M/S Kanth Solutions Pvt. Ltd. And ... vs ---
2012 Latest Caselaw 5531 Del

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*      IN THE HIGH COURT OF DELHI AT NEW DELHI


%                          Date of Judgment:14th September, 2012

+      Co. Pet. 263/2012

IN THE MATTER OF

M/S KANTH SOLUTIONS PVT. LTD. AND ORS.
                                   .... Petitioner/Transferor
                                              Company No. 1
                       AND

LANCO CONSTRUCTION PRIVATE LTD.
                                               .... Petitioner/Transferor
                                                          Company No. 2
                                AND

LANCO CONSULTANTS PRIVATE LTD.
                                               .... Petitioner/Transferor
                                                          Company No. 3
                                AND

SRI MANN ENTERPRISES PRIVATE LTD.
                                              .... Petitioner/Transferee
                               Through: Mr. Dilip Singh, Adv.

       CORAM:
       HON'BLE MS. JUSTICE INDERMEET KAUR

INDERMEET KAUR, J. (Oral)

1. This second motion joint petition has been filed under Sections

391 and 394 of the Companies Act, 1956 (for short 'the Act') by the

petitioner Companies seeking sanction of the Scheme of Arrangement

(for short Scheme).

2. The Petitioner Companies had earlier filed CA (M) No. 85/2012

seeking directions of this Court for dispensation/convening of meetings.

Vide order dated 08.05.2012 this Court allowed the Application and

dispensed with the requirement of convening meetings of Shareholders,

Secured and Unsecured Creditors of the Petitioner Companies.

3. The Petitioner Companies had thereafter filed the present Petition

seeking sanction of the Scheme. Vide order dated 25.05.2012 notice in

the Petition was directed to be issued to the Regional Director, Northern

Region and the Official Liquidator attached with this Court, Citations

were also directed to be published in 'Financial Express' (English, Delhi

Edition) and 'Dainik Bhaskar' (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 citation in the aforesaid newspapers. Copies of the

newspaper cuttings, in original, containing the publications have been

filed along with the Affidavit of Service.

4. 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 30.08.2012

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 Transferor Company do not appear to

have been conducted in a manner prejudicial to the interest of its

members, creditors or to public interest. In response to the observation

of the Official Liquidator regarding the reserves in the Transferor

Companies, an affidavit has been filed by Transferor Companies on

13.09.2012 stating that it is already mentioned in the Petition that all the

transferor companies are not carrying out any business activity except

investment of idle funds and the provisions of Companies Act do not

conflict in the determination of the share price.

5. In response to the notice issued in the Petition. Mr. Rakesh

Chandra, Regional Director, Northern Region, Ministry of Corporate

Affairs has filed his affidavit dated 27.08.2012. Relying on the Scheme,

he has stated that upon sanction of the Scheme, all the employees of the

Transferor Company/Companies shall become the employees of the

Transferee Company without any break or interruption in their services.

6. The petitioner/transferee company has already filed affidavit on

21.08.2012 regarding compliance with the Accounting Standard-14

issued by the Institute of Chartered Accountants of India.

7. That the observation of learned Regional Director in para No. 5 is

about the income of companies. This fact has already been stated in

detail in the petition. Secondly, the provisions of Companies Act do not

come in conflict with the determination of share price. However, the

Companies Act puts restriction only on shares issued at discount not on

premium. It is more investors' perspective that justifies the premium. So

far as the question of Sundry Debtors is concerned, it is stated in petition

that all funds were lying idle, hence these were invested in other

companies and later on these investments were realized. However, as

consideration was not received at the time of transaction took place,

hence they were shown as Sundry Debtors in balance sheet.

8. That in paragraph No. 6, learned Regional Director has observed

about the change of status of company from Public Limited to Private

Limited. It is stated that there is no discrepancy in the status. It is correct

that the Public Limited Companies were converted in August, 2011 so

later the status has been shown as Private Limited. The balance sheet of

the Companies are dated 31.03.2011, so it rightly shows the status of

companies as Public Limited. This observation is without merit and law

is settled on this point. The certificate issued by Company secretaries

shows the status of Company after conversion from public limited to

private limited.

9. That in sub para (1) of paragraph No. 7 learned Regional Director

has submitted the observation of ROC, the observation is made about

the typographical error related to paid up share capital one transferor

company in filing e form 22. The intention of the company was never to

conceal any fact or misrepresent any fact. This can be rightly inferred

from the observation of ROC that the e Form -2 contains the correct

figure of the paid up share capital. This typographical error took place as

the paid up share capital of that company was Rs. 5 lacs till two months

back and it increased later. Learned ROC has wrongly made this

observation that this is a prima facie case under Section 628 of the Act.

10. That the observation made in sub-para 2 of para 7 is no way

concerned with the present scheme of merger and these are mere inter-

linking of the different affairs of companies which are not part of the

Scheme. The observation made in sub para 2(d) & (e) of para (7) about

companies ANG Finvest Pvt. Ltd. and Sushil Electronics Pvt. Ltd. are

not related to this Scheme. The observation made in sub- par 2 (g) is

vague and misleading. The transfer effected in April 2011 cannot figure

as profit or loss in the Balance Sheet ended on 31.03.2011. The

observation made in sub-para 2(h) is nothing but presumption of learned

ROC. He should have taken note of the fact that the balance sheets are

duly audited by the chartered Accountants and so this observation is not

relevant. And it is categorically stated that there is no violation of

Section 295 of the Act. The observation made in sub-para 2(j) about the

addition of new clause in Section 56(2) of the Income Tax Act and its

non-compliance in the present case. The said clause does not have

relevancy to the present case.

11. That in paragraph No. 8, learned Regional Director has submitted

the factual aspect found by ROC and this factual position has been

stated in the petition as well as Scheme. So far as the payment of Stamp

Duty is concerned that is a statutory liability and that will be borne by

the Transferee Company as and when it arises.

12. That the observations made in the representation/Affidavit filed

by learned Regional Director are of routine nature. The scheme is not

prejudicial to any one and it is admitted fact that there is no proceeding

is pending today against any company. And to this effect a detailed

reply along with the affidavit from all the transferor Companies has

been duly filed on 13.09.2012.

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

party. Mr. Ashok Kumar Mann, Director of the Transferee Company,

has filed an affidavit confirming that neither the Petitioner Companies

nor their counsel has received any objection pursuant to citations

published in the newspapers.

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

Creditors of the Petitioner Companies, affidavit/report filed by the

Regional Director, Northern Region and the Official Liquidator attached

with this Court to the proposed Scheme, there appears to be no

impediment to the grant of sanction in the Scheme. Consequently,

sanction is hereby granted to the Scheme under Sections 391 and 394 of

the Act. 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 thirty days from the date of

receipt of the same. In terms of the provisions of Section 391 and 394 of

the Act, and in terms of the Scheme, the whole or part of the

undertakings, all properties, rights and powers of the Transferor

Company/Companies 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 of the Transferor

Company/Companies be transferred to the Transferee Company without

any further act or deed. Upon the Scheme coming into effect, the

Transferor Company/Companies shall stand dissolved without wining

up. 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.

15. The Petitioner Companies voluntarily state that they would

deposit a sum of Rs. 1,00,000/- with the Common Pool Fund of the

Official Liquidator within three weeks from today.

16. The petition is allowed in the above terms.

INDERMEET KAUR, J

SEPTEMBER 14, 2012 nandan