Jaiprakash Power Ventures Ltd. vs Himachal Baspa Power Company Ltd.

Sanjay Karol, J.—Mr. Anand Sharma, learned counsel for the petitioner, invites attention of this Court to the order dated 14.3.2011, passed by a Co-ordinate Bench of this Court in Company Petition No. 2 of 2011, titled as Jaiprakash Power Ventures Limited v. Jaypee Karcham Hydro Corpn. Ltd. And another.

This petition has been preferred by Jaiprakash Power Ventures Limited, having its registered Office at JUIT Complex, Waknaghat, P.O. Dumehar Bani, Kandaghat, District Solan, Himachal Pradesh (hereinafter referred to as the ''Transferor Company''), under the provisions of Sections 391 to 394 of the Companies Act, 1956 (hereinafter referred to as the Act), for sanction of scheme of Arrangement between Himachal Baspa Power Company Limited, having its registered Office at JUIT Complex, Waknaghat, P.O. Dumehar Bani, Kandaghat, District Solan, Himachal Pradesh (hereinafter referred to as the Transferee Company).

The Transferor Company and the Transferee Company are having their registered Office at the same place. It is pleaded that the Scheme of Arrangement between Transferor Company and Transferee Company was approved by the Board of Directors of the Transferor Company and Transferee Company at their respective meetings duly convened and held on 15th November, 2014. The Board of Directors of the Transferor Company and the Transferee Company vide their respective Resolutions dated 15th November, 2014 have inter-alia authorized Shri M.M. Sibbal, Sr. General Manager and Company Secretary of the Transferor Company to take all steps to seek appropriate directions and approval/sanction from this Court for the Scheme of Arrangement.

The Scheme of Arrangement, as approved by the Board of Directors of both the Transferor and Transferee Companies, is detailed herein below. Undertakings of the Transferor Company to the Transferee Company as a going concern with their respective assets and liabilities on lump exchange basis, against which the Transferee Company shall allot to the Transferor Company its 125 crore Equity Shares of Rs. 10/each and 25 crore Non convertible Debentures of Rs. 100/each. The following benefits are envisaged from the Scheme:

"(i) In case of Transferor Company

It will help Transferor Company to deleverage its balance sheet including reduction of debt and interest outgo and also enhancing shareholders'' value through sale of Shares and Non convertible Debentures so allotted. (ii) In case of the Transferee Company:

a. the acquisition will enable the Transferee Company to carry on the businesses for which it has been incorporated and enable independent evaluation of the Transferred Undertakings; and

b. the businesses of the Transferred Undertakings can be carried out more conveniently with greater focus and attention."

The applicants pray that the proposed Scheme of Arrangement will have no adverse effect on the interests of any of the classes of members or creditors of the respective Companies. It is also submitted that the Scheme is in no way prejudicial to the economic interest of both the applicants or to any of their creditors or shareholders. A prayer is made that a meeting of the equity shareholders and creditors of the Transferor and the Transferee Company be held where the Scheme of Arrangement will be put before the members as also creditors for their approval.

I have heard learned counsel appearing for the petitioner as also gone through the record.

I am satisfied, at this stage, that the proposed Scheme of Arrangement will be in the interest of both the Companies and that if implemented will not be contrary to their interest.

Mr. Anand Sharma, learned counsel, submits that since much work is required to be done in the meetings of equity shareholders/Creditors of the Transferor Company, at least four Advocates, each, be appointed.

As such, it is directed that the meetings of the Equity shareholders and creditors of the Transferor and Transferee Companies be held at JUIT Complex, Waknaghat, P.O. Dumehar Bani, Kandaghat, District Solan, Himachal Pradesh, as per the following schedule:--

"(i) Meeting of the Equity Shareholders of the Transferor Company be held at 10.00 AM on 28.2.2015. For this purpose, Shri R.K. Gautam, Senior Advocate is hereby appointed as Chairman and Shri Bimal Gupta, Advocate, as Co-Chairman as also Shri Lovneeesh Kanwar, Advocate, assisted by Ms. Shreya Chauhan, Advocate, for the said meeting. Remuneration is fixed at Rs. 1,25,000/- for Chairman, Rs. 90,000/- each for Shri Bimal Gupta and Shri Lovneesh Kanwar, Advocates and Rs. 50,000/- for the Assisting Advocate.

(ii) Meeting of the Creditors of Transferor Company be held at 1.00 PM on 28.2.2015. For this meeting, Shri Naresh Sood, Senior Advocate, is hereby appointed as Chairman and Ms Archana Dutt, Advocate, as Co-Chairman, as also Shri B.C. Verma, Advocate, assisted by Shri Rajesh Kumar, Advocate. Remuneration is fixed at Rs. 1,25,000/- for Chairman, Rs. 90,000/- each for Ms Archana Dutt and Shri B.C. Verma, and Rs. 50,000/- for the Assisting Advocate.

(iii) Meeting of the Equity Shareholders of the Transferee Company be held at 3.00 PM on 28.2.2015. For this purpose, Shri N.K. Thakur, Senior Advocate is hereby appointed as Chairman and Shri Jagan Nath, Advocate, as Co-Chairman, assisted by Ms Deepika Thakur, Advocate, for the said meeting. Remuneration is fixed at Rs. 1,25,000/- for Chairman, Rs. 90,000/- for Co-Chairman and Rs. 50,000/- for the Assisting Advocate.

(iv) The meeting of the creditors of the Transferee Company is dispensed with, as there is none.

(v) Notice of the above meetings shall be dispatched to each of the Shareholders as well as Creditors of the Transferor Company at their respective last known addresses, atleast 21 clear days before the meeting by prepaid ordinary post dispensing with the requirement of Rule 73 of Companies (Court) Rules, 1959 for dispatch of notices under UPC, since the system of UPC has been discontinued by the Ministry of Communications and IT, Department of Posts vide their circular No. 2-4/2008-PO dated 23rd February, 2011.

(vi) Advertisements informing the date, time and place of the aforesaid meetings of the Shareholders and Creditors be published by the Transferor and Transferee Companies, in accordance with the Companies (Court) Rules, 1959 in two news papers, namely ''Economic Times" (English Edition) published from Chandigarh and "Divya Himachal" (Hindi Edition), published from Chandigarh. Notice of these meetings will also be affixed on the Notice Board of the Transferor and Transferee Companies at their Registered Office.

(vii) The Advocates, so appointed, in addition to their fee as, fixed hereinabove, be entitled for free transportation from Shimla to the venue of the meeting and back. For this purpose, the applicants are directed to make adequate arrangements. Records required as also secretarial services shall be made available. In addition, out-of-pocket expenses incurred by them shall be reimbursed by the Transferor and Transferee Companies.

(viii) Quorum for the meetings of Equity shareholders as provided in the Articles of Association of each of the Company(ies), is five/two, as per requirement, which is in consonance with Section 174 of the Companies Act, 1956. However, Ministry of Corporate Affairs has notified Section 103 of the Companies Act, 2013, relating to "quorum", the required Quorum for the General Meetings of Public Company has been prescribed as thirty members personally present if the number of members as on the date of meeting exceeds five thousand. Accordingly, keeping in view the number of shareholders and creditors, we fix the Quorum as 30 (thirty) for Shareholders Meeting and 15 (fifteen) for Creditors Meetings.

(ix) The cut off date for determining the entitlement to receive notices of the meetings, we fix that the list of Equity Shareholders and Creditors for the purpose of sending notices to the Equity shareholders and Creditors as 31st December, 2014. But for the purpose of voting, the latest available records of the Equity shareholders and Creditors meetings shall be accepted.

(x) The voting by proxy is also permitted provided the proxies, in the prescribed form, are filled atleast 48 hours before the scheduled time of the meetings at the Registered Office of the Transferor Company. The proxy forms shall accompany the Notices sent by post. The necessary documents namely, the Scheme of Arrangement and the Explanatory Statement as contemplated under Section 393 of the Companies Act, 1956 shall also form part of the Notice.

(xi) The value of the Creditors shall be in accordance with the books of the Transferor Company and in case of the dispute as regards entries on the books, the respective Chairman/Co-Chairman conducting the meetings shall determine such value for the purpose of the meetings.

(xii) On the conclusion of the meetings, Chairmen/Co-Chairmen shall submit their respective reports to the Court along with result of the respective meetings within seven days of the conclusion of the meeting. The reports shall be duly supported by respective affidavits of the Chairmen of the respective meetings, appointed by this Court."

Names of the Advocates and their remunerations have been suggested by Mr. Anand Sharma, learned counsel for the petitioner, which I find to be in order.

Voting shall be conducted by secret ballot. The petitioner herein shall be at liberty to approach this Court for clarification of this order for any other direction required from this Court. Let a copy of order, duly authenticated by the Court Master, be made available to the Advocates so appointed herein above.

List this matter on 27.3.2015, after the affidavits of the Chairmen/Co-Chairmen have been filed.