M/S Kanchenjunga Advertising ... vs ----
2012 Latest Caselaw 5923 Del

$~18
*    IN THE HIGH COURT OF DELHI AT NEW DELHI

%                          Date of Judgment:03.10.2012

+                       C.P. No.261/2012
In the matter of

The Companies Act, 1956

And

Petition under Sections 391 & 394 of the Companies Act, 1956
Scheme of Arrangement of

M/S KANCHENJUNGA ADVERTISING PRIVATE LIMITED
                 ............... Petitioner/Demerged Company
                 AND
M/S KARMA LAKELANDS PRIVATE LIMITED
                 .................Petitioner/Resulting Company

             Through:   Mr.Ashish Middha, Adv. for the petitioners
                        Mr.K.S.Pradhan, Dy. ROC on behalf of R.D.

      CORAM:
      HON'BLE MS. JUSTICE INDERMEET KAUR

INDERMEET KAUR, J. (Oral)

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

the Companies Act,1956 by the petitioner companies seeking sanction

of the Scheme of arrangement (Demerger) of M/s Kanchenjunga

Advertising Private Limited (hereinafter referred to as Demerged

Company) and M/s Karma Lakelands Private limited (hereinafter

referred to as Resulting Company).

2 The registered offices of the Demerged Company and the

Resulting Company are situated at New Delhi, within the jurisdiction of

this Court.

3 The Demerged Company was incorporated under the Companies

Act, 1956 on 20th October, 1982 with the Registrar of Companies, Delhi

Haryana at New Delhi.

4. The Resulting Company was incorporated under the Companies

Act, 1956 on 6th October, 1986 with the Registrar of Companies, Delhi

and Haryana at New Delhi.

5. The present Authorized Share Capital of the Demerged Company

is Rs.1,00,00,000/- (Rupees One Crore only) divided into 1,00,000 (one

lac) Nos. of Equity Shares of Rs.100/- (Rupees One Hundred only) each

and the issued, subscribed and paid-up share capital of the Company is

Rs.42,76,300/- (Rupees Forty Two Lacs and Seventy Six Thousand and

Three Hundred Only) divided into 42,763 (Forty Two Thousand Seven

Hundred and Sixty Three) Nos. of Equity Shares of Rs.100/- (Rupees

One Hundred only) each fully paid up.

6. The present Authorized Share Capital of the Resulting Company

is Rs.12,15,00,000/- (Rupees Twelve Crore and Fifteen Lacs only)

divided into 1,21,50,000 (One Crore Twenty One Lacs and Fifty

Thousands) Nos. of Equity Shares of Rs.10/- (Rupees Ten only) each.

The present Issued, Subscribed and Paid-up Share Capital of Resulting

Company is Rs.10,15,33,820/- (Rupees Ten Crores Fifteen Lacs Thirty

Three Thousand Eight Hundred and Twenty only) divided into

1,01,53,382 (One Crore One Lac Fifty Three Thousand Three Hundred

Eighty Two) Nos. of the Equity Shares of Rs.10/- (Rupees Ten only)

each fully paid-up.

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

Demerged Company and the Resulting Company have been filed on

record. The audited Balance Sheets as on 31st March 2011 of the

Demerged Company and the Resulting Company, along with the report

of the auditors have also been filed.

8. A copy of the Scheme of Arrangement (Demerger) has been

placed on record and the salient features of the Scheme have been

incorporated and detailed in the petition and the accompanying

affidavits. It is submitted that both the Demerged Company and the

Resulting Company are promoted by the same group of promoters and

they are under the same management and control. It is claimed that the

proposed Scheme will result in reduction in overheads and other

expenses, reduction in administrative and procedural work, eliminate

duplication of work, better and more productive utilization of various

resources and will enable the undertakings concerned to affect internal

economies and optimize productivity. It is further claimed that the

proposed Scheme will contribute in fulfilling and furthering the objects

of the Demerged and Resulting Companies. It will also strengthen,

consolidate and stabilize the businesses of these Companies and will

facilitate further expansion and growth of their businesses. It is also

claimed that both the Demerged Company and Resulting Company will

be able to participate more vigorously and profitably in the competitive

market scenario.

9. So far as the Share exchange ratio is concerned, the Scheme

provides that upon coming into effect of this Scheme, the Resulting

Company shall issue and allot to the shareholders of the Demerged

Company, equity shares in the following ratio:

12.396 Nos. of Equity Shares of Rs.10/- each, credited as fully paid-up,

of the Resulting Company for every 1 No. of Equity Shares of Rs.100/-

each held in the Demerged Company, Kanchenjunga Advertising Pvt.

Ltd.

10. It has been submitted by the petitioners that no investigation

proceedings under Sections 235 to 251 of the Companies Act, 1956 are

pending against the petitioner companies.

11. The Board of Directors of the Demerged Company and the

Resulting Company in their separate meetings held on 31st July, 2011

have unanimously approved the proposed Scheme of Arrangement

(Demerged). Copies of the Resolutions passed at the meetings of the

Board of Directors of the Demerged Company and the Resulting

Company have been placed on record.

12. The petitioner companies had earlier filed CA (M) No.34 of 2012

seeking directions of this Court to dispense with the requirement of

convening the meetings of their equity shareholders and secured

creditors, which are statutorily required for sanction of the Scheme of

Arrangement (Demerger). Vide order dated 2nd March, 2012 this Court

allowed the application and dispensed with the requirement of

convening and holding the meetings of the Secured and Unsecured

creditors of the Demerged Company and the Resulting Company. Vide

orders dated 2nd March 2012, the meetings of Shareholders of the

Demerged Company and the Resulting Company were held on 7th April,

2012 to consider and approve, the proposed Scheme of Arrangement

(Demerger). The resolution approving the Scheme of Arrangement

(Demerger) was approved by the Shareholders of both the Demerged

and Resulting Companies and the report of both the Demerged and

Resulting Companies and the report of the chairman of the meetings

have been placed on record.

13. The petitioner companies have thereafter filed the present petition

seeking sanction of the Scheme of Arrangement. Vide order dated 25th

May, 2012, notice in the petition was directed to be issued to the

Regional Director, Northern Region. Citations were also directed to be

published in the newspapers "Business Standard" (English) and "Nav

Bharat times" (Hindi) in terms of the Companies (Court) Rules, 1959.

The citations were published by the petitioners in the aforesaid

newspapers on 18th August, 2012. Copies of the newspaper clippings

containing the publications have been placed on record.

14. In response to the notice issued in the petition, Mr.Rakesh

Chandra, Regional Director, Northern Region, Ministry of Corporate

Affairs has filed his report dated 18th September, 2012. He has stated

that upon sanction of the Scheme of Arrangement (Demerger), all the

employees of the Printing/Real Estate division of the De merged

Company shall become the employees of the resulting company without

any break or interruption in their services. He has further stated that the

valuation had been carried on the basis of the balance sheet as on March

31, 2010 and the present authorized share capital of the resulting

company was insufficient to accommodate allotment of equity shares to

the shareholders of the demerged company. He further stated that the

Registrar of Companies has in its office received one complaint from

Ms.Kanta Vashisht through her husband Sh.D.P.Vashisht alleging

certain irregularities in the affairs of the companies.

15. That in response to the affidavit filed by the Regional Director,

Northern Region, the petitioner companies through its Director,

Mr.Ashwani Khurana, filed a reply on September 29, 2012 stating that

there was a typing error in the valuation report submitted to the office of

Regional Director, N.R. and the present authorized share capital of the

resulting company is adequate and sufficient to allot equity shares to the

shareholders of the demerged company. He further states that the

petitioner company has not been done any wrong; nor is the purpose of

the demerger to destroy evidence of any nature. He undertakes to

cooperate in investigation, if any, ordered against the company. That

para 11.1 of the Scheme further states for the continuance of any legal

proceedings against the demerged company and/or resulting company,

as the case may be the effective date will be date of the sanction of the

scheme.

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

(Demerger) from any other party. The petitioner companies have filed

the affidavit dated 28th September, 2012 through Mr.Ashwani Khurana,

Director submitting that he has not received any objection pursuant to

the citations published on 18th August, 2012.

17. In fact, today, during the course of hearing Mr.K.S.Pradhan,

Deputy Registrar of Companies appearing for Regional Director

(Northern Region) has also stated that he has no objection to the present

Scheme of Arrangement (Demerger) being sanctioned by this Court.

18. Consequently, keeping in view the aforesaid facts and no

objection given by the Regional Director (Northern Region), the Scheme

of Arrangement (Demerger) is hereby approved/sanctioned under

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

companies will comply with the statutory requirements in accordance

with law. It is clarified that stamp duty or taxes, if payable, will be paid

in accordance with law. Upon the sanction becoming effective from the

appointed dated of Amalgamation i.e. 1st April, 2011, the printing

division of the Demerged Company shall stand demerged, transferred to

and vest in the Resulting Company. A certified copy of the order shall

be filed with the Registrar of Companies, NCT of Delhi and Haryana

within 30 days from the date of receipt of certified copy of this order.

19. Mr.Ashish Middha, leaned counsel voluntarily states that

Resulting Company would deposit a sum of Rs.1,00,000/- in the

Common Pool Fund of the Official Liquidator within three weeks from

today. The said statement is accepted.

20. The petition is allowed in the above terms.

Order dasti.

INDERMEET KAUR, J

OCTOBER 03, 2012/nandan