IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION COMPANY PETITION NO.841 OF 2009 CONNECTED WITH COMPANY APPLICATION NO.993 OF 2009 In the matter of Sections 391 to 394 of the Companies Act, 1956; And In the matter of Indsec Holdings Limited; And In the matter of the Scheme of Amalgamation of Indsec Holdings Limited with Essar Teleholdings Limited and their respective shareholders and creditors. Indsec Holdings Limited … Petitioner/Transferor Company Mr. Amish Shroff i/b Rajani Associates for the Petitioner. Mr. P. Ramrao, Official Liquidator. Mr. C. J. Joy and Mr. M. M. Goswami i/b S.K. Mohopatra for the Regional Director. CORAM: Dr. D.Y. Chandrachud, J. DATE: 4th December, 2009 PC: 1. Heard learned counsel for the Parties. 2. The sanction of this Hon’ble Court is sought under Sections 391 to 394 of the Companies Act, 1956 to the Scheme of Indsec Holdings Limited, 1 the Transferor Company with Essar Teleholdings Limited, the Transferee Company and their respective shareholders and creditors. 3. The Registered Office of the Transferee Company is situated at Chennai in the State of Tamil Nadu. The counsel appearing on behalf of the Petitioner states that the said Transferee Company has filed its Petition for obtaining sanction to the said Scheme in the High Court of Madras and the said Scheme has been sanctioned by the High Court of Madras on October 27, 2009. 4. Counsel appearing on behalf of the Petitioner has stated that they have complied with all the requirements as per the directions of this Court and they have filed necessary affidavits of compliance in the Court. Moreover, the Petitioner Company undertakes to company with all statutory requirements, if any, as required under the Companies Act, 1956 and the rules made there under. 5. The Regional Director has filed an Affidavit stating therein that save and except as stated in paragraph 6(i) and (ii) of the said Affidavit, the Scheme does not appear to be prejudicial to the interest of shareholders and public. 6. In paragraph 6(i) of the said affidavit, the Regional Director has stated that : “The Transferor Company is a Non Banking Finance Company. Hence the Transferor Company maybe directed to file a copy of the Scheme along with the copy of the order of this Hon’ble Court 2 on this Petition within 30 days from the date of the order, with the R.B.I.” 7. So far as the observations made by the Regional Director in Paragraph 6(i) of his affidavit are concerned, counsel appearing for the Petitioner states that the Petitioner undertakes to file a copy of the Scheme along with copy of order passed by this Court with the Reserve Bank of India within 30 days from the date of the Order. 8. In Paragraph 6(ii) of the said Affidavit read thus: “Clause 6.5 of the Scheme provides for the allotment of 2 equity shares by the Transferee Company for every 1 Debenture issued by the Transferor Company. The total number of debentures as at 31/03/2009 are 2,66,30,760. Therefore total number of equity shares required to be issued by the Transferee Company would be 5,32,61,520 number of shares. Whereas it is stated in the said para only 5,32,51,540 number of equity shares (short by 9980 equity shares) will be issued. In this connection petitioner company may be directed to make necessary corrections in clause 6.5 of the Scheme accordingly”. 9. In reply to the aforesaid remarks made by the Regional Director, counsel appearing on behalf of the Petitioner submits after obtaining instructions from the Petitioner that Petitioner had 2,66,30,760 convertible debentures outstanding as at March 31, 2009. However, the Petitioner redeemed 4990 debentures resulting into lesser allotment of 9980 shares in July 2009 i.e. after the date of Balance Sheet but before the 3 date of making application in September 2009. Therefore number of shares to be issued in ratio of 2 shares per debentures has been mentioned in clause 6.5 of the Scheme as 5,32,51,540. The aforesaid remark from Regional Director being based on the Audited Balance Sheet as on March 31, 2009 considers the previous numbers of 2,66,30,760 debentures and hence mentions the numbers of shares as 5,32,61,520. As the number of outstanding convertible debentures as on the date of petition as well as on date is the same as stated in the Scheme, 5,32,51,540 equity shares as mentioned in the Scheme will be required to be allotted on sanction and hence no necessary correction is required to be made in Clause 6.5 of the Scheme. 10. The Official Liquidator has filed a report stating therein that the affairs of the Transferor Company have been conducted in a proper manner and the Transferor Company may be ordered to be dissolved. 11. 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. 12. Since all the requisite statutory compliances have been fulfilled, Company Petition filed by the Transferor Company is made absolute in terms of prayer clauses (a) to (g). 4 13. The Petitioner Company to lodge a copy of this Order and the Scheme duly authenticated by the Company Registrar, High Court, 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 the Order. 14. The Petitioner to pay costs of Rs.7500/- 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. 15. Filing and issuance of the drawn up order is dispensed with. 16. All authorities concerned to act on a copy of this Order along with the Scheme duly authenticated by the Company Registrar, High Court, Bombay. (Dr. D. Y. Chadrachud, J.) 5