Essel Shyam Communication ... vs ...
2016 Latest Caselaw 1260 Del

                    IN THE HIGH COURT OF DELHI
                COMPANY APPLICATION (MAIN) NO. 3/2016
                                         Reserved on 5th January, 2016
                            Date of pronouncement: 18th February, 2016
In the matter of
The Companies Act, 1956 & the Companies Act, 2013 (to the extent
applicable):
And
Application under Sections 391 & 394 of the
Companies Act, 1956
Scheme of Arrangement between:
Essel Shyam Communication Limited
                                           Applicant/Demerged Company
       AND

Cloudcast Digital Limited
                                            Applicant/Resulting Company

                                Through Mr. P. K. Mittal, Advocate for
                                the applicant

SUDERSHAN KUMAR MISRA, J.

1. This joint application has been filed under Sections 391 & 394 of

the Companies Act, 1956 by the applicant companies seeking directions

of this court to dispense with the requirement of convening the meetings

of the equity shareholders, secured and unsecured creditors of the

resulting company and equity and preference shareholders of the

demerged company and for convening of separate meetings of the

secured and unsecured creditors of the demerged company, to consider

and approve, with or without modification, the proposed Scheme of

Arrangement between Essel Shyam Communication Limited (hereinafter

referred to as the demerged company) and Cloudcast Digital Limited

(hereinafter referred to as the resulting company).

2. The registered offices of the demerged and resulting companies

are situated at New Delhi, within the jurisdiction of this Court.

3. The demerged company was originally incorporated under the

Companies Act, 1956 on 30th April, 1996 with the Registrar of

Companies, NCT of Delhi & Haryana at New Delhi under the name and

style of Essel Spacelinks Limited. The company changed its name to

Essel Shyam Communication Limited and obtained the fresh certificate of

incorporation on 9th April, 1997.

4. The resulting company was originally incorporated under the

Companies Act, 1956 on 3rd November, 2006 with the Registrar of

Companies, NCT of Delhi & Haryana at New Delhi under the name and

style of ESCL Technologies Limited. The company changed its name to

Escal News India Limited and obtained the fresh certificate of

incorporation on 16th May, 2011. The company again changed its name

to Cloudcast Digital Limited and obtained the fresh certificate of

incorporation on 30th March, 2015.

5. The present authorized share capital of the demerged company is

Rs.48,00,00,000/- divided into 3,30,00,000 equity shares of Rs.10/- each

aggregating to Rs.33,00,00,000/- and 75,00,000 0.01% non-cumulative

compulsorily convertible preference shares of Rs.20/- each aggregating

to Rs.15,00,00,000/-. The issued, subscribed and paid-up share capital

of the company is Rs.27,57,29,900/- divided into 1,64,62,878 equity

shares of Rs.10/- each aggregating to Rs.16,46,28,780/- and 55,55,056

0.01% non-cumulative compulsorily convertible preference shares of

Rs.20/- each aggregating to Rs.11,11,01,120/-.

6. The present authorized share capital of the resulting company is

Rs.5,00,000/- divided into 50,000 equity shares of Rs.10/- each. The

issued, subscribed and paid-up share capital of the company is

Rs.5,00,000/- divided into 50,000 equity shares of Rs.10/- each.

7. Copies of the Memorandum and Articles of Association of the

demerged and resulting companies have been filed on record. The

audited balance sheets, as on 31st March, 2015, of the demerged and

resulting companies, along with the report of the auditors, have also been

filed.

8. A copy of the Scheme of Arrangement has been placed on record

and the salient features of the Scheme have been incorporated and

detailed in the application and the accompanying affidavit. It is submitted

by the applicants that the proposed Scheme, inter alia, provides for

demerger of the VSAT and ISP Division of the demerged company by

way of slump sale to the resulting company. It is claimed that the

proposed arrangement will achieve synergistic integration of the

businesses presently being carried on by the demerged company, which

shall be beneficial to the shareholders, creditors, employees and to the

interests of the public at large, as such arrangement would create greater

synergies between the businesses of the two companies and would

enable them to have access to better financial resources as well as

increase the managerial efficiencies, while effectively pooling the

technical, distribution and marketing skills of each other. It is further

claimed that the proposed demerger would assists in induction of joint

venture partner/strategic investor/financial investor and pursue inorganic

and organic growth opportunities in such businesses.

9. So far as the share exchange ratio is concerned, the Scheme

provides that the total consideration for transfer and vesting of VSAT and

ISP Division of the demerged company in the resulting company shall be

Rs.2,07,45,334/- which shall be discharged by the resulting company

within a period of three months from the effective date or receipt of all

regulatory approvals, whichever is later, without any interest, or such

other extended period(s) and in such manner as may be agreed by the

Board of the demerged and resulting companies.

10. It has been submitted by the applicants that no proceedings under

Sections 235 to 251 of the Companies Act, 1956 are pending against the

demerged and resulting companies.

11. The Board of Directors of the demerged and resulting companies

in their separate meetings held on 28th October, 2015 have unanimously

approved the proposed Scheme of Arrangement. Copies of the

Resolutions passed at the meetings of the Board of Directors of the

demerged and resulting companies have been placed on record.

12. The demerged company has 97 equity shareholders and 01

preference shareholder. 51 out of 97 equity shareholders, being 52.58%

in number and 97.19% in value, and the sole preference shareholder

have given their consents/no objections in writing to the proposed

Scheme of Arrangement. There consents/no objections have been

placed on record. They have been examined and found in order. In view

thereof, the requirement of convening the meetings of the equity

shareholders and preference shareholders of the demerged company, to

consider and, if thought fit, approve, with or without modification, the

proposed Scheme of Arrangement is dispensed with.

13. The resulting company has 07 equity shareholders. 03 out of 07

equity shareholders, being 42.86% in number and 99.99% in value, have

given their consents/no objections in writing to the proposed Scheme of

Arrangement. There consents/no objections have been placed on record.

They have been examined and found in order. In view thereof, the

requirement of convening the meeting of the equity shareholders of the

resulting company, to consider and, if thought fit, approve, with or without

modification, the proposed Scheme of Arrangement is dispensed with.

There is no secured or unsecured creditor of the resulting company, as

on 30th September, 2015.

14. The demerged company has 03 secured creditors and a direction

is sought to convene and hold their meetings to seek their approval to the

proposed Scheme of Arrangement. Considering the facts and

circumstances aforesaid, the meeting of the secured creditors of the

demerged company shall be held on 19th March, 2016 at 02:00 p.m. at C-

34, Sector-62, Electronic City, Noida. Mr. Ankur Arora, Advocate, (Mobile

No. 9811929774) is appointed as the Chairperson and Ms. Alka

Srivastava, Advocate, (Mobile No. 9811950380) is appointed as the

Alternate Chairperson to conduct the said meeting. The Quorum of the

meeting of the secured creditors of the demerged company shall be 2 in

number and more than 25% in value of the total secured debt.

15. The demerged company has 235 unsecured creditors and a

direction is sought to convene and hold their meetings to seek their

approval to the proposed Scheme of Arrangement. Considering the facts

and circumstances aforesaid, the meeting of the unsecured creditors of

the demerged company shall be held on 19th March, 2016 at 03:00 p.m.

at C-34, Sector-62, Electronic City, Noida. Mr. Rajeev Sharma, Advocate,

(Mobile No. 9810104886) is appointed as the Chairperson and

Mr.Siddharth Thakur, Advocate, (Mobile No. 9650032198) is appointed

as the Alternate Chairperson to conduct the said meeting. The Quorum

of the meeting of the unsecured creditors of the demerged company shall

be 50 in number and more than 25% in value of the total unsecured debt.

16. In case the quorum as noted above for the above meetings is not

present at the meetings, then the meetings shall be adjourned by half an

hour, and thereafter the persons present and voting shall be deemed to

constitute the quorum. For the purpose of computing the quorum the

valid proxies shall also be considered, if the proxy in the prescribed form

duly signed by the person entitled to attend and vote at the meetings is

filed with the registered office of the applicant company at least 48 hours

before the meetings. The Chairpersons and Alternate Chairpersons shall

ensure that the proxy registers are properly maintained.

17. The Chairpersons and Alternate Chairpersons shall ensure that

notices for convening the aforesaid meetings of the secured and

unsecured creditors of the demerged company, along with copies of the

Scheme of Arrangement and the statement under Section 393 of the

Companies Act, 1956, shall be sent to the secured and unsecured

creditors of the demerged company by ordinary post at their registered or

last known addresses at least 21 days before the date appointed for the

meetings, in their presence or in the presence of their authorized

representatives. Notice of the meetings shall also be published in the

Delhi editions of the newspapers "Statesman" (English) and "Veer Arjun"

(Hindi) in terms of the Companies (Court) Rules, 1959 at least 21 days

before the date appointed for the meetings.

18. The Chairpersons and Alternate Chairpersons will be at liberty to

issue suitable directions to the management of the applicant companies

so that the aforesaid meetings of the secured and unsecured creditors of

the demerged company are conducted in a just, free and fair manner.

19. The fee of the Chairpersons and the Alternate Chairpersons for the

aforesaid meetings shall be Rs.50,000/- each in addition to meeting their

incidental expenses. The Chairpersons will file their reports within two

weeks from the date of holding of the aforesaid meetings.

20. The application stands allowed in the aforesaid terms.

Dasti

SUDERSHAN KUMAR MISRA, J.

February 18, 2016