IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION COMPANY PETITION NO. 765 OF 2009 CONNECTED WITH COMPANY APPLICATION NO. 566 OF 2009 In the matter of the Companies Act, 1956; AND In the matter of Sections 391 and 394 of the Companies Act, 1956; AND In the matter of a Composite Scheme of Arrangement involving: i. Demerger of a division of Sterling Investment Corporation Private Limited and vesting it in Shapoorji Pallonji & Company Limited. ii. Amalgamation of Shapoorji Pallonji & Company (Rajkot) Private Limited with Sterling Investment Corporation Private Limited. 2 iii. Amalgamation of Shapoorji & Company (Rajkot) Private Limited with Cyrus Investments Limited. iv. Demerger of specified assets and liabilities of Sterling Investment Corporation Private Limited and of Cyrus Investments Limited and vesting it in Shapoorji Pallonji & Company Limited. Sterling Investment Corporation Private Limited ) a company registered under the provisions of the ) Indian Companies Act, 1913 and having its ) Registered Office at 70, Nagindas Master Road, ) Fort, Mumbai 400 023. )Petitioner AND COMPANY PETITION NO. 766 OF 2009 CONNECTED WITH COMPANY APPLICATION NO. 568 OF 2009 Cyrus Investments Limited ) a company registered under the provisions of the ) Indian Companies Act, 1913 and having its ) Registered Office at Esplanade House, ) 3 Hazarimal Somani Marg, ) Fort, Mumbai 400 001. )Petitioner AND COMPANY PETITION NO.767 OF 2009 CONNECTED WITH COMPANY APPLICATION NO. 569 OF 2009 Shapoorji Pallonji & Company (Rajkot) Private Limited ) a company registered under the provisions of the ) Indian Companies Act, 1913 and having its ) Registered Office at 70, Nagindas Master Road, ) Fort, Mumbai 400 023. )Petitioner AND COMPANY PETITION NO. 768 OF 2009 CONNECTED WITH COMPANY APPLICATION NO. 567 OF 2009 Shapoorji Pallonji & Company Limited ) a company registered under the provisions of the ) Indian Companies Act, 1913 and having its ) Registered Office at 70, Nagindas Master Road, ) Fort, Mumbai 400 023. ) Petitioner AND 4 COMPANY PETITION NO. 769 OF 2009 CONNECTED WITH COMPANY APPLICATION NO. 570 OF 2009 Shapoorji and Company (Rajkot) Private Limited ) a company registered under the provisions of the ) Indian Companies Act, 1913 and having its ) Registered Office at 70, Nagindas Master Road, ) Fort, Mumbai 400 023. ) Petitioner CORAM: R. S.Mohite J. DATE : 6th July, 2010 Mr. D. D. Madon, Senior Advocate, along with Mr.Cyrus Ardeshir i/b Vigil Juris, Advocates for the Petitioners. Mr. M.S. Bhardawaj, instructed by Mr. S. K. Mohapatra for the Regional Director in all Petitions. Dr. T. Pandian, Dy., Official Liqudiator present in CSP No. 767 of 2009 and CSP No. 769 of 2009. P.C.:- 1. Heard Learned counsel for the Petitioners. 2. The sanction of the Court is sought under Sections 391 to 394 of the Companies Act, 1956 to the Scheme of Arrangement for: 5 (a) Demerger of a division of Sterling Investment Corporation Pvt. Ltd. (“Petitioner” in Company Petition No.765 of 2009) and vesting thereof into Shapoorji Pallonji & Co. Ltd. (“Petitioner in Company Petition No. 768 of 2009). and (b) Amalgamation of Shapoorji Pallonji & Co. (Rajkot) Pvt. Ltd. (Petitioner in Company Petition No.767 of 2009) with Sterling Investment Corporation Pvt. Ltd. (Petitioner in Company Petition No. 765 of 2009). and (c) Amalgamation of Shapoorji & Company (Rajkot) Pvt. Ltd. (Petitioner in Company Petition No.769 of 2009) with Cyrus Investments Ltd. (Petitioner in Company Petition No.766 of 2009). and (d) Vesting of specified assets and liabilities of Sterling Investment Corporation Pvt. Ltd. (Petitioner in Company Petition No.765 of 2009) in Shapoorji Pallonji & Co. Ltd. (Petitioner in Petitioner Company No.768 of 2009). 6 and (e) Vesting of specified assets and liabilities of Cyrus Investments Ltd. (Petitioner in Company Petition No.766 of 2009) in Shapoorji Pallonji & Co. Ltd. (Petitioner in Company Petition No.768 of 2009) 3. Counsel appearing on behalf of the Petitioners has 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, the Petitioner Companies undertake to comply with all Statutory requirements, if any, as required under the Companies Act, 1956 and the Rules made there-under. The undertaking is accepted. 4. The Regional Director has filed his affidavit stating therein that save and except as stated in paragraph 6 (a) to (j) of the said Affidavit, the Scheme does not appear to be prejudicial to the interest of the Shareholders and public. Paragraphs 6 (a) to 6(j) of the said Affidavit read as under:- “(a) The reference to Clause 22(b) appearing in Clause 23(d) of Part VI of the Scheme be read as Clause 23(b) instead of Clause 22(b). 7 (b) As per Clause 20(3) of Part V of the Scheme, the value of the Debenture amount is only Rs.1,68,23,00,000/- whereas in the Annexure ‘E’ forming part of the Scheme against column no. 6, the value has been shown as Rs.1,68,48,00,000/-. The same shall be substituted by revised / corrected Schedule and the respective Company be directed to resubmit the following text of the Scheme in Form No.61 together with revised Annexure ‘E’ with the Registrar of Companies (Mumbai). (c) Sub Clause (4) of Clause 20 of Part V of the Scheme deals with substitution of Capital Clause of the MOA of Resulting Company viz. M/s. Shapoorji Pallonji & Co. Ltd. The said Clause is nothing but the repetition of Existing Capital Clause only. Subject Co. shall therefore amend its Authorized Capital suitably before giving effect to the Scheme if approved by the Hon’ble High Court. (d) That the Existing Preference Share Capital of the M/s. Sharpoorji Pallonji & Co. Ltd. has already been fully subscribed and paid-up. 8 Hence for allotment of 200 new Preference Shares to the Preference Shareholders of M/s Sterling Investments Corporation Private Limited as per Clause 8(b) of Part II of the Scheme in lieu of transfer of Property Division, the Authorized Capital of M/S. Shapoorji Pallonji & Co. Ltd. needs to be increased before giving effect to this scheme suitably. (e) As per Clause 20(3) of Part V of the Scheme read with Annexure “E” to this Scheme, M/s. Sharpoorji Pallonji & Co. Ltd. to allot 10,00,000 Equity Shares to M/s. Sterling Investment Corporation Private Limited Company. As the time for conversion of the proposed debenture into equity by 31.03.2010 being the Due Date has already expired, M/s. Shapoorji Pallonji & Co. Ltd. has to allot equity shares directly. For allotting new equity shares, subject Co. has to increase its authorized Capital accordingly before giving effect to the Scheme, if approved by the Hon’ble High Court. 9 (f) Similarly as per Clause 20(3) of Part V of the Scheme read with Annexure “F” to this Scheme, M/s Shapoorji Pallonji & Co has to issue by 31.03.2011 further 10,00,000 no of equity shares to M/s. Cyrus Investments Ltd. Hence, the Company be directed to increase Authorized Capital before giving effect to such allotment of new equity share. (g) Thus for the observation made in para no. d, e, and f herein above, M/s. Shapoorji Pallonji & Co Ltd be directed to Increase its Authorized Capital and accordingly pass necessary resolutions u/s 94/97 of the Companies Act, 1956 and File form No. 5 with the Registrar of Companies together with fees payable as prescribed under Schedule X of the Companies Act, 1956. (h) As per Clause 13(f) of Part III of the Scheme, as well as per Clause 18(f) of Part IV of the Scheme, the Authorized Share Capital of M/s. Sterling Investment Corporation Private Limited & M/s. Cyrus Investments Limited will be increased to Rs. 75 Crore and Rs. 302 Crores respectively. For which both the 10 Company be directed to comply with the requirement of Section 97 and pay the fees as per Schedule X of the Companies Act, 1956 with ROC before giving effect to the Scheme, if approved by the Hon’ble High Court. (i) The Income tax Liability and other Revenues / Tax etc. arising for transfer of Property Division by M/s. Sterling Investment Corporation Private Limited to M/s. Shapoorji Pallonji & Co. Ltd. and other transfers relating to immovable property covered in the Scheme shall be payable by the Respective Companies and the subject Companies be directed to give undertaking to this effect to pay the revenues. (j) M/s. Cyrus Investments Limited is an NBFC Company. That, the Company may be directed to file a copy of the Scheme together with the Order of the Hon’ble High Court approving the Scheme within 30 days with RBI.” 5. (i) In view of the observations made in paragraph 6 (a) to 6(g) of the said Affidavit of the Regional Director, the Counsel on behalf of the Petitioners seeks leave of this Court to amend the proposed Scheme in terms of draft amendments at item Nos. 1, 2 and 3 of the 11 Schedule of Amendments handed in and marked “X” for identification. The Counsel for the Petitioners also applies for certain consequential amendments as mentioned at item Nos. 4 and 5 of the said Schedule of Amendments marked “X”. The Petitioners are allowed to carry out the said amendments. The amendments to be carried out within a period of two weeks from today. (ii) So far as paragraphs 6(g) and 6 (h) of the said Affidavit of the Regional Director is concerned, the Petitioners through their counsel undertake that the Companies whose Authorised Share Capital are being increased under the Scheme will comply with the requirement of Section 97 of the Companies Act, 1956 and pay the fees as per Schedule X of the Companies Act, 1956 and file the requisite Form with the Registrar of Companies. The said undertaking is accepted. (iii) The Petitioners Companies through their counsel further undertake that the income-tax liability and other revenues/taxes, if any, arising for transfer of property division by Sterling Investment Corporation Private Ltd. and Shapoorji Pallonji & Co. Ltd. and other transfer relating to immovable property covered in the Scheme shall be paid by the respective companies as per law. The said undertaking is accepted. (iv) The Petitioners Companies through their counsel also undertake that the Transferee Company (i.e. Cyrus Investments Limited) will file a copy of 12 the Scheme along with the copy of this Hon’ble Court’s order on this Petition within 30 days from the date of the order, with the Reserve Bank of India. The said undertaking is accepted. 6. The Official Liquidator has filed his report in Company Petitions No. 767 of 2009 and Company Petition No. 769 of 2009 stating that the affairs of the Transferor Companies viz. Shapoorji Pallonji (Rajkot) Pvt. Ltd. and Shapoorji & Company (Rajkot) Pvt. Ltd. have been conducted in a proper manner and that the said Transferor Companies viz. Shapoorji Pallonji (Rajkot) Pvt. Ltd. and Shapoorji & Company (Rajkot) Pvt. Ltd. may be ordered to be dissolved. 7. 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. 8. Since all the requisite statutory compliances have been fulfilled, Company Petitions No. 767 of 2009 and 769 of 2009 are made absolute in terms of respective prayers clauses (a) to (d) and Company Petitions No. 765 of 2009, 766 of 2009, 768 of 2009, are made absolute in terms of prayer clauses (a) to (c), subject to the amendments to be carried out in the Scheme which are mentioned in the Schedule referred to hereinabove and marked “X”. 13 9. The Transferee 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. 10. The Petitioners in all the five Petitions to pay costs of Rs.10,000/- each to the Regional Director, Western Region, Mumbai and the Petitioners in Company Petition No. 767 of 2009 and 769 of 2009 to pay costs of Rs.10,000/- each to the Official Liquidator, High Court, Bombay. Costs to be paid within four weeks from today. 11. Filing and issuance of the drawn up order is dispensed with. 12. All concerned authorities to act on a copy of this order with Scheme duly authenticated by the Company Registrar, High Court, Bombay. ( R. S. MOHITE J.)