1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION COMPANY SCHEME PETITION NO.58 OF 2011 CONNECTED WITH COMPANY SUMMONS FOR DIRECTION NO.774 OF 2010 Mahimna Mercantile Credits Limited ……..Petitioner / First Demerged Company COMPANY SCHEME PETITION NO.59 OF 2011 CONNECTED WITH COMPANY SUMMONS FOR DIRECTION NO.775 OF 2010 Traitrya Constructions Finance ........Petitioner/ Second Limited Demerged Company AND COMPANY SCHEME PETITION NO.60 OF 2011 CONNECTED WITH COMPANY SUMMONS FOR DIRECTION NO.776 OF 2010 Shriyam Auto-Fin Limited. ........Petitioner / Third Demerged Company AND COMPANY SCHEME PETITION NO.61 OF 2011 CONNECTED WITH COMPANY SUMMONS FOR DIRECTION NO.777 OF 2010 Neptune Steel Strips Limited .........Petitioner / Fourth Demerged Company AND COMPANY SCHEME PETITION NO.62 OF 2011 CONNECTED WITH COMPANY SUMMONS FOR DIRECTION NO.778 OF 2010 Mindtree Industrial Finance Limited ........Petitioner / Fifth Demerged Company AND 2 COMPANY SCHEME PETITION NO.63 OF 2011 CONNECTED WITH COMPANY SUMMONS FOR DIRECTION NO.779 OF 2010 Vishvakarma Equipment Finance ........Petitioner/Sixth (India) Limited Demerged Company AND COMPANY SCHEME PETITION NO.64 OF 2011 CONNECTED WITH COMPANY SUMMONS FOR DIRECTION NO.780 OF 2010 Valuecorp Securities & Finance ........Petitioner/Seventh Limited Demerged Company AND COMPANY SCHEME PETITION NO.65 OF 2011 CONNECTED WITH COMPANY SUMMONS FOR DIRECTION NO.781 OF 2010 Pearl Housing Finance (India) ........Petitioner/Eight Limited Demerged Company AND COMPANY SCHEME PETITION NO.66 OF 2011 CONNECTED WITH COMPANY SUMMONS FOR DIRECTION NO.782 OF 2010 Creative Ashtech Power Projects ........Petitioner/Resulting Private Limited Company In the matter of the Companies Act I of 1956 AND In the matter of Sections 391 to 394 of the Companies Act, 1956 AND 3 In the matter of the Scheme of Arrangement between Mahimna Mercantile Credits Limited. AND Traitrya Constructions Finance Limited. AND Shriyam Auto-Fin Limited. AND Neptune Steel Strips Limited. AND Mindtree Industrial Finance Limited. AND Vishvakarma Equipment Finance (India) Limited. AND Valuecorp Securities & Finance Limited. AND Pearl Housing Finance (India) Limited. AND Creative Ashtech Power Projects Private Limited. AND Their Respective Shareholders 4 Mr.Rajesh Shah i/b Rajesh Shah & Co, Advocates for Petitioner in all Petitions. Mr.C.J.Joy with Mr Abhijit Desai i/b Mr.H.P.Chaturvedi for Regional Director in all Petitions. CORAM : S. J. VAZIFDAR,J DATE : 15TH APRIL, 2011 PC: 1. Heard learned counsel for parties. 2. The sanction of the Court is sought under Sections 391 to 394 of the Companies Act, 1956 to the Scheme of Arrangement between Mahimna Mercantile Credits Limited, the First Demerged Company, Traitrya Constructions Finance Limited, the Second Demerged Company, Shriyam Auto-Fin Limited, the Third Demerged Company, Neptune Steel Strips Limited, the Fourth Demerged Company, Mindtree Industrial Finance Limited, the Fifth Demerged Company, Vishvakarma Equipment Finance (India) Limited, the Sixth Demerged Company, Valuecorp Securities and Finance Limited, the Seventh Demerged Company, Pearl Housing Finance (India) Limited, the Eighth Demerged Company and Creative Ashtech Power Projects Private Limited, the Resulting Company. The Scheme provides for demerger of Finance Division of the Demerged Companies into Creative Ashtech Power Projects Private Limited, the Resulting Company. 5 3. Counsel appearing on behalf of the Petitioners have stated that they have complied with all the requirements as per directions of this Court and they have filed necessary affidavits of compliance in the Court. Moreover, Petitioner Companies undertake to comply with all statutory requirements, if any, as required under the Companies Act, 1956 and the rules made thereunder. The undertaking is accepted. 4. The Regional Director has filed his affidavit stating therein that save and except as stated in paragraphs 6(a) to (c) of the said affidavit, it appears that scheme is not prejudicial to the interest of shareholders and public. In paragraphs 6(a) to 6(c) of the said affidavit, the Regional Director has stated that: “(a) The Demerged Companies are Non Banking Finance Companies. Hence the Demerged Companies may be directed to file a copy of the scheme along with the copy of this Hon'ble Court’s order within 30 days from the date of the order, with Reserve Bank of India. (b) The Resulting Company is a private limited Company. All the Demerged Companies are public limited companies having more than 50 shareholders in each of the company. In the 6 event of any shares being allotted to more than 50 shareholders in Resulting Company, then Resulting Company shall convert itself into public limited company before such allotment of shares. (c) As per Clause 5.1.1 of the scheme if the share exchange ratio is adjusted, then some of the shareholders may receive few shares. However, all the preference shareholders will get equity shares in exchange of their holdings.” 5. As far as the objection of the Regional Director in paragraph 6(a) of his Affidavit is concerned, the Petitioners/Demerged Companies through their counsel undertake to file a copy of the Scheme along with the copy of this order with the Reserve Bank of India within 30 days from the date of order. The said undertaking is accepted. 6. So far as the objection of the Regional Director in paragraph 6(b) of his Affidavit is concerned, the Petitioner/Resulting Company through its Counsel undertakes to convert itself into Public Limited Company and to comply with the requirements of Section 31/44 of the Companies Act, 1956 before the issue of shares to the shareholders of the Demerged Companies, if the number of shareholders exceeds 7 50 in the Resulting Company. The said undertaking is accepted. 7. As far as the contents of paragraph 6(c) of the said Affidavit is concerned, the Petitioner through their Counsel submits that all the Demerged Companies are unlisted companies. Further, pursuant to the order passed by this Court on 26th November, 2010 in Company Summons for Direction Nos. 774 of 2010 to 781 of 2010 taken out by the respective Demerged Companies, this court has directed to convene and hold the meetings of Equity Shareholders of respective Demerged Companies. Accordingly, meetings of Equity Shareholders of respective Demerged Companies were duly convened and held on 31st December, 2010 and the Equity Shareholders of the respective Demerged Companies have unanimously approved the proposed Scheme of Arrangement without any modification. The chairman of the respective meetings has filed his report in respect of the result of the respective meetings. So far as the 7% Non Cumulative Redeemable Preference Shareholders of the respective Demerged Companies are concerned, the learned counsel states that all the 7% Non Cumulative Redeemable Preference Shareholders of the respective Demerged Companies have given their consents in writing agreeing to the proposed Scheme of Arrangement and hence their 8 meeting was dispensed with by the aforesaid order. The learned counsel submits that the shareholders have in their own wisdom understood the commercial justification of the Scheme and approved the same unanimously without any modification. Thus the proposed Scheme has the express consent/ knowledge of the shareholders. 8. The counsel appearing on behalf of the Petitioner Company states that clause 5.1.3 of Scheme of Arrangement clearly state that any fractional entitlements arising on issue Equity Shares of the Resulting Company to Shareholders of Demerged Companies shall be ignored. Thus the shareholders have in their own wisdom understood the commercial justification of the Scheme and approved the same unanimously without any modification. Moreover they would continue to remain shareholders of the respective Demerged Companies without any change in their shareholding. 9. The counsel appearing on behalf of the Petitioner Company further states it may be noted that save and except abovementioned observation in paragraph 6 of the Regional Directors Affidavit, the Regional Director says that the Scheme is not prejudicial to the interest of shareholders and public and the fact that no shareholder has come forward to object the scheme in the court. 9 10. 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. 11. There is no objection to the Scheme, save and except as stated in paragraphs 5 to 9 above, and since all the requisite statutory compliances have been fulfilled, the Scheme of Arrangement deserves to be sanctioned. Hence, all the Petition are made absolute in terms of prayer clauses (a) to (c) of the respective Petitions. 12. The Petitioner Companies 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 this Order. 13. The Petitioner in all the Company Scheme Petitions to pay costs of Rs.10,000/- each to the Regional Director, Western Region, Mumbai. Costs to be paid within four weeks from today. 14. Filing and issuance of the drawn up order is dispensed with. 10 15. All concerned authorities to act on a copy of this order along with scheme duly authenticated by Company Registrar, High Court, (O.S) Bombay. (S. J. VAZIFDAR, J)