LAWS(NCLT)-2017-3-102

IN RE Vs. SINTEX BAPL LTD AND ORS

Decided On March 23, 2017
IN RE Appellant
V/S
SINTEX BAPL LTD AND ORS Respondents

JUDGEMENT

(1.) These petitions have been filed by four petitioner-companies for sanctioning of a Composite Scheme of Arrangement among Sintex Industries Limited and Sintex Plastics Technology Limited and Sintex-BAPL Limited and Sintex Infra Projects Limited and their respective shareholders and creditors ["Scheme" for short].

(2.) The petitioner of C.P.(CAA) No. 3 of 2017, i.e. Sintex Industries Limited, had filed an application in the Honourable High Court of Gujarat, being Company Application No. 513 of 2016, praying for requisite directions for holding separate meetings of the equity shareholders, secured creditors (including debenture holders) and unsecured creditors of the said company and, if thought fit, approving with or without modification(s), the arrangement embodied in the Composite Scheme of Arrangement among Sintex Industries Limited, Sintex Plastics Technology Limited, Sintex-BAPL Limited and Sintex Infra Projects Limited and their respective shareholders and creditors and for issuing appropriate directions incidental for holding of such meetings. The said company further sought directions of the Honourable High Court for seeking dispensation from following separate procedure for reductions of the Capital Redemption Reserve account and the Securities Premium Account and also prayed for a declaration to the effect that no separate meetings of the creditors, whether secured or unsecured, of the petitioner-company are required to be called for reductions of the Capital Redemption Reserve Account and the Securities Premium Account. The Honourable High Court, vide its order dated 8th December, 2016, inter alia, directed convening and holding of the meetings of the equity shareholders, secured creditors (including debenture holders) and unsecured creditors of the said company. The Honourable High Court, vide its aforesaid order dated 8th December, 2016, appointed Mr. Dinesh B. Patel, Chairman of the petitioner-company and, in his absence, Mr. Arun P. Patel, Vice-Chairman of the petitioner-company and, in his absence, Mr. Amit D. Patel, Managing Director (Group) of the petitioner-company as the Chairman of the meetings that were to be held on 17th January, 2017. The Honourable High Court also dispensed with settling and/or approval of the advertisement, the form of Notice and the statement to accompany the Notice by the Registrar of the High Court. The Honourable High Court further held that no separate procedure is required to be followed for reductions of the Capital Redemption Reserve Account and the Securities Premium Account as the same is part and parcel of the present Scheme and that the meeting of the Creditors for considering the aforesaid Scheme which includes reductions of the Capital Redemption Reserve Account and the Securities Premium Account is not required to be called for as reductions of the Capital Redemption Reserve Account and the Securities Premium Account do not in any manner affect the interests of the creditors, whether secured or unsecured, of the petitioner-company.

(3.) The petitioner of C.P.(CAA) No. 4 of 2017, i.e. Sintex Plastics Technology Limited, had filed an application in the Honourable High Court of Gujarat, being Company Application No. 514 of 2016, for dispensing with the convening and holding of the meetings of the equity shareholders and unsecured creditors of the said company. The petitioner-company also sought directions of the Honourable High Court for seeking dispensation from following separate procedure for reduction of the paid up equity share capital and subdivision of equity shares. The petitioner-company further sought a declaration from the Honourable High Court to the effect that no separate meeting of the creditors of the petitioner-company is required to be called for reduction of the paid up equity share capital and sub-division of equity shares. The Honourable High Court, vide its order dated 8th December, 2016, inter alia, dispensed with the convening and holding of the meetings of equity shareholders and of the petitioner-company in view of the consent affidavits to the Scheme given by the equity shareholders. The Honourable High Court, vide its aforesaid order dated 8th December, 2016, also dispensed with the meeting of unsecured creditors of the petitioner-company. The Honourable High Court also dispensed with advertisement to be given in newspapers and publication of notice in the Government Gazette. The Honourable High Court further held that no separate procedure is required to be followed for reduction of the paid up equity shares as the same is part and parcel of the present Scheme and that the meeting of the creditors for considering the aforesaid Scheme which includes reduction of the paid up equity share capital and sub-division of equity shares is not required to be called for as reduction of the paid up equity share capital and subdivision of equity shares do not in any manner affect the interests of the creditors of the petitioner-company as the reduction of paid up equity share capital does not involve either diminution of liability in respect of unpaid share capital or payment to the shareholders of paid-up share capital.