Delhi High Court
Synthes Medical P. Ltd. & Anr. vs ............ on 12 August, 2014
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*IN THE HIGH COURT OF DELHI AT NEW DELHI
+ CO.PET. 274/2014
IN THE MATTER OF:
SYNTHES MEDICAL P. LTD. & ANR. ..... PETITIONER
Through: Mr. D. Bhattacharya and Ms. Deeti
Ojha, Advocate for the Petitioner.
Mr. Atma Sah, and Assistant Registrar
of Companies for the Regional
Director.
Mr. Rajiv Behl Advocate for the
Official Liquidator.
CORAM:
HON'BLE MR. JUSTICE SANJEEV SACHDEVA
ORDER
% 12.08.2014
SANJEEV SACHDEVA, J (ORAL)
1. This second motion petition has been filed under
sections 391 to 394 of the Companies Act, 1956
("Act") seeking sanction to the Scheme of
Amalgamation ("Scheme") of Synthes Medical Private
Limited (hereinafter referred to as Transferor
Company) with Johnson & Johnson Limited
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(hereinafter referred to as Transferee Company)
(Transferor Company hereinafter referred to as
Petitioner Company) and their respective shareholders.
A copy of the Scheme has been enclosed with the
petition.
2. The registered office of the Transferor Company is
situated at New Delhi, within the jurisdiction of this
Court. The registered office of the Transferee Company
is situated at Mumbai, outside jurisdiction of this
Court.
3. Details with regard to the date of incorporation of the
Petitioner Company, their authorized, issued,
subscribed and paid up capital have been given in the
Petition.
4. Copies of the Memorandum and Articles of
Association as well as the latest audited Annual
Accounts for the year ended 31 st March 2013 the
Transferor and Transferee Companies have also been
enclosed with the Petition.
5. Copies of the Resolutions passed by the Board of
Directors of the Transferor and Transferee Companies
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approving the Scheme have also been placed on record.
6. It has been submitted that no proceedings under
Sections 235 to 251 of the Act is pending against the
Petitioner Company.
7. The Petitioner Company had earlier filed CA (M) No.
44/2014 seeking directions of this Court for waiver of
the meetings of the shareholders as well as the
unsecured creditors of the Transferor Company. The
Transferor Company had no Secured Creditors. Vide
order dated 12 th March, 2014 this Court had directed
convening of meeting of the unsecured creditors of the
Transferor Company. Pursuant to the said order, the
meeting of the unsecured creditors of the Transferor
Company was held on 11 th April, 2014 at 11:00 A.M.
The Report of the Chairman of the said meeting has
been placed on record.
8. The Petitioner Company has thereafter filed the present
petition seeking sanction of the Scheme. Vide Order
dated 30th April, 2014, notice in the Petition was
directed to be issued to the Registrar of Companies,
Regional Director (Northern Region) and the Official
Liquidator. Citations were also directed to be published
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in the "Financial Express" (English) and "Jansatta"
(Hindi). Affidavit of Service and Publication has been
filed by the Transferor Company 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
8th July, 2014. Copies of the newspaper cuttings,
containing the publications have been filed along with
the Affidavit of Service.
9. In response to the notices issued, the Official
Liquidator sought information from the Transferor
Company. Based on the information received, the
Official Liquidator has filed his report on 7 th August,
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 Company do not
appear to have been conducted in a manner prejudicial
to the interest of its members, creditors or to public
interest as per 2 nd proviso of Section 394(1) of the Act.
10. In response to the notices issued in the Petition, Mr. A.
K. Chaturvedi, Regional Director, Northern Region,
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Ministry of Corporate Affairs has filed his Affidavit on
4th August, 2014. Relying on Clause 9.1 of Part-C of
the Scheme, he has stated that, all the employees of the
Transferor Company shall become the employees of the
Transferee Company without any break or interrupt in
their services upon sanctioning of the Scheme by the
Court. Despite notice, the Income Tax Authorities have
not raised any objection with regard to the Scheme.
11. The Regional Director has raised an observation that
since 75% of the equity share capital of the Transferee
Company is held by Johnson & Johnson Ltd. USA, a
foreign company may be asked to give an undertaking
for all compliances of Reserve Bank of India as
required under FEMA.
12. In reply to the aforesaid observation of the Learned
Regional Director, learned Counsel on behalf of the
Transferor Company states that compliance of the
conditions under Regulation 7 of the Foreign Exchange
Management (Transfer or Issue of Security by a Person
Resident Outside India) Regulations, 2000 is required
only if shares to non-resident shareholder of the Indian
company is issued pursuant to a scheme. Further, he
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states that, the current Scheme does not envisage any
issuance of shares to the shareholders of the Transferee
Company and post sanction of the Scheme, there will
be no change in current shareholding of the Transferee
Company or in their percentages. Therefore, no
compliance in terms of FEMA is required.
13. Further, learned Counsel appearing on behalf of
Petitioner Company relies on the decision of Kamakhya
Cosmetics & Pharmaceutical (P) Ltd. Co. Pet. No.
540/2012 dated 19.02.2013 wherein it has been held as
under:
"It is submitted by Mr. Dhritiman
Bhattacharyya, learned counsel on behalf of
the Petitioners that compliance of the
conditions under Regulation 7 of the
Foreign Exchange Management (Transfer or
Issue of Security by a Person Resident
outside India) Regulations, 2000 is required
only if pursuant to the Scheme, shares are
issued to non- resident shareholders of the
Indian company. The current Scheme does
not envisage any issuance of shares of the
Transferee Company and post sanction of
the Scheme, there will be no change in
current shareholding of the Transferee
Company or in their percentages. Therefore,
no compliance with the requirements of
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FEMA is warranted."
14. In view of the said decision there is no requirement of
the Petitioner Company to comply with the requirement
of the Reserve Bank of India under FEMA. In view of
the aforesaid clarification given by the Petitioner
Company, the concern of the Regional Director has
been duly addressed.
15. No objection has been received to the Scheme from any
other party, Mr. Anil Dewan, Director of the
Transferor/Petitioner Company has filed Affidavit
dated 11th August, 2014 confirming that neither the
Petitioner Company nor their Counsel has received any
objection pursuant to the citations published in the
Newspapers.
16. In view of the approval accorded by the Shareholders
and Creditors of the Transferor Company;
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 to the
Scheme. Consequently, sanction is hereby granted to
the Scheme under Sections 391 and 394 of the Act. The
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Transferor Company will comply with the statutory
requirements in accordance with law. In terms of the
provisions of Sections 391 and 394 of the Act, and in
terms of the Scheme, the whole or part of the
undertakings, properties, rights and powers of the
Transferor Company 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 be transferred to the
Transferee Company without any further act or deed.
Upon the Scheme coming into effect, the authorised
share capital of the Transferor Company will be added
to and merged with the authorised capital of the
Transferee Company and the Transferor Company shall
stand dissolved without winding up.
17. 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.
18. The registered office of the Transferee Company is
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situated at Mumbai and accordingly, separate petition
has already been moved before the High Court of
Judicature at Bombay, which is pending for disposal. In
the view of the above, sanction is hereby granted to the
Scheme under Section 391 and 394 of the Act, subject
to the sanction of the scheme by the High Court of
Judicature at Bombay.
19. Learned counsel states that the Transferor Company
would voluntarily deposit a sum of Rs.1,00,000/- with
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.
SANJEEV SACHDEVA, J
AUGUST 12, 2014
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