TMI Blog2009 (1) TMI 911X X X X Extracts X X X X X X X X Extracts X X X X ..... n dated 21.08.2008. The Registered Office of the petitioner is situated at Administrative Building, Essar Refinery Complex, Okha Highway (SH-25), Khambalia Taluka, Jamnagar in the State of Gujarat. 3. The petitioner company started its commercial activities in 1975 and has been carrying on the same since then. The petitioner company is a listed public limited company and has been engaged in the activities of shipping and other allied activities. It is a company with a turnover of more than ₹ 1000 Crores and profit of more than ₹ 200 Crores during the last financial year. India Shipping, the foreign transferor or transferor company no.1 was incorporated under the laws of Mauritius on 19.05.2005. The Registered Office of the Transferor Company No.1 is situated at 10, Frere Felix de Valois Street, Port Louis, Mauritius. The transferor company no.1 is essentially an investment company and holds shares of some other group companies. Essar Sisco Shipping Management Company Limited, the Indian transferor or transferor company no.2 was incorporated on 29.10.1992 in Chennai, Tamilnadu under the provisions of the Companies Act, 1956. The Registered Office of the Transfe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Directors of the petitioner company decided to shift the registered office of the petitioner company to Gujarat, another Company Application being Company Application No.310/2008 was moved and vide order dated 15.07.2008, the order dated 10.04.2008 was recalled and the application being Company Application No.268/2008 was permitted to be withdrawn. 7. This Court vide its order dated 02.09.2008 passed in Company Application No.490/2008 directed the petitioner company to convene a meeting of the equity shareholders of the company for the purpose of considering if thought fit, approving with or without modifications in the said Scheme of Amalgamation and the said order directed Mr. V. Ashok, WholeTime Director of the petitioner company and failing him Mr. N. Srinivasan, the director of the petitioner company be appointed as Chairman of the meeting and to report the resolutions thereafter to this Court. Notice of the meeting was sent individually to all the equity shareholders of the Company as required by the order together with the copy of scheme of amalgamation and the Explanatory Statement required under Section 393 of the Companies Act and a Form of Proxy. The notice of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10. In response to such observations, an affidavit is filed by Mr. Manoj Contractor, the Company Secretary and the Authorised Signatory of the petitioner company on 10.12.2008. Alongwith the said affidavit, the petitioner company has placed on record the latest published results of the company as on 30.09.2008. The petitioner company has also confirmed that on the issue of shares by the transferee company to the shareholders of the transferor company incorporated in Mauritius, the same shall be done in compliance with the applicable provisions of the Reserve Bank of India Act. The petitioner company has also submitted a copy of the relevant provisions of the Companies Act prevailing in Mauritius and has also placed on record the legal opinion expressed by a Counsel of Mauritius confirming that the present scheme is in compliance with said Act and that it does not violate any provisions of the said Act. 11. Over and above these two observations made by the Deputy Registrar in his Affidavit, Mr. Harin P. Raval, the learned Asst. Solicitor General of India has raised an issue that the Transferor Company No.1, situated at Mauritius is incorporated in Mauritius and hence it is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r for dissolution of any transferor company under Clause IV shall be made by the Court unless the Official Liquidator has on scrutiny of the Books and papers of the Company, made report to the Court that the affairs of the company have not been conducted in a manner prejudicial to the interests of its members or to public interest. Based on this provision, Mr. Raval has submitted that so far as transferor company no.1 is concerned, this provision is not workable as the company is situated in Mauritius and this Court cannot pass any order for winding up of the said company nor the Official Liquidator can submit any Report on the affairs of the Company as to whether its affairs are conducted in a manner prejudicial to the interests of its members or to public interest. He has therefore submitted that such a Scheme cannot be sanctioned by the Court. 13. Mr. Soparkar, the learned Advocate for the petitioner on the other hand has submitted that the definition of the 'Company' contained in Section 390(a) of the Act is confining only to Section 391 and 393 of the Act. The present petition is filed under Section 394 of the Act and hence such definition is not applicable. He ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nies Act, 2001. Section 4(2)(b) and 4(3) of Part II of the 14th Schedule of the Companies Act, 2001 reads as under :- (b) where the surviving company or the consolidated company is to be in corporate under the laws of a jurisdiction other than that of Mauritius, it shall submit to the Registrar - (i) an agreement that a service of process may be effected on it in Mauritius in respect of proceedings for the enforcement of any claim, debt, liability or obligation of a constituent company incorporated under this Act or in respect of proceedings for the enforcement of the rights of a dissenting member of a constituent company incorporated under this Act against the surviving company or the consolidated company; (ii) an irrevocable appointment of the Registrar as its agent to accept service of process in proceedings referred to in subparagraph (1); (iii) an agreement that it shall promptly pay to the dissenting members of a constituent company incorporated under this Act the amount, if any, to which they are entitled under this Act with respect to the rights of dissenting members; and (iv) a certificate of merger or consolidation issued by the appropriate authority of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the case of Zenta Private Limited, decided on 28.04.2006 wherein similar issues arose and the Court took the view that the term 'body corporate' appeared in 394(4)(b) and the term 'company' appeared in Section 390(a) of the Act presents no situation of conflict. It is not as if the company which can be wound up under Companies Act, 1956 alone that is contemplated in the Chapter pertaining to amalgamation and re-construction. In any event, so far as Section 391 and 393, both the provisions are invoked in the present case. The term 'body corporate' appearing under Section 2(7) includes the company incorporated outside India. As far as the term 'company' in Section 3 is concerned, even with definition, it does not mean that the scheme of amalgamation presented by the Transferor company which is registered in India cannot be entertained or sanctioned merely because the transferor companies are not situated within the jurisdiction of this Court or incorporated under the Companies Act. If the intention of the Parliament is to permit and facilitate sanction of compromises or arrangement proposed with a company expressly referred in Section 394 (1), th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shareholders 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 Act. The Court therefore is of the view that Scheme is in the interest of shareholders as well as creditors and it is neither prejudicial to their interest nor to public interest. The Court therefore grants its sanction to the Scheme and prayers made in Para 34 of the petition are hereby granted. 18. It is worthwhile to mention here that as per the statement made by Mr. Soparkar, the transferor company no.2 has filed a Company Petition for the purpose of obtaining sanction to the scheme of amalgamation with the transferee company, before the High Court of Tamilnadu and the scheme has been sanctioned by the Court vide its order dated 18.12.2008. This is one more reason for the Court to grant its sanction to the Scheme. 19. The fees for the Central Government Counsel are quantified at ₹ 3,500/= (Rupees Three Thousand Five Hundred Only) and the same ..... X X X X Extracts X X X X X X X X Extracts X X X X
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