Citifinancial Home Finance India ... vs Citifinancial Consumer Finance ...
2010 Latest Caselaw 5321 Del

22
*     IN THE HIGH COURT OF DELHI AT NEW DELHI

+     CO.PET. 240/2010

      CITIFINANCIAL HOME FINANCE
      INDIA LTD                  ..... Petitioner/Transferor Company
                     Through Mr.Abhishek Seth, Mr.Rajeev Kumar,
                     advocates.

                    WITH

      CITIFINANCIAL CONSUMER
      FINANCE I. LTD                       ....Petitioner/Transferee Company
                     Through

      CORAM:
      HON'BLE MR. JUSTICE SANJIV KHANNA

                           ORDER

% 23.11.2010

1. This second motion under Sections 391 and 394 of the Companies Act,

1956 (hereinafter referred to as Act, for short) has been filed by Citifinancial

Home Finance India Ltd (Transferor Company) with Citifinancial Consumer

Finance India Ltd. (Transferee Company) for sanction/approval of the scheme

of amalgamation which has been enclosed as Annexure A.

2. The Transferor Company and the Transferee Company had earlier filed

Co.A.(M) No. 58/2010 which was disposed of on 19th April, 2010. Transferor

Company is a wholly owned subsidiary of the Transferee Company. In view of

the no objection certificates/consent letters, the Court dispensed with the

need and requirement to convene and hold meetings of the shareholders of

the Transferor Company and the Transferee Company. It may be noted that

the Transferor Company does not have secured and unsecured creditors and

therefore meeting of the secured and unsecured creditors of the Transferor

C.P.NO.240/2010 Page 1 Company was not required to be held. However, meetings of the secured and

unsecured creditors of the Transferee Company were directed to be held and

the Court had appointed Chairperson/Alternate Chairperson for the said

meetings.

3. Pursuant to Order dated 19th April, 2010, meetings of the secured and unsecured creditors of the Transferee Company were held and the Court appointed Chairperson/Alternate Chairperson have submitted their reports.

4. Mr.Sharan Dev Singh Thakur, advocate appointed as the Chairperson

for the meeting of unsecured creditors in his report has stated that 17

unsecured creditors of the Transferee Company had attended the meeting

either in person or through proxies. As the coram fixed by the Court in the

Order dated 19th April, 2010 was not complete, the meeting was adjourned for

1/2 hour. Order dated 19th April, 2010 stipulates that persons present and

voting after the meeting is reconvened shall be deemed to constitute the

requisite coram. As per the report of the Chairperson, 17 unsecured creditors

representing 99.5% of the total amount due and payable by the Transferee

Company to unsecured creditors in value terms were present. 17 unsecured

creditors have voted in favour of the Scheme.

5. Dr.S. Saif Mahmood, advocate appointed as the Chairperson for the

meeting of the secured creditors has submitted his report. He has stated that

the requisite coram fixed by the Court in the Order dated 19th April, 2010 for

meeting of the secured creditors was not present and the meeting was

adjourned for ½ hour. Order dated 19th April, 2010 stipulates that persons

present and voting after meeting is reconvened would constitute the requisite

coram. Six secured creditors to whom Rs.2,52,45,41,861/- was payable and

C.P.NO.240/2010 Page 2 representing approximately 4% of the amount due and payable to the secured

creditors in value terms value were present. The six secured creditors present

have voted in favour of the proposed Scheme of Amalgamation. No negative

vote was cast.

6. After filing of the present petition, notices were directed to be issued to

the Regional Director (NR) and the Official Liquidator. Notices were also

directed to be published in the newspaper 'Statesman' (English) and 'Jansatta'

(Hindi). The petitioner companies have filed affidavit enclosing therewith

newspaper clippings of the publications in the said two newspapers.

7. Regional Director (NR) in his reply/report has stated that the

Transferee Company has 2096 secured creditors to whom an amount of

Rs.16,13,73,38,774/- is payable. Objection is also taken with regard to the

coram and it is stated that only six creditors attended the meeting of the

secured creditors and the total amount due and payable to them is

Rs.2,52,45,41,861/-. The objection with regard to the coram is incorrect and

cannot be sustained as in the Order dated 19th April, 2010 while fixing the

coram as 200 in number and more than 15% in value terms of the total

secured debt, it was directed that in case coram fixed for the meeting was not

present, then the meeting shall be adjourned for ½ hour and thereafter the

persons present and voting shall be deemed to constitute the coram. It is

pointed out that the Transferee Company has issued secured debentures and

therefore there are 2096 secured creditors. It is submitted that notices were

issued to the secured creditors of the Transferee Company but they did not

participate in the meeting and this shows that the secured creditors of the

C.P.NO.240/2010 Page 3 Transferee Company do not have any objection to the proposed Scheme of

Amalgamation. There appears to be merit in the contention of the learned

counsel for the petitioner. In this context, as noted above, the Transferor

Company is a subsidiary of the Transferee Company. As per the balancesheet

of the Transferor Company placed on record for the year ending 31st March,

2009, the said company had cash and bank balance of Rs.112,586,498/-. Its

current liabilities as on 31st March, 2009 were only Rs.4,96,875/-. The

Transferor Company had reserve and surplus of Rs.1,70,22,343/- as on 31st

March, 2009. Keeping in view the aforesaid facts, I do not think that

amalgamation of the Transferor Company with the Transferee Company is

going to adversely affect the interest of the secured creditors of the Transferee

Company. The charge in favour of the secured creditors of the Transferee

Company will continue and remain unaffected.

8. Official Liquidator in his response/reply has stated that the Official

Liquidator has not received any complaint against the proposed scheme of

amalgamation by any person/party interested in the scheme. It is further

stated that on the basis of the information submitted by the petitioner-

Transferor company, the Official Liquidator is of the view that the affairs of

the Transferor company do not appear to have been conducted in a manner

prejudicial to the interest of its members or public interest. Official Liquidator

has also stated that Notices were also published in the newspapers 'Statesman'

(English) and 'Jansatta' (Hindi).

9. The present petition is allowed and the proposed scheme of amalgamation

is approved/sanctioned. The Transferor company will stand dissolved from

C.P.NO.240/2010 Page 4 the effective date. No shares will be issued to the shareholders of the

Transferor Company in view of the amalgamation. It is clarified that this order

will not be construed as an order granting exemption from payment of stamp

duty, if payable.

The petition is disposed of.

DASTI.

SANJIV KHANNA, J.

      NOVEMBER 23, 2010
      P




C.P.NO.240/2010                                                          Page 5