Delhi High Court
Bilt Paper Holdings Ltd vs Avantha Holdings Ltd on 19 November, 2010
Author: Sanjiv Khanna
5.
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ COMPANY PETITON NO. 336/2010
Date of decision: 19th November, 2010
BILT PAPER HOLDINGS LIMITD. Amalgamating Company No. 1.
SOLARIS HOLDINGS LIMITED... Amalgamating Company No. 2.
KCT PAPERS LIMITED .. Amalgamating Company No. 3
AND
AVANTHA HOLDINGS LIMITED... Amalgamated Company.
Through Mr. Neeraj Kishan Kaul, Sr. Advocate
with Mr. Anirudh Das & Mr. Rohan Dheman,
Advocates for the petitoner.
Mr. Atma Sah, Astt. ROC for RD.
Mr. Rajiv Behl, Advocate for Official Liquidator
along with Official Liquidator in person.
CORAM:
HON'BLE MR. JUSTICE SANJIV KHANNA
O R D E R (ORAL)
1. This second motion under Sections 391to 394 of the Companies Act,
1956 (Act, for short) has been filed for sanction/approval of the scheme of
amalgamation, enclosed as Annexure A to this petition, amongst Bilt Paper
Holdings Limited, Solaris Holdings Limited, KCT Papers Limited
(hereinafter referred to as the Amalgamating Company Nos. 1 to 3
respectively) and Avantha Holdings Limited (hereinafter referred to as the
Amalgamated company).
2. The four petitioner companies had earlier filed Company Application
(M) No. 111/2010, which was disposed of vide order dated 4th June, 2010
directing that meeting of the equity shareholders, secured and unsecured
creditors of Amalgamating Company No. 1, secured creditors of
Amalgamating Company No. 2 and equity shareholders of Amalgamating
Company No. 3 should be held. By the said order, the Court dispensed with
the requirement to convene and hold meeting of the equity shareholders,
preference shareholders and unsecured creditors of Amalgamating
COMPANY PETITION NO. 336/2010 Page 1
Company No. 2, secured and unsecured creditors of Amalgamating
Company No. 3 and equity shareholders, preference shareholders and
secured and unsecured creditors of the Amalgamated Company.
3. Pursuant to the said order, meetings as directed vide order dated 4 th
June, 2010 have been held and reports of the Court appointed Chairpersons
have been filed in this Court.
4. Equity shareholders representing 96.44% of the subscribed paid up
equity capital of Amalgamating Company No. 1 have approved the scheme.
No negative votes were cast by the equity shareholders, who were present
and have voted. Two secured creditors of the Amalgamating Company No.
1 representing 100% of the secured debt have voted in favour of the scheme.
Out of five unsecured creditors of the Amalgamating Company No. 1, four
unsecured creditors attended the meeting and have unanimously voted in
favour of the scheme. They represent 93% of the unsecured debt of the
Amalgamating Company No. 1 in value terms.
5. Four out of twenty one, secured creditors of Amalgamating Company
No. 2 representing 20.1% of the secured debt of Amalgamating Company
No. 2 in value terms attended the meeting and have voted in favour of the
scheme. Along with the affidavit filed on 12th November, 2010, the
petitioner companies have filed no objection certificates from Infina
Finance Private Limited , Kotak Mahindra Prime Limited and Laxmi Narain
Investments Limited, now known as ABNL Investment Limited, who have
accorded and given their consent to the scheme of amalgamation. No
objection certificate of Axis Trustee Services Limited has also been filed.
The Axis Trustee Services Limited are the debenture trustees pursuant to
debenture trust deed executed on 11th March, 2010 of Rs.500 crores secured
debentures issued by Amalgamating Company No. 2. Learned counsel
appearing for Amalgamating Company No. 2 has today produced before the
Court photocopy of the debenture trust deed dated 11 th March, 2010 and the
same has been kept on record. He has drawn my attention to Clause 6.3(b).
It is pointed out that notices were also issued to registered debenture holders
as on 21st May, 2010 but they did not attend the meeting. The debenture
COMPANY PETITION NO. 336/2010 Page 2
trustee in their letter dated 4th November, 2010 has referred to Clause 6.3(b)
of the trust deed and has stated that as amalgamation is with the holding
company, no specific permission is required. They have further stated that
they have no objection to the scheme. It is noticed that the Amalgamated
Company is the holding company of the Amalgamating Company No. 3 and
holds more than 90% of the shares of the Amalgamating Company No. 3.
The Amalgamating Company No. 3 and the Amalgamated Company will be
bound by Clause 6.3(b) and the conditions imposed therein. In case it is
found that there is any violation of the said clause, it will be open to the
Court to recall the present order. Amalgamation will not affect or dilute the
charge in favour of the debenture holders. It is stated in the affidavit filed
on 12th November, 2010 that no dues are payable to L&T Finance Limited
and SICOM Limited. As per the report of the Chairman, notices were
issued to L&T Finance Limited and SICOM Limited but they did not attend
the meeting of the secured creditors. The no dues certificates issued by
L&T Finance Limited and SICOM Limited have been enclosed. In the said
circumstances, it is held that the secured creditors have approved the
scheme subject to the conditions mentioned above.
6. Shareholders of the Amalgamating Company No. 3, who attended
and have voted in the meeting have approved the scheme of amalgamation.
The said equity shareholders represent 94.2% of the paid up equity share
capital of the Amalgamating Company No. 3.
7. After filing of the present petition, notices were issued to the
Regional Director (Northern Region) and the Official Liquidator. The
Regional Director (Northern Region) has filed their report stating that the
Central Government does not have any objection to the proposed scheme of
amalgamation. The Official Liquidator has filed their reply/response stating
that they have not received any complaint against the proposed scheme of
amalgamation from any person/party interest in the scheme in any manner
on the date of filing of the report. On the basis of information submitted by
the petitioner companies, Official Liquidator is of the view that the affairs
of the Amalgamating Company Nos. 1 to 3 do not appear to have been
COMPANY PETITION NO. 336/2010 Page 3
conducted in a manner prejudicial to the interest of its members or the
public interest.
8. In terms of order dated 13th August, 2008, notice of hearing of the
petition was advertised in the Delhi Edition of Newspapers 'The Statesman'
(English) and 'Jansatta' (Hindi). The said publication has been carried out
and copy of the publications have been placed on record. The petitioners
have filed affidavit in this Court to the same effect. In the affidavit filed on
12th November, 2010, the petitioner companies have stated that they have
not received any objection to the proposed scheme of amalgamation till the
date of filing of the said affidavit.
9. Keeping in view the aforesaid facts, the scheme of amalgamation
subject to the conditions mentioned above is approved/sanctioned. It is
clarified that this Court has not specifically examined the share exchange
ratio. It is also clarified that stamp duty, if payable, will be paid in
accordance with law. This Court has not granted exemption from payment
of stamp duty. The Amalgamating Company Nos. 1 to 3 shall stand
dissolved from the effective date. It may be noted here that it has been
stated at the Bar that the Amalgamated Company does not intend to come
out with any IPO as of now.
The petition is disposed of.
DASTI.
SANJIV KHANNA, J.
NOVEMBER 19, 2010
VKR
COMPANY PETITION NO. 336/2010 Page 4
