Delhi High Court
M/S. Icl Sales & Services Pvt Ltd vs Rama Packaging & Wires Industries ... on 15 November, 2010
Author: Sanjiv Khanna
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ COMPANY PETITION Nos.287 and 296 of 2009
% Date of decision : 15th November, 2010.
M/s. ICL SALES & SERVICES PVT LTD. .....Transferor Company No.1.
M/s.UPKAAR CREDIT & PORTFOLIO
PVT LTD ......Transferor Company No.2.
M/s.DEEPAK PVT LTD... ......Transferor Company No.3.
Through Mr. Suman Doval, Mr.Sumi
Babbar, advocates.
WITH
RAMA PACKAGING & WIRES INDUSTRIES
PRIVATE LTD ..... Transferee Company
Through Mr. Atma Sah, Assistant ROC.
Mr. Rajiv Bahl, Advocate for Official
Liquidator.
CORAM:
HON'BLE MR. JUSTICE SANJIV KHANNA
ORDER
1. These petitions for second motion under Sections 391 and 394 of the
Companies Act, 1956 (Act for short) have been filed for sanction/approval of
the proposed scheme of amalgamation which envisages amalgamation of
transferor companies M/s. ICL Sales and Services Private Limited, transferor
company No.1, M/s. Upkar Credit & Portfolio Private Limited, transferor
company No.2, M/s. Deepak Oils Private Limited, transferor company No.3,
M/s Satroj Enterprises Private Limited (non-applicant) transferor company
no.4 with Rama Packaging and Wire Industries Private Limited (transferee
company).
2. The registered offices of transferee company and transferor company
no.4 are located in Punjab and Haryana, respectively. The transferor company
nos. 1-3 have their registered office in National Capital Territory of Delhi.
3. The petitioners have placed on record copy of the Order dated 16th July,
2010 passed by the Punjab and Haryana High Court in the case of the
transferor company No. 4 and the transferee company in Company Petition
No. 51/2009 allowing/approving the scheme of amalgamation in respect of the
said two companies.
Company Petition 284/2010 Page 1
4. The transferor companies Nos. 1-2 had earlier filed Company
Application (M) No.87/2009, which was disposed of vide order dated May 04,
2009. By the said order, the Court had dispensed with the need and
requirement to hold meetings of the shareholders and unsecured creditors as
their no objection/consent letters were placed on record. The said order
records that there were no secured creditor of the transferor company no.2.
5. Transferor company no.3 had filed CA(M) No. 40/2009 which was
allowed vide Order dated 17th March, 2009 dispensing with the requirement to
convene and hold meeting of its shareholders and creditors.
6. After filing of the present petition, advertisements were issued in terms
of Rule 80 of Companies (Court) Rules, 1959 in Delhi edition of 'Statesman'
(English) and 'Jansatta' (Hindi). Notices have been published as per the
affidavit of service placed on record along with newspaper clippings. It is
stated that no objection to the proposed scheme of amalgamation has been
received.
7. Regional Director in his report/reply had stated that neither the scheme
nor in the petition it is mentioned that the petitioner-companies have
complied with the Accounting Standard 14 as prescribed by the Companies
(Accounting Standard) Rules, 2006. Accordingly, the petitioner-companies
should be asked to furnish an undertaking that they shall be complying with
the Accounting Standards as prescribed under Accounting Standard 14
relating to accounting for amalgamation. The three transferors have filed
affidavit that they shall comply with the requirement of Accounting Standard
14 issued by the Institute of Chartered Accountants of India. In view of the said
affidavit/undertaking, the first objection raised by the Regional Director has
been duly complied with.
8. The second objection raised by the Regional Director is that the scheme
in para 19 of Part V stipulates that if the scheme cannot be made effective on or
before 31st March,2009 the scheme would be null and void and of no avail. In
view of the said objection, the respondent-company had filed resolution of the
Board of Directors extending the validity date to 31st October, 2010. As the said
date had also expired, the petitioner-companies have now filed another Board
resolution extending the validity date to 31st March, 2011. In view of the said
Company Petition 284/2010 Page 2
extension, the second objection raised by the Regional Director also stands
complied with.
9. Official Liquidator in their response/reply has stated the history of the
three transferor companies, their respective authorized, subscribed and paid
up share capital and their financial performance. It is stated that the share
capital of the transferee company is not sufficient to accommodate the share
capital which is to be issued to the shareholders of the transferor companies
even after cancellation of the cross holdings. This objection should have been
raised by the official liquidator when the scheme of amalgamation was being
considered in the case of transferee company before the Punjab & Haryana
High Court. However, learned counsel for the petitioners has stated that the
transferee company will pay necessary charges for enhancement of the
authorized and paid up share capital of the transferee company in accordance
with law.
10. The official liquidator has stated that they have not received any
complaint against the proposed scheme of amalgamation from persons/parties
interested in the scheme. It is further stated that on the basis of the
information furnished by the three transferor companies, the Official
Liquidator is of the view that affairs of the three transferor companies do not
appear have been conducted in a manner prejudicial to the interest of the
members or public interest.
11. In the case of the transferor company no.3, the Official Liquidator has
stated that the shareholders of the said company as per the scheme of
amalgamation are to be allotted 470 equity shares of Rs.100/- each fully paid
up for every 100 equity shares of Rs.10/- each fully paid up in the transferor
company no.3. It is stated that the aforesaid exchange ratio has been
certified/computed by SMS Associates, Chartered Accountants on the basis of
Net Assets Value Method which appears to be correct but the exchange ratio
provided in para 15 of the scheme is not in consonance and in accord with the
valuation report of SMS Associates, Chartered Accountants. It is noticed that
face value of each paid up share of transferor company no.3 is Re.1/- each and
Company Petition 284/2010 Page 3
not Rs.10/-. Transferor company no.3 has also filed affidavit stating that there
is a typographical error in the scheme and allotment of shares will be made in
accordance with the valuation report. The said statement on behalf of the
petitioners is taken on record and the petitioners will be bound by the
statement. The scheme will be accordingly, treated as modified.
Petitions are accordingly disposed of. Scheme of amalgamation as
modified and subject to conditions mentioned above is approved/sanctioned.
All pending applications are disposed of.
DASTI.
SANJIV KHANNA, J.
NOVEMBER 15, 2010
P/vld
Company Petition 284/2010 Page 4
