TaxTMI 
TaxTMI 
2013 (5) TMI 465
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....f the Companies Act for dispensation of the requirement of convening of the meeting of the equity shareholders and creditors of the transferor company. The Company Court while granting dispensation of the said meetings of the transferor company directed convening of separate meetings of equity shareholders, secured and unsecured creditors of the transferee company. 4. Meetings of the transferee company, as directed, were held in terms of the directions of the Company Court and in the respective meetings, the scheme was approved with the requisite majority. After the approval of the scheme petition was filed for sanction of the scheme of arrangement under Section 391 (2) read with Section 394 of the Act. 5. The court vide its order dated 21.04.2004 directed for issuance of notice to Regional Director, Department of Company Affairs, Kanpur and also for advertisement of the said scheme in the newspapers. Pursuant to the notice, the Regional Director filed his report giving his no objection to the grant of sanction to the scheme of arrangement. Despite the advertisement in the newspapers no objections were filed by anyone to the grant of sanction to the scheme of arrangement. Vid....
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.... shall be cancelled/extinguished. The exchange ratio, it is claimed, has been arrived at after due consideration of the financial position, profitability and effect of amalgmation in respect of the transferor company and the transferee company and is considered to the fair and reasonable taking all the circumstances into consideration. (iv) It is further claimed that by amalgamating the said two companies, the cost and management of the said companies will considerably be reduced and will result in carrying on the business more economically and efficiently and also in obtaining their main purpose by new and improved means and enlarging their areas of operation. (v) As a result of the amalgamation, the business of the two companies can be combined conveniently and advantageously. (vi) As a result of the amalgamation, the resources of the two companies will be pooled and the transferee company will be able to rationalize and strengthen its management, finance and it will be able to conduct its business efficiently. (vii) The amalgamation will result in usual benefits and economies of scale, pooling and consolidation of resources and reduction in the cost of management and....
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.... of the Act was followed both at the stage of first motion and at the stage of second motion before the scheme was approved. 16. Mr. V. N. Kaura, learned Senior Advocate appearing on behalf of the appellant contended that the appellant and other shareholders whose shareholding was being treated as fraction under the scheme should be treated as a separate class and a separate meeting qua them should have been held. 17. Under Section 391 of the Companies Act, there is only one class of equity shareholders. The decisive factor for determining the class of shareholder is not the shareholding pattern but the category of shares that one holds. All equity shareholders constitute the same class of shareholders. Merely because individuals held small fraction of shares, that would not make them a separate class. All equity shareholders irrespective of the shareholding pattern would constitute the same class. What the appellant is seeking to do is to create a class within a class, which is not what is contemplated in the scheme of Section 391 of the Companies Act. 18. The procedure as prescribed under Section 391 has been duly complied with and the company court has not at one but tw....
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....impermissible, we find no reason to take a different view. 25. Learned Counsel for the respondent has drawn our attention to various judgments of the High Courts to contend that similar schemes that provided for exist of the minority shareholders have been examined and upheld therein. In support of his submissions he relied upon the following judgments:- (i) ITW Signodge India Limited In Re (2004) 52 SCL 147 (AP) (ii) Matther and Platt Pumps Limited In re C.P.69 of 2010 (iii) Hoganas India Ltd. In Re [2009] 148 Comp Cas Bom (iv) Organon India Limited 2010 (4) Bom CR 268 (v) Sandwik Asia Limited 2009 (3) BOM CR 57 (vi) Reckitt Benckister (India) Ltd. 122 (2005) DLT 612. We have examined the judgments referred to by the respondent and are in agreement with the principles laid down therein. 26. The Company Court while examining the scheme of amalgamation/arrangement does not have the jurisdiction to act like an appellate authority to scrutinize the scheme minutely or to arrive at an independent conclusion whether the scheme should be permitted or not when the majority of the creditors or the shareholders have approved the scheme as required by Section 391 (2....