Allowed

Midco Capital Services Limited Vs

Bombay HC16 Mar 2012CSP/59/2012

Case brief

AI extract

What is this about?

The Bombay High Court sanctioned a composite scheme of arrangement between Oilco Services (India) Limited, Midco Capital Services Limited, and Midco Limited, involving their shareholders and creditors. The court accepted undertakings regarding reserve utilization and share allotment and directed fulfillment of statutory filing and stamp duty requirements.

What did the court decide?

Company Scheme Petitions 58, 59, and 60 of 2012 are made absolute; petitioners directed to file forms with Registrar of Companies and pay stamp duty and costs within specified timelines.

Midco Capital Services Limited Vs — Company and Corporate | Bombay HC (2012)

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY

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ORDINARY ORIGINAL CIVIL JURISDICITON

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COMPANY SCHEME PETITION NO.58 OF 2012

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CONNECTION WITH

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COMPANY SUMMONS FOR DIRECTION NO.791 OF 2011

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Oilco Services (India) Limited …Petitioner/Demerged Company

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AND

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COMPANY SCHEME PETITION NO.59 OF 2012

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CONNECTION WITH

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COMPANY SUMMONS FOR DIRECTION NO.790 OF 2011

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Midco Capital Services Limited …Petitioner/Transferor Company

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AND

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COMPANY SCHEME PETITION NO.60 OF 2012

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CONNECTION WITH

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COMPANY SUMMONS FOR DIRECTION NO.789 OF 2011

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Midco Limited …Petitioner/Transferee Company

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In the matter of Companies Act, 1956;

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AND

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In the matter of Sections 391 to 394 read with Sections 100 to 104 of the Companies Act, 1956;

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AND

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In the matter of Composite Scheme of Arrangement BETWEEN Oilco Services (India) Limited

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AND

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Midco Capital Services Limited

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AND

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Midco Limited and their respective Shareholders and Creditors

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Mr. Hemant Sethi i/b M/s. Hemant Sethi & Co., Advocates for the Petitioners in all Petitions.

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Mrs. R.N. Suttar, Asst. Official Liquidator, present in Company Scheme Petition No.59 of 2012.

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Mr. N. D. Sharma i/b Dr. T. C. Kaushik for Regional Director in all Petitions.

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CORAM: S. J. KATHAWALLA, J

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DATE: 16^th MARCH, 2012

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PC:

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Heard learned counsels for the parties.

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The sanction of the Court is sought under Sections 391 to 394 read with Sections 100 to 104 of the Companies Act, 1956, to a Composite Scheme of Arrangement between Oilco Services (India) Limited and Midco Capital Services Limited and Midco Limited and their respective Shareholders and Creditors.

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Counsel appearing on behalf of the Petitioners has stated that the Petitioners 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 there under. The said undertaking is accepted.

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The Regional Director has filed an affidavit stating therein that save and except as stated in paragraphs 6(a) to 6(c) of the said Affidavit, it appears that the Scheme is not prejudicial to the interest of shareholders and public. In paragraphs 6(a) to 6(c) of the Affidavit, it is stated that:

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“(a) In clause 4.3 of the Scheme, it is stated that an amount equivalent to the amount reduced as per clause 4.2 of the Scheme shall be credited to the General Reserve Account of the Transferee Company.

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Also in clause 13.3 of the scheme it is stated that the difference between net assets over the consideration discharged as per clause 12 of the scheme shall, if positive, be credited to the General Reserve Account of the Transferee Company. In this connection it is submitted that the Reserve arising out of this scheme shall not be utilized for the purpose of declaring dividend by the Resulting /Transferee Company in future.

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(b)Clause 12.1 of the scheme provides for issue of new shares to the shareholders of the Demerged Company. In this connection it is submitted that the new shares can be allotted to all the shareholders of the Demerged Company except Resulting Company.

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(c)Any balance amount available in the General Reserve so created as per Clause 4.3 of the scheme after making adjustment as per clause No 5 of the Scheme shall not be retained therein and the same shall be transferred to Securities Premium Account of the Resulting Company.”

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As far as objection in paragraph 6(a) of the Affidavit of the Regional Director is concerned, the Petitioners through their Counsel undertake that the reserve arising out of the Scheme shall not be utilized for the purpose of declaring dividend by the Resulting / Transferee Company in future. The said undertaking is accepted.

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So far as the objection in paragraph 6(b) of the Affidavit of the Regional Director is concerned, the Petitioners through their Counsel undertake that the new shares shall be allotted to all the shareholders of the Demerged Company except the Resulting Company. The said undertaking is accepted.

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So far as the objection in paragraph 6(c) of the Affidavit of the Regional Director is concerned, the Petitioners through their Counsel undertake that any balance amount available in the General Reserve so created as per Clause 4.3 of the Scheme after making adjustment as per Clause No.5 of the Scheme shall not be retained therein and the same shall be transferred to Securities Premium Account of the Resulting Company. The said undertaking is accepted.

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The Official Liquidator has filed his report in Company Scheme Petition No.59 of 2012 stating therein that the affairs of the Transferor Company have been conducted in a proper manner and that the Transferor Company may be ordered to be dissolved.

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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.

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Since all the requisite statutory compliances have been fulfilled, Company Scheme Petition Nos.58 of 2012 and 59 of 2012 are made absolute in terms of prayer clauses (a) and Company Scheme Petition No.60 of 2012 filed by the Transferee Company is made absolute in terms of prayer clauses (a) to (d).

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Petitioners are directed to file a copy of this order along with a copy of the Scheme with the concerned Registrar of Companies, electronically, along with E-Form 21, in addition to the physical copy within 30 days from the date of issuance of the order by the Registry.

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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,

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for the purpose of adjudication of stamp duty payable, if any, on the same within 60 days from the date of the Order.

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The Petitioners in all the Petitions to pay costs of Rs.10,000/each to the Regional Director, Western Region, Mumbai and the Petitioner in the Company Scheme Petition No. 59 of 2012 to pay costs of Rs.10,000/- to the Official Liquidator, High Court, Bombay. Costs to be paid within four weeks from today.

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

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All concerned authorities to act on a copy of this order along with the Scheme and the form of minutes duly authenticated by the Company Registrar, High Court, Bombay.

Midco Capital Services Limited Vs

Case brief

What is this about?

What did the court decide?

Midco Capital Services Limited Vs

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

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