IN THE HIGH COURT OF DELHI
COMPANY PETITION NO. 519/2015
Reserved on 13th July, 2016
Date of pronouncement: 12th August, 2016
In the matter of
The Companies Act, 1956 & the Companies Act, 2013 (to the extent
applicable):
And
Petition under Sections 391(2) & 394 of the
Companies Act, 1956
Scheme of Amalgamation of:
Cyclonic Bicycles Private Limited
Petitioner/Transferor Company No. 1
Ethan Agencies Private Limited
Petitioner/Transferor Company No. 2
Mulberry Fab Text Private Limited
Petitioner/Transferor Company No. 3
WITH
Onset Interiors Private Limited
Petitioner/Transferee Company
Through Mr. Rajeev K. Goel, Advocate
for the petitioners
Ms. Aparna Mudiam, Asstt. Registrar
of Companies for the Regional Director
Mr. Rajiv Bahl, Advocate for the
Official Liquidator
SUDERSHAN KUMAR MISRA, J.
1. This joint petition has been filed under Sections 391(2) & 394 of the Companies Act, 1956 by the petitioner companies seeking sanction of the Scheme of Amalgamation of Cyclonic Bicycles Private Limited (hereinafter referred to as the transferor company no. 1); Ethan Agencies CP 519/2015 Page 1 of 9 Private Limited (hereinafter referred to as the transferor company no. 2) and Mulberry Fab Text Private Limited (hereinafter referred to as the transferor company no. 3) with Onset Interiors Private Limited (hereinafter referred to as the transferee company).
2. The registered offices of the transferor and transferee companies are situated at New Delhi, within the jurisdiction of this Court.
3. The transferor company no. 1 was incorporated under the Companies Act, 1956 on 3rd August, 2004 with the Registrar of Companies, NCT of Delhi & Haryana at New Delhi.
4. The transferor company no. 2 was originally incorporated under the Companies Act, 1956 on 25th August, 2003 with the Registrar of Companies, NCT of Delhi & Haryana at New Delhi under the name and style of Rich Soya Foods Private Limited. The company changed its name to Ethan Agencies Private Limited and obtained the fresh certificate of incorporation on 14th October, 2011.
5. The transferor company no. 3 was originally incorporated under the Companies Act, 1956 on 21st September, 1987 with the Registrar of Companies, NCT of Delhi & Haryana at New Delhi under the name and style of Saldi Chits Private Limited. The company changed its name to CP 519/2015 Page 2 of 9 Mulberry Fab Text Private Limited and obtained the fresh certificate of incorporation on 8th February, 2012. Thereafter, the company shifted its registered office from the state of Haryana to Delhi and obtained a certificate in this regard on 20th August, 2014.
6. The transferee company was incorporated under the Companies Act, 2013 on 3rd January, 2015 with the Registrar of Companies, NCT of Delhi & Haryana at New Delhi.
7. The present authorized share capital of the transferor company no.1 is Rs.25,00,000/- divided into 2,50,000 equity shares of Rs.10/- each. The issued, subscribed and paid-up share capital of the company is Rs.25,00,000/- divided into 2,50,000 equity shares of Rs.10/- each.
8. The present authorized share capital of the transferor company no.2 is Rs.1,00,000/- divided into 10,000 equity shares of Rs.10/- each. The issued, subscribed and paid-up share capital of the company is Rs.1,00,000/- divided into 10,000 equity shares of Rs.10/- each.
9. The present authorized share capital of the transferor company no.3 is Rs.1,01,00,000/- divided into 1,01,000 equity shares of Rs.100/- each. The issued, subscribed and paid-up share capital of the company is Rs.1,00,00,000/- divided into 1,00,000 equity shares of Rs.100/- each. CP 519/2015 Page 3 of 9
10. The present authorized share capital of the transferee company is Rs.10,00,000/- divided into 1,00,000 equity shares of Rs.10/- each. The issued, subscribed and paid-up share capital of the company is Rs.1,00,000/- divided into 10,000 equity shares of Rs.10/- each.
11. Copies of the Memorandum and Articles of Association of the transferor and transferee companies have been filed on record with the joint application, being CA(M) 114/2015, earlier filed by the petitioners. The audited balance sheets, as on 31st March, 2015, of the transferor and transferee companies, along with the report of the auditors, had also been filed.
12. A copy of the Scheme of Amalgamation has been placed on record and the salient features of the Scheme have been incorporated and detailed in the petition and the accompanying affidavits. It is submitted by the petitioners that the transferor and transferee companies are closely held group companies and the proposed amalgamation would result in business synergy, consolidation and pooling of their resources. It is claimed that the proposed amalgamation will result in usual economies of a centralized and a large company including elimination of duplicate work, reduction in overheads, better and more productive utilization of human and other resources and enhancement of overall business CP 519/2015 Page 4 of 9 efficiency. It will enable these companies to combine their managerial and operating strength, to build a wider capital and financial base and to promote and secure overall growth of their businesses.
13. So far as the share exchange ratio is concerned, the Scheme provides that, upon coming into effect of this Scheme, the transferee company shall issue and allot equity shares to the shareholders of the transferor companies in the following ratio:-
"1,612 equity share of Rs.10/- each of the transferee company, credited as fully paid up, for every 1,000 equity shares of Rs.10/- held in the transferor company no. 1."
"2,338 equity share of Rs.10/- each of the transferee company, credited as fully paid up, for every 100 equity shares of Rs.10/- held in the transferor company no. 2."
"623 equity share of Rs.10/- each of the transferee company, credited as fully paid up, for every 100 equity shares of Rs.100/- held in the transferor company no. 3."
14. It has been submitted by the petitioners that no proceedings under Sections 235 to 251 of the Companies Act, 1956 are pending against the petitioner companies.
15. The Board of Directors of the transferor and transferee companies in their separate meetings held on 16th May, 2015 have unanimously approved the proposed Scheme of Amalgamation. Copies of the Resolutions passed at the meetings of the Board of Directors of the transferor and transferee companies have been placed on record. CP 519/2015 Page 5 of 9
16. The petitioner companies had earlier filed CA (M) No. 114/2015 seeking directions of this court to dispense with the requirement of convening the meetings of their equity shareholders, secured and unsecured creditors, which are statutorily required for sanction of the Scheme of Amalgamation. Vide order dated 21st July, 2015 this court allowed the application and dispensed with the requirement of convening and holding the meetings of the equity shareholders and unsecured creditors of the transferor and transferee companies, there being no secured creditors of the petitioner companies, to consider and, if thought fit, approve, with or without modification, the proposed Scheme of Amalgamation.
17. The petitioner companies have thereafter filed the present petition seeking sanction of the Scheme of Amalgamation. Vide order dated 17th August, 2015, 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 'Business Standard' (English) and (Hindi) editions. Affidavit of service has been filed by the petitioners showing compliance regarding service on the Official Liquidator and the Regional Director, Northern Region and also regarding publication of citations in the aforesaid newspapers on 10th September, 2015. Copies of the newspaper clippings containing the publications have been filed along with the said affidavit.
CP 519/2015 Page 6 of 9
18. Pursuant to the notices issued, the Official Liquidator sought information from the petitioner companies. Based on the information received, the Official Liquidator has filed a report dated 12th February, 2016 wherein he has stated that he has not received any complaint against the proposed Scheme of Amalgamation from any person/party interested in the Scheme in any manner and that the affairs of the transferor companies do not appear to have been conducted in a manner prejudicial to the interest of their members, creditors or public interest, as per second proviso of Section 394(1) of the Companies Act, 1956.
19. In response to the notices issued in the petition, Mr. A. K. Chaturvedi, Regional Director, Northern Region, Ministry of Corporate Affairs has filed his report dated 15th February, 2016 stating that the Registrar of Companies has not made any adverse comments to the proposed Scheme. Although the Regional Director has not raised any objection to the proposed Scheme of Amalgamation but in para 5 of his report, while referring to the letter dated 27.10.2015 of Income Tax Officer (Hqrs-7), he has submitted that the transferee company has not filed its income tax returns till date. In response to the aforesaid observation, the petitioner companies in the affidavit dated 2nd July, 2016 of Mr. Anish Malhotra, Director of the transferee company, have submitted that the transferee company has filed its income tax return for CP 519/2015 Page 7 of 9 the financial year ended 31st March, 2015 with the income tax authorities. A copy of ITR acknowledgement evidencing filing of the income tax return is enclosed with the affidavit. In view of the aforesaid, the observation made by the Regional Director stands satisfied.
20. No objection has been received to the Scheme of Amalgamation from any other party. The petitioner companies, in the affidavit dated 8th February, 2016 of Mr. Kulvinder Pal Singh Bhatia, Director of the transferee company have submitted that neither the petitioner companies nor their counsel have received any objection pursuant to the citations published in the newspapers on 10th September, 2015.
21. Considering the approval accorded by the equity shareholders and creditors of the petitioner companies to the proposed Scheme of Amalgamation and the affidavits filed by the Regional Director, Northern Region and the Official Liquidator not raising any objection 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 Companies Act, 1956. The petitioner companies will comply with the statutory requirements in accordance with law. Certified copy of this order be filed with the Registrar of Companies within 30 days. It is also clarified that this order will not be construed as CP 519/2015 Page 8 of 9 an order granting exemption from payment of stamp duty as payable in accordance with law. Upon the sanction becoming effective from the appointed date of Amalgamation, i.e. 1st April, 2015, the transferor companies no 1 to 3 shall stand dissolved without undergoing the process of winding up.
22. Learned counsel for the Official Liquidator prays that costs of at least Rs.50,000/- should be paid by the petitioners keeping in view the fact that the matter has involved examination of extensive records and also prioritized hearings. Learned counsel for the petitioner company states that the same is acceptable to him. As already directed vide order dated 13.07.2016, the petitioners shall deposit a sum of Rs.50,000/- by way of costs with the Delhi High Court Bar Association Lawyers Social Security and Welfare Fund, New Delhi.
23. The petition is allowed in the above terms.
Dasti.
SUDERSHAN KUMAR MISRA, J.
August 12, 2016 CP 519/2015 Page 9 of 9