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2007 (11) TMI 684
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....he publication in the newspapers, namely, (1) Times of India (English) and (2) Nav Bharat Times (Hindi) both dated 13.8.2007 each containing the advertisement of the said notice convening the said meetings directed to be held by the said order dated 17.7.2007, the affidavit of Shri Gunwant Dara and Ms. Purnima Bat Kak, chairpersons, filed on 17.9.2007 and 31.8.2007 showing the publication and despatch of the notices convening the said meetings, the reports of the chairperson of the said meetings as to the result of the said meetings and upon hearing Shri Satwinder Singh, Advocate, for the Petitioners, Ms. Manisha Tyagi, Advocate, for the official liquidator, and Mr. R.D. Kashyap, Dy. Registrar of Companies, in person, and it appearing from the reports that the proposed scheme of arrangement has been approved unanimously without any modification by the said equity shareholders, secured and unsecured creditors of the transferor company present and voting either in person or by proxy and upon reading the affidavit dated 31.10.2007 of Shri Rakesh Chandra, Regional Director, Northern Region, Ministry of Company Affairs, Noida, on behalf of Central Government stating that the individual ....
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....ty in number and 99.73% of value of the unsecured creditors present voted in favour of the scheme. The court ordered that, in this view of the matter, the objection raised by the Regional Director stands satisfied; and considering the affidavit of Shri A.K. Chaturvedi, official liquidator, filed on 31.10.2007 stating therein that the affairs of the transferor company have not been conducted in a manner prejudicial to the interest of its shareholders or creditors or to public interest; and there being no investigation proceedings pending in relation to the Petitioner companies under Section 235 to 251 of the Companies Act, 1956. 2. This Court doth hereby sanction the scheme of arrangement set forth in Schedule-I annexed hereto and doth hereby declare the same to be binding on all the shareholders and creditors of the transferor and transferee companies and all concerned and doth approve the said scheme of arrangement with effect from the appointed date, i.e., the date on which a certified copy of the order of the court, sanctioning the scheme, is filed with the Registrar of Companies, Delhi and Haryana. 3. And this Court doth further order: (1) That all the prop....
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.... ordered that the cost of Rs. 20,000 has to be paid by the Petitioners to the official liquidator, which will be deposited in the common pool fund of the official liquidator. ANNEXURE SCHEME OF ARRANGEMENT BETWEEN Bharti Airtel Limited Transferor Company and Bharti Infratel Limited Transferee Company and THEIR RESPECTIVE SHAREHOLDERS The Scheme is divided into the following parts: (A) PART I deals with the Definitions, Share Capital, Preamble and Rationale for the Scheme; (B) PART II deals with the Demerger of Telecom Infrastructure of the Transferor Company and merger thereof with the Transferee Company; (C) PART III deals with the Issue of Shares and Accounting Treatment in Books of the Transferor Company and Transferee Company; (D) PART IV deals with the General Clauses, Terms and Conditions; and (E) PART V deals with Other Terms and Conditions. PART I DEFINITIONS, SHARE CAPITAL, PREAMBLE AND RATIONALE FOR THE SCHEME 1.1 Definitions In this Scheme of Arrangement (as defined hereunder), unless inconsistent with the subject or context, the following expressions shall have the following meaning: 1.2.1 'Act' or '....
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...., subject to the nonexclusive right of the transferor company to use the towers and other elements of the Telecom Infrastructure for the purposes of its business, at such terms and conditions as may be reasonable and acceptable to the transferor company and the transferee company. Explanation: In case of any doubt regarding whether any particular asset or liability forms a part of the Telecom Infrastructure undertaking or otherwise, the same shall be resolved mutually by the board of directors of the transferor company and the transferee company; 2.2.7 'Transferee Company' or 'Infratel' means Bharti Infratel Limited, a company incorporated under the Companies Act 1956 and having its registered office at H-5/12, Mehrauli Road, New Delhi -110030; 1.1.8 'Transferor Company' or 'Airtel' means Bharti Airtel Limited, a company incorporated under the Companies Act 1956 and having its registered office at H-5/12, Mehrauli Road, New Delhi -110030; 2.2.9 'Scheme' or 'the Scheme' or 'this Scheme' means this scheme of arrangement as set out herein and approved by the board of directors of the transferor company and the transfe....
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....with a view to vest in it the Telecom Infrastructure to be managed and maintained by it. Going forward, the transferee company may consider inducting strategic partners into the transferee company to gain technical and competitive edge in the business of managing Telecom Infrastructure. (B) Purpose of the scheme 1. This scheme of arrangement is presented under Sections 391 to 394 of the Companies Act, 1956 and other applicable laws for vesting of the Telecom Infrastructure undertaking of the transferor company in the transferee company, pursuant to the relevant provisions of the Companies Act, 1956 and other applicable laws. The transferee company is a wholly owned subsidiary of the transferor company. This scheme also provides for various other matters consequential or otherwise integrally connected therewith. (C) Rationale for the scheme 1. Telecommunications and other information and communication technologies play an increasingly important role in the growth of an economy. Considering this, various countries have put in place mechanisms to lower barriers of entry, so that the customers can choose among competing telecommunications service providers. 2. In order t....
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.... 6. The above demerger of the Telecom Infrastructure undertaking from the transferor company and merger thereof with the transferee company reflects the global trend of segregating the telecommunication services (and telecommunication infrastructure business, with a view of adopting the best management practices, establish highest operational standards, provide best value proposition to other telecommunication operators and also to identify separately the actual economic value add arising out of Telecom Infrastructure business and telecommunication services businesses. 7. The management of the transferor company and the transferee company believe that the scheme of arrangement would benefit the respective companies and other stake holders of respective companies on account of the following reasons: (a) Reduced set-up and operating costs resulting in cost efficiency coupled with a greater financial flexibility; (b) Segregation of the business of providing telecommunication services and the business of providing the Telecom Infrastructure facilities, thereby enabling the companies to concentrate on its core business activities; (c) Improved quality of services to its c....
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....feror company, the transferee company had been a party or beneficiary or obligee thereto. 2.4 Any inter se contracts between the telecom infrastructure undertaking of transferor company and the transferee company shall vest in the transferee company upon the sanction of the scheme and upon the scheme becoming effective. The transferor company has entered into site sharing agreements with other operators in respect of some of the towers owned by it. Upon the scheme being effective, such agreements shall be assigned in favor of the transferee company without any further act or deed. Any statutory licenses, authorizations, statutory rights, permissions, approvals, sales tax, service tax, excise, provident fund, ESI, DGFT, Reserve Bank of India, Importer-Exporter Code etc. or other registrations, no-objection certificates or consents to carry on the operations pertaining to the Telecom Infrastructure shall stand transferred and vested in the transferee company without any further act or deed, and shall be appropriately mutated by the statutory authorities' concerned therewith in favour of the transferee company upon the vesting and transfer of Telecom Infrastructure pursuant to ....
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....ure undertaking in a more efficient manner consistent with the diverse needs of business and does not involve any movement of assets or liabilities to any company outside the group controlled by the transferor company. Hence, the transferee company shall not be required to issue any shares or pay any consideration to the transferor company or to its shareholders. 3.2 Accounting treatment in the books of the transferee company 3.2.1 Upon the scheme becoming effective, the transferee company shall record the Telecom Infrastructure at their respective fair values as on the for appointed date. 3.2.2 The transferee company will credit an amount equal to the fair values of Telecom Infrastructure as general reserve, which shall constitute Free Reserves available for all purposes as the transferee company at its own discretion considers proper including in particular for off-setting any additional depreciation that may be charged by the transferee company. Explanation: Additional depreciation means depreciation provided, charged or suffered by the transferee company on the assets transferred by the transferor company under the scheme in excess of what would be chargeable on the....
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.... With effect from the date of filing the Scheme with the High Court and up to and including the effective date except in the ordinary course of business the transferor company shall not, without the prior written consent of the board of directors of the transferee company or pursuant to any pre-existing obligation, sell, transfer or otherwise alienate, charge, mortgage or encumber or otherwise deal with or dispose of the Telecom Infrastructure undertaking or any part thereof. 4.2 Legal proceedings 4.2.1 All legal proceedings of whatsoever nature by or against the Transferor Company pending and/or arising before the Effective Date and relating to Telecom Infrastructure undertaking, shall not abate or be discontinued or be in any way prejudicially affected by reason of the Scheme or by anything contained in this scheme but shall be continued and enforced by or against the transferee company, as the case may be in the same manner and to the same extent as would or might have been continued and enforced by or against the transferor company. 4.2.2 After the effective date, if any proceedings are taken against the transferor company in respect of the matters referred to in Sub-c....
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....ted to the Telecom Infrastructure') and who are in such employment as on the effective date shall become the employees of the transferee company, and, subject to the provisions of this scheme, on terms and conditions not less favorable than those on which they are engaged by the transferor company and without any interruption of or break in service as a result of the transfer of the Telecom Infrastructure undertaking. 4.4.2 In so far as the existing provident fund, gratuity fund and pension and/or superannuation fund, trusts, retirement fund or benefits and any other funds or benefits created by the transferor company for the employees related to the Telecom Infrastructure (collectively referred to as the 'funds'), the funds and such of the investments made by the funds which are referable to the employees related to the Telecom Infrastructure being transferred to the transferee company in terms of Clause 4.4.1 above shall be transferred to the Transferee Company and shall be held for their benefit pursuant to this scheme in the manner provided hereinafter. The funds shall, subject to the necessary approvals and permissions and at the discretion of the transferee com....
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....r amendments to the scheme 5.2.1 The transferor company and the transferee company, through their respective Boards (which shall include any committee constituted by the Board) may assent to any modifications/amendments to the scheme or to any conditions or limitations that the court and/or any other authority may deem fit to direct or impose or which may otherwise be considered necessary, desirable or appropriate by them. The transferor company and the transferee company -acting through their respective authorized representatives be and are hereby authorized to take all such steps as may be necessary, desirable or proper to resolve any doubts, difficulties or a questions whether by reason of any directive or orders of any other g" authorities or otherwise howsoever arising out of or under or by virtue of the scheme and/or any matter concerned or connected therewith. 5.3 Conditionality of the scheme This scheme is and shall be conditional upon and subject to: 5.3.1 The scheme being approved by the requisite majorities in number and value of such cases of persons including the members and / or creditors of the transferor company and the members and/or creditors of the tr....
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....hall be entitled to claim credit for such taxes deducted/paid against its tax/duty liabilities notwithstanding that the certificates/challans or other documents for payment of such taxes/duties are in the name of the transferor company. Further any tax/duty payments not directly relatable to the Telecom Infrastructure shall be apportioned between the transferor company and the transferee company on the appropriate basis as the board of the transferor company and the transferee company mutually in their discretion deem fit and proper. 5.7 Upon coming into effect of the scheme, all permissions, licenses, approvals, incentives, remissions, tax-incentives, consents, sanctions, and other authorizations, pertaining to the Telecom Infrastructure undertaking, to which the transferor company is entitled to shall stand vested and permitted or continued by the order of sanction of this hon'ble court in the transferee company, therefore the transferee company shall file the scheme, for the record of the statutory authorities who shall take it on file, (pursuant to the sanction orders of the court. The transferee company is authorised to take all such steps on behalf of the tra....