CL: A private dispute between an objector and company could not be used to stall a scheme which was otherwise not opposed to public interest
■■■
[2015] 55 taxmann.com 417 (Bombay)
HIGH COURT OF BOMBAY
SKS Ispat & Power Ltd., In re
G.S. PATEL, J.
CO. SCHEME PETITION NOS. 433 & 434 OF 2013
CO. SUMMONS DIRECTION NOS. 202 AND 203 OF 2013
MAY 5, 2014
Section 230 of the Companies Act, 2013/Section 391 of the Companies Act, 1956 - Compromise and arrangement - Scheme of arrangement for demerger of cement division of company SKS into resulting company SKS cement was proposed which was approved by board of directors of both companies - All equity shareholders consented to proposed scheme by issuing letters of consent - However, company scheme petitions were opposed by a creditor/objector on ground that cement business and other assets of SKS had been under valued by SKS to cheat creditors - Hence, court appointed second valuer - Valuer appointed by court concurred with view taken by earlier valuer holding that valuation done by earlier valuer was a fair value of cement division and all that was being transferred was a nominal value of assets - Thus, apart from a mere allegation that valuation was intended to cheat creditors, there was nothing that objector was able to point out to vitiate either report or support its objections to scheme - It appeared from submissions of objector that he was a disgruntled creditor complaining of non-payment of its debts - Whether this in itself could not be reason enough not to grant sanction, because a private dispute between an objector and company could not be used to stall a scheme which was otherwise not opposed to public interest - Held, yes - Whether thus scheme was to be sacnctioned as prayed - Held, yes [Paras 17,19 & 22]
■■■
[2015] 55 taxmann.com 417 (Bombay)
HIGH COURT OF BOMBAY
SKS Ispat & Power Ltd., In re
G.S. PATEL, J.
CO. SCHEME PETITION NOS. 433 & 434 OF 2013
CO. SUMMONS DIRECTION NOS. 202 AND 203 OF 2013
MAY 5, 2014
Section 230 of the Companies Act, 2013/Section 391 of the Companies Act, 1956 - Compromise and arrangement - Scheme of arrangement for demerger of cement division of company SKS into resulting company SKS cement was proposed which was approved by board of directors of both companies - All equity shareholders consented to proposed scheme by issuing letters of consent - However, company scheme petitions were opposed by a creditor/objector on ground that cement business and other assets of SKS had been under valued by SKS to cheat creditors - Hence, court appointed second valuer - Valuer appointed by court concurred with view taken by earlier valuer holding that valuation done by earlier valuer was a fair value of cement division and all that was being transferred was a nominal value of assets - Thus, apart from a mere allegation that valuation was intended to cheat creditors, there was nothing that objector was able to point out to vitiate either report or support its objections to scheme - It appeared from submissions of objector that he was a disgruntled creditor complaining of non-payment of its debts - Whether this in itself could not be reason enough not to grant sanction, because a private dispute between an objector and company could not be used to stall a scheme which was otherwise not opposed to public interest - Held, yes - Whether thus scheme was to be sacnctioned as prayed - Held, yes [Paras 17,19 & 22]
No comments:
Post a Comment