Delhi High Court
Tricolite Power Products Private ... vs ..... on 14 July, 2014
Author: Sanjeev Sachdeva
$~13
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ CO.PET.179 /2013
TRICOLITE POWER PRODUCTS PRIVATE
LIMITED AND ANR.
..... Petitioner
Through: Mr. Pawan Kumar, 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
% 14.07.2014
SANJEEV SACHDEVA, J (ORAL)
1. This second motion joint Petition has been filed under
section 391 to 394 of the Companies Act, 1956
("ACT") by Tricolite Power Products Private Limited
(Transferor Company) with Tricolite Electrical
Industries Limited (Transferee Company) (collectively
referred as the Petitioner Companies) seeking sanction
of the Scheme of Amalgamation ("SCHEME"). A copy
of the Scheme has been enclosed with the petition.
==================================================
2. The registered offices of Transferor Company and the
Transferee Company are situated within the National
Capital Territory of Delhi and are within the
jurisdiction of this Court.
3. Details with regard to the date of incorporation of the
Transferor and Transferee Company, their authorized,
issued, subscribed and paid up capital have been set out
in the Petition.
4. Copies of the Memorandum and Articles of
Association as well as the latest audit ed Annual
Accounts for the year ended 31 st March, 2011 as well
as year ended 31 st March 2012 of the Petitioner
Companies have also been enclosed with the Petition.
5. Copies of the Resolutions passed by the Board of
Directors of the Petitioner Companies appr oving the
Scheme of Amalgamation have also been placed on
record.
6. The Learned Counsel for the Petitioner Companies
submits that no proceedings under sections 235 and
251 of the Companies Act, 1956 are pending against
the Petitioner Companies.
==================================================
7. The Petitioner Companies had earlier filed CA (M) No.
36/2013 seeking directions of this Court for
dispensation of the meetings of Shareholder, Creditors
and Unsecured Creditors of Petitioner Companies. Vide
order dated 08.04.2013, this Court allowed the
application and dispensed with the convening of
meetings of Shareholders, Secured & Unsecured
Creditors of Petitioner Companies.
8. The Petitioner Companies have thereafter filed the
present Petition seeking sanction of the Scheme of
Amalgamation. Vide order dated 22.04.2 013, notice of
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
"Statesman" (English Edition) and "Veer Arjun" (Hindi
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 citations in the aforesaid
newspapers on 26.10.2013. Copies of Newspapers, in
original, containing the publication have been filed
along with the Affidavit of Service.
==================================================
9. In response to the notice issued, the Official Liquidator
sought information from the Petitioner Companies.
Based on the information received, the Official
Liquidator has filed his report dated 03.03.2014
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 Transferor Company do not
appear to have been conducted in a manner prejudicial
to the interest of its members or to public interest as per
the second proviso of section 394 (1) of the Companies
Act, 1956.
10. In response to the notice issued in the Petition, learned
Regional Director, Northern Region, Ministry of
Corporate Affairs has filed his Affidavit/Report dated
14.03.2014. The Learned Regional Director in paras 4
& 5 have given certain observations which are as
follows:-
"4. That the Deponent further craves leave
to submit that the Appointed Date as per the
Scheme shall be 01.04.2011, whereas the
Companies have prepared their Balance
Sheet and Profit & Loss Account for the
period 31.03.2013 and filed those Balance
Sheet and other returns under the
Companies Act, 1956. Therefore, Deponent
==================================================
submit that Appointed Date may be shifted
to 01.04.2013 to avoid any revision of
Balance Sheet and Profit & Loss Account &
other returns including Tax Returns for
earlier period.
5. That the Deponent further craves leave to
submit that the Registrar of Companies,
Delhi has also observed that: -
(i) At the time of incorporation of the
Transferor Company, the Paid up Equity
Share Capital of the Company was Rs 1 lac
divided into 10,000 equity shares of Rs. 10/ -
each. These shares were held by Shri
Amitabh Nangia, Meera Kumar and Inder
Pal Singh by subscribing 2450, 2450 &
5100 equity shares respectively.
(ii) Subsequently, the Company has allotted
11,50,000 Equity Share on 27.12.2006 for
consideration other than in cash to Shri
Inder Pal Singh in view of Industrial Plot
measuring one acre at Manesar acquired
whereas as per Annual Return made upto
31.12.2007, Shri Inder Pal Singh is shown
to be holding 5000 shares only and there is
no disclosure of such 11,50,000 shares.
Moreover, the Company has also not filed
E-form-3 in terms of the provisions of
section 75(2) of the Act for such allotment
for consideration other than cash.
It is further submitted that the Company in
its letter-dated 31.01.2014 stated that from-3
was attached to Form-2. Copy of the said
Form-3 submitted by the Company is
==================================================
enclosed here-with as Annexure 'A' of the
Affidavit. The said Form-3 contained Stamp
Duty of Rs. 100/- only, whereas under
section 75(2) of the Act, Stamp Duty as
applicable to execution of title deeds on the
value of the immovable property of Rs. 115
Lacs required to be affixed. The Provisions
of the section 75(2) is reproduced as under:-
"Where a contract such as is mentioned in
clause (b) of sub-section ( I ) is not reduced
to writing, the Company shall , within (thirty
days) after the allotment, file with the
Registrar the prescribed particulars of the
contract stamped with the same stamp duty
as would have been payable if the contract
had been reduced to writing and those
particulars shall be deemed to be an
instrument within the meaning of the Indian
Stamp Act, 1899 (2 of 1899) and the
Registrar may as a condition of filing the
particulars, require that the duty payable
thereon be adjudicated Under Section 31 of
the that Act"
(iii) In the subsequent Annual Return made
up to 30.09.2008 the Company has shown
following four shareholders : -
(a) Shri Amitabh Nangia ...5,000 shares
(b) Shri Meera Kumar ...5,000 shares
(c) Shri Inder Pal Singh ... 5,91,600 shares
(d) Tricolite Electrical Industries Ltd. ....
5,58,400 shares
==================================================
However, in the said Annual Return the
disclosures about transfer of shares is shown
as Nil.
(iv) It has mention in the said report inter -
alia that the valuation has been done NAV
method on the basis of the financial
statement and audited Balance Sheet as at
31.03.2011 and accordingly shares shall be
allotted to Amitabh Nangia and Meera
Kumar whereas it is a matter of examination
as relied upon the Annual Return made up
to 30.09.2011 & 29.09.2012, as on
01.04.2011, Shri Inder Pal Singh was also
Shareholder of the Company holding 23,200
equity shares which were later on
Transferred to the Transferee Company on
05.10.2011 i.e. after the Appointed date i.e
01.04.2011 fixed for the proposed Scheme
of Amalgamation. It is further submitted
that Accounts for 31.03.2013 were filed as
per Section 220 of the Companies Act,
1956. Appointed Date may be shifted to
01.04.2013 to avoid any revision of
accounts and the statutory returns including
Income Tax Returns."
11. In response to the aforesaid observations, the Petitioner
Companies have in the Reply Affidavit dated 20 th May,
2014, have submitted as follows:-
1. That they have fixed the appointed
date as 01.04.2011, only to reflect the date
on which the assets and liabilities of the
Transferor Company are to be identified
==================================================
for the purposes of transfer to the
Transferee Company. It is further
submitted that the independent experts
have computed the Share Swap Ratio after
considering the financial results and
positions of respective Petitioner
Companies till appointed date. The
Scheme of Amalgamation and Valuation
Report dated 27.03.2012 was considered
and approved by respective Board of
Directors of the Petitioner Companies on
27.03.2012. It is pertinent to mention here
that at that time of approval of S cheme, the
audited financial statements for the years
ending March 31, 2012 and March 31,
2013 were not in existence and available
with the Petitioner Companies. Hence,
only audited financial statements as on
31.03.2011 have been used for the purpose
of the disclosure of latest audited financial
results of the companies in the Scheme, as
per standard formats and practice in this
regard.
Learned Counsel for the Petitioners submits that
the appointed date may be shifted to 01.04.2013.
It is accordingly clarified that the appointed date
be shifted to 01.04.2013.
2. Further, the Regional Director in para 5
(i) to (iii) has observed with regard to non
disclosure of information with regard to
allotment of shares in the Annual Return
for the financial year ending 2007. In
response to said objection, it has been
==================================================
submitted by the Learned Counsel for the
Petitioners that due to some inadvertence,
the correct particulars of shares allotted
and transferred were not correctly recorded
in the annual return for the financ ial year
ending on 31.03.2007. It is further
submitted that said bonafide and
inadvertent error was not repeated in the
subsequent annual returns filed between
the financial years ending 31.03.2008 and
31.03.2013 and the Transferor Company
after noticing the above said inadvertent
bonafide error, on 06.01.2014, had filed its
revised annual return for the financial year
ending on 31.03.2007 containing correct
particulars of the Shareholders. Hence,
objection raised by the Regional Director
stands disposed of.
3. Further, the Regional Director in sub
para 5 (ii) has observed that the Transferee
Company has not complied with the
provisions of Section 75(2) of the Act and
has not paid the required stamp duty. In
response to said observation it has been
stated by the Learned Counsel for the
Petitioners Section 75(2) of the Companies
Act is not applicable to the present case, as
the Transferor Company had already paid
Stamp Duty amounting to Rs. 5,34,600/ - at
the time of transfer of said land and a
written Registered Lease Agreement was
executed in its favour. It is pertinent to
mention here that Section 75 is applicable
only to those contracts which are not
reduced into writing. In view of
==================================================
explanation given in this regard, the
objections raised by the Regional Dire ctor
with regard to paying of Stamp Duty may
does not carry any substance.
4. Further, the Regional Director in sub
para 5 (iv) has observed that in the
Valuation Report the Transferee Company
has only allotted Shares to two
shareholders and totally ignored the other
shareholder namely Mr. Inder Pal Singh.
In response to said observation it has been
stated that on 05.10.2011 Mr. Inder Pal
Singh had transferred 23,200 Equity
Shares, i.e. all Equity Shares he was
holding, in favour of the Transferee
Company. The said transfer of Equity
Shares has been duly reflected by the
Transferor Company in its annual return
for the financial years ending 31.03.2012
and 31.03.2013. At the time of finalization
and approval of Valuation Report, i.e.
27.03.2012, Mr. Inder Pal Singh was no
more a Shareholder of the Transferor
Company. Therefore, the Chartered
accountants in their Valuation Report have
only recommended for issuance of Equity
Shares in favour of Mr. Amitabh Nangia
and Mrs. Meera Kumar. In view of
explanation given in this para, the
objections raised by the Regional Director
with regard to non issuance of Equity
Shares to Mr. Inder Pal Singh is rejected as
it does not carry any substance.
==================================================
12. In view of the aforesaid clarifications given by the
Petitioners and the shifting of the appointed date to
01.04.2013, the concerns raised by the Learned
Regional Director have been duly addressed.
13. No objection has been received to the Scheme of
Amalgamation from any other party. Mr. Amitabh
Nangia, Authorized Representative of Transferor
Company nos. 1 & 2 has filed an affidavit dated
05.03.2014 confirming that neither Transferor
Company nos. 1 & 2 nor their Legal 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;
representation / reports filed by the Regional Director,
Northern Region and the Official Liquidator, attached
with this Court to the proposed Scheme of
Amalgamation, there appears to be no impediment to
grant of sanction to the Scheme of Amalgamation.
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 requi rements in accordance
with law.
15. Certified copy of the 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 section 391
and 394 of the Companies Act, 1956, and in terms of
the Scheme, the whole or part of the undertaking, the
properties, rights and powers of 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 Tr ansferor
Company be transferred to the Transferee Company
without any further act or deed. Upon the Scheme
coming into effect, Transfer Company shall stand
dissolved without winding up.
16. 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.
17. Learned Counsel for the Petitioner Companies states
that the Petitioner Companies (collectively) would
==================================================
voluntarily deposit a sum of Rs 1 lac with the Common
Pool of the Official Liquidator within three weeks from
today. The statement is accepted.
18. The Petition is allowed in the above terms.
Order Dasti.
SANJEEV SACHDEVA, J
JULY14, 2014
==================================================
