Sports Station (India) Private ... vs Ssipl Lifestayle Private Limited
2012 Latest Caselaw 6566 Del

15
*      IN THE HIGH COURT OF DELHI AT NEW DELHI

%                            Date of Judgment:16.11.2012

+             COMPANY PETITION NO. 332/2012


    IN THE MATTER OF SECTIONS 391 TO 394 AND SECTION 100
              TO 103 OF THE COMPANIES Act, 1956

                           AND

       IN THE MATTER OF SCHEME OF ARRANGEMENT
                          BETWEEN

SPORTS STATION (INDIA) PRIVATE LIMITED
                            ..........Transferor/petitioner
                                     Company-I.
                        AND
SSIPL LIFESTAYLE PRIVATE LIMITED
                            ..........Transferee/petitioner
                                     Company-II
                   Through: Mr.N.P.S.Chawla            and
                            Ms.Simaran Sethi, Advocate for
                            the petitioners.
                            Mr.S.B.Gautam,         Official
                            Liquidator.
                            Mr.K.S.Pradhan, Deputy ROC on
                            behalf of Regional Director
                            (North)

       CORAM:
       HON'BLE MS. JUSTICE INDERMEET KAUR

C.P.No.332/2012                                    Page 1 of 10
 INDERMEET KAUR, J. (Oral)

1. This joint petition has been filed under Sections 391 to 394 and

Sections 100 to 103 of the Companies Act, 1956 by the Transferor

Company/Petitioner Company-I and Transferee Company/Petitioner

Company-II seeking sanction of the Scheme of Arrangement between

Sports Station (India) Private Limited (hereinafter referred to as

Transferor Company) with SSIPL Lifestyle Private Limited (hereinafter

referred to as Transferee Company).

2. The registered offices of both the petitioner companies are

situated at New Delhi, within the jurisdiction of this Court.

3. Details with regard to the date of incorporation of both the

petitioner companies, their authorized, issued and paid up capital have

been given in the petition.

4. Copies of the Memorandum and Articles of Association as well as

the latest audited Annual Accounts for the year ended 31st March, 2011

and the provisional unaudited Annual Accounts for the year ended 31st

March, 2012 of both the Petitioner Companies have also been enclosed

with the petition.

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

Petitioner Companies approving the Scheme of Arrangement have also

been placed on record.

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

251 of the Companies Act, 1956 is pending against the Petitioner

Companies.

7. So far as the share exchange ratio is concerned, the Scheme

provides that as the entire issued, subscribed and paid up share capital of

the Transferor Company is held by the Transferee Company either

directly or through its nominees, therefore, upon sanction of the Scheme

of Arrangement, the said share capital of the Transferor Company will

stand cancelled and there will be no issue and allotment of shares by the

Transferee Company in consideration of the amalgamation of the

Transferor Company with the Transferee Company.

8. The Petitioner Companies had earlier filed Company Application

(M) No.107 of 2012 seeking directions of this Court for

dispensation/convening of meetings. Vide order dated 01.06.2012, this

Court allowed the Application and dispensed with the requirement of

convening meetings of the Shareholders, Secured Creditors and un-

secured Creditors of both the Petitioner Companies.

9. Both the Petitioner Companies thereafter filed the present Petition

seeking sanction of the Scheme of Arrangement. Vide order dated

20.07.2012, notice in the Petition was directed to be issued to the

Regional Director (Northern Region), Ministry of Corporate Affairs and

the Official Liquidator. Citations were also directed to be published in

'Financial Express' (English, Delhi Edition) and 'Jansatta' (Hindi,

Delhi Edition). Affidavit of Service and Publication has been filed by

the Petitioners showing compliance regarding service of the Petition on

the Regional Director, Northern Region and the Official Liquidator, and

also regarding publication of citations in the aforesaid newspaper on

02.11.2012. Copies of the newspaper cuttings, in original, containing

the publications have been filed along with the said Affidavit.

10. 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 08.11.2012,

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

proposed Scheme from any person/party interest 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.

11. In response to the notices issued in the Petition, Learned Regional

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

Affidavit/Report dated 08.11.2012. The learned Regional Director in

his affidavit has submitted that from the annual return made up to

30.09.2011 by Transferor Company, it has been observed that it is a

subsidiary of the Transferee Company. Earlier, it was closely held

Company and during the August-September 2011 most of the

Shareholders of the Transferor Company have transferred their holding

to the Transferee Company. The learned Regional Director, sought

clarification as to when the shareholders of the Transferor Company

transferred their shares to the Transferee Company. The Regional

Director has further observed that the since M/s SSIPL Retail Limited, a

public company is holding 63,09,000 shares in the Transferee Company,

therefore by virtue of Section 3(1)(iv) of the Companies Act, 1956 the

Transferee Company becomes a subsidiary of a public limited company

and deemed to be public limited company. Further, being a wholly

owned subsidiary of the Transferee Company, the Transferor Company

also becomes a subsidiary of a public limited company and deemed to

be public limited company, thereby requiring a minimum of 7

shareholders and 3 Directors. Accordingly the Regional Director has

observed that there is prima facie contravention of Provisions of Section

12 and 252 of the Companies Act, 1956.

12. In response to the first observation of the learned Regional

Director, Mr.N.P.S.Chawla, learned counsel for the Petitioner

Companies has submitted that subsequent to the Annual General

Meeting of the Transferor Company held on 30.09.2011, all the

shareholders of the Transferor Company (except the Transferee

Company itself) transferred their shares (19 shares) to the Transferee

Company. Consequently, the Transferor Company became a wholly

owned subsidiary of the Transferee Company. The counsel also

mentioned that the fact, that the Transferor Company is a wholly-owned

subsidiary of the Transferee Company was disclosed as such in

Company Application (Main) No.107 of 2012 and thereafter in

Company Petition No.332 of 2012 filed with this Hon'ble High Court.

Further, in response to the second observation, the Learned counsel for

the petitioner Companies submitted that, since both the Petitioner

Companies are private limited companies and subsidiaries of public

limited companies, therefore they should have a minimum of 7 (seven)

shareholders and 3(three) directors. In view of the said fact, Petitioner

Companies suo-moto had altered the shareholding pattern and board

composition in the month of October, 20912. The same was done in

order to strictly comply with the provisions of Section 12 and Section

252 of the Companies Act.

13. The learned counsel for the Petitioner Companies has thus

explained/agreed to abide by the observations/requirements pointed out

by the Regional Director (Northern Region) and to file requisite

application seeking compounding of the offence within a period of two

weeks from today. The Regional Director thus does not further press

his objections on account of the reply filed by Petitioner Companies.

Hence, the submissions made by the counsel of the Petitioner

Companies, hereby stands withdrawn and answered.

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

from any other party. Mr. N.P.S.Chawla, Counsel for the Petitioner

Companies, has filed an affidavit dated 08.11.2012, confirming that

neither the Petitioner Companies nor their legal counsel has received

any objection pursuant to citations published in the newspapers.

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

Creditors of the Petitioner companies; representation/reports filed by the

Regional Director, Northern Region, Ministry of Corporate Affairs, to

the proposed Scheme of Arrangement, there appears to be no

impediment to the grant of sanction to the Scheme of Arrangement

under sections 391 to 394 and sections 100 to 103 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

the 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 undertaking, the property, rights and powers of the

Transferor Company/Petitioner Company-I be transferred to and vest in

the Transferee Company/Petitioner Company-II without any further act

or deed. Similarly, in terms of the Scheme, all the liabilities and duties

of the Transferor Company/Petitioner Company-I be transferred to the

Transferee Company/Petitioner Company-II without any further act or

deed. 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.

16. Upon the sanction becoming effective from the appointed date of

Amalgamation, that is 1st April, 2012, the transferor company shall

stand dissolved without undergoing the process of winding up.

17. 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 week from

today. The statement is accepted.

18. The petition is allowed in the above terms.

Order dasti.

INDERMEET KAUR, J

NOVEMBER 16, 2012 nandan