MAESTROS MEDILINE SYSTEMS v. MMS INFRASTRUCTURE LIMITED

Ms. Alpana Ghone with Mr. Rajesh Shah i/b Rajesh Shah & Co., Advocate for the Petitioners. Mr. N. D. Sharma i/b Mr. H. P. Chaturvedi for Regional Director in both Petitions. CORAM: S. J. Kathawalla, J. DATE: 10th June, 2011. PC:

1. Heard counsel for the parties.

2. The sanction of the Court is sought under Sections 391 to 394 of the Companies Act, 1956, to the Scheme of Arrangement between MAESTROS MEDILINE SYSTEMS LIMITED and MAESTROS ELECTRONICS & TELECOMMUNICATIONS SYSTEMS LIMITED and MMS INFRASTRUCTURE LIMITED.

3. Counsel appearing on behalf of the Petitioners states 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 undertaking is accepted.

4. The Regional Director has filed an Affidavit stating therein that save and except as stated in paragraph 6(a) to 6(e) of the Affidavit, it appears that the Scheme is not prejudicial to the interest of 3 shareholders and public. In paragraph 6 (a) to 6(e) of the Affidavit it is stated that:- “(a) As per clause 7.5 & 17.5 of the scheme, both the Resulting Companies shall to the extent required increase its authorized share Capital in order to issued new equity shares as per the scheme. In this connection the Resulting Companies may be directed to comply with provisions of section 94/97 read with Schedule X of the Companies Act 1956, in respect of filing of necessary forms with the Registrar of Companies after payment of necessary filing fee and stamp duty as applicable on the said forms. (b) From the existing shareholding pattern of the Demerged Company it is ascertained that FII/NRI are holding shares in the ratio of 5.46% and 0.18% respectively. In this connection the Resulting Companies No. 1 & 2 may be directed to comply with RBI /FEMA Regulations in respect of allotment of New Shares to these FII/NRI shareholders. (c) As per clause 7.6 & 17.6 of the Scheme the Resulting Companies No. 1 & 2 have to ensure that new shares are listed in the Bombay Stock Exchange on which shares of the Demerged Company are listed. (d) The time limit given in clause No. 30 of the Scheme i.e. 30/12/2010 has already expired. However Board of Directors of the petitioner companies have passed Board Resolution dated 30/10/2010 extending the time to give the effect to the Scheme up to 30/09/2011. Copy of the Board Resolution is marked as Exhibit –‘D’ collectively. (e) Clause No. 9 & 19 of the Scheme enable the Demerged Companies to adjust deficit against General Reserve or any other Reserve including profit and loss account. Once the scheme is approved, there will be substantial 4 reduction in the Securities Premium Account as per provisions of section 78 of the Companies Act 1956.”

5. The Petitioner Companies have filed their respectively affidavit in reply to the aforesaid objection raised by the Regional Director as far as first objection in paragraph 6(a) of the Regional Director is concerned, the Petitioner / Resulting Companies have stated that they will comply with the provisions of Sections 94/97 read with Schedule X of the Companies Act, 1956 and that they will file necessary forms with the Registrar of Companies after payment of necessary filing fee and stamp duty as applicable for increase their Authorised Capital in order to issued new equity share as per the scheme.

6. Further, so far as the second objection in paragraph 6(b) of the Regional Director is concerned, the Petitioner / Resulting Companies have stated that they that the Resulting Companies 1 & 2 will comply with RBI /FEMA Regulations in respect of allotment of New Shares to these FII/NRI shareholders.

7. So far as the objection in paragraph 6(c) of the Regional Director is concerned, the Resulting Companies have stated that as per clause 7.6 and 17.6 of the scheme, the Resulting Companies will ensure that new shares will be listed in the Bombay Stock Exchange on which the shares of the Demerged Company listed.

8. So far as the objection in paragraph 6(d) of the Regional Director is concerned, the Petitioner Companies have stated that, they have already 5 passed board resolution extending the time to give effect to the scheme upto 30/09/2011.

9. So far as the objection in paragraph 6(e) of the Regional Director is concerned, the petitioner Company in Company Scheme Petition No. 717 of 2011 has tendered an Affidavit of Mr. B. K. Tendulkar, Director, interalia, sating that a Special Resolution has been passed on 21st May, 2011 for approving the utilisation of the Securities Premium Account of the Petitioner Company in terms of Section 78 read with Section 100 to 105 of the Companies Act, 1956. Vide the order dated 21st April, 2011, this Court directed to pass the Special Resolution regarding, the adjustment of the amount from the Securities Premium Account of the Petitioner Company as under:- “RESOLVED THAT, pursuant to the provisions of Section 100 and other applicable provisions, if any, of the Companies Act, 1956 and Articles of Association of the Company and subject to obtaining such approvals, consents, permissions and sanctions as may be required and subject to the sanction of the Scheme of Arrangement among the Company (i.e. Maestros Mediline Systems Limited), Maestros Electronics & Telecommunications Systems Limited and MMS infrastructure Limited and their respective shareholders and creditors under Sections 391 to 394 read with section 78 and 100 to 105 and other applicable provisions of the Companies Act, 1956, if any (hereinafter referred to as the “Scheme”), which has already been approved by the Board of Directors at their meeting held on December 12, 2009 and October 30, 2010 and subject to confirmation of the Hon’ble High Court of Bombay (the “Court”) which has accepted the application vide its 6 order dated June 11, 2010 and direction dated April 21, 2011 and further subject to such conditions as may be prescribed while granting such approvals, consents, permissions, sanctions and confirmation which the Board of Directors (hereinafter referred to as the “Board” which term shall include any Committee which the Board of Directors of the Company may have constituted or may thereafter constitute and/ or any Director or any individual or individuals delegated with the powers necessary for the purpose) of the Company may agree and accept, the consent of the members of the Company be and is hereby accorded that the capital reserves account and / or securities premium account shall be debited or General Reserve or any other reserve including Profit and Loss Account be debited or written off or adjusted on account of transfer of or deficit arising due to transfer of Electronics business to Maestros Electronics & Telecommunications Limited and Infrastructure Business to MMS Infrastructure Limited (i.e. to demerged companies) in accordance with the provisions of the Scheme upto such amount as may be deemed necessary by the Board while implementing the Scheme.”

10. The Petitioner Company at this stage seeks the dispensation of procedure under Section 101(2) of the Companies Act, 1956 and further submits that the present reduction of share capital does not involve either diminution of liability in respect of unpaid share capital or the payment to any shareholder of any paid up share capital. The Petitioner Company states that no prejudice is caused to any party for seeking dispensation and that the shareholders were aware of the reduction of share capital as per the provisions of Sections 78 and 100 to 105 of the Companies Act, 1956. The Petitioner Company further states that the 7 reduction of share capital proposed is not likely to affect in any manner the interest of the creditors of the Company. Hence, the said procedure is not required to be followed and same is dispensed with.

11. 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 have come forward to oppose the Scheme.

12. Since all the requisite statutory compliances have been fulfilled, all the Company Scheme Petitions are made absolute in terms of prayer Clauses (a) to (c).

13. The Petitioner Companies to lodge a copy of this order and the Scheme duly authenticated by the Company Registrar High Court, (O.S.) 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.

14. The Petitioner Companies in all the Petitions to pay costs of Rs. 10,000/- each to the Regional Director, Western Region, Mumbai. Costs to be paid within four weeks from today.

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

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