Citicorp Maruti Finance Limited vs ------------------
2012 Latest Caselaw 6649 Del

15
*        IN THE HIGH COURT OF DELHI AT NEW DELHI

%                            Date of Judgment:21.11.2012

+             COMPANY PETITION NO: 398 of 2012

         (ORDINARY ORIGINAL COMPANY JURISDICTION)


In the matter of-

CITICORP MARUTI FINANCE LIMITED,

                     .....................PETITIONER / TRANSFEROR
                            COMPANY

                     Through, ASP Advocates: Mr. Abhishek Seth, Mr.
                     Rajeev Kumar and Mr. Rahul Raj, Advocates for
                     the Petitioners.
                     Mr. Pradhan, Deputy Registrar of Companies, for the
                     Regional Director.
                     Mr. Rajeev Bahl, Advocate for the Official
                     Liquidator.
         CORAM:
         HON'BLE MS. JUSTICE INDERMEET KAUR


INDERMEET KAUR, J. (Oral)

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

Companies Act, 1956 by Citicorp Maruti Finance Limited (hereinafter

referred to as Petitioner / Transferor Company), in respect of a

Scheme of Amalgamation (Scheme for short) between the said

Petitioner Company and Citicorp Finance (India) Limited (hereinafter

referred to as Transferee Company). As per the scheme, the Petitioner

Company is proposed to be merged in the Transferee Company.

2. The registered office of the Petitioner Company is situated in

New Delhi, within the jurisdiction of this Court. The registered office

of the Transferee Company is situated in Mumbai. High Court of

Bombay has allowed the Application filed by the Transferee Company

vide order dated 24.08.2012. The present petition has been filed only

by Transferor Company.

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

Company and Transferee Company, their authorized, issued,

subscribed and paid up capital have been given in the petition.

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

Petitioner Company and Transferee 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

Petitioner Company and the Transferee 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 Petitioner Company.

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

the Scheme provides that the Transferee Company shall not be

required to issue any shares, since the Transferor Company is a wholly

owned subsidiary of the Transferee Company, accordingly all the

equity shares held by the Transferee Company in the Transferor

Company shall be cancelled.

8. The Petitioner Company had earlier filed CA (M) No 114 of 2012

seeking directions of this Court for dispensation of the requirement of

meetings of Shareholders and Secured creditors of the Petitioner /

Transferor Company and to hold a separate meeting of the Unsecured

Creditors of the Transferor Company for the purpose of considering

and if thought fit approving with or without modifications, the Scheme

of Amalgamation. Vide order dated July 11, 2012, this Court allowed

the Application and dispensed with the requirement of convening

meetings of Shareholders, Secured Creditors of the Transferor

Company and a separate meeting of the Unsecured Creditors of the

Transferor Company was ordered to be convened. From the report of

the Chairperson at the aforesaid meeting, it is apparent that Scheme

was approved unanimously by the Unsecured Creditors of the

Petitioner Company.

9. The Petitioner Company thereafter filed the present petition

seeking sanction of the Scheme. Vide order dated August 31, 2012

notice in the petition was directed to be issued to the Regional

Director, Northern Region and Official Liquidator 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 Danik 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, the Registrar of Companies and the Official

Liquidator, and also regarding publication of citations in the aforesaid

newspapers on October 06, 2012. Copies of the newspaper cuttings, in

original, containing the publications have been filed along with the

Affidavit of Service.

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

information from the Petitioner Company. Based on the information

received, the Official Liquidator has filed his report dated 17th

November, 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

Petitioner Company do not appear to have been conducted in a manner

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

The Official Liquidator has not raised any objection to the scheme of

amalgamation.

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

Chandra, Learned Regional Director, Northern Region, Ministry of

Corporate Affairs has filed his Affidavit dated 09.11.2012. In Para 5,

of the Affidavit of the Learned Regional Director, it has been observed

that the Transferor Company and the Transferee Company are Non

Banking Finance Companies and registered with the Reserve Bank of

India and may be required to give an undertaking for compliance of all

the Rules and Regulations of the Reserve Bank of India being the

concerned regulator of its activities for proposed amalgamation.

12. In response to the above mentioned observations it has been

undertaken that the Transferor and Transferee Company will comply

with all the applicable Rules and Regulations of Reserve Bank of

India. In view of the above said undertaking, the observation made by

the Regional Director no longer survive.

13. The Regional Director in para no. 6 of his affidavit has observed

that the Transferor Company is a wholly owned subsidiary of the

Transferee Company and the Transferee Company is a wholly owned

subsidiary of a Foreign Company and accordingly the Transferee

Company may be asked to give an undertaking for compliance of any

approval from Reserve Bank of India as required under FEMA, if

deemed fit and proper by the Hon'ble High Court.

14. In response to the aforesaid observation of the Regional Director,

it is undertaken that, the Transferor and Transferee Company would

comply with all applicable regulations under FEMA as may be

required by the Reserve Bank of India. In view of the above said

undertaking, the observation made by the Regional Director no longer

survive.

15. Further the Learned Regional Director in para 7 of his affidavit

has observed that the Petitioner Company may be asked to give an

undertaking for necessary compliance/approval from Competition

Commission of India with regards to proposed merger/amalgamation,

if deemed fit and proper by the Hon'ble High Court.

16. In response to the above mentioned observations it is stated that,

as per Regulation 4 read with Schedule I category (8A) (as inserted via

Amendment Regulations, 2012) of The Competition Commission of

India (Procedure with regard to transaction of business relating to

combinations) 2011 ("Regulations") any merger or amalgamation

involving a holding company and its subsidiary wholly owned by

enterprises belonging to the same group and/or mergers or

amalgamations involving subsidiaries wholly owned by enterprises

belonging to the same group need not file any notice with the

Commission as it is not likely to cause an appreciable adverse effect

on competition in India. Accordingly, the Company states that the said

Regulations make it clear that no such notice is required to be given to

the commission in case of an amalgamation which involves an

Holding company and its subsidiaries, which are wholly owned by

enterprises belonging to the same group.

17. The Petitioner Company further Undertakes that if under any law

or regulation applicable to it, it is required to give any notice or seek

an approval from any governmental authority or regulator including

the Competition Commission of India then the Petitioner Company

shall comply with the said law / regulation. In view of the above said

clarifications, the observations made by the Regional Director no

longer survive.

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

party. Mr. Rajesh Kumar Aggarwal, authorized signatory of the

Petitioner Company, has filed an affidavit dated 19th November, 2012

confirming that the Petitioner Company has not received any objection

pursuant to citations published in the newspapers.

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

Creditors of the Petitioner Company, representation/reports filed by

the Regional Director and the Official Liquidator, 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, 1956, and in terms of the Scheme, the

Petitioner 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 Petitioner Company will be

transferred to the Transferee Company 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 department which may be

specifically required under any law. The Transferor Company shall

stand dissolved without following the procedure of winding up.

20. Learned Counsel for the Petitioner Company states that the

Petitioner Company would voluntarily deposit a total sum of

Rs.1,00,000/- in the Common Pool fund of the Official Liquidator

within three weeks from today. The statement is accepted.

21. The Petition is allowed in the above terms.

Order dasti.

INDERMEET KAUR, J

NOVEMBER 21, 2012 nandan