Co. Appl. No. 526 0/2013 (for directions) 1. This is a joint application by Vodafone Essar South Limited (now Vodafone South Limited) (hereafter referred to as 'the Transferor company') and Vodafone Essar Space Limited (now Vodafone Spacetel Limited) (hereafter referred to as 'the Transferee company') [hereafter also collectively referred to as 'Applicant companies'] under Section 392 of the Companies Act, 1956 ('Act') praying for dismissal as withdrawn of main Company Petition No. 276 of 2010 in which an order was passed by this Court on 28th March, 2011 approving the Scheme of Demerger ('Scheme') of the National Long Distance ('NLD') and International Long Distance ('ILD') businesses from the Transferor company into the Transferee company. 2. In terms of the Scheme that was approved by the Court, the effective date was under Clause 1.1 (f) defined as the date on which the last of the approvals or events specified under Clause 17 of Part III of this Scheme was to be obtained. Under Clause 17, the Scheme was made conditional upon and subject to "the requisite consent, approval or permission of the Department of Telecommunications ('DoT'), Government of India, any authority or department thereof, or any other statutory or regulatory authority including the Reserve Bank of India, which may by law be necessary for the implementation of this Scheme." 3. On 30th March, 2011, the Transferor company made an application in the DoT for permission to transfer the NLD/ILD licences held by it to the Transferee company. On 9th May, 2012, the DoT wrote to the Transferor company communicating its rejection of the request for transfer of the NLD/ILD licences from the Transferor company to the Transferee company. Thereafter the Transferor company wrote to the DoT on 30th January, 2013 asking it to reconsider the decision. Thereafter the Applicant companies took a decision at their respective Board meetings held on 14th March, 2013 that in view of the changed eligibility criteria no purpose would be served in pursuing request for transfer of NLD/ILD licences from Transferor company to Transferee company. Accordingly on 18th March, 2013 the Transferor company wrote to the DoT stating that it had decided not to proceed with the matter and that its application should be treated as closed. Accordingly on 18th March, 2013 the Transferor company wrote to the DoT stating that it had decided not to proceed with the matter and that its application should be treated as closed. It is in the above circumstances that the Applicants have moved the present application praying that the order passed on 28th March, 2011 in Company Petition No. 276 of 2011 should be recalled and the said petition be permitted to be withdrawn. 4. In response to the notice issued in this application, a letter dated 10th April, 2013 addressed by the Regional Director (Northern Region) in the Ministry of Corporate Affairs ('MCA'), Government of India to the Registrar of Companies ('ROC'), Delhi has been produced by Mr. K.S. Pradhan, Deputy ROC. In the said letter the ROC has been advised to apprise this Court that the Central Government has stated that it has no objection to the Applicants withdrawing Company Petition No. 276 of 2010 subject to the following conditions: (a) The views of the Income Tax Department ('ITD') be ascertained by the Court; (b) The right of the Applicant companies to file applications in the Court seeking approval of a Scheme of Arrangement or Amalgamation be restricted for at least two years, and (c) Appropriate costs may be awarded to the Central Government. 5. Mr. Rajiv Nayyar, learned Senior Counsel appearing for the Applicant companies points out that as far as the views of the ITD are concerned, the Scheme as approved by the Court has not come into effect and no demerger of the NLD and ILD businesses from the Transferor company into the Transferee company has taken place. As a result, there is no change in the situation that existed prior to the sanction of the Scheme. Therefore, there was no tax angle to the reversal of the above transactions and the consequent withdrawal of the Co. Pet. No. 276 of 2010. As a result, there is no change in the situation that existed prior to the sanction of the Scheme. Therefore, there was no tax angle to the reversal of the above transactions and the consequent withdrawal of the Co. Pet. No. 276 of 2010. He also refers to the decision of the Bombay High Court in Company Application No. 389 of 2011 in Company Scheme Petition No. 43 of 2011 (In Re: Topworth Steels & Powers Pvt. Ltd.) in which it was held that if the Scheme approved by the Company Court, has for valid reasons, not been able to be given effect to, then the Company Court can again be approached under Section 392 (1) read with Section 392(2) for passing appropriate orders to recall the order sanctioning Scheme. 6. An examination of the order passed by the Bombay High Court in Topworth Steels 6" Powers Pvt. Ltd., reveals that the Court there was faced with more or less the same situation as the case at hand. There the Scheme as approved by the Bombay High Court under Section 391 of the Act could not be given effect to since the mining licences in question could not be transferred from the Transferor to the Transferee companies. After discussing the scope of the powers of the Company Court under Sections 391 and 392 of the Act, it was concluded that the Court has the power to give directions in regard to any matter or make any modification for the proper working of the compromise or arrangement subject to such arrangement having come into effect. However, in exercise of its inherent powers, the Company Court can, in peculiar facts, where the Scheme has itself not come into effect, recall its order sanctioning the Scheme. 7. In the present case, it is seen that the entire Scheme was made conditional upon the approvals being granted by the DoT for the transfer of the NLD and ILD licences from the Transferor company to the Transferee company. If that was not possible for reason of change in the eligibility criteria brought about after the sanction of the Scheme by the Court, then obviously the Scheme cannot be given effect to. The request by the Applicants that they should be permitted to revert to the position in which that were prior to the sanctioning of the Scheme cannot, therefore, be refused. The request by the Applicants that they should be permitted to revert to the position in which that were prior to the sanctioning of the Scheme cannot, therefore, be refused. As pointed out by the Bombay High Court in Topworth Steels & Powers Pvt. Ltd., the Court is not denuded of its inherent powers to restore the parties to the situation in which they were placed prior to the sanctioning of the Scheme if the very basis for the Scheme to become effective does not exist. Further, the Central Government has also expressed no objection to the prayer in this application being allowed subject only to three conditions which will be dealt with next. 8. As regards ascertaining the views of the ITD, the Court is unable to discern any tax angle arising since the demerger has not taken effect and the Applicant companies continue as they were prior to the Scheme being sanctioned. Nevertheless, it is clarified that this order will not come in the way of the ITD taking any action in exercise of its powers in accordance with law. The Court has not expressed any view whatsoever on the question of any income tax liability of the Applicant companies. As and when any action is sought to be taken by the ITD in accordance with law as a result of the earlier order and the present order passed by this Court, it would be open to the Applicant companies to urge their pleas before the ITD. 9. The plea of the RD that the right of the Applicant companies to file applications in the Court for approval of a Scheme of amalgamation or arrangement be restricted for a period of two years, cannot be countenanced for the simple reason that a statutory right of the parties to seek judicial remedies cannot be sought to be curtailed. 10. The present application is allowed with costs of Rs. 20,000 which will be paid to the Central Government by the Applicant companies within three weeks. The order passed by this Court on 28th March, 2011 is recalled and the Company Petition No. 276 of 2010 is dismissed as withdrawn. 10. The present application is allowed with costs of Rs. 20,000 which will be paid to the Central Government by the Applicant companies within three weeks. The order passed by this Court on 28th March, 2011 is recalled and the Company Petition No. 276 of 2010 is dismissed as withdrawn. The Applicant companies will write to the ROC within 30 days enclosing a certified copy of this order and withdraw their earlier letter dated 30th March, 2011 by which a certified copy of the Court's order dated 28th March, 2011 was forwarded to the RD.