Allowed

Future Retial Ltd. v. --

Bombay HC31 Jan 2014CSP/625/2013

Case brief

AI extract

What is this about?

The High Court sanctioned the scheme of amalgamation of Future Value Retail Limited with Future Retail Limited under Sections 391-394 of the Companies Act, 1956. The court accepted undertakings and amendments regarding shares and stock exchange compliance, finding the scheme fair and reasonable.

What did the court decide?

Company Scheme Petition No. 624 of 2013 and No. 625 of 2013 made absolute; amendments to scheme allowed.

Future Retial Ltd. Vs -- — Company and Corporate | Bombay HC (2014)

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION

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COMPANY SCHEME PETITION NO. 624 OF 2013

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CONNECTED WITH

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COMPANY SUMMONS FOR DIRECTION NO. 427 OF 2013

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FUTURE VALUE RETAIL LIMITED ………… Petitioner /
the Transferor Company

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AND

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COMPANY SCHEME PETITION NO. 625 OF 2013

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CONNECTED WITH

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COMPANY SUMMONS FOR DIRECTION NO. 428 OF 2013

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FUTURE RETAIL LIMITED

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………… Petitioner /
the Transferee Company

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In the matter of the Companies Act, 1956
(1 of 1956);

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AND

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In the matter of Sections 391 to 394 of the
Companies Act, 1956;
 AND
In the matter of Scheme of Amalgamation
 of
Future Value Retail Limited
 WITH
Future Retail Limited
 AND
their respective shareholders and
creditors

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Mr. Virag Tulzapurkar, Senior Counsel with Mr. Hemant Sethi i/b. Hemant
Sethi & Co., Advocates for the Petitioner.
Mrs. R. N. Sutar, Asst. Official Liquidator present in CSP No 624 of 2013.
Ms. Madhavi Tavanandi i/b Mr. H.P. Chatruvedi for Regional Director.

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 CORAM : G.S. Patel, J

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Heard counsel for the parties. No objector has come before the court to oppose the Scheme and nor any party has controverted any averments made in the Petition.

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The sanction of the Court is sought under Sections 391 to 394 of the Companies Act, 1956, to the Scheme of Amalgamation of Future Value Retail Limited with Future Retail Limited and their respective shareholders and creditors.

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Learned advocate for the Petitioner Companies states that the Petitioner Company in Company Scheme Petition No 624 of 2013 is engaged in the business of operating retail formats like Big Bazaar and Food Bazaar and the Petitioner Company in Company Scheme Petition No. 625 of 2013 is engaged in the business of organised retail through its various business formats. The Scheme would result in simplification of group structure by elimination of multiple entity and achieve greater administrative efficiency, elimination of administrative functions and multiple record keeping, thus resulting in reduced expenditure, and significant reduction in the multiplicity of regulatory compliances. The Petitioner Companies approved the said Scheme by passing the Board Resolution which are annexed to the respective Company Scheme Petitions.

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The learned Advocate for the Petitioners further states that, Petitioner companies have complied with all the directions passed in Company Summons for Directions and that the Company Scheme Petitions have been filed in consonance with the orders passed in respective Summons for Directions.

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The learned counsel appearing on behalf of the Petitioner Companies has stated that the Petitioner Companies 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 Official Liquidator has filed his report on 27th September 2013 in the Company Scheme Petition No 624 of 2013 stating therein that the affairs of the Petitioner Company have been conducted in a proper manner and that the Petitioner Company may be ordered to be dissolved by this Court.

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The Regional Director has filed an Affidavit on 31st October 2013 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. In paragraph 6 of the said affidavit, it is stated as under:

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(a) Clause 5.2 and 5.3 of the Scheme provides for Issue of
Optionally Convertible Debentures/ Compulsory Convertible
Debentures. Hence, in the Share capital of Transferee Company,
their will be a changes on such allotment of new shares. The
Scheme is silent with respect to Listing of new shares. It is suggested

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that Transferee company shall ensure that such new shares shall be
listed in the respective stock exchange in which the existing shares
are now listed

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b) As per SEBI circular CIR/CFD/DIL/5/2013 dated
04/02/2013, the Transferee Company shall comply with Clause
24(f) of the Listing Agreement and obtain No Objection Certificate
from Stock Exchange. Transferee Company has not produced the
NOC issued by the respective stock exchanges in which shares are
now listed. It is humbly submitted that the Hon’ble High Court
may consider the view of SEBI/ Stock Exchange before approving
this Scheme”

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In response to the observations made by the Regional Director is concerned, the Counsel for the Petitioner Companies have tendered two affidavits affirmed on 30^th January 2014 of (1) Future Value Retail Limited, Petitioner in Company Scheme Petition No. 624 of 2013 and (2) Future Retail Limited, Petitioner in Company Scheme Petition No. 625 of 2013.

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In so far as observations made in paragraph 6(a) of the Affidavit of the Regional Director is concerned, the Counsel appearing for the Petitioner Companies states that the shares, if any, issued pursuant to conversion of Optionally Convertible Debentures and Compulsorily Convertible Debentures to be issued pursuant to the Scheme shall be listed on stock exchanges on which the shares of Transferee Company are listed. The said submission is accepted.

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So far as paragraph 6 (b) of the Affidavit is concerned, the Counsel for the Petitioner submits that it has received observation letter from BSE Limited (“BSE”) and National Stock Exchange of India Limited (“NSE”) after taking into account the observation Letter of SEBI. The observation

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letters issued by BSE and NSE are attached to the Affidavit tendered on
behalf of Future Retail Limited.

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In accordance with the observation letters, the Petitioner Companies have proposed to amend the Scheme by replacing the existing clause 5.4 by the following clause:

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“ The holders of debentures issued pursuant to this clause shall have a put option with respect to such debentures on FRL. The redemption of the debentures will be guaranteed by a promoter company of FRL, namely, Future Corporate Resources Limited. ”

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The Counsel for the Petitioners further state that public shareholders of Future Retail Limited, the Petitioner Company in Company Scheme Petition No 625 of 2013 have approved the revised Scheme by way of postal ballot and further, the shareholders and holders of Compulsorily Convertible Debentures of Future Value Retail Limited, the Petitioner Company in Company Scheme Petition No 624 of 2013 have also given their consent to the proposed modification.

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In view thereof the aforesaid amendment as proposed is allowed. Amendment to be carried out within four weeks from today.

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

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Since all the requisite statutory compliances have been fulfilled, the Company Scheme Petition No 624 of 2013 is made absolute in terms of prayer clauses (a) to (d) and the Company Scheme Petition No 625 of 2013 is made absolute in terms of prayer clauses (a) to (c).

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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 (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 this Order becoming valid.

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The Petitioner Companies are directed to file a copy of this order along with a copy of the amended Scheme of Amalgamation with the concerned Registrar of Companies, electronically, along with E-Form 21 in addition to physical copy as per the relevant provisions of the Act.

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The Petitioner Companies in both the Company Scheme Petition to pay costs of Rs.10,000/- each to the Regional Director, Western Region, Mumbai and the Petitioner Company in Company Scheme Petition No 624 of 2013 to pay costs of Rs.10,000/- to the Official Liquidator, High Court, Bombay. Costs to be paid within four weeks from the date of the Order.

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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 amended Scheme duly authenticated by the Company Registrar, High Court (O. S.), Bombay.

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 (G. S. Patel, J)

Future Retial Ltd. v. --

Case brief

What is this about?

What did the court decide?

Future Retial Ltd. v. --

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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