Taraspan Solutions Pvt. Ltd. & Ors vs ----
2012 Latest Caselaw 5076 Del

$~A19
*    IN THE HIGH COURT OF DELHI AT NEW DELHI

%                          Date of Judgment:28th August, 2012

+      CO.PET. 282/2012

                 IN THE MATTER OF THE COMPANIES ACT, 1956
                     SECTIONS 391 AND 394 AND
              IN THE MATTER OF AMALGAMATION OF

       TARASPAN SOLUTIONS PVT. LTD. & ORS. ..... Petitioner/
                                       Transferor Company
                        AND

       PETAN COMMUNICATION
       SOLUTIONS PVT. LTD.                                ..... Petitioner/
                                                  Transferee Company
                         Through:     Mr. Saurabh Kalia and
                                      Mr.Sameer Chaudhary, Adv.
                                      Mr.K.S.Pradhan, Deputy
                                      Registrar of Companies on behalf
                                      of Regional Director (NR)
                                      Mr. Rajiv Bahl, Adv. for the
                                      Official Liquidator.
       CORAM:
       HON'BLE MS. JUSTICE INDERMEET KAUR

INDERMEET KAUR, J. (Oral)

1. This second motion joint Petition has been filed under Sections

391 to 394 of the Companies Act, 1956 (hereinafter referred to as „Act‟)

by the petitioner Companies seeking sanction of the Scheme of

Amalgamation (hereinafter referred to as „Scheme‟)

2. The petitioner Companies had earlier filed C.A.(M) No. 93 of

2012 seeking directions of this Court for dispensation of the meetings.

Vide order dated 25th May, 2012, this Court allowed the application and

dispensed with the requirement of convening meetings of Equity

Shareholders, Secured and Unsecured Creditors of the Petitioner

Companies.

3. The petitioner Companies have thereafter filed the present

petition seeking sanction of the Scheme of Amalgamation. Vide order

dated 01.06.2012, notice in the Petition was directed to be issued to the

Regional Director, Northern Region, the Official Liquidator Citations

were also directed to be published in "Business Standard" (English) and

"Jansatta" (Hindi). Affidavit of service and publication has been filed by

the petitioners showing compliance regarding service of the pet ition on

the Regional Director (NR), Registrar of Companies, NCT of Delhi &

Haryana and the Official Liquidator and also regarding Publication of

Citations in the aforesaid newspapers on 09.08.2012, copies of the

newspapers cuttings, in original, containing the publications have been

filed with the affidavit of service.

4. Pursuant to the notices issued, the Official Liquidator sought

information from the petitioner Companies. Based on the information

received the Official Liquidator has filed his report dated 23.08.2012

wherein he has stated that he has not received any complaint against the

proposed Scheme from any person/party interested in the Scheme in any

manner and that the affairs of the Transferor Company do not appear to

have been conducted in a manner prejudicial to the interest of its

members, creditors or to public interest.

5. In response to the notices issued in the Petition, learned Regional

Director, Northern Region, Ministry of Corporate Affairs has filed his

affidavit/report dated 16th August, 2012. Relying on Clause 17 of Part-F

of the Scheme of Arrangement, he has stated that, upon sanction of the

Scheme of Arrangement all the employees of the Transferor Company

shall become the employees of Transferee Company without any break

or interruption in their services upon sanctioning of the Scheme of

Arrangement by the Hon‟ble Court. In para 5 relying upon para 7.8 Part

D (wrongly mentioned as part G) of the Scheme the Regional Director,

NR has stated that it provides for change of name of Transferee

Company to that of Transferor Company post-merger and the Transferee

Company be asked to follow the relevant procedure under the

Companies Act, 1956. The petitioner companies vide their reply

affidavit dated 24.08.2012 in para 4 has stated that the said observation

is of procedural compliance in nature and the Transferee Company gives

an undertaking that post approval of the Scheme, the company will

follow the procedure as prescribed under the Companies Act, 1956 for

such change of name.

6. That the Regional Director (NR) in para 6 and 6.1 of the reply

affidavit has also stated that since the shares are held by certain entities

and in the valuation report by the Charted Accountant that he has

followed regulations issued by RBI vide Notification No.FEMA

205/2010-RB dated 07.4.2012. In view of the same the Petitioner

Companies may be asked to clarify whether compliance of Rules and

Guidelines of FEMA/RBI with regard to transfer of shares to Foreign

Company have been complied with or not, if deemed fit and proper by

this Hon‟ble Court. The Petitioner Companies in their response dated

24.08.2012 has stated that the valuation report by the independent valuer

namely M/s Prakash K Prakash, Chartered Accountant in their report

has clearly mentioned that they have considered the relevant RBI

Guidelines for valuation of equity shares including the relevant

notifications as well valuation by Discounted Cash Flow Statement

while determining valuation. Apart from the above the Petitioner

Companies does not need any permission from the RBI with respect to

the above Amalgamation and only regulatory filing is required to be

done post-merger. The Petitioner Companies undertakes that they will

do all the compliances as required under law with respect to RBI.

Further the business activities of both the Companies are covered under

100% automatic route as detailed below and verified from attached FDI

Policy 2012. In this regard the relevant provision of the FDI Policy,

2012 of the Govt. of India is quoted which specifically provides:

"3.5.4 Acquisition of shares under Sche me of Demerger/Amalgamation - Mergers/demergers/ amalgamations of companies in India are usually governed by an order issued by a competent Court on the basis of the Scheme submitted by the companies undergoing merger/demerger/amalgamation. Once the scheme of merger or demerger or amalgamation of two or more Indian companies has been approved by a Court in India, the transferee company or new company is allowed to issue shares to the shareholders of the transferor company resident outside India, subject to the conditions that:

(i) the percentage of shareholding of persons resident outside India in the transferee or new company does not exceed the sectoral cap, and

(ii) the transferor company or the transferee or the new company is not engaged in activities which are prohibited under the FDI Policy"

This it is clear from the above that the only condition which is

required to be followed is that the allotment shall not exceed sectoral

cap and the companies should not be engaged in prohibited category

under the FDI Policy. In the present case the Transferor and Transferee

Company are engaged in the business of Software Development

Services and Cash and Carry Wholesale Trading and other related

activities. In terms of FDI Policy, both the business are in 100%

Automatic Route, which is clear from the FDI Policy. Further both the

companies also do not fall in the prohibited category as provided under

the FDI Policy, 2012. Therefore post-merger the Transferee Company

does not need any approval from RBI and only regulatory filing is

required, which the Petitioner Companies has undertaken to do so post

merger in accordance with law.

7. No objection has been received to the Scheme of Arrangement

from any other party, the counsel for the Petitioner Companies has filed

an affidavit dated 24th August 2012 confirming that he has not received

any objection pursuant to the citations published in the Newspapers.

8. Even today, during the course of hearing Mr. Rajiv Bahl, learned

counsel for the Official Liquidator and Mr. K.S. Pradhan, Deputy

Registrar of Companies for Regional Director (Northern Region) state

that they have no objection to the present Scheme being sanctioned.

9. In view of the approval accorded by the Shareholders and

Creditors of the petitioner Companies, representations/ reports filed by

the Regional Director, Northern Region and the Official Liquidator,

attached with this court to the proposed Scheme of Arrangement, there

appears to be no impediment to the grant of sanction to the Scheme of

Amalgamation. Consequently sanction is hereby granted to the Scheme

of Amalgamation under Sections 391 and 394 of the Companies Act,

1956. The petitioner companies will comply with the statutory

requirements in accordance with law. Certified copy of the order be filed

with the Registrar of Companies within 30 days from receipt of the

same. In terms of the provisions of Sections 391 and 394 of the

Companies Act, 1956 and in terms of the Scheme, the whole or part of

the undertaking, the property, rights and powers of the Transferor

Company be transferred to and vest in the Transferor Company without

any further act or deed. Similarly, in terms of the Scheme, all the

liabilities and duties of the Transferor Company be transferred to the

Transferee Company without any further act or deed. Upon the Scheme

coming into effect, the Transferor Company shall stand dissolved

without winding up. It is, however, clarified that this order will not be

construed as an order granting exemption from payment of stamp duty

or taxes or any other charges, if payable in accordance with any law; or

permission/compliance with any other requirement which may be

specifically required under any law.

10. Learned counsel for the petitioners states that the petitioner

Companies would voluntarily deposit a sum of Rs. 1,00,000/- in the

Common Pool Fund of the Official Liquidator within three weeks from

today. The statement is accepted.

11. The petition is allowed in the above terms.

Order dasti.

                                             INDERMEET KAUR, J
AUGUST         28, 2012
rb/nandan