Delhi High Court
Autometers Limited vs ............. on 19 August, 2014
Author: Sanjeev Sachdeva
$~36
IN THE HIGH COURT OF DELHI AT NEW DELHI
+ CO.PET. 48/2014
IN THE MATTER OF AUTOMETERS LIMITED
..... Petitioners
Through: Mr. Ashish Midha, Advocate for
the Petitioners
Mr. Atma Sah, Assistant
Registrar of Companies for the
Regional Director.
CORAM:
HON'BLE MR. JUSTICE SANJEEV SACHDEVA
ORDER
% 19.08.2014
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
Arrangement (De-merger) of M/s Autometers Limited
(hereinafter referred to as Demerged Company) with
Greenvale Private Limited (hereinafter referred to as
Resulting Company No. 1), Rivervale Private Limited
(hereinafter referred to as Resulting Company No. 2)
==================================================
and Sunnyvale Private Limited (hereinafter referred to
as Resulting Company No. 3) (hereinafter referred to as
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.
3. Details with regard to the date of incorporation of
Petitioner Companies, 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 of the
Petitioner/Demerged Company have also been enclosed
with the Petition. As the Resulting Companies have
been incorporated recently no balance sheet has been
prepared for the transferee companies.
5. Copies of the Resolutions passed by the Board of
Directors of the Petitioner Companies approving the
==================================================
Scheme of Arrangement (De-merger) have also been
placed on record.
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 CA (M) 153
of 2013 seeking directions of this Court for
dispensation/convening of meetings. The meetings of
secured and unsecured creditors of the Demerged and
Resulting Companies were dispensed with. The
meetings of shareholders of Resulting Companies were
also dispensed with. Meeting of the shareholders of the
Demerged Company was held under the directions of
the court all the resolution approving for Scheme of
Arrangement (De-merger) was passed unanimously.
8. The Petitioner Companies had thereafter filed the
present Petition seeking sanction to the Scheme of
Arrangement. Vide Order dated 21st January 2014,
notice of the Petition was directed to be issued to the
Regional Director, Northern Region. Citations were
also directed to be published in "Business Standard" in
==================================================
English and in Hindi Edition and the same were
published in "Business standard" in English and in
Hindi Edition on 12th February, 2014 as per the orders
of the Court. 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 also regarding
publication of citations in the aforesaid newspaper.
Copies of the newspaper cuttings, in original,
containing the publications have also been filed along
with the Affidavit of Service.
9. The Regional Director has stated that, upon sanction of
the Scheme, all the employees of the Demerged
Company engaged in the Demerged undertaking shall
become the employees of the Resulting Companies
without any break or interruption in their services.
Further submits that despite notice, the Income Tax
Authorities has not raised any observation with regard
to the Scheme.
10. The Learned Regional Director has, in its Affidavit
stated that there are certain charges proposed to be
transferred from the Demerged Company to the
==================================================
Resulting Companies, the Petitioner Company may be
asked to comply with the provisions of the Act for
satisfaction and creation of charges in the Demerged
Company and the Resulting Companies respectively.
11. In response to the aforesaid observation, the Petitioner
Companies in the Reply Affidavit dated 14 th July,
2014, submit that the Petitioner Companies undertakes
to comply with the provisions of satisfaction and
creation of charges as per the Companies Act 1956.
12. The Learned Regional Director further stated that no
charge has been credited in respect of the loan from
Investment Financial Services Limited on Rs.25 lacs.
13. The Petitioners have filed an Affidavit stating that no
charge was required to be credited as the loan from
Investment Financial Services Limited (HSBC) has
been secured by pledging the shares and securities of
the company.
14. Further, the Learned Regional Director has, in its
Affidavit stated the appointed date has been fixed as
01.04.2013 and the Resulting companies have been
incorporated in September 2013 i.e. after the appointed
==================================================
date. The appointed date is fixed for transfer of assets
but the same are transferred from effective date. The
assets should be existence on the date of incorporation
and on the effective date.
15. In response to the aforesaid observation, the learned
counsel for the Petitioner has relied on decision of this
Court in CO.PET. 619/2013, Prime Electric Ltd. and
Anr., dated 14.03.2014 wherein it has been held as
under:-
"Further, with regard to the observation of
the Regional Director regarding that the
Appointed Date in the Scheme is prior to
incorporation of the Resulting Company;
the Petitioner Companies have submitted
that the Appointed date (i.e. 01.04.2012)
has been fixed only for the purpose of
identification and quantification of the
assets and liabilities pertaining to
the Demerged Undertaking belonging to
Petitioner Company-I and the
said identification is based on the balance
sheet as at 31.03.2012 which was filed
along with CA (M) No. 118 of 2013 before
this High Court. Further it is stated that all
the assets and liabilities pertaining to
the Demerged Undertaking were in
==================================================
existence on the Appointed Date and it is
on and from the Effective Date when these
assets and liabilities are to be transferred to
Petitioner Company-II.
Reliance, in this regard, is placed upon a
judgment of this Court in the matter of HCL
Hewlett-Packard Ltd.:1994 80 Comp Cas.
228 Delhi and order of this Court under
section 394 of the Companies Act, 1956 in
Co. Pet No. 343/2011, wherein this Court
rejected similar plea of the
Regional Director and has held that such
scheme of arrangement would be
in conformity with the provisions of the
Companies Act, 1956."
16. Further the Learned Regional Director has, in its
Affidavit stated that the Petitioner Companies have not
stated in the petition that they have complied with the
provisions of Section 2(19AA) of the Income Tax Act.
17. In response to the aforesaid observation, learned
counsel for the Petitioners submits that the Income Tax
Authorities have not raised any objection, but in any
case, the Petitioners undertake to comply with the
requirement of provision of Section 2(19AA), in case,
==================================================
the petitioner companies seek to avail of the benefit
granted to them.
18. The Learned Regional Director has raised the concern
that in the Balance Sheet as of 31.03.2013, the
Petitioners had not made any disclosure in respect of
the related party transactions as mandated under
Section 211(3A) read with the Accounting Standards-
18 as well as specific disclosure in said Balance Sheet,
it could not be ascertained as whether there is non
compliance of the provisions of sections 295& 297 of
the Companies Act 1956.
19. In response to the aforesaid observation, the Petitioner
Companies in their reply submit that the Auditor had
given the details of such transactions in its Notes on
Financial Statements for the Year Ended 31 st March,
2013 and Notes on Financial Statements for the Year
Ended 31 st March, 2012. The same have been filed
with balance sheets provided to the Regional Director.
However, the said Balance Sheets along with certificate
from the Chartered Accountant stating that the said
sheet was part of Balance Sheet but the person
uploading the Balance Sheet has not uploaded the same
==================================================
and are placed on record with reply to the
representation. As regards non filing of Balance Sheet
for the financial year ending 2011, the Petitioner
Companies have filed the same and the proof of filing
23AC and 23ACA along with relevant form have been
filed with the reply to the representation. Further,
learned counsel for the Petitioners submits that all the
requisite disclosures have been made in the accounts
supplied to the Regional Director.
20. It is clarified that the Registrar of Companies shall be
entitled to examine the accounts with regard to the
related party transactions and in case of any breach of
any statutory provisions, the Registrar of Companies
shall be entitled to take appropriate action as envisaged
in law irrespective of the sanction of scheme
21. The Learned Regional Director has raised another
concern that Petitioners have not filed the Balance
sheet for the year ending 31.03.2013 and also not filed
the list of shareholders along with the Annual Return
for year ending 31.03.2011.
22. In response to the aforesaid observation, the learned
counsel for the Petitioner has produced the e-form
==================================================
23AC and 23ACA for 31.03.2011 to show that the
Balance sheet has been filed and with respect of list of
shareholders, it submits that appropriate steps have
been taken.
23. It is clarified that in case of breach of any statutory
provisions, the Registrar of Companies the Registrar of
Companies shall be entitled to take appropriate action
as envisaged in law irrespective of the sanction of
Scheme.
24. The Regional Director has further stated that the certain
assets/shares to be transferred to the Resulting
Companies do not appear in the Balance Sheet as on
31st March, 2013 and it is not clear whether the same
appears in the records of the company as on 1 st
October, 2013.
25. In response to the aforesaid observation, the Petitioner
Companies in their Reply, submit that majority of the
assets/shares appear in the balance sheet and some of
the shares/assets etc. were purchased during the period
from 1st April, 2013 and 31 st August, 2013. The details
of assets appearing in Balance Sheet and purchased
after 1st April, 2013 are shown in the annexure filed
==================================================
with reply to the representation of the Regional
Director.
26. In view of the aforesaid clarification and undertaking
given by the Petitioner Companies, the concerns of the
Regional Director have been duly addressed.
27. No objection has been received to the Scheme from any
other party. Mr. Ashish Middha, Advocate of the
Petitioner Companies have filed an Affidavit of Sh.
Keashav Thirani, Director of the Petitioner Companies
nor their Counsel has received any objection pursuant
to citations published in the newspapers.
28. In view of the approval accorded by the Shareholders
and Creditors of the Petitioner Companies;
representation filed by the Regional Director, Northern
Region the proposed Scheme of Arrangement, there
appears to be no impediment to the grant of sanction to
the Scheme of Arrangement. Consequently, sanction is
hereby granted to the Scheme of Arrangement under
Sections 391 and 394 of the Companies Act, 1956.
29. The Petitioner Companies will comply with the
statutory requirements in accordance with law.
==================================================
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 Demerged
Company be transferred to and vest in the Resulting
Companies without any further act or deed. Similarly,
all the liabilities and duties of the Demerged Company
be transferred to the Resulting Companies without any
further act or deed.
30. 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.
31. The Petition is allowed in the above terms.
Order Dasti.
SANJEEV SACHDEVA, J
AUGUST 19, 2014
==================================================
