Future Capital Financial Services v. Future Capital Holdings Limited

Ms Alpana Ghone a/w Mr. Rajesh Shah i/b M/s. Rajesh Shah & Co., Advocates in both the Petitions. 2 Dr. T. Pandian, Official Liquidator, present in the Company Scheme Petition No. 236 of 2011. Mr. Vishwajit Sawant i/b H. P.Chaturvedi for Regional Director in both Petitions. M/s. O.A. Das & Associates, Advocate for Bank of India one of the Secured Creditor. CORAM: S. J. Kathawalla, J. DATE: 17th June, 2011 PC:

2. Heard learned counsel for the parties. The sanction of the Court is sought under Sections 391 to 394 read with Sections 78, 100 to 103 of the Companies Act, 1956, to a Scheme of Arrangement between Future Capital Financial Services Limited, the Transferor Company and Future Capital Holdings Limited, the Transferee Company and their respective Shareholders.

3. Counsel appearing on behalf of the Petitioners has stated that they have complied with all requirements as per directions of this Court and they have filed necessary affidavits of compliance in the Court. Moreover, Petitioner Companies undertake to comply with all statutory requirements if any, as required under the Companies Act, 1956 and the Rules made thereunder. The said undertaking is accepted. 3

4. The Regional Director has filed an Affidavit in the above Petitions stating therein that save and except as stated in paragraph 6 of the said Affidavit it appears that the Scheme is not prejudicial to the interest of shareholders and public.

5. The Counsel appearing for the Regional Director has drawn my attention to paragraph 6 of the affidavit of the Regional Director in which it is stated that: “That the Deponent further submits that, clause 7(v) of the scheme deals with utilization/reduction of Securities Premium Account of the Transferee Company. However, this clause is silent about upto what extent the Securities Premium Account will be adjusted. In this connection advocates for the petitioner companies vide their letter dated 25/05/2011 stated that the utilization of Securities Premium Account will not exceed Rs 125 crores and the amount remaining unutilized out of Rs 125 crores shall continue to form part of the Securities Premium Account of the Transferee Company. This is for the information of this Hon’ble High Court.”

6. So far as the contents of paragraph 6 of the affidavit of Regional Director is concerned, the counsel for the Petitioners submits that as per the Accounting Treatment specified in Clause 7 of the Scheme, the Securities Premium Account of the Transferee Company will be utilized for adjusting the excess/deficit after recording the entries in sub clause 7(i) to 7(iii) of the Scheme.

7. The said accounting treatment was approved by the shareholders as a part of the Scheme in their meeting held on February 17, 2011. In answer to the objection raised by the Regional Director, Counsel for the Petitioner submits that since 4 the actual amount which will be utilized out of the Securities Premium Account was not determined at the time of filing the Petition, the Petitioner had not annexed the Form of Minutes to the Petition. The Petitioner states that the Transferee Company will utilize a sum upto Rs. 125,00,00,000/- out of the amount of Rs. 671,82,06,894/- presently standing to the credit of the Securities Premium Account pursuant to clause 7(iv) of the Scheme. At this stage the Counsel for the Petitioner tendered an additional Affidavit dated 31st May, 2011 of one Chetan Gandhi, Head – Legal & Secretarial of the Transferee Company in support of the Petition, annexing therewith a Form of Minutes in respect of utilization of Securities Premium Account in accordance with the provisions of Sections 78 and 100 to 103 of the Companies Act, 1956. The Counsel submits that the said Form of Minutes needs to be approved in terms of prayer (a) of the said Affidavit. The Counsel further submits that the Petitioner has already served a copy of the said Affidavit on the Regional Director. The said Affidavit is taken on record. The Form of Minutes are hereby approved.

8. M/s. O.A. Das & Associates appearing on behalf of Bank of India, Secured Creditor states that he has no objection to the Scheme being sanctioned.

9. The Official Liquidator has filed his report in Company Scheme Petition No. 236 of 2011 stating therein that the affairs of the Transferor Company have been conducted in a proper manner and the Transferor Company be ordered to be dissolved. 5

10. From the material on record, the Scheme appears to be fair and reasonable and is not violative of any provisions of law and is not contrary to public policy. None of the parties concerned has come forward to oppose the Scheme.

11. Since all the requisite statutory compliances have been fulfilled, Company Scheme Petition No. 236 of 2011 filed by the Transferor Company is made absolute in terms of prayer clauses (a) to (d) and Company Scheme Petition No. 237 of 2011 filed by the Transferee Company is made absolute in terms of prayer clauses (a) to (c).

12. The Petitioner Companies to lodge a copy of this order and the Scheme, duly authenticated by the Company Registrar, High Court, Bombay with the concerned Superintendent of Stamps, for the purpose of adjudication of stamp duty payable, if any, on the same within 60 days from the date of the Order.

13. The Petitioners in both Company Scheme Petitions to pay costs of Rs.10,000/- each to the Regional Director, Western Region, Mumbai, and the Petitioner in Company Scheme Petition No. 236 of 2011 to pay costs of Rs.10,000/- to the Official Liquidator, High Court, Bombay. Costs to be paid within four weeks from today.

14. Filing and issuance of the drawn up order is dispensed with. 6

15. All concerned authorities to act on a copy of this order along with Scheme and the Form of Minutes duly authenticated by the Company Registrar, High Court, Bombay. (S. J. Kathawalla, J.)