Shivraj Exim Private Limited vs ...
2015 Latest Caselaw 3024 Del

                    IN THE HIGH COURT OF DELHI
                  COMPANY PETITION NO. 762/2014

                                         Reserved on 16th March, 2015
                               Date of pronouncement: 16th April, 2015
In the matter of
The Companies Act, 1956 & the Companies Act, 2013 (to the extent
applicable):

And

Petition under Sections 391 to 394 of the
Companies Act, 1956

Scheme of Amalgamation of:

Shivraj Exim Private Limited
                                     Petitioner/Transferor Company No. 1

MAR Fashions Private Limited
                                     Petitioner/Transferor Company No. 2

Funny Time Finvest Private Limited
                                     Petitioner/Transferor Company No. 3
      WITH

ASM Pipes Private Limited
                                          Petitioner/Transferee Company

                               Through Mr. Rajeev Kumar,       Advocate
                               for the petitioners
                               Ms.     Aparna     Mudiam,      Assistant
                               Registrar of Companies           for the
                               Regional Director
                               Mr. Rajiv Bahl, Advocate          for   the
                               Official Liquidator

SUDERSHAN KUMAR MISRA, J.

1. This joint petition has been filed under Sections 391 to 394 of the

Companies Act, 1956 by the petitioner companies seeking sanction of

the Scheme of Amalgamation of Shivraj Exim Private Limited (hereinafter

referred to as the transferor company no. 1); MAR Fashions Private

Limited (hereinafter referred to as the transferor company no. 2); and

Funny Time Finvest Private Limited (hereinafter referred to as the

transferor company no. 3) with ASM Pipes Private Limited (hereinafter

referred to as the transferee company).

2. The registered offices of the transferor and transferee companies

are situated at New Delhi, within the jurisdiction of this court.

3. The transferor company no. 1 was incorporated under the

Companies Act, 1956 on 29th April, 2005 with the Registrar of

Companies, NCT of Delhi & Haryana at New Delhi.

4. The transferor company no. 2 was incorporated under the

Companies Act, 1956 on 6th April, 2005 with the Registrar of Companies,

NCT of Delhi & Haryana at New Delhi.

5. The transferor company no. 3 was incorporated under the

Companies Act, 1956 on 19th July, 1996 with the Registrar of Companies,

NCT of Delhi & Haryana at New Delhi.

6. The transferee company was incorporated under the Companies

Act, 1956 on 20th April, 2005 with the Registrar of Companies, NCT of

Delhi & Haryana at New Delhi.

7. The present authorized share capital of the transferor company

no.1 is Rs.21,00,000/- divided into 10,000 equity shares of Rs.10/- each

aggregating to Rs.1,00,000/- and 2,00,000 preference shares of Rs.10/-

each aggregating to Rs.20,00,000. The issued, subscribed and paid-up

share capital of the company is Rs.2,08,400/- divided into 10,000 equity

shares of Rs.10/- each aggregating to Rs.1,00,000/- and share forfeiture

account of Rs.1,08,400/-.

8. The present authorized share capital of the transferor company

no.2 is Rs.21,00,000/- divided into 10,000 equity shares of Rs.10/- each

aggregating to Rs.1,00,000/- and 2,00,000 preference shares of Rs.10/-

each aggregating to Rs.20,00,000. The issued, subscribed and paid-up

share capital of the company is Rs.1,52,700/- divided into 10,000 equity

shares of Rs.10/- each aggregating to Rs.1,00,000/- and share forfeiture

account of Rs.52,700/-.

9. The present authorized share capital of the transferor company

no.3 is Rs.1,50,00,000/- divided into 15,00,000 equity shares of Rs.10/-

each. The issued, subscribed and paid-up share capital of the company

is Rs.1,22,52,200/- divided into 12,25,220 equity shares of Rs.10/- each.

10. The present authorized share capital of the transferee company is

Rs.21,00,000/- divided into 10,000 equity shares of Rs.10/- each

aggregating to Rs.1,00,000/- and 2,00,000 preference shares of Rs.10/-

each aggregating to Rs.20,00,000. The issued, subscribed and paid-up

share capital of the company is Rs.1,49,605/- divided into 10,000 equity

shares of Rs.10/- each aggregating to Rs.1,00,000/- and share forfeiture

account of Rs.49,605/-.

11. Copies of the Memorandum and Articles of Association of the

transferor and transferee companies have been filed on record with the

joint application, being CA(M) 160/2014, earlier filed by the petitioners.

The audited balance sheets, as on 31st March, 2014, of the transferor

and transferee companies, along with the report of the auditors, had also

been filed.

12. A copy of the Scheme of Amalgamation has been placed on record

and the salient features of the Scheme have been incorporated and

detailed in the petition and the accompanying affidavit. It is claimed that

the proposed amalgamation would benefit the companies and its

stakeholders by reduction of the group companies engaged in similar

activities. It is further claimed that the amalgamation will result in

reduction in overheads, administrative, managerial, and other

expenditure, and optimal utilization of various resources due to

consolidation of activities.

13. So far as the share exchange ratio is concerned, the Scheme

provides that, upon coming into effect of this Scheme, the transferee

company shall issue and allot equity shares to the shareholders of the

transferor companies in the following ratio:

"07 equity shares of Rs.10/- each, credited as fully paid up, of the transferee company for every 03 equity shares of Rs.10/- each fully paid up held in transferor company no. 1."

"99 equity shares of Rs.10/- each, credited as fully paid up, of the transferee company for every 100 equity shares of Rs.10/- each fully paid up held in transferor company no. 2."

It is provided that no shares shall be issued against the shares

forfeited by the transferor company nos. 1 and 2.

It is further provided that pursuant to the merger of the transferor

company no. 1 and transferor company no. 2 with the transferee

company, Sainty Financial Services Private Limited will become the

wholly owned subsidiary of the transferee company. Therefore, the entire

share capital of the transferor company no. 3 is held by the transferee

company directly or indirectly through its subsidiary company. Therefore,

the transferee company shall not be required to issue any shares or pay

any consideration to the transferor company no. 3 or to its shareholders.

14. It has been submitted by the petitioners that no proceedings under

Sections 235 to 251 of the Companies Act, 1956 are pending against the

transferor and transferee companies.

15. The Board of Directors of the transferor and transferee companies

in their separate meetings held on 8th October, 2014 have unanimously

approved the proposed Scheme of Amalgamation. Copies of the

Resolutions passed at the meetings of the Board of Directors of the

transferor and transferee companies have been placed on record.

16. The petitioner companies had earlier filed CA (M) No. 160/2014

seeking directions of this court to dispense with the requirement of

convening the meetings of their equity shareholders, secured and

unsecured creditors, which are statutorily required for sanction of the

Scheme of Amalgamation. Vide order dated 28th November, 2014, this

court allowed the application and dispensed with the requirement of

convening and holding the meetings of the equity shareholders and

unsecured creditors of the transferor and transferee companies, there

being no secured creditors of the petitioner companies, to consider and, if

thought fit, approve, with or without modification, the proposed Scheme

of Amalgamation.

17. The petitioner companies have thereafter filed the present petition

seeking sanction of the Scheme of Amalgamation. Vide order dated 8th

December, 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 'Business Standard' (English) and

(Hindi) editions. Affidavit of service has been filed by the petitioner

showing compliance regarding service on the Official Liquidator and the

Regional Director, Northern Region and also regarding publication of

citations in the aforesaid newspapers on 17th January, 2015. Copies of

the newspaper clippings containing the publications have been filed

along with the said affidavit.

18. Pursuant to the notices issued, the Official Liquidator sought

information from the petitioner companies. Based on the information

received, the Official Liquidator has filed a report dated 11th March, 2015

wherein he has stated that he has not received any complaint against the

proposed Scheme of Amalgamation 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 their members, creditors or public interest, as

per second proviso of Section 394(1) of the Companies Act, 1956.

19. In response to the notices issued in the petition, Mr. A. K.

Chaturvedi, Regional Director, Northern Region, Ministry of Corporate

Affairs has filed his report dated 11th March, 2015. Relying on Clause 9 of

Part-II and Clause 20.1 of Part-III of the Scheme, he has stated that,

upon sanction of the Scheme of Amalgamation, all the employees of the

transferor companies shall become the employees of the transferee

company without any break or interruption in their services. He has

further submitted that in Clause 6 of Part-II and Clause 17 of Part-III of

the Scheme, it has been stated that amalgamation of the transferor

companies shall be accounted for as per Accounting Standard-14 issued

by the Institute of Chartered Accountants of India. He further submitted

that in Clause 14 of Part-II and Clause 25 of Part-III of the Scheme, it has

been stated that upon this scheme becoming effective, the transferor

companies shall stand dissolved without the process of winding up.

20. The Regional Director has not raised any objection to the proposed

Scheme of Amalgamation. However, in Para 18 of his report, he has

submitted that the transferor company no. 3 had filed its balance sheet

for the period ended 31.03.2014 and the appointed date mentioned in the

Scheme for transferor company no. 3 is 02.04.2015. Therefore, the

assets and liabilities of the transferor company no. 3 to be transferred on

02.04.2014 are not known. He, therefore, prays that the transferor

company no. 3 may be directed to provide the list of its assets and

liabilities to be transferred on 02.04.2014. In response to the aforesaid

observation, the transferor company no. 3 had filed the list of its assets &

liabilities as on 2.4.2014, the appointed date of amalgamation. Therefore,

the observation raised by the Regional Director stands satisfied.

21. No objection has been received to the Scheme of Amalgamation

from any other party. The petitioner companies, in the affidavit dated 11th

March, 2015 of Mr. Ajay Garg, Authorized Signatory of the petitioner

companies, have submitted that neither the petitioner companies nor

their counsel have received any objection pursuant to the citations

published in the newspapers on 17th January, 2015.

22. Considering the approval accorded by the equity shareholders and

creditors of the petitioner companies to the proposed Scheme of

Amalgamation and the affidavits filed by the Regional Director, Northern

Region, and the Official Liquidator not raising any objection 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. Certified copy of this order be filed with the Registrar of Companies

within 30 days. It is also clarified that this order will not be construed as

an order granting exemption from payment of stamp duty as payable in

accordance with law. Upon the sanction becoming effective from the

appointed date 1 of Amalgamation, i.e. 1st April, 2014, the transferor

company nos. 1 and 2; and from the appointed date 2 of amalgamation

i.e. 2nd April, 2014, the transferor company no. 3 shall stand dissolved

without undergoing the process of winding up.

23. The petition is allowed in the above terms.

Dasti.

SUDERSHAN KUMAR MISRA, J.

April 16, 2015