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* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of Judgment: 28.09.2012.
+ COMPANY PETITION NO. 309 OF 2012
U. P. METBLAST & ENERGY LIMITED
....... Transferor Company No.1
AND
ARROW RETAIL PRIVATE LIMITED
............ Transferor Company No.2
AND
SHREE BALAJI HEAVY ELECTRICALS
PRIVATE LIMITED ...... Transferor Company No.3
AND
HIND TRADEX LIMITED............... Transferee Company
Through:- Mr. Mukesh Sukhija, Adv. for the
petitioner.
Mr. K.S. Pradhan, Regional
Director (Northern Region)
Mr. Rajiv Bahl for the Official
Liquidator.
CORAM:
HON'BLE MS. JUSTICE INDERMEET KAUR
INDERMEET KAUR, J. (Oral)
1. This joint Petition has been filed under sections 391(2) & 394 of the Companies Act, 1956 by the Petitioner Transferor Companies and CP No.309/2012 Page 1 of 12 Transferee Company seeking sanction of the Scheme of Amalgamation of M/s U. P. METBLAST & ENERGY LIMITED (Transferor Company No. 1); ARROW RETAIL PRIVATE LIMITED (Transferor Company No. 2); SHREE BALAJI HEAVY ELECTRICALS PRIVATE LIMITED (Transferor Company No. 3); with HIND TRADEX LIMITED (Transferee Company).
2. The registered offices of the Petitioner Transferor Companies and Transferee Company are situated at New Delhi, within the jurisdiction of this Court.
3. Details with regard to the date of incorporation of Transferor and Transferee Companies, their authorized, issued, subscribed and paid up capital have been given in the Petition.
4. Copies of the Memorandum and Articles of Association as well as the latest audited Accounts as at 30th September, 2011 of the Petitioner Transferor and Transferee Companies have also been enclosed with the Petition.
CP No.309/2012 Page 2 of 12
5. Copies of the Resolutions passed by the Board of Directors of the Petitioner Companies approving the Scheme of Amalgamation have also been placed on record.
6. It has been submitted that no proceedings under Sections 235 to 251 of the Companies Act, 1956 is pending against the Petitioner Companies.
7. So far as Share Exchange ratio is concerned, the Scheme provides that upon amalgamation of the „Transferor Companies No. 1 to 3‟ into the „Transferee Company‟ pursuant to the Scheme of Amalgamation, the following would be the share Exchange Ratio:
(A) "FOR EVERY 10 (TEN) EQUITY SHARE(S) OF RS.10/-
(RUPEES TEN) EACH FULLY PAID UP OF UP METBLAST & ENERGY LIMITED (TRANSFEROR COMPANY NO. 1) 89 (EIGHTY NINE) EQUITY SHARE(S) OF RS.10/- (RUPEES TEN) EACH FULLY PAID UP OF HIND TRADEX LIMITED (TRANSFEREE COMPANY)."
(B) "FOR EVERY 10 (TEN) EQUITY SHARE(S) OF RS.10/-
(RUPEES TEN) EACH FULLY PAID UP OF ARROW CP No.309/2012 Page 3 of 12 RETAIL PRIVATE LIMITED (TRANSFEROR COMPANY NO. 2) 91 (NINETY ONE) EQUITY SHARE(S) OF RS.10/- (RUPEES TEN) EACH FULLY PAID UP OF HIND TRADEX LIMITED (TRANSFEREE COMPANY)."
(C) "FOR EVERY 10 (TEN) EQUITY SHARE(S) OF RS.10/-
(RUPEES TEN) EACH FULLY PAID UP OF SHREE BALAJI HEAVY ELECTRICALS PRIVATE LIMITED (TRANSFEROR COMPANY NO. 3) 13 (THIRTEEN) EQUITY SHARE(S) OF RS.10/- (RUPEES TEN) EACH FULLY PAID UP OF HIND TRADEX LIMITED (TRANSFEREE COMPANY)."
8. The Petitioner Companies had earlier filed CA (M) No. 101 seeking directions of this Court for dispensation/convening of meetings. Vide order dated May 29, 2012, this Court allowed the Application and dispensed with the requirement of convening meetings of Shareholders and Un-secured Creditors of the Transferor Companies and the Transferee Company and also the Secured Creditors of the Transferor Company No. 1 and Transferee Company, while the Transferor Company No. 2 and Transferor Company No. 3 had no Secured Creditor.
CP No.309/2012 Page 4 of 12
9. The Petitioner Transferor Companies and the Transferee Company have thereafter filed the present Petition seeking sanction of the Scheme of Amalgamation. Vide order dated July 09, 2012, notice in the Petition was directed to be issued to the Regional Director, Northern Region and the Official Liquidator. Citations were also directed to be published in the „Statesman‟ (English, Delhi Edition) and „Vir Arjun‟ (Hindi, Delhi Edition). Affidavit of Service and Publication has been filed by the Petitioners showing compliance regarding service of the Petition on the Regional Director, Northern Region and the Official Liquidator, and also regarding publication of citations in the aforesaid newspaper on August 25, 2012. Copies of the newspaper cuttings, in original, containing the publications have been filed along with the Affidavit of Service.
10. Pursuant to the notices issued, the Official Liquidator sought information from the Petitioner Companies. Based on the information received, the Official Liquidator has filed his report dated September 21, 2012 wherein he has stated that he has not CP No.309/2012 Page 5 of 12 received any complaint against the proposed Scheme from any person/party interested in the Scheme in any manner and that the affairs of the Transferor Companies No, 1 to 3 do not appear to have been conducted in a manner prejudicial to the interest of its members, creditors or to public interest.
11. In response to the notices issued in the Petition, Mr. Rakesh Chandra, Learned Regional Director, Northern Region, Ministry of Corporate Affairs has filed his Affidavit dated September 13, 2012. Relying on Clause 7 of the Scheme of Amalgamation, he has stated that, upon sanction of the Scheme of Amalgamation, all the employees of the Transferor Companies No. 1 to 3 shall become the employees of the Transferee Company without any break or interruption in their services upon sanctioning of the Scheme of Amalgamation by the Hon‟ble Court and on perusal of the Balance Sheet as at 31.03.2011 of the Transferor Company No. 1 viz. M/s U.P. Metblast & Energy Limited., it has been observed that the company has granted a loan amounting to Rs 15,80,000/- to Ms. Manju Goel, relative of director CP No.309/2012 Page 6 of 12 which fall within the purview of the Provisions of Section 295 of the Act. Thus, the Company has violated the Provisions of Section 295. Further, by contravening the Provisions of Section 295 of the Act by the Director of the Company, the concerned Directors vacate his office by operation of law pursuant to the Provisions of Section 283(1)(h) of the Companies Act, 1956, which is a material in the affairs of the Company. The Transferee Company vide its letter- dated 06.09.2012 has given undertaking that they will move Compounding Application under Section 621-A of the Companies Act, 1956 for the default committed under Section 295 of the Companies Act, 1956 with the Registrar of Companies, New Delhi. Mr. Anuj Goyal, Director of Transferor Company No.1 filed an affidavit dated 05.07.2012 in response to the affidavit filed by Regional Director stating that-
1. That the Transferor Company No. 1 had given loan of Rs. 15,80,000/- to Ms. Manju Goel in non-compliance of the provisions of section 295 of the Companies Act, 1956.
2. That the above non-compliance has occurred inadvertently and due to oversight; without any mala-fide intention on the part of the Board of Directors of the Transferor Company No. 1. CP No.309/2012 Page 7 of 12
3. That the whole amount of Rs. 15,80,000/- has been repaid on 09.11.2011 by Ms. Manju Goel to the Transferor Company No. 1.
4. That the Transferor Company No. 1 has filed a compounding application under section 621A read with Section 295 of the Companies Act, 1956 in the prescribed e-form 61 vide SRN B57956252 dated 20.09.2012 in respect of the loan of Rs. 15,80,000/- given by the Transferor Company No. 1 to Ms. Manju Goel. A copy form 61 along with its challan was attached with this affidavit.
5. That as per clause 4 of the Scheme of Amalgamation filed before the Hon‟ble Court, none of the proceedings filed by or against the Transferor Company No. 1 would be abated or discontinued by the reason of amalgamation of the Transferor Company No. 1 with the Transferee Company. Clause 4 of the scheme of Amalgamation is reproduced herein below for ready reference- "4. Legal Proceedings All legal proceedings of whatever nature by or against the Transferor Companies pending on the Effective Date, shall not be abated, be discontinued or be, in any way, prejudicially affected by reason of the transfer of the undertaking of the Transferor Companies or of anything contained in this Scheme but the CP No.309/2012 Page 8 of 12 proceedings may be continued, prosecuted and enforced by or against the Transferee Company in the same manner and to the same extent as it would or might have been continued, prosecuted and enforced by or against the Transferor Companies as if the Scheme had not been made."
6. The observations raised by the Ld. RD on this point no longer survives.
12. Moreover the counsel for the Petitioner Companies placed reliance on the judgment of this Hon‟ble Court in the matter of Salil Industries Limited Vs.Nabhganja Buildwell Pvt. Ltd. in CP No. 149/2010, delivered on 06.9.2010; para no. 17: In support of the above submission, learned counsel relied on the judgment of Single Judge of the Gujarat High Court in the matter of Core Healthcare Limited Vs. Nirma Limited [(2007) 138 Comp Cas 204 (Gujarat)] wherein the court has held that "the Scheme can always be sanctioned subject to and without prejudice to the liability, if any, in the Civil and Criminal proceedings in respect of past transactions and the liability, if any, of the Board, Directors, Management etc., in civil and criminal proceedings would continue."
In view of the submissions made at the bar and the settled law on the subject, the objection raised by the Regional Director is rejected and the Scheme is sanctioned subject to and without prejudice to the liability, if any, in the civil and criminal proceedings in respect of past transactions. It is further clarified that the proceedings pending before the ACMM, Tis Hazari, Delhi CP No.309/2012 Page 9 of 12 against the transferor company and/or its Board, Directors and management etc. shall continue and the liability, if any, of the Board, Directors, Management etc., in the said proceedings would continue as if the Scheme has not been made.
13. No objection has been received to the Scheme of Amalgamation from any other party by either of the Petitioner Company or the counsel. Mr. Anuj Goyal & Mr. Ramesh Kumar Goyal, the Directors of the respective companies given their affidavits both dated 05.07.2012 confirming that neither the Petitioner Companies nor the counsel has received any objection pursuant to citations published in the newspapers.
14. In view of the approval accorded by the Shareholders and Creditors of the Petitioner Companies; representation/reports filed by the Regional Director, Northern Region and the Official Liquidator, attached with this Court to the proposed Scheme of Amalgamation, there appears to be no impediment to the grant of sanction to the Scheme of Amalgamation. Consequently, sanction is hereby granted to the Scheme of Amalgamation under sections 391 and 394 of the CP No.309/2012 Page 10 of 12 Companies Act, 1956. The Petitioner Companies will comply with the statutory requirements in accordance with law. Certified copy of the order be filed with the Registrar of Companies within 30 days from the date of receipt of the same. In terms of the provisions of sections 391 and 394 of the Companies Act, 1956, and in terms of the Scheme, the whole or part of the undertaking, the property, rights and powers of the Transferor Company No. 1 to 3 be transferred to and vest in the Transferee Company without any further act or deed. Similarly, in terms of the Scheme, all the liabilities and duties of the Transferor Companies No. 1 to 3 be transferred to the Transferee Company without any further act or deed. It is, however, clarified that this order will not be construed as an order granting exemption from payment of stamp duty or taxes or any other charges, if payable in accordance with any law; or permission/compliance with any other requirement which may be specifically required under any law.
15. Learned Counsel for the Petitioners states that the Petitioner Companies would voluntarily deposit a sum of Rs. One lac in the CP No.309/2012 Page 11 of 12 Common Pool fund of the Official Liquidator within three weeks from today. The statement is accepted.
16. The Petition is allowed in the above terms.
Order Dasti INDERMEET KAUR, J SEPTEMBER 28, 2012 A CP No.309/2012 Page 12 of 12