HIGH COURT OF RAJASTHAN, JAIPUR BENCH

Vast Textiles Ltd., In re

SHIV KUMAR SHARMA, J.

S.B. COMPANY APPLICATION NOS. 2 AND 3 OF 2007

AND COMPANY PETITION NOS. 16 AND 17 OF 2006

FEBRUARY 9, 2007

Section 392 of the Companies Act, 1956 - Compromise and arrangement - High Court, while allowing company petition filed by petitioner-company for approving scheme of arrangement, directed to delete para 19(c) of section 4 of scheme, which laid down that since on arrangement share capital of transferor companies would become authorised capital of transferee company, no fee to Registrar of Companies or stamp duty to State Government would be payable, holding that capital of company can be increased only after following procedure prescribed under Act and payment of requisite fee to Registrar of companies and stamp duty to State Government - In instant application, petitioner-company sought modification of said order specially direction to delete para 19(c) of scheme, stating that said para did not contemplate that relevant provisions of Companies Act would not be complied with - Petitioner relied upon decisions in Juggilal Kamlapat Holding Ltd., In re [2006] 68 SCL 40 (All.) and Hotline Hol Celding (P.) Ltd., In re [2005] 127 Comp. Case 165 (Delhi) to contend that where in case of merger, capital of transferor-companies becomes authorised capital of transferee-company, no fee to Registrar of Companies or stamp duty to State Government is payable - Whether in view of ratio indicated in aforesaid two decisions, impugned order omitting para 19(c) was to be deleted and scheme, as prayed for, was to be approved, but subject to fulfilling condition of enhancing authorised capital after following procedure under Companies Act - Held, yes

CASE REVIEW

Decision of Rajasthan High Court in Vast Textiles Ltd., In re [2007] 78 SCL 190 set aside.