CL: To disregard a method of valuation of shares in scheme of reduction, it must be shown that chosen method of valuation is such as has resulted in an artificially depressed or contrived valuation well below what a fair-minded person may consider reasonable
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[2014] 49 taxmann.com 52 (Bombay)
HIGH COURT OF BOMBAY
Cadbury India Ltd., In re
G.S. PATEL, J.
CO. PETITION NO. 1072 OF 2009
CO. APPLICATION NOS. 1332 OF 2009 AND 71 & 120 OF 2010
MAY 9, 2014
Section 66 of the Companies Act, 2013/Section 100 of the Companies Act, 1956 - Share capital - Reduction of - Whether before a Court can decline sanction to a scheme of reduction on account of a valuation, an objector to scheme must first show that valuation is ex-facie unreasonable - Held, yes - Whether sanctioning Court has no power or jurisdiction to exercise any appellate functions over scheme; it is not a valuer and it does not have necessary skills or expertise - Held, yes - Whether Court cannot substitute its own opinion for that of shareholders, its jurisdiction is peripheral and supervisory, not appellate - Held, yes - Whether it is impossible to say which of several available valuation models are 'best' or most appropriate - Held, yes - Whether no valuation is to be disregarded merely because it has used one or other of various methods; it must be shown that chosen method of valuation is such as has resulted in an artificially depressed or contrived valuation well below what a fair-minded person may consider reasonable - Held, yes - Whether where in proposed scheme of reduction of share capital of Cadbury India valuation of shares was done by Court appointed valuer and was accepted by overwhelming majority including a bulk of non-promoter minority, scheme was to be sanctioned - Held, yes [Paras 7.1.5, 7.1.7, 7.1.9, 7.1.11 & 8.1]
■■■
[2014] 49 taxmann.com 52 (Bombay)
HIGH COURT OF BOMBAY
Cadbury India Ltd., In re
G.S. PATEL, J.
CO. PETITION NO. 1072 OF 2009
CO. APPLICATION NOS. 1332 OF 2009 AND 71 & 120 OF 2010
MAY 9, 2014
Section 66 of the Companies Act, 2013/Section 100 of the Companies Act, 1956 - Share capital - Reduction of - Whether before a Court can decline sanction to a scheme of reduction on account of a valuation, an objector to scheme must first show that valuation is ex-facie unreasonable - Held, yes - Whether sanctioning Court has no power or jurisdiction to exercise any appellate functions over scheme; it is not a valuer and it does not have necessary skills or expertise - Held, yes - Whether Court cannot substitute its own opinion for that of shareholders, its jurisdiction is peripheral and supervisory, not appellate - Held, yes - Whether it is impossible to say which of several available valuation models are 'best' or most appropriate - Held, yes - Whether no valuation is to be disregarded merely because it has used one or other of various methods; it must be shown that chosen method of valuation is such as has resulted in an artificially depressed or contrived valuation well below what a fair-minded person may consider reasonable - Held, yes - Whether where in proposed scheme of reduction of share capital of Cadbury India valuation of shares was done by Court appointed valuer and was accepted by overwhelming majority including a bulk of non-promoter minority, scheme was to be sanctioned - Held, yes [Paras 7.1.5, 7.1.7, 7.1.9, 7.1.11 & 8.1]
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