1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION COMPANY PETITION NO.926 OF 2009 CONNECTED WITH COMPANY APPLICATION NO.845 OF 2009 In the matter of the Companies Act, 1956 (1 of 1956); And In the matter of Sections 391 (1) to 393 of the Companies Act, 1956; And In the matter of Scheme of Compromise between Lloyds Finance Limited and its Public Issue Debenture Holders. Lloyds Finance Limited, a Company incorporated under the Companies Act, 1956, having its registered office at Viraj Impex House, 2nd Floor, 47, P.D’Mello Road, Masjid (East), Mumbai – 400 009. ……Petitioner Mr. Janak Dwarkadas, Senior Counsel, a/w. Mr. Zal Andhyarujina, a/w. Mr. Rustam Gagrat, a/w. Mr. Mohan Salian & Mr. Jesse Cornelious, i/b. Gagrats, for Petitioner. Mr. D. Madon, Senior Counsel, Mr. Cyrus Ardeshir, Advocate a/w. Amey Nabar, Advocate i/b Hariyani & Co. for Special Committee. 2 Mr. Sachin Chandarana, Advocate a/w. Mr. Durgesh Khandeparkar, Advocate i/b. M.K. Ambalal & Co. for ICICI Bank. Mr. Shyam Mehta, Advocate i/b. Mr. S.K. Mohapatra for the Regional Director. Coram : S.J. Kathawalla J. Date : 27th September, 2010 1. Heard Learned Counsel for the parties. 2. Mr. Janak Dwarkadas, Learned Senior Counsel appearing for the Petitioner states that at the time of the admission of the Petition, though through oversight Directions were not expressly sought for service on the Regional Director and advertisement of the Notice of the Petition in newspapers, yet the Petitioner has effected service of the said Petition on the Regional Director and also advertised the Notice of the Petition in the “Free Press Journal” in English and “Maharashtra Times” in Marathi on 10th February, 2010. The Petitioner has also published the Notice of the Petition in the Maharashtra Government Gazette on 8th February, 2010. The Petitioner has also filed in Court the Affidavit dated 18th February, 2010 proving service and advertisements of the Notice of the said Petition. The Learned Counsel seeks condonation of the said action, which is granted. 3 3. The sanction of the Court is sought (u/s. 391 of the Companies Act, 1956) in terms of prayer clause (a), (b) and (c) of the Petition to the Scheme of Compromise between the Lloyds Finance Limited and its Public Issue Debenture holders. 4. The Counsel appearing on behalf of the Petitioner has stated that they have complied with all the requirements as per the Law of this Court and have filed necessary Affidavit to that effect in this Court. Moreover, the Petitioner Company also undertakes to comply with all statutory requirements, if any, as required under the Companies Act, 1956 and the Rules made thereunder. The undertaking is accepted. 5. The Regional Director has filed his Affidavit stating therein that the Scheme is not prejudicial to the interest of Shareholders and public, save and except that, according to the Regional Director, 75% in value of all the Debenture Holders taken as one Class has not approved the Scheme. 6. The Company Petition is strongly opposed and contested by ICICI Bank Ltd. in its capacity as Debenture Trustee. 7. As regards the Trusteeship fees and legal expenses of ICICI Bank Ltd., the Petitioner Company and ICICI Bank Ltd. agrees to settle the dues with the Special Committee in due course at appropriate time. 4 8. Considering the opposition of the ICICI Bank as a Debenture Trustee, the Petitioner Company proposes to raise the amount offered to the Public Issue Debenture Holders of class ‘A’, ‘B’ and ‘C’ to the Scheme. The repayment is raised from 50% to 55% for Class ‘A’ Debenture Holders, from 30% to 35% for Class ‘B’ Debenture Holders and from 20% to 25% for Class ‘C’ Debenture Holders. All other terms and conditions of the Scheme will remain unchanged. In view thereof, the Counsel for the Petitioner submits that the Petitioner may be allowed to amend the Scheme and also to make all necessary consequential changes thereof as per the Schedule handed which is marked “X” for identification. Leave to amendment granted. Amendment to be carried out within two weeks from today. 9. In view of the fact that upon the scheme being sanctioned by this Hon’ble Court, the scheme shall supersede any and all terms and conditions, if any, relating to the Debentures in the prospectus, Debenture Trust Deed or the submissions before any Civil or Criminal Court and/or Governmental Authority etc. and the terms and conditions, if any, therein, which are contrary to this scheme shall be deemed to be modified in accordance with this scheme. ICICI Bank Ltd. shall stand discharged from all its duties and obligations under 5 the Debenture Trust Deed with regards to class ‘A’, ‘B’ and ‘C’ of the Debenture Holders under the scheme. 10. In modification of the Order dated 23rd June, 2006 in Company Application No.350 of 2006 in Company Petition No.1017 of 2002, it is directed that instead of ICICI Bank Ltd., the Petitioner Company/Special Committee shall sell the flat situate at Mercantile Apartment, Dr. C.P. Gidwani Road, Chembur, Mumbai, which is mortgaged to ICICI Bank Ltd. for Debenture liability and the sale proceeds shall be deposited in this Court. Upon the sale proceeds being so deposited with this Court, the Special Committee will be free to withdraw the same and utilize the same to repay the Debenture Holders under this Scheme, subject to a proportionate amount being set aside towards the claim of Repco Bank. 11. ICICI Bank also agrees to refund the deposit of Rs.25,00,000/- (Rupees Twenty five lacs only) lying with them to the Petitioner Company upon Scheme being sanctioned. The said amount will be utilized for repayment of the Debenture Holders as per the Scheme. The Special Committee will ensure that from the amounts deposited by ICICI Bank Ltd., the Special Committee will keep proportionate amount towards the claim of Repco Bank while distributing the amounts to other Debenture holders. 6 11A. In view of the fact that a proportionate amount of the sale proceeds of the said Flat and a proportionate amount of Rs.25,00,000/- are being kept aside to satisfy the claim of the Repco Bank, the Regional Director has no objection to the classification of the Debenture Holders as contained in the Scheme. 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. 13. Since all the requisite statutory compliances have been fulfilled by the Petitioner Company, the Petition is made absolute in terms of prayers (a), (b) and (c). 14. The Petitioner to lodge a copy of this Order and the Scheme with the concerned Superintendent of Stamps for the purpose of adjudication of stamp duty payable, if any, on the same within 30 days from the date of the Order. 15. The Petitioner to pay the cost of Rs.10,000/- to the Regional Director, Western Region, Mumbai. Costs to be paid within four weeks from today. 16. Filing and issuance of the drawn up Order is dispensed with. 7 17. All authorities concerned to act on a copy of this Order along with the Scheme duly authenticated by the Company Registrar, High Court, Bombay. (S.J. KATHAWALLA J.)