Delhi High Court
O.C. Denims And Special Finishes ... vs -- on 9 July, 2013
Author: R.V. Easwar
$~32
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of decision: 9th July, 2013
+ COMPANY APPLICATION (M) NO. 86 OF 2013
O.C. DENIMS AND SPECIAL
FINISHES LIMITED & ANR. ......Applicants
Through: Mr. Deepak Diwan, Ms. Adarika
Ghose and Ms. Sanjna Muttreja,
Advocates for the Applicants
CORAM:
HON'BLE MR. JUSTICE R.V.EASWAR
R. V. EASWAR, J.: (ORAL)
1. This is a first motion application under Sections 391 and 394 of the
Companies Act, 1956 („Act‟) in connection with the Scheme of
Amalgamation („Scheme‟) of O.C. Denims and Special Finishes Limited
(hereinafter referred to as „Transferor company‟) with the Orient Craft
Limited (hereinafter referred to as „Transferee company‟) [hereinafter
collectively referred to as „Applicant companies‟]. A copy of the proposed
Scheme is enclosed with the application.
CO. APPLN. (M) 84/2013 Page 1 of 6
2. The registered offices of the Applicant companies are situated
within the National Capital Territory of Delhi and are within the
jurisdiction of this Court.
3. The details of the dates of incorporation of the Applicant
companies, their authorized, issued, subscribed and paid up capital have
been enclosed with the application.
4. The copies of the Memorandum and Articles of Association as well
as the latest audited annual accounts for the year ended 31 st March 2012 of
the Applicant companies have also been enclosed with the application.
5. Learned counsel for the Applicant companies submits that no
proceedings under Sections 235 to 251 of the Act are pending against the
Applicant companies as on the date of the present application.
6. The proposed Scheme has been approved by the Boards of Directors
(„BoDs‟) of the Applicant companies. Copies of the board resolutions
have been filed along with the application.
7. The status of the equity shareholders, secured and unsecured
creditors of the Applicant companies and the consents obtained by them
CO. APPLN. (M) 86/2013 Page 2 of 6
for the proposed Scheme is set out in a table forming part of the
application which reads as under:-
Company No. of equity Consents No. of Consents No. of Consents
shareholders given secured given unsecured given
creditors creditors
Transferor 7 Yes NIL N.A. 101 NIL
company (99.9%)
Transferee 11 Yes 16 NIL 1351 NIL
company (96.7%)
8. A prayer has been made for dispensation from the requirement of
convening the meetings of the equity shareholders, secured and the
unsecured creditors of the Applicant companies.
9. In view of the averments made in the application that 99.99% equity
shareholders of the Transferor company and 96.79% equity shareholders
of the Transferee company have given their written consents/NOC, the
requirement of convening their meetings are dispensed with.
10. The Transferor company has "nil" secured creditors and 101
unsecured creditors to the tune of `2,18,21,170/- (Rupees Two Crore
Eighteen Lakh Twenty One Thousand One Hundred Seventy only) and the
Transferee company has 16 secured creditors to the tune of
`745,50,38,924/- (Rupees Seven Hundred Forty Five Crore Fifty Lakh
Thirty Eight Thousand Nine Hundred Twenty Four only) and 1351
CO. APPLN. (M) 86/2013 Page 3 of 6
unsecured creditors to the tune of `182,36,09,505/- (Rupees One Hundred
Eighty Two Crore Thirty Six Lakh Nine Thousand Five Hundred Five
only).
11. Learned counsel for the applicants submits that the net worth of the
Applicant companies is positive as per the certificate dated 28 th May 2013
issued by Sunita Maheshwari & Co, Chartered Accountants and the net
worth of the Transferor company will get added to the net worth of the
Transferee company pursuant to the merger and therefore, the rights and
interests of the secured and unsecured creditors of the Applicant
companies will not be adversely affected and in fact will be placed in a
better position vis-a-vis their security post-amalgamation. The Applicants,
therefore, prays that the requirement of convening and holding the
meeting of the secured and unsecured creditors of the Applicant
companies may be dispensed with.
12. In support of his submissions, the Learned counsel for the Applicant
companies placed reliance on the judgments of this Court in the matter of
In Re.: Scheme of Amalgamation of Unitel Credit Private Limited
with Intec Capital Limited [CA (M) No. 116/2010 decided on 4th June
2010]; In Re.: Scheme of Amalgamation of M/s Global Digital
CO. APPLN. (M) 86/2013 Page 4 of 6
Technologies Limited with MVL Industries Limited [CA (M) No.
108/2012 decided on 2nd July 2012]; and In Re.: Scheme of
Amalgamation of Mag Engineering Private Limited and Sandhar
Technologies Limited [CA (M) No. 19/2013 decided on 4 th February
2013] wherein this Court, under similar circumstances, has dispensed with
the requirement of convening and holding the meeting of the secured and
unsecured creditors. The Learned counsel has also placed on record the
net worth certificate dated 28th May 2013 issued by Sunita Maheshwari
and Co., Chartered Accountants. The certificate shows that the pre-
amalgamation net worth of the Transferor company is `1,71,81,593/- and
the pre and post amalgamation net worth of the Transferee company is
`209,09,81,096/- and will be `509,92,22,034/- respectively. Further, post-
amalgamation, the value of debt (secured and unsecured creditors) of the
Transferee company is `930,04,69,599/- against the value of the assets of
`1536,14,90,021/- (at their respective fair values), therefore, the interests
of the creditors of either of the Applicant companies will not be adversely
affected and in fact will be placed in a better position viz. a viz. their
security post amalgamation.
CO. APPLN. (M) 86/2013 Page 5 of 6
13. In view of the above and considering the settled law on the subject,
the requirement of convening and holding the meetings of the secured and
unsecured creditors of the Applicant companies are dispensed with.
14. The Application stands allowed in the aforesaid terms.
Order be given dasti.
R.V. EASWAR, J.
JULY 09, 2013
Bisht
