TaxTMI 
TaxTMI 
2020 (8) TMI 463
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.... by law from time-to- time by passing a special resolution. 2. The applicant-company is primarily engaged in the business of manufacturing and selling industrial gas and air compressors, vacuum solutions, industrial tools and solutions, mobile air, tools, power, pumps and light towers. 3. The learned senior counsel for the petitioner-company submits that the equity shares of the petitioner-company were delisted from BSE Limited and Pune Stock Exchange Limited in May, 2011 under the Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009. Post the delisting, the investment made by the non-promoter public share- holders of the petitioner-company are locked and these shareholders do not have an opportunity to liquidate their shareholding or realize their investment from the petitioner-company. Various non-promoter public shareholders have also requested the petitioner-company to provide them an exit opportunity. The learned senior counsel for the petitioner-company further submits that the company petition was filed for providing the non- promoter public shareholders an opportunity to liquidate their shareholding at a fair and equitable price. 4.....
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....inize the tax return filed by the company after giving effect to the proposed reduction. The decision of the Income-tax authority is binding on the petitioner-company." 6. In regard to the above observations made in the report of Regional Director, the petitioner-company through its learned senior counsel undertakes to submit that the interest of the creditors and all the stakeholders and Government Revenue are protected as well as all undisputed statutory dues that are due and payable as of date have been paid off. 7. Similarly, with regards to the report of the Regional Director, the petitioner-company through its learned senior counsel undertakes to comply with all the applicable provisions of the Income-tax Act, 1961 and all tax issues arising out of the petition will be met and answered in accordance with law. 8. The Regional Director's report also mentions that there are no complaints received against the petitioner-company/scheme of reduction but there are six SRN reflected on the MCA portal in relation to some complaint for which the status is unknown. The petitioner-company through its learned senior counsel undertakes to address and deal with these complaints....
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....ter earlier, many shareholders sold their shares to Lancaster. Out of the share holders left now, if others who have not come forward and objected to the move of the petitioner inference can be drawn that they have no objection to part with their shares at the offered rates and, There fore, if the share capital held by them is reduced, the objectors cannot have any grievance as far as others are concerned as their rights are protected." In view of the undertaking provided by the petitioner-company, this Bench is inclined to follow the same approach as the learned judge in Reckitt Benckiser (India) Ltd., In re [2005] 122 DLT 612 and hold that nothing survives in the objections filed by Mr. Janak Mathuradas, Mr. Arun Kejriwal, Mr. Monish Bhandari and Oswal Trading Co. P. Ltd. as they have been given an option to retain their shares and continue as shareholders of the petitioner-company. 12. Here a question also arises that whether the offer price being offered by the petitioner to the 37 shareholders (who declines to accept the exit offer) is fair and equitable. In this regard, it was brought out before the Bench that after utilizing different valuation method, an average fair ....
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....f equity shareholders and to apprise them of the alleged pernicious effects of the scheme. It is, therefore, too late in the day for him to contend that the scheme was unfair to him . . ." Accordingly, these shareholders also cannot raise objections against the proposed reduction at this stage before this Tribunal. (c) Those who voted for reduction in share capital in the extraordinary general meeting of October 25, 2018 but now are opposing it : Certain shareholders who had voted in favour of the proposed reduction at the extraordinary general meeting have also filed an affidavit supporting Mr. Janak Mathuradas' objections against the proposed reduction. In some cases, these shareholders have also acquired additional shares of the petitioner-company after the extraordinary general meeting. It is unfair for these shareholders to raise objection to the proposed reduction. 15. The learned senior counsel appearing on behalf of Mr. Janak Mathuradas contended that the proposed reduction is unfair. However, these contentions no longer survive in view of the undertaking provided by the petitioner-company to allow Mr. Mathuradas to continue as a shareholde....
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....t cannot on the face of it be accepted. That unreasonableness must exist on the face of the valuation : one so apparent that 'he who runs can read'. To upset a valuation, a wrong approach must be demonstrated clearly and unequivocally, and the result must be plainly invidious. A plausible rationale provided by a valuer is not be readily discarded merely because an objector has a different point of view. 7.1.6 In considering an application for sanction will ask itself if, at a minimum, these tests are met : Is a fair and reasonable value being offered to the minority shareholders ? Have the majority of non-pro moter shareholders voted in favour of the resolution ? Can it be said, on reading a valuation as any fair-minded and reasonable person would do, and without microscopic scrutiny, that the valuation is so egregiously wrong that the judicial conscience will not permit it ? Has the valuer gone so far off-track that the results his valuation returns cannot but be wrong ? 7.1.7 A court called upon to sanction such a scheme is not bound by the ipse dixit of a majority. It must weigh the scheme and look at it from all angles. It must see whether the scheme i....
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....e are yet others. No valuation is to be disregarded merely because it has used one or the other of various methods. It must be shown that the chosen method of valuation is such as has resulted in an artificially depressed or contrived valuation well below what a fair-minded per son may consider reasonable." 17. In the present case, we have found no patent unfairness in the valuation report obtained by the petitioner-company. The proposed capital reduction has in fact also been approved by a majority of the non-promoter public shareholders. Therefore, this contention is also not accepted. 18. The learned senior counsel appearing on behalf of the petitioner-company further submits that the petitioner-company has complied with all the statutory requirements as per the directions of the Tribunal and they have filed necessary affidavit of service. The learned senior counsel further submits that the petitioner-company has sufficient liquidity through its investments. The learned counsel had submitted a copy of the balance- sheet of M/s. Atlas Copco (India) Ltd. where in as on September 30, 2019 a total investment of Rs. 2,702.27 million is reflected which will be used for the reduc....