Case: Innovatherm Gmbh &amp; Another Vs. Sesa Goa Limited

2. Brief facts which are necessary for the purpose of deciding this appeal are as under:The respondent Sesa Goa Ltd has filed Company Petition in this Court seeking sanction of proposed scheme of amalgamation and arrangement under Sections 391 to 394 read with Sections 98, 100 and 203 of the Companies Act, 1956 between Sesa Goa Ltd and Sterlite Industries India Ltd (SIIL for short) amalgamating Company no.1, Madras Aluminum Company Ltd (MALCO for short) amalgamating Company No.2, Sterlite Energy Ltd (SEL for short) amalgamating Company No.3, Vedant Aluminum Ltd (VAL for short) /demerged Company and Sesa Goa Ltd (SGL for short) amalgamated Company.3. The appellants herein/ the original applicants are unsecured creditors of VAL, the demerged Company. They filed an application challenging the scheme of amalgamation on various grounds and more particularly on the ground that if the scheme is sanctioned, it would have adverse civil consequences and it would adversely affect their interest.4. It is an admitted position that VAL, the demerged Company has filed a petition under Section 391 of the Companies Act in the Madras High Court and in the said petition, the appellants herein had filed their objections and were duly heard by the Madras High Court and the scheme for amalgamation including the objections taken by the appellants, were reserved for orders on 29/10/2012 and the judgment is not yet pronounced. The appellants are now seeking to intervene in the Company Petition filed by SGL Company which is pending in this Court and have prayed that they may be heard. It is an admitted position that the appellants are neither the members nor they are the creditors of SGL Company. But it is alleged that since they are the creditors of VAL, the demerged Company, if the scheme is accepted by the Goa High Court, their interest will also be adversely affected and, therefore, they have locus to file their objections and intervene in this Company Petition. Learned Single Judge by his judgment and order dated 22/11/2012 was pleased to reject the Company Applications filed by the applicants for the reasons recorded. In another petition, similar objections were raised namely Company Application No.74/2012 in Company Petition No.12/2012 and Company Application No.75/2012 in Company Petition No.12/2012.

Reasoning: The restrictions, therefore, imposed on the category of person referred to in subsection (1)(a) and (b) of Section 391 of the Companies Act is not found in(2) of Section 392 of the Companies Act. Keeping in view the aforesaid provision, therefore, the rival contentions will have to be taken into consideration.12. In the present case, since the transferee Company is having its registered office at Madras, the petition was filed in the Madras High Court by the transferee Company and in the said petition, the appellants being the creditors of the transferee Company were duly heard and judgment has now been reserved by the Madras High Court onview of this, the final order passed in both the Courts would be dependent on both the transferor and transferee Company obtaining necessary sanction from the Court of competent jurisdiction. Even if one Court refuses to sanction the scheme, the entire scheme resultantly wouldguidelines, therefore, which are laid down by the Apex Court pertain to the power of the Court in taking into consideration the scheme not only from the point of view of majority shareholders or creditors but also from the point of view of minority shareholders and creditors. The submission made by learned Counsel appearing on behalf of the appellants, therefore, cannot be accepted and the ratio of this judgment of the Apex Court in the said case, is not of any assistance to thethe present case, the appellants are neither the shareholders nor creditors of the transferor Company and as such, the question of permitting them to intervene in the transferors petition filed under Section 391 of the Companies Act, does notour view, the ratio of the said judgment does not advance the case of the appellants any further in the facts and circumstances of the present case. Inthe present case, the appellants are neither the shareholders nor creditors of the transferor Company and as such, the question of permitting them to intervene in the transferors petition filed under Section 391 of the Companies Act, does notis not possible to accept the said submission. As we have pointed out hereinabove, the judgment in the case of MiheerMafatlal (supra) does not in any way apply to the creditors of the transferee Company and it does not lay down the ratio that the creditor of transferee Company would also have right to intervene in the petition filed by the transferor Company. Secondly, in the case of National Textiles Workmen Union (supra), the issue involved was regarding the workmen of the Company who had filed winding up petition and in that context, therefore, the Supreme Court held that the workers of the said Company would be adversely affected and, therefore, they had right and locus to intervene in the said winding upare unable to accept the said contention of learned Counsel. The issue involved in the said case was identical and the question was whether any exercise which has to be carried out by the Company for restructuring as contemplated under Section 100 whether the intervenor, who was neither shareholder or creditor, can intervene and in such context, therefore, the Court had held that the said person had no locus. The ratio of the said case squarely applies to the presentthe said case, it was contended that SEBI had interest in the said petition. The Division Bench however, did not accept the said contention and submitted that at the highest notice can be issued only to Central Government under Sectionand SEBI could not claim to have any locus in the said application under Section 391 of the Companies Act. In our view, the ratio of the said judgment would also directly apply to the facts of the presentour view, it will not be possible to draw the same analogy as is tried to be drawn on the basis of the provisions of Order I, Rule 10(2) of C.P.C. and consequently, the ratio of the said judgment cannot be made applicable to the facts of the presentour view, we respectfully disagree with the view taken by learned Single Judge since the provision of Section 391 of the Companies Act cannot be extended to such extent that even third parties namely those persons who are not shareholders or creditors of the Company can be allowed to intervene in such petitions filed under Section 391 of the Companies Act. It is an admitted position that the appellants who are the creditors of transferee Company namely VAL, the demerged Company were duly heard in the petition filed by the said Company in the Madras High Court for getting their scheme sanctioned and the judgment of the Madras High Court is awaited. If the objection raised by the appellants in the said Court is accepted and the scheme is not approved by the Madras High Court, then, the entire scheme will fail and as such, it cannot be said that there is violation of principles of natural justice. We are, therefore, unable to accept the view taken by learned Single Judge in the said two decisions and overrule the said judgments.21. In our view, therefore, there is no merit in the contention raised by the learned Counsel appearing on behalf of the appellants.