IN THE HIGH COURT OF DELHI
COMPANY PETITION NO. 324/2009
Reserved on 22nd September, 2010
Date of pronouncement: 29th March, 2011
In the matter of
The Companies Act, 1956:
And
Petition under Sections 391 to
394 of the Companies Act, 1956
Scheme of Arrangement between:
M/s. Bharti Infratel Limited .. Petitioner/Transferor
Company
AND
M/s. Bharti Infratel Ventures Limited ..
Petitioner/Transferee
Company
Through Mr. Nikhil Bhalla, Adv.
for the petitioners
Mr. Parag P. Tripathi, ASG with
Mr. Nitin Mehta, Mr. Anuj Bhandari,
Advs. for the Income Tax Deptt.
SUDERSHAN KUMAR MISRA, J.
1. This joint petition has been filed under Sections 391 to
394 of the Companies Act, 1956 by the petitioner companies
seeking sanction of the Scheme of Arrangement between M/s.
Bharti Infratel Limited (hereinafter referred to as transferor
company) and M/s. Bharti Infratel Ventures Limited (hereinafter
referred to as the transferee company).
2. The registered offices of the transferor and transferee
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companies are situated at New Delhi, within the jurisdiction of
this court.
3. The transferor company was incorporated under the
Companies Act, 1956 on 30th November, 2006 with the Registrar
of Companies, NCT of Delhi & Haryana at New Delhi.
4. The transferee company was incorporated under the
Companies Act, 1956 on 31st December, 2007 with the Registrar
of Companies, NCT of Delhi & Haryana at New Delhi.
5. The authorized share capital of the transferor company,
as on 31st March, 2009, was Rs.60,00,00,000/- divided into
6,00,00,000 equity shares of Rs.10/- each. The issued,
subscribed and paid up capital of the company was
Rs.54,05,00,000/- divided into 5,40,50,000 equity shares of
Rs.10/- each.
6. The authorized share capital of the transferee company,
as on 31st March, 2009, was Rs.50,00,000/- divided into 5,00,000
equity shares of Rs.10/- each. The issued, subscribed and paid
up capital of the company was Rs.5,00,000/- divided into 50,000
equity shares of Rs.10/- each.
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7. Copies of Memorandum and Articles of Association of
the transferor and transferee companies have been filed on
record. The audited balance sheets, as on 31 st March, 2009, of
the transferor and transferee 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 petition and the accompanying
affidavits. It is submitted that the transferee company is a
wholly owned subsidiary of the transferor company and the
Scheme proposes that the Telecom Infrastructure Undertaking
of the transferor company be demerged/transferred and be
vested in the transferee company. It is submitted by the
petitioner companies that to evolve a structure for more
effective participation on the Project MOST (Mobile Operators’
Shared Towers), it is considered appropriate to consolidate the
Telecom Infrastructure Undertaking, in a distinct company and,
thereby, create distinct corporate identity for carrying on the
business of providing Telecom Infrastructure. It is claimed that
the Scheme of Arrangement would benefit the respective
companies and other stakeholders of respective companies to
reduce set-up and operating costs resulting in cost efficiency
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coupled with a greater financial flexibility; to improve quality of
services to its customers by establishing highest service
standards through operational agreements; and to increase
speed of roll-out, to increase efficiency and to improve sharing
of infrastructure.
9. So far as the share exchange ratio is concerned, the
Scheme provides that the transferee company is a wholly owned
subsidiary of the transferor company. It is further provided that
the Scheme is intended to restructure, within the group of
companies controlled by the transferor company, the holding of
the Passive Infrastructure Assets in a more efficient manner
consistent with the diverse needs of business. Hence, the
transferee company shall not be required to issue any shares or
pay any consideration to the transferor company or to its
shareholders.
10. It has been submitted by the petitioners that no
proceedings under Sections 235 to 251 of the Companies Act,
1956 are pending against the petitioner companies.
11. The Board of Directors of the transferor company
and the transferee company in their separate meetings held on
20th January, 2009 and 27th April, 2009 respectively, have
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unanimously approved the proposed Scheme of Arrangement.
Copies of the Resolutions passed at the meetings of the Board
of Directors of the transferor and transferee companies have
been placed on record.
12. The petitioner companies had earlier filed CA (M)
No. 122/2009 seeking directions of this court to dispense with
the requirement of convening the meetings of the equity
shareholders, secured and unsecured creditors of the transferor
company and equity shareholders and unsecured creditors of
the transferee company, which are statutorily required for
sanction of the Scheme of Arrangement. Vide order dated 20th
July, 2009, this court allowed the application and dispensed with
the requirement of convening and holding the meetings of the
equity shareholders, secured and unsecured creditors of the
transferor company and equity shareholders and unsecured
creditors of the transferee company to consider and, if thought
fit, approve, with or without modification, the proposed Scheme
of Arrangement. There is no secured creditor of the transferee
company.
13. The petitioner companies have thereafter filed the
present petition seeking sanction of the Scheme of
Arrangement. Vide order dated 28th July, 2009, notice in the
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petition was directed to be issued to the Regional Director,
Northern Region. Citations were also directed to be published in
‘Statesman’ (English) and ‘Veer Arjun’ (Hindi) in terms of the
Companies (Court) Rules, 1959. Affidavit of service has been
filed by the petitioners showing compliance regarding service on
the Regional Director, Northern Region, and also regarding
publication of citations in the aforesaid newspapers on 6th
August, 2009. Copies of the newspaper clippings containing the
publications have been filed along with the affidavit of service.
14. In response to the notices issued in the petition,
Dr. Navrang Saini, Regional Director, Northern Region, Ministry
of Corporate Affairs has filed his report dated 26th October,
2009. Relying on Clause 4.4.1 of Part-IV of the Scheme, he has
stated that, upon sanction of the Scheme of Arrangement, all
the employees of the transferor company engaged in or in
relation to the Passive Infrastructure Assets of the transferor
company shall continue to remain the employees of the
transferor company without any break or interruption in their
services.
15. The Regional Director has further submitted that
the individual assets and liabilities and values thereof pertaining
to “Passive Infrastructure Assets” of the transferor company
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proposed to be transferred to the transferee company are not
mentioned in the Scheme. He has further submitted that since
the shareholders and creditors of the companies have approved
the Scheme of Arrangement as such, it should have been part of
the Scheme so that their details are known to the shareholders
and creditors of both the companies.
16. In response to the above objection, the petitioner
companies in their rejoinder stated that the transferee company
is 100% subsidiary of the transferor company and that the
proposed transfer of the “Passive Infrastructure Assets” is to
restructure the holding of assets within the group companies
controlled by the transferor company in a more efficient manner
consistent with the diverse needs of the business. It has been
further submitted that the present Scheme is not a Scheme of
Arrangement with respect to the creditors of the companies and
none of the creditors of the transferor company are being
transferred to the transferee company by way of present
Scheme. Further, the “Passive Infrastructure Assets” are being
transferred without any consideration and the value of
investment of the shareholders of the transferor company shall
not deplete in any manner as the value of the investment by the
transferor company in the transferee company shall enhance
corresponding to the said transfer.
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17. In support of the aforesaid submission, learned
counsel placed reliance on the judgment of this court in Re:
Bharti Airtel Limited [CP No. 233/2007, decided on 26th
November, 2007] wherein this court had rejected the similar
objection raised by the Regional Director, Northern Region. In
view of the above, the objection raised by the Regional Director
does not survive.
18. The Regional Director, while referring to Para
3.1.1 of Part-III of the Scheme regarding the share exchange
ratio, has further submitted that the petitioner companies have
failed to submit a valuation report and that both the transferor
and transferee companies may be directed to obtain a valuation
report from a recognized firm of Chartered Accountants.
19. In response to the above objection, the petitioner
companies in their rejoinder have submitted that the transferee
company is 100% subsidiary of transferor company and in lieu
of the transfer of “Passive Infrastructure Assets”, no equity
shares are to be issued by the transferee company to the
shareholders of the transferor company, and, therefore, there is
no need for obtaining the valuation report from a recognized
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firm of Chartered Accountants with respect to the Scheme. In
support of above submission, the petitioner companies relied on
the judgment of this court in Re: Bharti Airtel Limited [CP No.
233/2007, decided on 26th November, 2007] wherein a similar
Scheme of Arrangement involving demerger of Passive
Infrastructure Assets into a group company, wherein no
consideration were paid nor any shares were issued by the
transferee company to the transferor company, was sanctioned.
In view of the above, the objection raised by the Regional
Director does not survive.
20. The Regional Director, while referring to Para 2.3
of Part-II of the Scheme, has further submitted that the
transferee company may be directed to obtain the necessary
approvals from the Department of Telecommunications for
transfer of licenses after sanction of the Scheme by this court,
pursuant to the Department of Telecommunications’ letter No.
820-I/2003-LR dated 9th June, 2003, in which the Department of
Telecommunications has clarified that the licensee may transfer
the licenses with prior written approval of the licensor even in
cases of amalgamation under Sections 391/394 of the
Companies Act, 1956.
21. In response to the above objection, the petitioner
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companies in their rejoinder have submitted that in terms of the
Department of Telecommunications’ letter No. 820-I/2003-LR
dated 9th June, 2003 only post facto approval is required in case
any telecom license agreement between a telecom service
provider and Department of Telecommunication is being
transferred by way of merger or demerger. It is further
submitted that no telecom license agreement between the
transferor company and Department of Telecommunication is
being transferred to the transferee company pursuant to this
Scheme and, that the aforesaid letter has no application to this
Scheme. In view thereof, the objection raised by the Regional
Director does not survive.
22. The Income Tax Department appeared in the
matter and filed their objections to the Scheme of Arrangement
by way of an affidavit of Mr. Raghuveer Singh Dagur, Deputy
Commissioner of Income Tax, Circle-2(1), New Delhi, which are
akin to the objections filed by them in the matter of M/s.
Vodafone Essar Infrastructure Limited & Ors. viz. Company
Petition No. 334/2009. On 22nd September, 2010, Mr. Parag P.
Tripathi, learned ASG appearing with Mr. Nitin Mehta and Mr.
Anuj Bhandari, stated on behalf of the Income Tax Department
that they adopt the arguments that have been addressed in
Company Petition No. 334/2009 and that they do not wish to
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address any further arguments in this matter.
23. The objections filed on behalf of the Income Tax
Department stand dismissed in terms of the orders passed in
Company Petition No. 334/2009 and no separate orders are
required to be passed in this behalf in this petition.
24. No objection has been received to the Scheme of
Arrangement from any other party. Learned counsel for the
petitioners in his affidavit dated 17th November, 2009 has
submitted that they have not received any objection pursuant to
citations published on 6th August, 2009.
25. In view of the approval accorded by the equity
shareholders, secured and unsecured creditors of the petitioner
companies to the proposed Scheme of Arrangement, and there
being no surviving objection to the same by the Regional
Director, Northern Region, there appears to be no impediment to
the grant of sanction to the Scheme of Arrangement.
Consequently, sanction is hereby granted to the Scheme of
Arrangement under Sections 391 and 394 of the Companies Act,
1956. The petitioner companies will comply with the statutory
requirements in accordance with law. Certified copy of this
order be filed with the Registrar of Companies within five weeks.
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It is also clarified that this order will not be construed as an
order granting exemption from payment of stamp duty as
payable in accordance with law. Upon the sanction becoming
effective from the appointed date of Arrangement, that is 1st
April, 2009, the ‘Passive Infrastructure Assets’ of the transferor
company shall stand merged in the transferee company.
26. The petition is allowed in the above terms.
Dasti.
SUDERSHAN KUMAR MISRA, J.
March 29, 2011
sun
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