Emc It Solutions India Pvt Ltd vs ----
2012 Latest Caselaw 6813 Del

$~A13

*        IN THE HIGH COURT OF DELHI AT NEW DELHI

%                                 Date of Judgment:29th November, 2012

+        CO. PET. 249/2012

IN THE MATTER OF:

EMC IT SOLUTIONS INDIA PVT. LTD.                             ... Petitioner /
                                                       Transferee Company
                             AND

M/S EMC DATA STORAGE
SYSTEMS (INDIA) PRIVATE LIMITED
BAGMANE CONSTRUCTIONS PVT. LTD.                         ....Non-Petitioner/
                                                        Transferor Company
                        Through      Mr. P. Nagesh and Mr.Anand K.
                                     Ganesan, Adv.
                                     Mr. Atma Sah, Astt. ROC on behalf of
                                     Regional Director (NR).
         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, (for short 'Act') in connection with the Scheme

of Arrangement and de-merger (for short 'Scheme') between EMC Data

Storage Systems (India) Private Limited (hereinafter referred to as the

'Transferor Company'), of which the Marketing Support Services

Division is to be demerged and vested in the EMC IT Solutions India

Private Limited (hereinafter referred to as the 'Transferee/Applicant

Company'). A copy of the Scheme is filed along with the application as

Exhibit - E.

2. The registered office of the Petitioner/Transferee Company is

situated within the National Capital Territory of Delhi and is within the

jurisdiction of this Court. The registered office of the Transferor

Company is located in Bangalore, Karnataka.

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

Company, its 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 have also been enclosed with the Petition.

5. The proposed Scheme has been approved by the Board of

Directors of the Petitioner Company. Copy of the Board Resolution has

been filed along with the Petition.

6. The learned counsel for the Petitioner submits that if the Scheme

of Arrangement and De-merger is sanctioned by this Court, it would

enable the Transferee Company to provide for a separate dedicated

management of the Marketing Support Services Division, which will

lead to a more focused approach and will provide greater flexibility to

the respective entities, to meet the need for carrying out its operations,

which would be in the best interests of the Transferor and Transferee

Companies, its shareholders, creditors and all persons connected to the

companies. It is further submitted that the proposed Scheme will provide

scope for independent collaboration and expansion without committing

the existing organization in its entirety. The Appointed Date for the

Scheme is 1.4.2011.

7. The Scheme provides for the employees of the Transferor

Company being absorbed in the Transferee Company with continuity of

service and on the same terms and conditions as applicable immediately

prior to the transfer and without any break or interruption in service.

8. The learned counsel submits that no proceedings under Sections

235 to 251 of the Act are pending against the Petitioner company.

9. The learned counsel for the Petitioner submits that the High Court

of Karnataka has by order dated 18.4.2012 passed in Company Petition

No. 27 of 2012 approved the Scheme of Arrangement and De-merger,

subject to the approval to be granted by this Court.

10. This Court by Order dated 25.4.2012 passed in Company

Application (Main) No. 35 of 2012 had dispensed with the meetings of

the secured creditors, unsecured creditors and the shareholders of the

Petitioner Company to consider and approve the scheme of

Arrangement and De-merger.

11. Upon the present second motion being filed, vide order dated

1.6.2012 this Court had issued notice to the Regional Director, Northern

Region. Citations were also directed to be published in the 'The

Business Standard (English) and 'Nav Bharat Times' (Hindi) in terms of

the Company (Court) Rules, 1959.

12. Affidavit has been filed by the Petitioner for the publication of

Citations in 'The Business Standard' (English Edition) on 12.7.2012 and

in 'Nav Bharat Times' (Hindi Edition) on 13.7.2012. An affidavit has

also been filed stating that in pursuance to the publication carried out in

the newspapers, neither the Petitioner Company nor the counsel of the

Petitioner Company has received any objection from any person to the

Scheme for which sanction has been sought from this Court.

13. The Regional Director in its report filed with this Court has also

confirmed on the terms relating to the employees. The Regional Director

has not raised any objection to the Schemes of Arrangement and De-

merger proposed by the Petitioner company except to observe that the

valuation and share exchange ratio adopted by the Chartered

Accountants of the Petitioner Company is against the normal accepted

valuation method adopted.

14. In reply to the above observation, the Petitioner has filed an

affidavit wherein it has been stated that share exchange ratio was settled

by the Transferee and Transferor Companies in view of the nature of the

transaction and the undertaking transferred in marketing without any

immovable properties. It is stated that the above does not affect the

valuation of the shares as the value is being held by the same set of

controlling shareholders and both the Transferor and Transferee

Companies would be controlled by the same parent company. It is stated

that there is no transfer of right, title or interest in any immovable

property to any third party and there is no attempt to indirectly transfer

any rights through the Scheme of de-merger and therefore the

apprehension of the Regional Director is not justified. It is stated that the

Chartered Accountant has certified that the share exchange ratio is fair

and not prejudicial to any of the Shareholders of the Transferor or

Transferee Companies.

15. In view of the above submissions on behalf of the Petitioner

Company, the observations of the Regional Director do not survive.

Upon perusal of the Schemes, this Court is also of the opinion that the

said Scheme appears to be fair and reasonable.

16. Consequently, sanction is hereby granted to the Scheme of

Arrangement and De-merger under Section 391 and 394 of the

Companies Act, 1956. The Petitioner shall comply with the statutory

requirements in accordance with law. It is, however, clarified that this

order will not be construed as an order granting exemption from

payment of stamp duty or tax, if payable.

17. Learned Counsel for the Petitioners states that the Petitioner

Companies would voluntarily deposit a sum of Rs. One lac in the

Common Pool fund of the Official Liquidator within three weeks from

today. The statement is accepted.

18. The petition is allowed in the above terms.

NOVEMBER 29, 2012/rb                             INDERMEET KAUR, J