Macro Steel Engineers Pvt Ltd vs United Drilling Tools Ltd
2014 Latest Caselaw 2197 Del

$~51
*    IN THE HIGH COURT OF DELHI AT NEW DELHI
+    Co.Pet No. 70 /2014 and Co.Appl. (M) 155 OF 2013

MACRO STEEL ENGINEERS PVT LTD            .....Petitioner
                    Through:  Mr.Rajiv K. Goel and
                              Mr.Naresh Kumar, Advocates

                                    AND

UNITED DRILLING TOOLS LTD                                 .......Respondent

Through :

CORAM:

HON'BLE MR. JUSTICE SANJEEV SACHDEVA
%                     ORDER
                     01.05.2014

     SANJEEV SACHDEVA,J (ORAL)

1. This joint Second motion Petition has been filed under sections 391 & 394 of the Companies Act, 1956 by the Petitioner Companies seeking sanction to the Scheme of Amalgamation of Macro Steel Engineers Pvt Ltd with United Drilling Tools Ltd. A copy of the Scheme is filed along with the petition.

2. The Registered Offices of both the Petitioner Companies are situated at New Delhi, within the jurisdiction of this Court.

3. The details of respective dates of incorporation of the petitioner companies, their authorized, issued, subscribed and paid up capital have been set out in the petition.

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

5. The copies of resolutions passed by the Board of Directors of the Petitioners 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 CA (M) No. 155 of 2013 seeking directions of this Court for dispensation/convening of meetings. Vide order dated 19th November, 2013, this Court allowed the Application and requirement of convening meetings of Shareholders and Un-Secured Creditors of the Transferor Company; and Preference Shareholders and Secured Creditors of the Transferee Company were dispensed with. The Transferor Company did not have any Secured Creditor. This Court further directed for convening of separate meetings of Equity Shareholders and Un-secured Creditors of the Transferee Company under its supervision to consider and approve the proposed Scheme of Amalgamation. The Scheme of Amalgamation was unanimously approved and adopted in the meetings of Equity Shareholders and Un-secured Creditors of the Transferee Company.

8. The Petitioner Companies had thereafter filed the present Petition seeking sanction to the Scheme of Amalgamation. Vide order dated 29th January, 2014, notice of the Petition was directed to be issued to the Registrar of Companies, Central Government through the Regional Director, Northern Region, Ministry of Corporate Affairs, Noida and the Official Liquidator attached with this Court. Citations were also directed to be published in „Business Standard‟ (English, Delhi Edition) and „Dainik Bhaskar‟ (Hindi, Delhi Edition). Affidavit of Service and Publication has been filed by the Petitioners showing compliance regarding service of the Petition on the ROC, RD and OL, and also regarding publication of citations in the aforesaid newspapers. Copies of the newspaper cuttings, in original, containing the publications have also been filed along with the Affidavit of Service.

9. Pursuant to the notice issued, the Official Liquidator sought information from the Petitioner Companies. Based on the information received, learned Official Liquidator has filed his report dated 22 nd April, 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, which is subject matter of dissolution, do not appear to have been conducted in a manner prejudicial to the interest of its members, creditors or to public interest.

10. It has been stated in the said report that the Official Liquidator has not received any complaint against the proposed Scheme of Amalgamation. It is further stated that affairs of the Petitioners 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 to Section 394(1) of the Act.

11. In response to the notice issued in the Petition, Regional Director, Northern Region, Ministry of Corporate Affairs has filed his Affidavit/Report dated 22 nd April, 2014. Relying on the Scheme of Amalgamation, he has stated that, upon sanction of the Scheme, all the employees of the Transferor Company shall become the employees of the Transferee Company without any break or interruption in their services.

12. The Regional Director has made the following observations:

a. Appointed Date in the Scheme of Amalgamation has been fixed as 1st October, 2012. The Petitioner Companies should be asked to clarify the significance of fixing the Appointed Date. Since the Petitioner Companies have prepared their Audited Annual Accounts for the year ended 31.3.2013 and filed the same with the ROC, the Petitioners may be asked to shift the Appointed Date to 1st April, 2013.

b. The Petitioner Transferee Company is listed at Bombay Stock Exchange and other Stock Exchanges. Bombay Stock Exchange vide its letter dated 17.5.2013 has given its approval with the condition that "the Company shall comply with the various provisions of the aforesaid SEBI Circular."

13. In response to the aforesaid observations, the Petitioner Transferee Company in the Reply Affidavit dated 29th April, 2014, has submitted that the Appointed Date is a cut-off date fixed for the purpose of giving effect to the Scheme of Amalgamation in the Books of Accounts of the Transferee Company. Appointed Date can be fixed retrospectively or prospectively. Every Scheme of Amalgamation or De-merger, if approved by the Hon‟ble High Court, becomes effective only when the copy of High Court order is filed with the concerned Registrar of Companies. The Petitioner Transferor Company has its Accounting Year 1st October to 30th September. At the time of filing of the Scheme, the latest Audited Annual Accounts of the Petitioner Transferor Company were available for the year ended 30th September, 2012. Hence, the Appointed Date was fixed as 1st October, 2012. During the process of the amalgamation, the Transferor Company has prepared its Audited Annual Accounts for the year ended 30th September, 2013 and filed the same with the ROC. Similarly, the Transferee Company has also prepared its audited Annual Accounts for the year ended 31st March, 2013 and filed the same with the ROC. Since the Transferor Company has already filed its audited Annual Accounts for the year ended 30th September, 2013, Appointed Date may be changed to 1st October, 2013 so that accounts of the Transferor Company for the period from 1st October, 2013 to 31st March, 2014 may be consolidated with the accounts of the Transferee Company. Mr Rajeev Goel, learned Counsel for the Petitioner Companies pointed out that Para 1.2 of the Scheme of Amalgamation provides that "the Appointed Date means commencement of business on 1st October, 2012 or such other date as the Hon‟ble High Court(s) may direct." He, accordingly, prays that this Hon‟ble Court may direct to change the Appointed Date to 1 st October, 2013 or such other date as it may deem fit. Petitioners have confirmed that they are agreeable to any such change in the Appointed Date. In view of the aforesaid clarifications, I deem it fit to change the Appointed Date to 1st October, 2013.

14. With regard to compliance with SEBI Circular, it was submitted that Equity Shares of the Transferee Company are listed on Bombay Stock Exchange, Delhi Stock Exchange and Uttar Pradesh Stock Exchange. In accordance with the requirements of Securities and Exchange Board of India (SEBI) Circular No. CIR/CFD/DIL/5/2013 dated 4 th February, 2013 read with Circular No. CIR/CFD/DIL/8/2013 dated 21st May, 2013, approval to the Scheme of Amalgamation has already been obtained from public category Equity Shareholders of the Transferee Company through Postal Ballot with added facility of electronic voting. Public category Equity Shareholders of the Transferee Company has unanimously approved the Scheme of Amalgamation through Postal Ballot process. Counsel for the Petitioner Companies submitted that Para 10.e of the Scheme of Amalgamation clearly provides that the Petitioner Companies will comply with the requirements of Listing Agreement, SEBI Regulations and other applicable provisions, if any, in this regard. Petitioner Transferee Company has confirmed and undertaken that it will comply with all the conditions imposed by Bombay Stock Exchange (BSE) and other Stock Exchanges while granting their approval to the Scheme and also comply with the SEBI Circular No. CIR/CFD/DIL/5/2013 dated 4th February, 2013 read with Circular No. CIR/CFD/DIL/8/2013 dated 21st May, 2013, and all the applicable provisions of law in this regard.

15. No objection has been received to the Scheme of Amalgamation from any other party. Mr Pramod Kumar Gupta, Chairman cum Managing Director of the Transferee Company has filed an affidavit confirming that neither the Petitioner Companies nor their Counsel has received any objection pursuant to citations published in the newspapers.

16. 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 the 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 requirements in accordance with law.

17. 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 Company be transferred to and vest in the Transferee Company without any further act or deed. Similarly, 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 Transferor Company shall stand dissolved without winding up.

18. 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.

19. The Petitioner Companies voluntarily states that they would collectively deposit a sum of Rs.1,00,000 to the common pool fund of Official Liquidator within three weeks from today. The statement is accepted.

20. The Petition is allowed in the above terms.

SANJEEV SACHDEVA, J.

May 01, 2014/sv