Debikay Sales Pvt. Ltd. vs Prapti Traders P. Ltd.
1999 Latest Caselaw 1077 Del

ORDER

Dalveer Bhandari, J.

1. This order will dispose of the petition filed under Section 391(2) and 394 of the Companies Act, 1956, seeking amalgamation of the 13 Companies, namely: (1) Debikay Sales Pvt. Ltd., (2) Mahdev Constructions Pvt. Ltd. (3) Venture Enterprises Ltd. (4) Venture Overseas Ltd. (5) Chunauti Holdings Pvt. Ltd. (6) Asterix Investment Ltd. (7) Gala Traders & Finances Pvt. Ltd. (8) Lagan Services Pvt. Ltd. (9) Majestic Trading & Services Ltd. (10) Narayani Paper Products Ltd. (11) Palitana Investment Ltd. (12) Venture Global Limited (13) Tarzan Udyog Viniyog Ltd. (Transferor Companies) with M/s. Prapti Traders Pvt. Ltd. (Transferee company).

2. The registered offices of the Transferor Companies Nos. 1 to 5 are situated within the jurisdiction of this Court and Transferor companies No. 6 to 13 and the Transferee Company are within the jurisdiction of Calcutta. The Calcuttta High Court by order dated 21.9.99 has already accorded sanction in terms of prayer (a) to (k) of the petition. In this petition, notices were issued to the Regional Director and the Official Liquidator and citation was published in Times of India (English) and Veer Arjun (Hindi). Citations have been published. The reports of the Official Liquidator and Regional Director have also been received. The Official Liquidator and the Regional Director, Kanpur have no objection to the scheme. In their reports, both the Official Liquidator and Regional Director, Kanpur stated that the said scheme is not in any manner prejudicial to the public interest or the interests of members of the transferor companies and the affairs of the company have not been carried out in any manner prejudicial to the creditors or shareholders or public at large. In the report of the Official Liquidator it has also been stated that in the scheme due care has been taken for the interests of the workmen of the transferor companies.

3. The scheme of amalgamation provides that all the assets and liabilities of the business of all the 13 transferor companies shall be taken over by the transferee company, including their workmen and the employees. As per the proposed scheme all the members of the transferor company, immediately on or before the affective date, shall become the staff, workmen and employees of the transferee company and their services shall be deemed to have been continued without interruption or broken by the reason of the said transfer. The service conditions applicable to such staff (workmen or employees) after such transfer shall not in any case be less favourable to them than those as were applicable to them immediately preceding the transfer.

4. The learned counsel for the petitioners has stated the circumstances, reasons and grounds that have necessitated and/or justify the scheme of amalgamation as under :

(a) The transferor companies and the Transferee Company are all engaged in the business of investing and/or dealing in shares and securities. AIL, GTPL, LSPL, MTSL, NPPL, MCPL, VEL, TUVL and CHPL also carry on the business of providing finance. VGL also carries on the business of providing Finance and trading in leather garments, card terminals and software. All the Equity Shares issued by DSPL, MCPL and CHPL and all the Preference Shares issued by AIL, GTPL, LSPL, MTSL and VEL are held by the Transferee Company and/or its nominees. The Transferee Company also hold Equity Shares in TMSL, PIL, VGL and TUVL. Further the Transferer Companies also hold various shares inter-se.

(b) In the circumstances it is considered desirable and expedient to amalgamate the Transferor Companies with the Transferee Company in the manner and on the terms and conditions stated in the said Scheme of Amalgamation.

(c) The proposed Scheme will result in reduction in overheads and other expenses, reduction in administrative and procedural work, eliminate duplication of work, better and more productive utilisation of various resources and will enable the undertakings concerned to effect internal economies and optimise productivity.

(d) The said Scheme will enable the Transferor Companies and the Transferee Company to rationalise and streamline their manage ment, business and finances and lead to the better and more economic control, running and management of the said Companies.

(e) The said Scheme will result in formation of a larger company with a larger capital and financial base enabling further growth and development of the business of the said companies. The said Scheme will enable the undertakings and business of the said Companies to obtain greater facilities possessed and enjoyed by one large company compared to a number of small companies for raising capital, securing and conducting trade and business on favourable terms and other benefits.

(f) The business of the Transferor Companies and the Transferee Company can be conbined conveniently and advantageously and in general, the said business will be carried on more economically and profitably under the Scheme.

(g) The said Scheme will contribute in furthering and fulfillling the objects of the companies concerned and enable optimum growth and development of their combined business.

(h) The said Scheme will thus have beneficial results for the said companies, their shareholders, employees and all concerned.

5. I have heard the learned counsel for the petitioners, the Regional Director and the learned counsel appearing for the Official Liquidator.

6. I have carefully considered the scheme of amalgamation. The rights and interests of the shareholders, creditors and employees are not likely to be jeopardised. The scheme of amalgamation does not appear to be unfair, contrary to public policy or in violation of public interest. In my opinion, the scheme in substance is fair and reasonable and accordingly, accord sanction to the scheme of arrangement/amalgamation as prayed for, in this petition.

7. The schenme of amalgamation shall be binding on all the equity shareholders, secured and unsecured creditors of both the companies and shall take effect from the effective date as defined in the scheme. A certified copy of this order alongwith the scheme of amalgamation will be filed with the Registrar of Companies within two weeks from the date of this order.

8. The transferor companies shall stand dissolved from the effective date, without the process of winding up. The statement of assets be filed within ten days.

9. A formal order shall be drawn up by the Registry in accordance with law.

10. The petition is accordingly disposed of.