14 has not been furnished. He has also raised an objection in para No.9 of his representation/affidavit. Para No.8.5 and 9 are reproduced as under: - 8.5 That the Deponent states that the Petitioner Companies have vide para No.34 of the reply stated that the accounting treatment proposed in the books of Quatrro Global Services Limited (i.e. the Transferee Company) on merger of Scope e-Knowledge Center Private Limited into Quatrro Global .....

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para 31 of the report has stated that the Scheme in paragraph 13 envisages Capital Reduction of QGS India (Transferee Company). Pursuant to amalgamation of Scope India with QGS India becoming effective. The face value of equity share of Re.1 each of QGS India will be reduced to Re.0.5 each. To the extent of reduction in face value of equity shares of QGS India, an amount is to be credited to the Capital Reserve Account. This shall tantamount to subscribed and paid up share capital of ₹ 1, .....

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within the ambit of provisions stipulated under Section 100(1) of the Companies Act, 1956. . In reply to the objections raised by the Regional Director, an affidavit dated 23.4.2016 of Amitabh Johri, authorised signatory of both the Petitioner-Companies as mentioned in their respective Board Resolutions, has been filed in which following explanations/averments have been made: 2. That as far as the observations raised in Para 8.5 and Para 12 of the Affidavit of the Regional Director is concerned, .....

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g of interests method as prescribed under Section 211(3C) of the Companies Act, 1956 and under Section 133 of the Companies Act, 2013 as stated in clause 10 of the Scheme of Amalgamation. 3.2 That as far as the observations raised in Para 9 of the Affidavit of the Regional Director read with Clause 31 of the report of the Registrar of Companies is concerned, it is submitted that: (a) The Scheme of Arrangement provides for merger of Scope India into QGS India and reduction of share capital of QGS .....

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n does not involve payment of any paid up share capital and hence provisions of Section 101 of the Act will not be applicable. (d) The Petitioner Company would like to further submit that reduction of face value of equity share of Re.1 each of QGS India to Re 0.5 each is an arrangement between the Company and its shareholders. Further, the Scheme has been approved by the Board of Directors of both the Petitioner Companies vide the Board Resolution dated December 1, 2015. Further, the creditors a .....

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articles, by special resolution, reduce its share capital in any way; and in particular and without prejudice to the generality of the foregoing power, may - (a ) extinguish or reduce the liability on any of its shares in respect of share capital not paid-up; (b) either with or without extinguishing or reducing liability on any of its shares, cancel any paid-up share capital which is lost, or is unrepresented by available assets; or (c) either with or without extinguishing or reducing liability .....

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ital. (g) Accordingly, the reduction in the face value of equity share is within the purview of section 100 (1) of the Companies Act, 1956. (h) The Petitioner Company further submits that the proposed reduction of share capital is under Section 391 to Section 394 read with Section 100 to Section 104 of the Act. The petitioner company further submits that various Courts in various judgments such as Maneckchowk & Ahmedabad Manufacturing Company Limited vs Unknown (1970 (40) CompCas 819 (Gujara .....

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rt of Punjab and Haryana at Chandigarh in case of Q.H. Talbros Limited (Company Appeal No.52) again held that Section 391 is not only a complete code but it is intended to be in a nature of a single window clearance system. (i) Further, the Supreme Court in Miheer H. Mafatlal vs Mafatlal Industries Ltd (AIR 1997 SC 506) has held that the jurisdiction of the Court is supervisory in nature and that of an appellate body. Further, the commercial wisdom of the parties to the Scheme which have been su .....

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t as a court of appeal and sit in judgment over the informed view of the concerned parties to the compromise, as the same would be in the realm of corporate and commercial wisdom of the concerned parties. The court has neither the expertise nor the jurisdiction to delve deep into the commercial wisdom exercised by the creditors and members of the company who have ratified the scheme by the requisite majority. Consequently, the company court's jurisdiction to that extent is peripheral and sup .....

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ld. And that the proposed scheme of compromise and arrangement is not found to be violative of any provision of law and is not contrary to public policy (j) In view of the above, the petitioner company respectfully submits that as all the provisions laid down in Section 391 read with Section 100 have been complied with and the arrangement is between the shareholders and the company which is not prejudicial to the interest of the public and the petitioner company has already obtained approval fro .....

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e conducted in the manner not prejudicial to the members of to public interest. 11. That in view of the observations of the Chartered Accountant the Official Liquidator most respectfully submits that the affairs of the company are conducted in the manner not prejudicial to the members or to public interest. The above-stated explanations submitted by Amitabh Johri, authorised signatory of the Petitioner-Companies, meet the queries raised by the Regional Director and Official Liquidator. It is fur .....

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