IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION COMPANY SCHEME PETITION NO.43 OF 2010 CONNECTED WITH COMPANY SUMMONS FOR DIRECTION NO.59 OF 2010 In the matter of the Companies Act, 1956 (1 of 1956); AND In the matter of Section 391 to 393 read with section 100 to 104 of the Companies Act, 1956; AND In the matter of Scheme of Reduction Cum Arrangement between MCX Stock Exchange Limited and Shareholders of MCX Stock Exchange Limited MCX Stock Exchange Limited ……..Petitioner Company Mr. Rohit Kapadia,Senior Counsel with Mr. Neville Lashkari, Advocate a/w Ms. Dimple Shah, Ms. Geeta Channe i/b Mulla & Mulla & Craigie Blunt & Caroe, Advocates for the Petitioner. Mr. Ashish Agarwal i/b Mr. S. K. Mohapatra for Regional Director. CORAM: S. J. Kathawalla J. DATE: 12th March 2010 P.C: 1. Heard learned counsel for the parties. 2. The sanction of the Court is sought under Sections 100 to 104 and 391 to 393 of the Companies Act, 1956 to the Scheme of Reduction cum Arrangement between MCX Stock Exchange Ltd. and its Shareholders. 3. Counsel appearing on behalf of the Petitioners has stated that they have complied with all requirements as per directions of this Court and they have filed necessary affidavit of compliance in the Court. Moreover, the Petitioner Company 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. 4. The Regional Director has filed an Affidavit stating therein that save and except as stated in paragraphs 6(a) and 6(b) of the said affidavit, the Scheme does not appear to be prejudicial to the interest of shareholders and public. The paragraphs 6(a) and 6(b) of the said Affidavit read thus:- “6. (a) the company is granted recognition as Stock Exchange by the SEBI being the regulating authority. The company has to inform to the SEBI about the proposed scheme of reduction of capital cum arrangement under section 100 to 2 104 read with section 391 to 393 of the Companies Act, 1956. In this regard, the deponent respectfully submit that the company vide its letter dated 21/12/2009 has informed to the SEBI and obtained acknowledgement a copy of the said letter is annexed and marked as Exhibit D. (b)The company has proposed to issue 119,66,30,000 number of warrants of Re 1/- each not having voting right/and will not carry Interest/Dividend. However, there is no enabling provisions in the Articles of Association of the Company to issue such warrants. The company may be directed to amend its Articles of Association suitably to incorporate enabling provisions before issue of such warrants.” 5. In reply to the objections raised by the Regional Director in paragraph 6(b) of his Affidavit, the counsel for the petitioner submits that the petitioner has adequate power in Article 59 of its Articles of Association. The said Article reads thus: 59. Term of Issue of Debenture “Any debentures, debenture stock or other securities may be issued at a discount, premium or otherwise, and may be issued on condition that 3 they shall be convertible into shares of any denomination and with any privileges and conditions as to redemption, surrender, drawing, allotment of shares, attending (but not voting) at the general meeting, appointment of directors, and otherwise debentures with the right to conversion into or allotment of shares shall be issued only with the consent of the company in the general meeting by way of special resolution.” The Counsel further submits that Warrants are securities convertible into shares and therefore, issuance of warrants is enabled under the above Article. In view of the aforesaid provision, the objection raised by the Regional Director does not survive. 6. 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. 7. Since all the requisite statutory compliances have been fulfilled, Company Petition No. 43 of 2010 is made absolute in terms of prayer clauses (a) to (d). The Counsel for Petitioner states that there is an error in prayer clause(c) of the petition pertaining to the 4 exhibit number. The same should be read as Exhibit “F” to the additional affidavit instead of Exhibit “G” to the Petition. He further states that there is delay of a day in filing the Affidavit of service in the Registry and that the same may be condoned. Delay in filing the Affidavit of service is condoned. 8. 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 30 days from the date of the order. 9. The Petitioner to pay Costs of Rs.7500/- to the Regional Director, Western Region, Mumbai. Costs to be paid within four weeks from today. 10. Filing and issuance of the drawn up order is dispensed with. 11. 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.) 5