1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION COMPANY SCHEME PETITION NO. 304 OF 2010 CONNECTED WITH COMPANY SUMMONS FOR DIRECTION NO. 323 OF 2010 Alia Creative Consultants Private Limited…..Petitioner /Demerged Company COMPANY SCHEME PETITION NO. 305 OF 2010 CONNECTED WITH COMPANY SUMMONS FOR DIRECTION NO. 324 OF 2010 India Capital Advisors Private Limited....Petitioner/Resulting Company In the matter of the Companies Act, 1956 (1 of 1956); AND In the matter of Sections 391 to 394 read with Sections 78 and 100 to 103 of the Companies Act, 1956; AND In the matter of Scheme of Arrangement between Alia Creative Consultants Private Limited (“the Demerged Company”) AND India Capital Advisors Private Limited (“the Resulting Company”) AND their respective Shareholders Mr. Hemant Sethi i/b Hemant Sethi & Co., Advocates for the Petitioners in both Petitions. Mrs.Purnima Awasthi i/b Mr. S. K. Mohapatra for Regional Director in both Petitions. CORAM: S.J. KATHAWALLA , J DATE: 24TH SEPTEMBER, 2010 1. Heard learned counsel for the parties. 2. The sanction of the Court is sought under Sections 391 to 394 read with Sections 78 and 100 to 103 of the Companies Act, 1956 to the Scheme of Arrangement between Alia Creative Consultants Private Limited and India Capital Advisors Private Limited and their respective shareholders. The Scheme inter-alia provides for demerger of „Real Estate Leasing Business‟ of Alia Creative Consultants Private Limited („the 2 Demerged Company‟) into India Capital Advisors Private Limited („the Resulting Company‟) 3. Counsel appearing on behalf of the Petitioners has stated that the Petitioners have complied with all requirements as per directions of this Court and they have filed necessary affidavits of compliance in the Court. Moreover, Petitioners undertake to comply with all statutory requirements, if any, as required under the Companies Act, 1956 and the rules made there under. The said undertaking is accepted. 4. The Regional Director has filed an affidavit stating therein that save and except as stated in para 6(a), 6(b), 6(c) and 6(d) of the said affidavit, the scheme does not appear to be prejudicial to the interest of shareholders and public. In paragraph 6 of the said affidavit, the Regional Director has stated that: (a) Schedule- 1 attached to the scheme deals with terms and conditions of allotment of new preference shares. Clause 2.2.1 of the scheme defines the issue of shares which do not refer to the said Schedule-I attached to the Scheme. Hence it is suggested that clause 2.2.1 may be amended suitably. (b) Clause 3.2.3 of the scheme refers to clause 3.1.5 of the scheme which appears to be not correct. Hence it is suggested that clause 3.1.7 be substituted in place of clause 3.1.5. of the scheme . (c) The Demerged Company has filed compounding applications under section 621A of the Companies Act, 1956 in respect of violation under Section 297 of the Act pertaining to contract with associate companies M/s Alia Digital Technology Services Private Limited and M/s. Mendoza Overseas Private Limited in which Directors are interested. However the Directors of the Demerged Company have not yet filed compounding applications in this regards. Hence liberty may be granted to the Registrar of Companies, Mumbai to initiate necessary penal action against the Directors of Demerged Company if no such Compounding Applications is filed by the Directors of the Demerged Company in this regard. (d) Part-C of the Scheme deals with purchase and reduction of equity share capital of ‘ÁCCPL’;. There is no reason/justification embodied in the scheme for 3 adopting such a proposal. There is no clarity as to whether company proposes for this reduction under section 100(1)(C) or any other ground. In this connection ACCPL vice letter dated 01/07/2010 submitted that ÄCCPL has funds in excess of its business requirement. Hence the board has decided to make an offer for purchase of its own shares to the assenting equity shareholders at the value mentioned in the Scheme i.e. at Rs 150 per equity share. Such shareholders who are desirous of selling their shareholding in ACCPL may accept the offer for purchase by duly signing the option form that will be send to them”. Copy of the letter dated 1/07/2010 of M/s Alia Creative Consultants Private Limited is annexed hereto and marked as Exhibit-D. 5. The counsel appearing for the Petitioners seeks leave of this Court to amend the Scheme in order to comply with requisitions contained in paragraphs 6(a) and 6 (b) of the affidavit filed by the Regional Director. The draft amendment is tendered in Court. The same is taken on record and marked „X‟ for identification. The amendment of the Scheme is allowed in terms of draft amendment X. The amendment shall be carried out by the Petitioners within two weeks from the date of this order. 6. In so far as violation of provisions of Section 297 of the Companies Act, 1956 committed by the Directors of the Demerged Company, the Registrar of Companies without prejudice to their rights and contentions will be at liberty to initiate necessary prosecution against the Directors in the event necessary compounding applications are not filed within a period of four weeks. 7. In so far as observations made in paragraph 6 (d) of the affidavit of the Regional Director, the Counsel appearing for the Petitioners state that necessary explanation has been given by the Petitioner / Demerged Company by its letter dated 1st July 2010 and the averment to that effect has been made in para 6(d) itself. It is stated that the Demerged Company has funds in excess of its business requirement. Hence the board has decided to make an offer for purchase of its own shares to the assenting equity shareholders at the value mentioned in the Scheme i.e. at Rs 150 per equity share and such shareholders who are desirous 4 of selling their shareholding in Demerged Company may accept the offer for purchase by duly signing the option form that will be sent to them. 8. 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. 9. Since all the requisite statutory compliances have been fulfilled, the Company Scheme Petition No. 304 of 2010 is made absolute in terms of prayer clauses (a) to (d) and Company Scheme Petition No .305 of 2010 is made absolute in terms of prayer clause (a) to (c) . 10. 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. 11. The Petitioner to pay costs of Rs.10,000/- each to the Regional Director. 12. Costs to be paid within four weeks from today. 13. Filing and issuance of the drawn up order is dispensed with. 14. 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.J. KATHAWALLA, J)