235. Power to acquire shares of shareholders dissenting from scheme or contract approved by majority
(1) Where a scheme or contract involving the transfer of shares or any class of
shares in a company (the transferor company) to another company (the transferee company)
has, within four months after making of an offer in that behalf by the transferee company,
been approved by the holders of not less than nine-tenths in value of the shares whose
transfer is involved, other than shares already held at the date of the offer by, or by a
nominee of the transferee company or its subsidiary companies, the transferee company
may, at any time within two months after the expiry of the said four months, give notice in
the prescribed manner to any dissenting shareholder that it desires to acquire his shares.
(2) Where a notice under sub-section (1) is given, the transferee company shall,
unless on an application made by the dissenting shareholder to the Tribunal, within one
month from the date on which the notice was given and the Tribunal thinks fit to order
otherwise, be entitled to and bound to acquire those shares on the terms on which, under
the scheme or contract, the shares of the approving shareholders are to be transferred to
the transferee company.
(3) Where a notice has been given by the transferee company under sub-section (1)
and the Tribunal has not, on an application made by the dissenting shareholder, made an
order to the contrary, the transferee company shall, on the expiry of one month from the
date on which the notice has been given, or, if an application to the Tribunal by the
dissenting shareholder is then pending, after that application has been disposed of, send
a copy of the notice to the transferor company together with an instrument of transfer, to
be executed on behalf of the shareholder by any person appointed by the transferor
company and on its own behalf by the transferee company, and pay or transfer to the
transferor company the amount or other consideration representing the price payable by
the transferee company for the shares which, by virtue of this section, that company is
entitled to acquire, and the transferor company shall—
(a) thereupon register the transferee company as the holder of those shares;
and
(b) within one month of the date of such registration, inform the dissenting
shareholders of the fact of such registration and of the receipt of the amount or other
consideration representing the price payable to them by the transferee company.
(4) Any sum received by the transferor company under this section shall be paid into
a separate bank account, and any such sum and any other consideration so received shall
be held by that company in trust for the several persons entitled to the shares in respect of
which the said sum or other consideration were respectively received and shall be disbursed
to the entitled shareholders within sixty days.
(5) In relation to an offer made by a transferee company to shareholders of a transferor
company before the commencement of this Act, this section shall have effect with the
following modifications, namely:—
(a) in sub-section (1), for the words “the shares whose transfer is involved
other than shares already held at the date of the offer by, or by a nominee of, the
transferee company or its subsidiaries,”, the words “the shares affected” shall be
substituted; and
(b) in sub-section (3), the words “together with an instrument of transfer, to be
executed on behalf of the shareholder by any person appointed by the transferee
company and on its own behalf by the transferor company” shall be omitted.
Explanation.—For the purposes of this section, “dissenting shareholder” includes
a shareholder who has not assented to the scheme or contract and any shareholder who
has failed or refused to transfer his shares to the transferee company in accordance with
the scheme or contract.