K.S.Krishanan Associates Pvt. ... vs ------------------
2012 Latest Caselaw 7102 Del

*      IN THE HIGH COURT OF DELHI AT NEW DELHI

%                          Date of Judgment:12.12.2012

+                  Company Petition No.143/2012



IN THE MATTER OF

SECTION 391 AND 394 OF THE COMPANIES ACT, 1956

AND IN THE MATTER OF

THE SCHEME OF AMALGAMATION OF

K.S.KRISHANAN        ASSOCIATES        PVT.     LTD.,    a   Company
incorporated under the Companies Act, 1956 having its registered office
at 3F/307, Mamram East Plaza, Plot C-1 & 2, LSC, Block G, Kondli,
Gharoli, Delhi 110096 (hereinafter referred to as "KSKAPL)

                   ............PETITONER NO.1/TRANSFEROR
                             COMPANY NO.1.
AND

M/S KRISOAPS PVT LTD, a company incorporated under the
Companies Act, 1956 having its Registered Office at 3F/307, Mamram
East Plaza, Plot C-1 &2, LSC, Block G, Kondli, Gharoli, Delhi
(hereinafter referred to as "KRISOAPS")

              ......... PETITONER NO.2/TRANSFEROR
                        COMPANY NO.2
WITH
C.P. No.143/2012                                         Page 1 of 9
 MIL INDIA LTD, a Company incorporated under the Companies Act,
1956 having its registered office at 3F/307, Mamram East Plaza, Plot C-
1 & 2, LSC, Block G, Kondli, Gharoli, Delhi-110096 (hereinafter
referred to as "MIL India" or the Transferee Company")
              ........ PETITOINER NO.3/TRANSFEREE COMPANY
       Through:    Mr.Aaditya Vijay Kumar, Advocate for the
                   petitioner.
                   Mr.K.S.Pradhan, Dy. Registrar for R.D. (North)
                   Mr.Rajiv Bahl, Advocate for the Official Liquidator.


       CORAM:
       HON'BLE MS. JUSTICE INDERMEET KAUR


INDERMEET KAUR, J. (Oral)

1. This Second Motion petition has been filed under Section 391 and

394 of the Companies Act 1956 by M/s K.S. Krishnan Associates Pvt

Ltd and M/S Krisoaps Pvt. Ltd. and M/S MIL India ltd, seeking

sanctioning of the Scheme of Amalgamation ( for short „Scheme‟).

2. The Petitioner Companies had earlier moved Co Applications No

2153/2011 seeking dispensation of the meetings of the shareholders of

the Companies, in view of the consent of the shareholders having been

filed along with the First Motion petition. Vide order dated 31.10.2011

this Court allowed the application and dispensed with the meetings of

shareholders to be convened. Since the Transferor No 2 Company did

not have any creditors and Transferor No 1 Company had only

Unsecured Creditors and no Secured Creditors and Transferee Company

had both Unsecured and Secured Creditors, this Court directed the

following three separate meetings to be convened on 3.12.2011. A

meeting of the Unsecured Creditor of the Transferor No 1 Company, a

meeting of the Unsecured Creditors of the Transferee Company and a

meeting of the Secured Creditors of the Transferee Company. Mr Syed

Naqvi, Advocate was appointed as the Chairman of and Mr Yogendra

Pal Singh, Advocate was appointed as the Alternate Chairman of the

meeting of the Unsecured Creditor of the Transferor No 1 Company. Mr

Mohit Chaudhary, Advocate was appointed as the Chairman and Mr

D.K.Batra, OSD of this Court was appointed as the Alternate Chairman

of the meeting of Unsecured Creditor of the Transferee Company. Mr

H.S. Dhir was appointed as the Chairman and Mr Dhiraj Singh

Bhandari, Registrar of this Court was appointed as the Alternate

Chairman of the meeting of the Secured Creditors of the Transferee

Company.

3. In terms of the said order dated 31.10.2011 of this Court, the

notice of the said meetings was published in „Indian Express‟ and

„Jansattaa‟ Newspapers. Despite public notice, no creditors attended the

meetings. Neither the Company nor the Chairmen of the meetings,

appointed by the court, receivde any objection from any of the creditors

to the proposed Scheme. All the three meetings went unattended by the

creditors. The Petitioner then moved an Co Appls 356 of 2011 and Co

Appls 357 of 2011 seeking recall of the order dated 31.10.2011 and

dispensation of convening meetings of the creditors respectively. In the

said application the Petitioners pleaded that the total liabilities of the

Transferee Company was more than the total liabilities towards the

creditors. Consequently, this court vide order dated 5.3.2012, dispensed

with the meetings of the creditors.

4. With no objection having been received from any creditors and

shareholders‟ consent having been filed, the Petitioner Companies filed

the present petition seeking sanction of the Scheme. Vide order dated

30.3.2012 notice in the Petition was directed to be issued to the

Regional Director, Northern Region and Official Liquidator (OL).

Citations were also published in Indian Express ( English) and Jansatta

(Hindi) newspapers on 14.6.2012. Affidavit of service and publication

have been filed by the Petitioners showing compliance regarding service

of the Petition and also regarding publications of citations in the

aforesaid newspapers. Copies of the newspapers containing the notice

have been filed on record.

5. Pursuant to the notices issued, the OL sought information from

the Petitioner Companies. Based on the information received, the OL

filed his report dated 10.9.2012, wherein the OL has stated that he had

not received any complaint against the proposed Scheme from any

person/party interested in the Scheme in any manner and the affairs of

the Petitioner Companies do not appear to have been conducted in a

manner prejudicial to the interest of its members, creditors or to public

interest.

6. Sh. Rakesh Chandra, Regional Director, Northern Region,

Ministry of Corporate Affairs, has filed his affidavit in response to the

notice issued by this court. In his affidavit, the RD has commented on

continuity of service of the employees of the two Transferor Companies

post merger, with the Transferee Company. It is seen that in paragraph 9

of the Scheme, there is a provision for continuity of service of

employees with the Transferee Company without any break. RD has

also observed that in none of the three meetings of the creditors, directed

to be the convened on 5.12.2011, any creditor attended the meetings. In

this regard, vide order dated 5.3.2012, this Court had already dispensed

with the meetings of the creditors to be reconvened, in view of the assets

of the Transferee Company being more than its total liabilities towards

the creditors.

7. R.D. has also observed that the Scheme does not mention about

the Accounting Standard -14, issued by the Institute of Chartered

Accountants of India to be followed by the Transferee Company. The

Petitioners, in their affidavit filed in response to the above report by RD,

have undertaken to comply with the applicable accounting standard.

8. It is further observed by the R.D. in his affidavit that there is a

prima facie contravention of Section 297 of the Companies Act, 1956, in

view of a related party transaction in Transferee Company. The

Petitioners, in their affidavit filed in response to the above report by

R.D., have stated that Transferee Company shall rectify, if any violation

is found. It is further stated in the hearing that no notice has been

received by the Company of any violation and the RD‟s observation is

only an apprehension.

9. No objection has been received to the Scheme from any other

party. Mr Sridhar Krishnan, the authorised representative of the

Petitioner Companies, has filed his affidavit on 5.9.2012, confirming

that none of the Petitioner Companies have received any objection to the

Scheme pursuant to the citations published in the newspapers.

10. As far as share exchange ratio for amalgamation is concerned, the

Scheme provides that, upon the Scheme coming into effect, the

Transferee Company shall issue shares in the following manner:

Transferor No 1 Company

Transferee Company shall issue and allot to the equity shareholders of

Transferor No 1 Company, 217.66 equity shares of the face value of Rs

10/- each of Transferee Company, for every 1 (one) equity share of the

face value of Rs 100/- each in Transferor No 1 Company.

Transferor No 2 Company

Transferee Company shall issue and allot to the equity shareholders of

Transferor No 1 Company, 2.89 equity shares of the face value of Rs

10/- each of Transferee Company, for every 1 (one) equity share of the

face value of Rs 100/- each in Transferor No 1 Company.

11. In view of the approval accorded by the shareholders of the

Petitioner Companies and reports filed by the OL and RD, there appears

to be no impediment to grant of sanction of Scheme. Consequently, the

sanction is hereby granted to the Scheme of Amalgamation under

Section 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 the date of receipt of the same. In terms

of the provisions of Section 391 and 394 of the Companies Act, 1956,

and in terms of the Scheme, the whole or part of the undertakings, the

properties, rights and powers of Petitioner No 1 and 2 be transferred to

and vest in the Transferee Company without any further act or deed.

Similarly, in terms of the Scheme, all the liabilities and duties of

Petitioner No 1 and 2 be transferred to the Transferee Company without

any further act or deed. Upon the Scheme coming into effect, Petitioner

No 1 and 2 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 law, or permission/compliance with any

other requirement which may be specifically required under any law.

12. Learned Counsel for the Petitioner Companies states that the

Petitioner Companies would voluntarily deposit a sum of Rs 1,00,000/-

with the Common Pool of the Official Liquidator within four weeks

from today.

13. The Petition is allowed in the above terms.

INDERMEET KAUR, J

DECEMBER, 12, 2012 A