Sony India Private Limited vs Sony India Software Centre ...
2012 Latest Caselaw 3952 Del

*      IN THE HIGH COURT OF DELHI AT NEW DELHI

%                            Date of Judgment:      July 06, 2012

+             COMPANY PETITION NO. 137/2012
IN THE MATTER OF:
SONY INDIA PRIVATE LIMITED    .....Petitioner/Transferor

                   AND

SONY INDIA SOFTWARE CENTRE PRIVATE LIMITED
                                  .....Transferee
              Through: Mr. Abhisehk Seth and Mr.Rajeev
                       Kumar, Advocates.
CORAM:
HON'BLE MS. JUSTICE INDERMEET KAUR


INDERMEET KAUR, J. (Oral)

1 This petition has been filed under Sections 391 to 394 of the

Companies Act, 1956 (the Act) by Sony India Private Limited

(hereinafter referred to as petitioner/transferor company), in respect of a

scheme of arrangement (scheme for short) between the said petitioner

company and Sony India Software Centre Private Limited

(resulting/transferee company). As per the scheme, the „Software

Undertaking" of the transferor company is proposed to be demerged in

the transferee company.

2 The registered office of the petitioner company is situated in New

Delhi, within the jurisdiction of this Court. The registerd office of the

transferee company is situated in Karnataka High Court of Karnataka at

Bangalore has allowed the petition bearing No. 26 of 2012 filed by the

transferee company vide order dated 16.04.2012 approving the above

Scheme.

3 Details with regard to the date of incorporation of transferee

company and transferor company, their authorized, issued, subscribed

and paid up capital have been given in the petition.

4 Copies of the Memorandum of Articles of Association of the

transferee company and transferor company as well as their latest

audited annual accounts have also been placed on record.

5 Copies of the Resolutions passed by the Board of Directors of the

transferee company and transferor company approving the Scheme have

also been placed on record.

6 It has been submitted that no proceedings under Sections 235 to

251 of the Companies Act, 1956 are pending against the transferee

company and transferor company.

7 So far as the share exchange ratio is concerned, the scheme

provides that upon the scheme finally coming into effect, the transferee

company shall issue shares in the following manner:-

1,000 fully paid up equity shares of Rs.10/- each of the transferee

company shall be issued and allotted for every one equity share of

Rs.10/- each held in the transferor company.

8 The transferor company had earlier filed CA (M) 16/2012 seeking

directions of this Court for dispensation of the meetings of its

shareholders and convening the meeting of its unsecured creditors. The

transferor company had no secured creditors. Vide order dated, January

25, 2012 this Court allowed the application and dispensed with the

requirement of convening meetings of shareholders and secured

creditors and directed the convening of the separate meeting of the

unsecured creditors of the transferor company.

9 The meeting of the unsecured creditors of the transferor company

was held on March 10, 2012. As per the affidavit of Mr. Gautum

Avasthi, Chairperson appointed for the meeting of the unsecured

creditors, showing the publication and dispatch of the notices convening

the said meeting. It is apparent that the scheme of arrangement was

unanimously approved at the meeting of the unsecured creditors.

10 The transferor company thereafter filed the present petition

seeking sanction of the scheme. Vide order dated March 27, 2012 notice

in the petition was directed to be issued to the Regional Director,

Northern Region and a copy of the petition was directed to be served

upon the Registrar of Companies. Citations were also directed to be

published in Indian Express‟ (English, Delhi edition) and Dainik Jagaran

(Hindi, Delhi edition). Affidavit of service and publication has been

filed showing compliance regarding service of the petition on the

Regional Director, Northern Region and the Registrar of Companies and

also regarding publication of citations in the aforesaid newspapers on

April 23, 2012. Copies of the newspaper cuttings, in original, containing

the publications have been filed along with the affidavit of service.

11 In response to the notices issued in the petition, Mr. B.K. Bansal,

learned Regional Director, Northern Region, Ministry of Corporate

Affairs has filed his affidavit dated 12.06.2012. Relying on clause 11.1

of Part-III of Section-I of the scheme of arrangement he has stated that

all the permanent staff/employees of the transferor company engaged

with its „Software Undertaking‟ shall become the employees of the

transferee company without any break or interruption in their service

upon sanctioning of the scheme of arrangements by the Court.

12 In para No. 4 of the affidavit dated 12.06.2012, Mr. B.K. Bansal

has observed that „the petitioner company has confirmed vide its letter

that no charges are proposed to be transferred from the demerged

company/ petitioner company to the resulting company i.e. Sony India

Software Centre Pvt. Ltd.

13 In response to the aforesaid observation, it is submitted and

clarified by the petitioner that currently there are no charges registered

against the demerged company/ petitioner company with the ROC/any

authority or person and therefore the question of the transfer does not

arise at all in favour of the resulting company.

14 In para No. 5 of the affidavit dated 12.06.2012, Mr. B.K. Bansal

has observed that "para 8.3 of part II of the scheme provides that" any

excess in the value of net assets of software undertaking transferred to

the resulting company shall be applicable for distribution to the

shareholders of the resulting company. In this regard it has been

submitted by the learned Regional Director that excess, if any, in the

value of the net assets of the software undertaking should be adjusted to

the capital reserve as prescribed in AS-14 (i.e. accounting standards) and

not to the general reserve as proposed in the scheme of arrangements."

15 In response to the aforesaid observation it is clarified that AS-14

(i.e. accounting standards issued by the Institute of Chartered

Accountants) is applicable only to amalgamations and not to demerger.

On a plain reading of the accounting standard under reference, it is clear

that the same is applicable only in case of an amalgamation and not in

case of demergers. This has also been held lby the Gujarat High Court in

the case of 2010 1 CLJ 351 tiled Gallops Realty (P) Ltd. Copy of the

order has been placed on record.

16 In view of the above said clarifications, the observations made by

the Regional Director no longer survive.

17 No objection has been received to the scheme from any other

party. Mr. Sanjay Bhargava, authorized signatory of the petitioner

company, has filed an affidavit dated July 3, 2012 confirming that the

petitioner company has not received any objection pursuant to citations

published in the newspaper.

18 In view of the approval accorded by the shareholders and

creditors of the petitioner company, representation/reports filed by the

Regional Director, and no objections received to the proposed scheme,

there appears to be no impediment to grant of sanction to the scheme.

Consequently, sanction is hereby granted to the scheme under sections

391 and 394 of the Companies Act, 1956. The petitioner company will

comply with the statutory requirements in accordance with law.

Certified copy of the order will be filed with the Registrar of Companies

within 30 days from the date of receipt of the same. In terms of the

provisions of Sections 391 and 394 of the Companies Act and in terms

of the scheme, the "software undertaking" of the transferor company

and the property, rights and powers concerning the same will 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

pertaining to the "software undertaking" of the transferor company be

transferred to the transferee company without any act or deed. It is,

however, clarified that this order will 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 department which may be specifically required under any law.

19 Learned counsel for the petitioner states that the petitioner

company would voluntarily deposit a sum of Rs. 1 lac in the common

pool fund of the Official Liquidator within three weeks from today. The

statement is accepted.

20     The petition is allowed in the above terms.



                                               INDERMEET KAUR, J

July 06, 2012
sb