85
IN THE HIGH COURT OF DELHI AT NEW DELHI
Judgment delivered on: 22.09.2016
CO.PET. 802/2014
IN THE MATTER OF:-
AURO I.T. SOLUTION PRIVATE LIMITED
Petitioner No.1/Transferor Company
AND
AURO SUGAR PRIVATE LIMITED
Petitioner No.2/Transferee Company
Through: Mr Kailash Sharma & Mr M.
Salim, Advocates for
petitioners.
Ms. Aparna Mudiam, Asst.
ROC for Regional Director.
CORAM:
HON'BLE MR JUSTICE SIDDHARTH MRIDUL
JUDGMENT
SIDDHARTH MRIDUL, J
1. The present is a Second Motion Petition filed jointly by Auro I.T. Solution Private Limited (hereinafter referred to as 'Transferor Company') with Auro Sugar Private Limited (hereinafter referred to as 'Transferee Company'), under Sections 391 to 394 of the Companies Act, 1956 CO.PET.802/2014 Page 1 of 1 (hereinafter referred to as 'the Act') read with Rule 9 of the Company (Court) Rules, 1959, for approval of the Scheme of Arrangement (hereinafter referred to as 'Scheme').
2. The Transferor Company and the Transferee Company have been hereinafter jointly referred to as 'Petitioner Companies'.
3. The registered offices of the Petitioner companies are situated in the National Capital Territory of Delhi, and therefore, this Court has the necessary jurisdiction to adjudicate the present petition.
4. The details qua the authorized share capital, issued, subscribed and paid up capital of the Petitioner companies, have been set out in paragraph 4 of the Scheme.
5. The Transferor Company was incorporated under the provisions of Act on 22.03.2010. The authorized share capital of the Transferor Company 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 Transferor company is Rs.1,00,000/-, divided into 10,000 equity shares of Rs.10/- each.
6. Transferee Company was incorporated under the provisions of Companies Act, 1956 on 24.04.1979. The authorized share capital of Transferee Company is Rs.15,00,000/-, divided into 5000 equity shares of Rs.100/- each and 10,000 (9% cumulative) redeemable preference shares CO.PET.802/2014 Page 2 of 2 of Rs.100/- each. The issue, subscribed and paid-up share capital of the Transferee company is Rs.1,00,000/-, divided into 1000 equity shares of Rs.100/- each.
7. It has been averred on behalf of the Petitioner companies that there are no proceedings pending against them, under Sections 235 to 251 of the Act (including their corresponding sections of the Companies Act, 2013).
8. It has been further submitted on behalf of the Petitioner companies that the Scheme has been approved by the respective Board of Directors (BOD) of the Petitioner companies. A copy of the BOD resolution dated 28.02.2014 has been filed and the same is on record.
9. The Copies of the Memorandum of Association and Articles of Association, of each of the Petitioner companies, have been duly filed as Annexures to Company Application (M) No. 137 of 2014 (Application for First Motion), which earlier came to be filed by the Petitioner companies. The same are on record.
10. The audited financial statements, as on 31st March, 2013 pertaining to each of the Petitioner companies and unaudited provisional Balance Sheet as at 28th February, 2014 have also been duly filed by the Petitioner companies and the same are on record.
CO.PET.802/2014 Page 3 of 3
11. A copy of the Scheme has been duly placed on record. It has been urged on behalf of the Petitioner companies that the proposed merger of the Petitioner companies would enable the consolidated entity to carry on the business more efficiently and effectively and meet the regulatory norms for the business. It would further strengthen the financials and lead to optimal utilisation of resources whilst leveraging the operational, capital and corporate synergies.
12. The Share Exchange Ratio for the Amalgamation has been provided in the valuation report submitted by the Chartered Accountant dated 01.03.2014 which has been approved by the Board of Directors of the petitioner companies vide Resolutions dated 05.03.2014. The Share Exchange Ratio has been summarised hereinbelow:
i. 01 (One) Equity Share of Auro Sugar Pvt. Ltd. of Rs.100/- each fully paid up for every 10 Equity Share of Auro IT Solutions Pvt. Ltd. of Rs.10/- each fully paid up.
13. To recapitulate, the Petitioner companies had, in the earlier round, filed an application (i.e. application for the First Motion), being Company Application (M) No. 137 of 2014, whereby a prayer was sought, seeking directions of this court to dispense with the requirement of convening the meetings of their respective shareholders, secure and unsecured creditors. CO.PET.802/2014 Page 4 of 4 This Court vide order dated 01.12.2014 was pleased to allow the application and dispensed with the requirement of convening meetings of the equity shareholders, secured and unsecured creditors of the Petitioner companies.
14. Pursuant to the same, the Petitioner companies, have filed the instant petition (i.e. Second Motion Petition). Notice in the present petition was issued by this Court, by way of the order dated 22.12.2014. Notice was accepted on behalf of the Official Liquidator (OL), the Registrar of Companies and the Regional Director (RD), Northern Region.
15. Furthermore, vide order of this Court dated 22.12.2014, citations were directed to be published. It has been noted that Citations were published in 'Business Standard' (English Edition) on 10.01.2015 and 'Jansatta' (Hindi, Edition) on 11.01.2015, in compliance with the order of this Court dated 22.12.2014.
16. Pursuant to the notices issued, report of the Official Liquidator (OL) dated 18.03.2015 has been filed, wherein, inter alia, it has been stated that the OL has not received any complaint qua the Scheme from any person or party interested in the Scheme in any manner. Further, it has been stated in the said report dated 18.03.2015, that on the basis of information supplied by the petitioner companies, it appears, that the affairs of the petitioner companies have been conducted in a manner which could not be construed CO.PET.802/2014 Page 5 of 5 as being prejudicial to either the interest of their members or the public at large.
17. In other words, it has been stated by the OL in the report dated 18.03.2015 that the affairs of the petitioner companies, do not fall foul of the provisions of the Second Proviso to Section 394(1) of the Act. Thus, it has been averred on behalf of the OL, in effect, that he would have no objections, if this Court were to sanction the Scheme, subject to the objections raised vide paragraphs 15 to 17 of the OL's Report dated 18.03.2016.
18. Further, in response to the notices issued in the Petition, Sh. A. K. Chaturvedi, Regional Director, Northern Region, Ministry of Corporate Affairs, filed affidavits dated 19.03.2015, wherein, inter alia, it has been stated that there are no objections to the sanction of the proposed Scheme, except the objections enumerated in paragraphs 15 to 18 of the said report.
19. It has further been stated on behalf of the OL and the RD that the Share Exchange Ratio has not been incorporated in the proposed Scheme.
20. It has been averred on behalf of the petitioner companies that vide an affidavit dated 15.07.2016, the petitioner companies have stated that due to an inadvertent error, the Share Exchange Ratio was not incorporated in the CO.PET.802/2014 Page 6 of 6 Scheme and the same has been placed on record vide a valuation report of the Chartered Accountant dated 01.03.2014 accompanied by a Resolutions of the Board of Directors of the petitioner companies dated 05.03.2014 approving the said valuation report of the Chartered Accountant.
21. Having heard Ms. Aparna Mudiam, Assistant ROC, who appears on behalf of the RD, it is evident that all the objections raised on their behalf have been satisfactorily dealt with by the petitioner companies in terms of affidavit dated 15.07.2016. It is observed that paragraph 6 of the said affidavit dated 15.07.2016 clearly postulates that "In case, if it is found that there is any demand against the transferor company by the income tax authorities, the transferee company undertakes to pay the same."
22. Therefore, in view of the above, no further objections on behalf of the RD, to the present Scheme, remain.
23. It has been noted that no objection has been received to the Scheme from any other party. The Petitioner companies, vide affidavit dated 15.07.2016, have submitted that neither the Petitioner companies nor their counsel have received any objection pursuant to the citations published in the newspapers dated 10.01.2015 and 11.01.2015.
24. In view of the foregoing, upon considering the approval accorded by the members and creditors of the Petitioner companies to the proposed CO.PET.802/2014 Page 7 of 7 Scheme, and the affidavits filed by the Regional Director, Northern Region, Ministry of Corporate Affairs and the Official Liquidator attached to this High Court, whereby no objections have been raised to the proposed Scheme, there appears to be no impediment to the grant of sanction to the Scheme.
25. Consequently, sanction is hereby granted to the Scheme under section 391 and 394 of the Companies Act, 1956. The Petitioner companies will however, comply with the statutory requirements in accordance with law.
26. A certified copy of the order, sanctioning the scheme, be filed with the ROC, within thirty (30) days of its receipt.
27. Resultantly, it is hereby directed that the petitioner companies will comply with all provisions of the scheme and, in particular, those which are referred to hereinabove.
28. In any event, notwithstanding what has been stated on behalf of the petitioner companies hereinabove, the transferee company will file an undertaking with this court, within two weeks from today, stating therein, that it will take over and defray all liabilities of the transferor company. It is also made clear, that the concerned Statutory Authority will be entitled to proceed against the transferee company qua any liability which it would CO.PET.802/2014 Page 8 of 8 have fastened onto the transferor company for the relevant period, and that, which may arise on account of the scheme being sanctioned.
29. Notwithstanding the above, if there is any deficiency found or, violation committed qua any enactment, statutory rule or regulation, the sanction granted by this court to the scheme will not come in the way of action being taken, albeit, in accordance with law, against the concerned persons, directors and officials of the petitioner companies.
30. The transferor company shall stand dissolved without being wound up.
31. It is made clear, that this order shall not be construed as an order granting exemption, inter alia, from, payment of stamp duty or, taxes or, any other charges, if, payable, as per the relevant provisions of law or, from any applicable permissions that may have to be obtained or, even compliances that may have to be made, as per the mandate of law.
32. Learned counsel appearing on behalf of the Official Liquidator prays that costs of at least Rs.1,00,000/- may be paid by the petitioner companies, keeping in view the fact, that the matter called for examination of extensive records and prioritised hearings. Learned counsel appearing on behalf of the petitioner companies states that the same is acceptable to him. CO.PET.802/2014 Page 9 of 9
33. In view of the foregoing, the petitioner companies shall deposit a sum of Rs.1,00,000/- by way of costs, with the Common Pool Fund of the OL, Delhi.
34. Consequently, the petition is allowed and disposed of, in the aforesaid terms. Pending applications, if any, stand disposed of.
SIDDHARTH MRIDUL, J * SEPTEMBER 22, 2016 dn * The date stands corrected vide order dated 28.11.2016 passed in Co.Pet.802/2014. CO.PET.802/2014 Page 10 of 10