Sunil Ambwani, J. - (1.) HEARD Shri R. P. Agarwal, learned counsel for the petitioner companies and Shri Navin Sinha, senior advocate assisted by Shri Vipin Sinha for Shri Raj Kumar Gupta, the objector to the scheme of amalgamation considered for approval in the meetings of the shareholders of the companies and creditors of the transferor company convened by the court and held on February 6, 1999, under the orders of this Court under Section 391 of the Companies Act, 1956 (in short "the Act").
(2.) THE Banaras Beads Ltd. with its registered office at A1, Industrial Estate, Varanasi, the transferor company is sought to be amalgamated with the BBL Beads Limited with its registered office at the same address at Varanasi, the transferee -company. The scheme does not give the background of disputes between the two groups of shareholders, which were sought to be settled through an arbitration of the hon'ble Mr. Justice A.N. Gupta, the then sitting judge at Lucknow Bench. He gave an award on November 1, 1998, between the two parties namely "AKG Group" led by Shri Ashok Kumar Gupta, resident of Varanasi. Smt. Rekha Gupta (wife), Shri Sidharth Gupta (son), Km. Deepali Gupta (daughter) and Smt. Vaishali Gupta (married daughter) and his HUF known as Ashok Kumar Gupta HUF on the first part; an "RKG group" led by Shri Raj Kumar Gupta, resident of New Delhi, Smt. Pushpa Gupta (wife), Akash Gupta (son), Km. Nidhi Gupta (daughter) and his HUF known as Raj Kumar Gupta HUF on the second part. In the award the arbitrator observed that "AKG group" holds 31.96 per cent, and "RKG group" 31.92 per cent, shares in Banaras Beads Limited, and that the company is holding shares in 13 other public limited and private limited companies. The arbitrator, in para. 15.08 of the award, in the best interest of the parties, directed as follows: 15.08 : To ensure smooth implementation of the scheme of arrangement envisaged under this award, I direct that at the general meetings of the shareholders/creditors of Banaras Beads Ltd. convened for the purpose of consideration and approval of the scheme of arrangement, neither Sri Ashok Kumar Gupta nor Sri Raj Kumar Gupta nor any other members of the two groups (including their associate companies) shall attend such meeting(s) personally. Smt. Resham Devi Gupta, and in her absence Smt. Vinod Kumari Gupta, as hereinafter provided, shall attend the said meeting(s) as their attorneys to support the scheme of arrangement. I further direct that by virtue of this award and without any further deed, the said ladies, in alternative, shall be deemed to have been duly appointed as their attorneys by the respective members of the AKG group and the RKG group and their associate companies, for the limited purpose of attending the said meetings and to vote for them. However, if necessary under law, Sri Ashok Kumar Gupta and Sri Raj Kumar Gupta shall ensure that proper proxy forms are also duly signed/executed by each of the concerned members of their respective groups and the associate companies, appointing Smt. Resham Devi Gupta, and in her absence Smt. Vinod Kumari Gupta, as their proxies to attend and vote at such meetings of the shareholders/creditors, and further ensure that the said proxy forms are deposited with the company within the stipulated time.
(3.) THE award was challenged before the District Judge, Varanasi under Section 34 of the Arbitration and Conciliation Act, 1996. The District Judge, Varanasi, rejected the application against which FAFO No. 809 of 1999 is pending in this Court.;