TaxTMI 
TaxTMI 
2013 (5) TMI 94
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....he 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 C....
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....lgamation petition filed by the transferor company. He invited our attention to two judgments passed by learned Single Judge (D. G. Karnik, J.) in the matter of ICICI Bank Ltd. In re 2002(4) Bom. C.R. 403 and Mayfair Ltd. In re [2003] 46 SCL 672 (Bom.). He submitted that learned Single Judge in the said case has held that such a creditor could certainly object to the scheme for arrangement on all grounds available to him in law. He also relied upon the judgment of learned Single Judge Hindustan Dorr-Oliver Ltd., In re [2002] 40 SCL 521 (Bom.). He then tried to distinguish the judgments of learned Single Judge of the Bombay High Court in the case of Industrial Credit & Investment Corpn. of India Ltd v. Financial & Management Services Ltd. [1998] 17 SCL 429 (Bom.) and also judgments of learned Single Judge of Delhi High Court in two petitions namely Appellants: Telesound India Ltd. In re [1983] 53 Comp Case 926 (Delhi) and Union of India v. Asia Udyog (P.) Ltd. [1974] 44 Comp Case 359 (Delhi). He then submitted that even under the Code of Civil Procedure, Order I, Rule 10, it was provided that the party whose rights are adversely affected, has right to intervene. In support, he relie....
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.... Company Petition filed for sanctioning the scheme of amalgamation by the transferor Company. He submitted that learned Single Judge had clearly, after going through the provisions of the Companies Act, held that such a creditor to the transferee Company had no locus in the petition for amalgamation filed by the transferor Company as held in the case of Industrial Credit & Investment Corpn. India Ltd (supra). He submitted that the respondent had only relied on the judgment of the Delhi High Court which has been referred to in the impugned order. He then submitted that the judgments of the Division Bench in the case of Hindalco Industries Ltd and Sequent Scientific Ltd. (supra) were clearly applicable to the facts in the present case. He further submitted that the Division Bench had also held in the Securities and Exchange Board of India (supra) that SEBI had no locus to intervene. He also relied on the judgment of the Apex Court in the case of S.K. Gupta v. K.P. Jain [1979] 3 SCC 54 and submitted that the Apex Court had clearly held that the said judgment on the provisions of Sections 391 and 392 operate in separate fields and that in a petition filed under Section 391, only the cr....
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....rovided that no order sanctioning any compromise or arrangement shall be made by the Tribunal unless the Tribunal is satisfied that the company or any other person by whom an application has been made under sub-section (1) has disclosed to the Tribunal, by affidavit or otherwise, all material facts relating to the company, such as the latest financial position of the company, the latest auditor' s report on the accounts of the company, the pendency of any investigation proceedings in relation to the company under sections 235 to 251, and the like.] (3) An order made by the Tribunal under sub-section (2) shall have no effect until a certified copy of the order has been filed with the Registrar. (4) A copy of every such order shall be annexed to every copy of the memorandum of the company issued after the certified copy of the order has been filed as aforesaid, or in the case of a company not having a memorandum, to every copy so issued of the instrument constituting or defining the constitution of the company. (5) If default is made in complying with sub-section (4), the company, and every officer of the company who is in default, shall be punishable with fine which may extend to....
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....ub-section (1)(a) and (b) of Section 391 of the Companies Act is not found in sub-clause (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 on 29/10/2012. The transferor Company has its registered office at Goa, hence, the petition, at its instance, is filed in the High Court of Bombay at Goa. Since the initiation of proceedings for the same scheme is in two different Courts, whether a direction to club both the proceedings is necessary was considered by the Bombay High Court in the matter of Bank of India Ltd. v. Ahmadabad Manufacturing Calico Printing Co. (P.) Ltd. [1972] 42 Comp. Cas. 211 and in the said case it has been held that sanction would operate only after the necessary orders under Section 394 of Companies Act are obtained by both transf....
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....aterial to enable the voters to arrive at an informed decision for approving the scheme in question. That the majority decision of the concerned class of voters is just and fair to the class as a whole so as to legitimately bind even the dissenting members of that class. 4. That all necessary material indicated by Section 393(1)(a) is placed before the voters at the meetings concerned as contemplated by Section 391 sub-section (1). 5. That all the requisite material contemplated by the proviso of sub-section (2) of Section 391 of the Act is placed before the Court by the applicant concerned seeking sanction for such a scheme and the Court gets satisfied about the same. 6. That the proposed scheme of compromise and arrangement is not found to be violative of any provision of law and is not contrary to public policy. For ascertaining the real purpose underlying the scheme with a view to be satisfied on this aspect, the Court, if necessary, can pierce the veil of apparent corporate purpose underlying the scheme and can judiciously X-ray the same. 7. That the Company Court has also to satisfy itself that members or class of members or creditors or class of creditors, as the case ma....
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....s concerned. While dealing with the said question which was raised in the said case, the Apex Court came to the conclusion that the rights of the workers would be adversely affected if winding up order is passed and, therefore, those workers would have right to intervene in the winding up petition. In this context, the Apex Court took into consideration the principles of natural justice and law on the said point. In our 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. In the 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 transferor's petition filed under Section 391 of the Companies Act, does not arise. 15. Lastly, it was submitted that it is well settled position in Administrative Law that whenever any action is likely to have adverse civil consequences on any particular person, then, such person has to be given hearing. It was submitted that this concept was accepted by the Apex Court in the cases of Miheer H. Mafatlal and National Textiles Workmen Union (supra) and ther....
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.... Chartered Bank being neither the shareholder, member and creditor of the transferee Company which was before the Court, had no locus to be heard in the said proceedings. Similar view has been taken by the Division Bench of this Court in the case of Hindalco Industries Ltd. (supra) and connected Company Application No.234/2009. In the said case, The Company was Flagship Company of Aditya Birla Group. The Company proposed to undertake the financial restructuring exercise on the terms and conditions spelt out in the said proposed scheme and it was presented for approval under Section 391 read with Section 100 of the Companies Act. An objection was raised by one Ram Niranjan Kediya of Tourism Service Private Ltd. He was admittedly neither shareholder nor creditor of the petitioner Company. The question before the Court was whether he had any locus to raise any objection in relation to scheme propounded by the Company under Section 391 of the Companies Act and in that context, the Division Bench had observed that the said intervenor neither being the member or creditor of the Company, had no locus to intervene in the said petition. Learned Counsel for the appellants had vehemently urge....