Splendid Builders Private ... vs ............
2014 Latest Caselaw 3558 Del

$~19
*IN THE HIGH COURT OF DELHI AT NEW DELHI
+      CO.PET. 201/2014
       IN THE MATTER OF SPLENDID BUILDERS
       PRIVATE LIMITED & ORS.

                                                      ..... Petitioners
                   Through:    Mr. P. Nagesh with Mr.
                               Ashutosh Gupta, Advocate for
                               the Petitioners.
                               Mr. Atma Sah, Assistant
                               Registrar of Companies for the
                               Regional Director.
                               Mr. Rajiv Behl Advocate for
                               the Official Liquidator.

       CORA M:
       HON'BLE MR. JUSTICE SANJEEV
       SACHDEVA

                           ORDER

% 06.08.2014

SANJEEV SACHDEVA, J (ORAL)

1. This second motion joint Petition has been filed under sections 391 to 394 of the Companies Act, 1956 ("Act") seeking sanction to the Scheme of Amalgamation (Scheme) of Jindal Menthol & Investments Private Limited (hereinafter referred to as Transferor Company No. 1), Splendid Builders

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Private Limited (hereinafter referred to as Transferor Company No. 2), Quick Exports Private Limited (hereinafter referred to as Transferor Company No.

3) with Jindal Exports and Imports Private Limited (hereinafter referred to as Transferee Company) (collectively Transferor Company No. 2, Transferor Company No. 3 and Transferee Company referred as the Petitioner Companies). A copy of the Scheme has been enclosed with the petition.

2. The registered offices of the Petitioner Companies are situated at New Delhi, within the jurisdiction of this Court, while registered office of Transferor Company No. 1 is situated at Gurgaon, Haryana, which is situated outside the jurisdiction of this Court.

3. The details of respective dates of incorporation of the Petitioner Companies, their authorised, issued, subscribed and paid up capital have been set out in the petition.

4. The copies of the Memorandum and Articles of Association of the Petitioner Companies have been enclosed with the petition.

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5. The copies of Resolutions passed by the Board of Directors of the Petitioner Companies approving the Scheme have also been filed along with the petition.

6. Learned counsel for the Petitioner Companies submits that no proceedings under sections 235 to 251 of the Companies Act, 1956 is pending against the Petitioner Companies.

7. The Petitioner Companies had earlier filed C.A. (M) No. 37 of 2014 seeking directions of this Court for dispensation of the meetings. Vide Order dated 26 th February, 2014, this Court allowed the application and dispensed with the requirement of convening meetings of Equity Shareholders, Secured Creditors and Unsecured Creditors of the Petitioner Companies.

8. The Petitioner Companies have thereafter filed the present Petition seeking sanct ion of the Scheme of Amalgamation. Vide Order dated 31 st March, 2014, notice in the Petition was directed to be issued to the Regional Director, Northern Region and the Official Liquidator. Citations were also directed to be published in "Indian Express" (English, Delhi

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Edition) and "Jansatta" (Hindi, Delhi Edit ion). Affidavit of Service and P ublication has been filed by the Petitioner Companies showing compliance regarding service of the petition on the Regional Director, Northern Region and the Official Liquidator and also regarding publication of Citations in the aforesaid Newspapers on 5 th May, 2014, copies of the newspapers cuttings, in original, containing the publications have been filed with the affidavit of service.

9. In response to the notices issue d, the Official Liquidator sought information from the Petitioner Companies. Based on the information received the official liquidator has filed his report dated 26 th May, 2014 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 Companies do not appear to have been conducted in a manner prejudicial to the interest of its members, creditors or to public as per 2nd proviso of Section 394(1) of the Act.

10. In response to the notices issued in the Petition,

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learned Regional Director, Northern Region, Ministry of Corporate Affairs has filed his affidavit/report dated 26th May 2014 raising certain concerns as follows:-

".......

i. That M/s Jindal Menthol & Investment Pvt Ltd. is Non Banking Finance Companies (NBFC) and registered with the Reserve Bank of India. It is submitted that the Transferor Company No. 1 and the Transferee Company may be asked to give an undertaking for all compliance from Reserve bank of India being concerned Regulator if deemed fit & property by the Hon'ble Court.

ii. That Transferor Company No. 1 does not have any Secured Creditor whereas per e-record maintained in his office it has created charge on 25.03.2013 and not filed satisfaction of charge so far, hence the company may be asked as to how it has complied with the provisions of section 138 of the Companies Act, 1956. Registrar of Companies, Delhi has also reported that it has been observed from the balance sheet as at 31.03.2013 of the respective companies that the main business activity of such Companies are with regard to Investment and making loans and advances, however, there is no mention as to whether these Companies are

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Registered with RBI as NBFC, if s o, these Companies have obtained no objection from the RBI with regard to proposed Scheme of A malgamation."

11. In reply to the aforesaid observations of the Learned Regional Director, the Petitioner Companies have filed an Affidavit dated 12th July, 2014 stating that the Transferor Company No. 1 and the Transferee Company undertakes to comply with all compliances in with respect to Reserve Bank of Indi a and further submits that Transferor Company No. 1 is outside the jurisdiction of this Hon'ble Court as the registered office of the Transferor Company No . 1 is at Gurgaon. Even though there were some charges mentioned in the Ministry of Corporate Affairs website they were not taken into consideration because the said charge was against non-fund based facility and was not even mentioned in the Balance Sheet of the Transferor Company No.1 dated 31 st March, 2013.

12. Learned Counsel for the Petitioner submits that with respect to the registration of the Petitioner Companies with R eserve Bank of India, only the Transferor Company No. 1 i.e. M/s Jindal Menthol

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& Investment Pvt Ltd, is registered with RBI as NBFC. Further in reply to the observations made by the office of regional director that as per the Balance Sheet dated 31 st March, 2013 of the Transferor Company No. 2 the main business activity of suc h companies are with regard to i nvestment and making loans, it is submitted that the observations are factually incorrect as the majority of revenue of Transferor Company No. 2 comes from the business from Forex and commodity trading, which is also reflected in the Profit & Loss Account. It is further submitted that in so far as the Transferor Company No. 3 is concerned, it is submitted that majority of the revenue comes from the business from Forex and commodity trading, which is also mentioned in P&L account of the Transferor Company No. 3. Furthermore it is mentioned that the Transferee Company's majority revenue comes from the business from trading in precious metals and stones, which is also reflected in the P&L account of the Transferee Company, Hence none of the Petitioners Companies qualify as NBFC requiring them to get themselves registered with RBI as stated by the Regional Director.

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13. Mr. P. Nagesh, Learned Counsel for Petitioner Companies submitted that in accordance with RBI Circular DNBS (PD) C.C. No. 63/02.02/2005 -06 dated 24 th January, 2006, Non Deposit Accepting NBFC are required to inform Reserve Bank of India (RBI) about scheme of merger or amalgamati on along with Court's order approving the same within a period of one month from the date of the final order. Hence, in accordance with the above said Circular, there is no requirement of taking prior approval for sanctioning Scheme of Amalgamation from RBI. It is submitted that RBI Notification No. RBI/2009-10/162 dated September 17, 2009 has no bearing on this case as the Transferor Company No. 1 is Non Deposit Accepting NBFC. It is further submitted that, the RBI Notification No. RBI/2013 - 14/606 dated 26th May, 2014 has also no bearing on the present case as it is prospective and came into effect from 26 th May, 2014. It is further submitted that the Scheme was approved by the Board of Directors of the respective companies on 18 th December, 2013 and was subsequently filled with the Hon'ble High Court of Delhi on 18 th February, 2014, which is much prior to the effective date of

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this Notification. While considering the interpretation of the effective date of a circular, the Hon'ble Supreme Court in the case of Monnet Ispat and Energy Limited Vs. UOI and Ors. has held as follows:

"the Court has to keep in mind presumption articulated in legal maxim nova constitutiofutur is for mam imponeredebet non praeteritis , i.e., 'a new law ought to regulate what is to follow, not the past'. The presumption of prospectively operates unless show n to the contrary by express provision in the statute or is otherwise discernible by necessary implication."

14. Further, the Learned Counsel for the petitioners Companies submits that the petitioner companies has received reply from RBI dated 14 th July, 2014 pursuant to a RTI application, where with reference 26 th May, 2014, the RBI has stated that all the Schemes of Merger/amalgamation/takeover/acquisition initiated post the date of issue of the circular would require prior RBI approval. RBI further cleared that this circular will not have any retrospective Effect.

15. It is directed that in case it is found that the

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Petitioner Companies have violated any provision of the Reserve Bank of India Act, then the Directors of the Petitioner Companies guilty of breaching the applicable provisions of the RBI Act shall continue to be liable irrespective of the sanction of the Scheme.

16. The Regional Director submits that despite notice, the Income Tax Authorities have not raised any objection with regard to the scheme.

17. In view of aforesaid clarification and undertaking given by the petitioners, the concern of the Regional Director has been duly addressed.

18. No objection has been received to the Scheme of Amalgamation from any other party, Ms. Kisturi Devi Jindal, Director of Transferor Company 2, Mr. Rachit Singhal Director of Transferor Company 3, and Ms. Neha Jindal of Director Transferee Company has filed their affidavit dated 27 th May, 2014 confirming that neither the Petitioner Companies nor their Legal Counsel has received any objection pursuant to the citations published in the Newspapers.

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19. In view of the approval accorded by the Shareholders and Creditors of the Petitioner Companies; representation/reports filed by the Regional Director, Northern Region to the proposed Scheme of Amalgamation, there appears to be no impediment to the grant of sanction to the Scheme of Amalgamation. Transferor Company No. 1, which is within the territorial jurisdiction of Punjab & Haryana High Court, wherein said scheme has been sanctioned. Consequently, sanction is hereby granted to the Scheme of Amalgamation under sections 391 and 394 of the Companies Act, 1956. The Petitioner Companies will comply with the statutory requirements in accordance with law.

20. Certified copy of the formal order 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, all the property, rights and powers of the Transferor Companies be transferred to and vest in the Transferee Company without any further act or deed. Similarly, all the liabilities and duties of the Transferor Companies are transferred to the Transferee Company without any further act or deed.

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Upon the Scheme coming into effect, the Transferor Companies shall stand dissolved without winding up.

21. It is, however, clarified that this Order will not be construed as an Order granting exemption from payment of stamp duty 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.

22. The Learned Counsel for the Petitioner submits that the Petitioner Companies (collectively) would voluntarily deposit a sum of Rs.1,50,000/- in the Common Pool fund of the Official Liquidator within three weeks from today. The State ment is accepted.

23. The Petition is allowed in the above terms.

Order Dasti.

SANJEEV SACHDEVA, J AUGUST 6, 2014

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