THE HON'BLE SRI JUSTICE N.V. RAMANA COMPANY PETITION No.176 of 2009 ORDER: The petitioner, namely, JT International (India) Private Limited represented by its Chief Financial Officer filed this Company Petition under Sections 391 to 394 r/w Sections 100 to 104 of the Companies Act, 1956, seeking the following reliefs: “(a) That Scheme of Arrangement between JT International (India) Private Limited and its Equity Shareholders, as approved by the Equity Shareholders of the Petitioner Company, a copy of which is filed hereto as ANNEXURE D, be sanctioned and confirmed by this Hon’ble High Court so as to be binding on all the members, creditors and employees of the Petitioner Company and all concerned; (b) For an order under Sections 391 to 394, read with Section 100 to 104 of the Companies Act, 1956, that the Petitioner Company do within 30 days after the date of the orders, cause a certified copy to be delivered to the Registrar of Companies, Andhra Pradesh, Hyderabad for registration and on such certified copy being delivered or such date as this Hon’ble High Court may deem fit, the Registrar of Companies, Andhra Pradesh, Hyderabad shall take all necessary consequential action in respect of the Petitioner Company; (c) That the parties of the Scheme of Arrangement or other persons interested shall be at liberty to apply to this Hon’ble High Court for any direction that may be necessary in regard to the carrying out of the Scheme of Arrangement; and (d) That such other order or orders as the Hon’ble Court may deem fit and proper in the circumstances of the case.” In the affidavit filed in support of the petition, it is stated that the petitioner-company was originally incorporated on 24.09.1993 under the provisions of the Companies Act, 1956 as a private limited company. Its Registered Office is situated at Sy.No.581/1, IDA, Uppal, Hyderabad. Its authorized share capital as on 31.03.2009 is Rs.75,00,00,000/-, divided into 7,50,00,000 equity shares of Rs.10/- each; issued and subscribed capital is Rs.50,10,00,000/-, divided into 5,01,00,000 equity shares of Rs.10/- each, and called-up and paid-up capital is Rs.10,00,000/-, divided into 1,00,000/- equity shares of Rs.10/- each, fully paid up, and Rs.25,00,00,000/-, divided into 5,00,00,000 equity shares of Rs.10/- each, Rs.5/- paid up. The main objects of the company, as set out in its Memorandum of Association, is to make, process, blend, sell, import, export and carry on business in cigarettes, cigars, tobacco, snuff and other tobacco products, pipes, lighters and other smoker’s requisites and articles, and the material used in the production of any such goods or products and to provide technical assistance market research, promotional services, planning and marketing facilities in relation to such goods, products or business etc. The petitioner-company over the past few years has incurred substantial losses in the course of its operations. In order to rationalize the balance sheet of the petitioner company, it is proposed to set-off part of accumulated losses of the petitioner company against the paid-up value of equity shares of it. Such an endeavor by the petitioner company would not only enable the petitioner to clean-up its balance sheet, but also provides with an opportunity to improve its financial status for the benefit of all the shareholders/stakeholders at large. With a view to provide greater level of transparency, openness and to secure full involvement of all the shareholders/stakeholders, the petitioner-company has proposed the Scheme of Arrangement. The Board of Directors of the petitioner company in their meeting held on 20.07.2009 approved the scheme of arrangement between the company and its shareholders, envisaging reduction of share capital and restatement of the assets of the company at their respective fair values, subject to the consent of the shareholders and approval by the Court. The proposed scheme of arrangement seeks reduction of the issued, subscribed and paid up equity share capital to Rs.1,25,50,000/- divided into 1,00,000 equity shares of Rs.0.50 ps. each fully paid up and Rs.5,00,00,000 equity shares of Rs.0.25 ps. each fully paid up. It is stated that all the equity shareholders and unsecured loan creditors of the petitioner company have given their consent in writing to the scheme. There are no secured creditors in the petitioner company. The petitioner company filed C.A.No.1139 of 2009 to dispense with the convening the meeting of the equity shareholders, unsecured loan creditors and unsecured trade creditors and this Court by order dated 19.10.2009 dispensed with the convening the meeting of the equity shareholders, unsecured loan creditors and unsecured trade creditors. Now, the petitioner company filed the present company petition praying to sanction the scheme of arrangement, as approved by the shareholders of the company so as to be binding on all the members, creditors and employees of the company. On 11.11.2009, this Court, while admitting the Company Petition issued notice to the Regional Director, Ministry of Corporate Affairs, Southern Region, Chennai, and ordered publication of the notice in Andhra Bhoomi, Telugu daily newspaper and Business Standard, English daily newspaper having circulation in Hyderabad. The petitioner took out notices as ordered by this Court to the Registrar of Companies, Andhra Pradesh, Hyderabad and also the Regional Director, Ministry of Corporate Affairs, Chennai, by way of paper publication. The notices having been served, the Registrar of Companies, Andhra Pradesh, Hyderabad, has filed an affidavit, stating that after carefully examining the scheme and the material papers made available to him, he has no objection against the scheme of arrangement. Heard the learned counsel on record and perused the scheme of arrangement. In view of the fact that the members of the company have not objected the scheme of arrangement; the equity shareholders and unsecured loan creditors of the petitioner company have given their consent in writing for sanction of the scheme, and that the Registrar of Companies, Andhra Pradesh, Hyderabad has also not raised any objection against the scheme of arrangement, I am of the considered opinion that this Court should also have no objection for sanctioning the scheme of arrangement. Hence, this Court hereby sanctions the scheme of arrangement as approved by the shareholders and unsecured loan creditors of the petitioner company, as set out in paragraph 9 of the petition herein and schedule thereto (Annexure D), and hereby declares that the same is binding on all the shareholders, creditors and employees of the petitioner company. The parties to the scheme of arrangement or other persons interested shall be at liberty to apply to this Court for any directions that may be necessary in regard to the working of the scheme of arrangement and that the petitioner company do file with the Registrar of Companies a certified copy of the order within 30 days from this date. The Company Petition is accordingly allowed. __________________ N.V. RAMANA, J. Date:28.01.2010 va