1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION COMPANY SCHEME PETITION NO 340 OF 2011 CONNECTED WITH COMPANY SUMMONS FOR DIRECTION NO 345 OF 2011 In the matter of the Companies Act, 1956 (1 of 1956); AND In the matter of Sections 391 to 394 of the Companies Act, 1956; AND In the matter of the Scheme of Amalgamation OF Tata Communications Internet Services Limited ( ‘the Transferor Company’) WITH Tata Communications Limited (‘the Transferee Company’) TATA COMMUNICATIONS INTERNET SERVICES LIMITED, a Company incorporated under the provisions of the Companies Act, 1956 and having its registered office at Videsh Sanchar Bhawan, Mahatma Gandhi Road, Fort, Mumbai 400 001 ) ) ) ) ) ) )……..Petitioner Company Mr. Hemant Sethi i/b Hemant Sethi & Co. for the Petitioner. Dr. T. Pandian, Official Liquidator. Mr. C.J. Joy and Ms. Jyotsna Pandhi i/b Mr. H.P Chaturvedi for Regional Director 2 CORAM: S.C. DHARMADHIKARI, J DATE: 20th AUGUST 2011 1. Heard learned counsel for the parties. 2. The sanction of the Court is sought under Sections 391 to 394 of the Companies Act, 1956 to a Scheme of Amalgamation of Tata Communications Internet Services Limited with Tata Communications Limited. The Petitioner/Transferor Company is 100% subsidiary of Tata Communications Limited, the Transferee Company. 3. Counsel appearing on behalf of the Petitioner has stated that the Petitioner has complied with all requirements as per directions of this Court and they have filed necessary affidavits of compliance in the Court. Moreover, Petitioner undertake to comply with all statutory requirements, if any, as required under the Companies Act, 1956 and the rules made there under. Undertaking is accepted. 4. The Regional Director has filed an Affidavit stating therein that save and except as stated in paragraph 6 of the said Affidavit, it appears that the scheme is not prejudicial to the interest of shareholders and public. In paragraph 6 of the said Affidavit, the Regional Director has stated that: (a) The shares of the Transferee Company are listed with the Bombay Stock Exchange Limited and National Stock Exchange of India Limited. Transferee Company has given intimation to Bombay Stock Exchange Limited and National Stock Exchange of 3 India Limited about present Scheme of Amalgamation. However approval if any, obtained from BSE/NSE by the Transferee Company in respect of present scheme of amalgamation has not been furnished” (b) “The Registrar of Companies, Mumbai is in receipt of complaint from Shri Maheswar Hazari, MP, against the Tata group of Companies including Transferee Company regarding “finding of special audit –non payment of license fees by Tata group Companies”. Registrar of Companies has taken up the matter with the Transferee Company. However, Ministry of Corporate Affairs /Regional Director/ Registrar of Companies reserves their right to take necessary action against the Transferee Company and any of the Officers in default of the Transferee Company, if any, offence is established against the Transferee Company in this regard. “ 5. As far as first observation in paragraph 6(a) of the Affidavit of the Regional Director is concerned, the learned Counsel appearing on behalf of the Petitioner states that the entire issued, subscribed and paid up share capital of Petitioner Company is held by the Transferee Company and that the Petitioner Company is wholly owned subsidiary of the Transferee Company. My attention has been drawn to the order dated 10th day of June 2011 dispensing with the filing of a separate Company Summons for Direction and Company Scheme Petition by the Transferee Company. 6. The Clause 24 (f) of the Listing Agreement reads thus:- 4 “(f) The company agrees that it shall file any scheme/petition proposed to be filed before any Court or Tribunal under sections 391,394 and 101 of the Companies Act, 1956, with the stock exchange, for approval, at least a month before it is presented to the Court or Tribunal.” 7. In the instance case no Application and Petition along with the Scheme is required to be filed by the Transferee Company as there is no re-organisation of the share capital of the Transferee Company as no new shares are being allotted to the shareholders of the Petitioner/Transferor Company in the Transferee Company. However, out of abundant caution, the Transferee Company has in all fairness filed the Scheme under Clause 24(f) with the Bombay Stock Exchange and the National Stock Exchange by their letter dated 25 April, 2011 stating that the proposed Scheme envisages merger of wholly owned subsidiary with its parent Company, hence there would be no issue of shares by the Transferee Company upon merger of the subsidiary. The Counsel for the Petitioner submits that no written response or objection has been received from the stock exchanges. The Transferee Company has been verbally communicated by the stock exchanges that no approval is required by the Transferee Company as the Transferee Company has not 5 filed an Company Summons for Direction and Company Scheme Petition with this Court. 8. Reliance is placed upon unreported Judgment of this Court in Company Scheme Petition No 80 to 83 of 2010 in the matter of Scheme of Amalgamation of Cornershop Entertainment Company Private Limited and Cornershop Animation Company Private Limited and Digital Media Convergence Limited and Re-Med Services Private Limited with ETC Networks Limited and Judgment of Delhi High Court in Company Petition No. 124 of 2008 in the matter of Scheme of Amalgamation of Bharti Aquanet Limited with Bharti Airtel Limited where the Regional Director, Northern Region had taken similar objection. 9. As the Transferee Company is the listed Company and is not required to file any Petition, this observation does not survive. 10. In reply to the second observation in paragraph 6(b) of the said Affidavit it is clarified that sanctioning of the Scheme will not dilute the proposed penal action, if any to be taken by the Regional Director/Registrar of Companies/Ministry of Corporate Affairs against the Transferee Company and its officers, in default, if any violation is established on the basis of inspection conducted and that the Ministry of Corporate 6 Affairs/Regional Director/Registrar of Companies are at liberty to take necessary action against the Transferee Company and any of its Officers in accordance with law, in case, if any offence is established against the Transferee Company. 11. The Official Liquidator has filed his report stating therein that the affairs of the Transferor Company have been conducted in a proper manner and that the Transferor Company may be ordered to be dissolved by this Court. 12. From the material on record, the Scheme appears to be fair and reasonable and is not violative of any provisions of law and is not contrary to public policy. None of the parties concerned have come forward to oppose the Scheme. 13. Since all the requisite statutory compliances have been fulfilled Company Scheme Petition is made absolute in terms of prayer clauses (a). 14. The Petitioner to lodge a copy of this order and the Scheme duly authenticated by the Company Registrar, High Court (O. S.), Bombay, with the concerned Superintendent of Stamps for the purpose of adjudication of stamp duty payable, if any, on the same within 60 days from the date of order. 7 15. The Petitioner Company to pay costs of Rs.10,000/- each to the Regional Director, Western Region, Mumbai and to the Official Liquidator, High Court, Bombay. Costs to be paid within four weeks from today. 16. Filing and issuance of the drawn up order is dispensed with. 17. All authorities concerned to act on a copy of this order along with Scheme duly authenticated by the Company Registrar, High Court (O. S.), Bombay. (S. C. DHARMADHIKARI. J.)