Delhi High Court
Kohinoor Club Private Limited vs ... on 28 August, 2015
IN THE HIGH COURT OF DELHI
COMPANY PETITION NO. 588/2014
Reserved on 21st July, 2015
Date of pronouncement: 28th August, 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 read with Rule 9 of the
Companies (Court) Rules, 1959
Scheme of Amalgamation of:
Kohinoor Club Private Limited
Petitioner/Transferor Company
WITH
T.S. Kisan and Company Private Limited
Non-Petitioner/Transferee Company
Through Mr. Tariq Muneer, Advocate
for the petitioner
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 petition has been filed under Sections 391 to 394 of the
Companies Act, 1956 read with Rule 9 of the Companies (Court) Rules,
1959 by the petitioner/transferor company seeking sanction of the
Scheme of Amalgamation of Kohinoor Club Private Limited (hereinafter
referred to as the petitioner/transferor company) with T.S. Kisan and
Company Private Limited (hereinafter referred to as the transferee
company).
2. The registered offices of the petitioner/transferor company and the
transferee company are situated at New Delhi, within the jurisdiction of
this court.
3. The petitioner/transferor company was incorporated under the
Companies Act, 1956 on 26th August, 2002 with the Registrar of
Companies, NCT of Delhi & Haryana at New Delhi.
4. The transferee company was incorporated under the Companies
Act, 1956 on 18th February, 1982 with the Registrar of Companies, NCT
of Delhi & Haryana at New Delhi.
5. The present authorized share capital of the petitioner/transferor
company was Rs.10,00,000/- divided into 1,00,000 equity shares of
Rs.10/- each. The issued, subscribed and paid-up share capital of the
company was Rs.1,00,000/- divided into 10,000 equity shares of Rs.10/-
each.
6. The present authorized share capital of the transferee company
was Rs.75,00,000/- divided into 75,000 equity shares of Rs.100/- each.
The issued, subscribed and paid-up share capital of the company was
Rs.36,15,600/- divided into 36,156 equity shares of Rs.100/- each.
7. Copies of the Memorandum and Articles of Association of the
petitioner/transferor company and the transferee company have been
filed on record with the application, being CA(M) 127/2014, earlier filed by
the petitioner. The audited balance sheets, as on 31st March, 2013, of the
petitioner/transferor company and the transferee company, along with the
report of the auditors, had also been filed.
8. 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 submitted by
the petitioner that the transferor company is a wholly owned subsidiary of
the transferee company and the proposed Scheme will result in pooling
of resources and infrastructure of the entities to their common advantage,
resulting in a more productive utilization of the resources, costs and
operational efficiencies, faster and effective decision, making and its
implementation, which would be beneficial for all stakeholders. It is
claimed that proposed amalgamation will result in greater efficiency in
cash management of the transferee company and unfettered access to
cash flow generated by the combined business which can be deployed
more efficiently to fund organic and inorganic growth opportunities, and to
maximize shareholder value.
9. So far as the share exchange ratio is concerned, the Scheme
provides that, upon coming into effect of this Scheme, the transferee
company shall not be required to issue any shares, since the transferor
company is a wholly owned subsidiary of the transferee company.
Accordingly, all the equity shares held by the transferee company in the
transferor company shall be cancelled.
10. It has been submitted by the petitioner that no proceedings under
Sections 235 to 251 of the Companies Act, 1956 are pending against the
petitioner/transferor company and the transferee company.
11. The Board of Directors of the petitioner/transferor company in their
meeting held on 18th August, 2014 have unanimously approved the
proposed Scheme of Amalgamation. A copy of the Resolution passed at
the meeting of the Board of Directors of the petitioner/transferor company
has been placed on record.
12. The petitioner/transferor company had earlier filed CA (M) No.
127/2014 seeking directions of this court to dispense with the
requirement of convening the meetings of its shareholders, secured and
unsecured creditors, which are statutorily required for sanction of the
Scheme of Amalgamation. Vide order dated 12th September, 2014, this
court allowed the application and dispensed with the requirement of
convening and holding the meeting of the equity shareholders of the
petitioner/transferor company, there being no secured or unsecured
creditor of the petitioner company, to consider and, if thought fit, approve,
with or without modification, the proposed Scheme of Amalgamation.
Vide the said order, this Court also dispensed with the requirement of
filing a separate petition by the transferee company.
13. The petitioner/transferor company has thereafter filed the present
petition seeking sanction of the Scheme of Amalgamation. Vide order
dated 24th September, 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 'Statesman'
(English) and 'Veer Arjun' (Hindi) editions. An affidavit has been filed by
the petitioner showing compliance regarding publication of citations in the
aforesaid newspapers on 10th November, 2014. Copies of the newspaper
clippings containing the publications have been filed along with the said
affidavit.
14. Pursuant to the notices issued, the Official Liquidator sought
information from the petitioner/transferor company. Based on the
information received, the Dy. Official Liquidator has filed his report dated
26th November, 2014 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 petitioner/transferor company do not appear to have been
conducted in a manner prejudicial to the interest of its members, creditors
or public interest, as per second proviso of Section 394(1) of the
Companies Act, 1956.
15. 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 1st December, 2014. Relying on Clause
8.1 of the Scheme, he has stated that, upon sanction of the Scheme of
Amalgamation, all the employees of the transferor company shall
become the employees of the transferee company without any break or
interruption in their services. He has further submitted that in Clause 13.1
of the Scheme, it has been stated that the transferee company shall
account for the amalgamation in its books by "Pooling of Interest" method
under the provisions of Accounting Standard-14 issued by the Institute of
Chartered Accountants of India. He further submitted that in terms of
Clause 15.1 of the Scheme, it has been stated that upon the Scheme
becoming effective, the transferor company shall stand dissolved without
the process of winding up.
16. The Regional Director, in para (v) of his report, has further
submitted that both the companies have not filed their balance sheets for
the financial year ending 31.03.2014. He, therefore, prays that the
petitioner companies may be directed to file their due balance sheets. In
response to the aforesaid observation of the Regional Director, the
petitioner/transferor company has filed the affidavit dated 29th May, 2015
of Mr. Jitendra Kumar Thapar, Director of the petitioner/transferor
company stating that the petitioner company is in the process of
amalgamation and merger with its parent company, because of which
balance sheet for the year ending 31.03.2014 has not been filed, to avoid
duplication of effort and retain consistency with the present
amalgamation proceedings. The company, however, undertakes to
submit consolidated balance sheet for the year ending on 31.03.2014
immediately after obtaining formal order of amalgamation and merger. In
view of the above, the observation raised by the Regional Director,
Northern Region does not survive.
17. No objection has been received to the Scheme of Amalgamation
from any other party. The petitioner company, in the affidavit dated 3rd
December, 2014 of Mr. Jitendra Kumar Thapar, Director of the
petitioner/transferor company, has submitted that neither the petitioner
company nor their counsel have received any objection pursuant to
citations published in the newspapers on 10th November, 2014.
18. Considering the approval accorded by the equity shareholders of
the petitioner/transferor company to the proposed Scheme of
Amalgamation and the affidavits filed by the Official Liquidator and the
Regional Director (Northern Region) 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
company 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 of Amalgamation, that is 1st April, 2013, the transferor
company shall stand dissolved without undergoing the process of winding
up.
19. Learned counsel for the Official Liquidator prays that costs may be
imposed on the petitioner company in view the fact that the matter has
involved examination of extensive records and prioritized hearings.
Learned counsel for the petitioner states that the petitioner company is
ready and willing to pay cost of Rs.50,000/-. Looking to the
circumstances, the petitioner company shall deposit cost of Rs.50,000/-
in the Common Pool Fund of the Official Liquidator within four weeks
from today.
20. The petition is allowed in the above terms.
Dasti.
SUDERSHAN KUMAR MISRA, J.
August 28, 2015
