Delhi High Court
Convergys Stream Private Limited vs ... on 28 August, 2015
IN THE HIGH COURT OF DELHI
COMPANY APPLICATION (MAIN) NO. 137/2015
Reserved on 7th August, 2015
Date of pronouncement: 28th August, 2015
In the matter of
The Companies Act, 1956 & the Companies Act, 2013 (to the extent
applicable):
And
Application under Sections 391 to 394 of the
Companies Act, 1956
Scheme of Amalgamation of:
Convergys Stream Private Limited
Applicant/Transferor Company No. 1
Convergys Infowavz Private Limited
Applicant/Transferor Company No. 2
WITH
Convergys India Services Private Limited
Non-Applicant/Transferee Company
Through Mr. Saurabh Kalia, Advocate
for the applicants
SUDERSHAN KUMAR MISRA, J.
1. This application has been filed under Sections 391 to 394 of the
Companies Act, 1956 by the applicant/transferor companies seeking
directions of this court to dispense with the requirement of convening the
meetings of their equity shareholders, secured and unsecured creditors
to consider and approve, with or without modification, the proposed
Scheme of Amalgamation of Convergys Stream Private Limited
(hereinafter referred to as the applicant/transferor company no. 1) and
Convergys Infowavz Private Limited (hereinafter referred to as the
applicant/transferor company no. 2) with Convergys India Services
Private Limited (hereinafter referred to as the transferee company) and to
dispense with the requirement of the transferee company to approach
this Court for seeking sanction of Scheme of Amalgamation.
2. The registered offices of the applicant/transferor companies and
the transferee company are situated at New Delhi, within the jurisdiction
of this Court.
3. The applicant/transferor company no. 1 was originally incorporated
under the Companies Act, 1956 on 26th May, 2000 with the Registrar of
Companies, Maharashtra at Mumbai under the name and style of Stream
Tracmail Private Limited. The company changed its name to Stream
International Services Private Limited and obtained the fresh certificate of
incorporation on 24th November, 2004. The company again changed its
name to Convergys Stream Private Limited and obtained the fresh
certificate of incorporation on 8th October, 2014. Thereafter, the company
shifted its registered office from the State of Maharashtra to Delhi and
obtained a certificate in this regard from the Registrar of Companies,
NCT of Delhi & Haryana at New Delhi on 1st April, 2015.
4. The applicant/transferor company no. 2 was originally incorporated
under the Companies Act, 1956 on 16th February, 2000 with the
Registrar of Companies, Maharashtra at Mumbai under the name and
style of Infowavz International Private Limited. The company changed its
name to Convergys Infowavz Private Limited and obtained the fresh
certificate of incorporation on 11th December, 2014. Learned counsel for
the applicants has submitted that the company had shifted its registered
office from the State of Maharashtra to Delhi and obtained a certificate in
this regard from the Registrar of Companies, NCT of Delhi & Haryana at
New Delhi on 7th April, 2015.
5. The present authorized share capital of the applicant/transferor
company no. 1 is Rs.53,00,00,000/- divided into 1,50,00,000 equity
shares of Rs.10/- each aggregating to Rs.15,00,00,000/- and 38,00,000
preference shares of Rs.100/- each aggregating to Rs.38,00,00,000/-.
The present issued, subscribed and paid-up share capital of the
company is Rs.10,02,41,500/- divided into 1,00,24,150 equity shares of
Rs.10/- each.
6. The present authorized share capital of the applicant/transferor
company no. 2 is Rs.1,00,00,000/- divided into 10,00,000 equity shares
of Rs.10/- each. The present issued, subscribed and paid-up share
capital of the company is Rs.47,99,580/- divided into 4,79,958 equity
shares of Rs.10/- each.
7. Copies of the Memorandum and Articles of Association of the
applicant/transferor companies have been filed on record. The audited
balance sheets, as on 31st March, 2014, of applicant/transferor
companies, along with the report of the auditors, have 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 application and the accompanying affidavit. It is claimed
by the applicant that the consolidation of entities will provide
opportunities for operational synergies through integration of
complementary businesses of the transferor companies and will provide
cost and capital productivity synergies which will lead to economies of
scale and better utilization of overlapping facilities and infrastructure. It is
further claimed that the proposed amalgamation would result in simplified
corporate structure and therefore lead to a more efficient utilization of
capital and create a consolidated base for future growth of the transferee
company.
9. So far as the share exchange ratio is concerned, the Scheme
provides that the transferor company no. 1 is a wholly owned subsidiary
of the transferee company and transferor company no. 2 is a wholly
owned subsidiary of the transferor company no. 1, hence no shares will
be issued pursuant to amalgamation of the transferor companies into the
transferee company and the transferee company shall not be required to
issue any shares or pay any consideration to the shareholders of the
transferor companies.
10. It has been submitted by the applicants that no proceedings under
Sections 235 to 251 of the Companies Act, 1956 and/or under Sections
206 to 229 of the Companies Act, 2013 are pending against the
applicant/transferor companies.
11. The Board of Directors of the transferor and transferee companies
in their separate meetings held on 24th July, 2015 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.
12. The applicant/transferor company no. 1 has 02 equity shareholders
and 02 unsecured creditors. Both the equity shareholders and both the
unsecured creditors have given their consents/no objections in writing to
the proposed Scheme of Amalgamation. Their consents/no objections
have been placed on record. They have been examined and found in
order. In view thereof, the requirement of convening the meetings of the
equity shareholders and unsecured creditors of the applicant/transferor
company no. 1 to consider and, if thought fit, approve, with or without
modification, the proposed Scheme of Amalgamation is dispensed with.
There is no secured creditor of the applicant/transferor company no. 1,
as on 27th July, 2015.
13. The applicant/transferor company no. 2 has 02 equity shareholders
and 02 unsecured creditors. Both the equity shareholders and both the
unsecured creditors have given their consents/no objections in writing to
the proposed Scheme of Amalgamation. Their consents/no objections
have been placed on record. They have been examined and found in
order. In view thereof, the requirement of convening the meetings of the
equity shareholders and unsecured creditors of the applicant/transferor
company no. 2 to consider and, if thought fit, approve, with or without
modification, the proposed Scheme of Amalgamation is dispensed with.
There is no secured creditor of the applicant/transferor company no. 2,
as on 27th July, 2015.
14. The applicants also seeks dispensation of requirement of the
transferee company to approach this Court for sanction of Scheme of
Amalgamation under Sections 391-394 of the Companies Act, 1956 on
the ground that the Scheme does not entail or involve any arrangement
between the transferee company and its shareholders since the
transferor company no. 1 is a wholly owned subsidiary of the transferee
company and transferor company no. 2 is a wholly owned subsidiary of
the transferor company no. 1; no new shares will be issued by the
transferee company in lieu of the shares of the transferor companies; and
there will be no change in the control and management of the transferee
company, therefore, the rights of the shareholders of the transferee
company will not be affected in any manner whatsoever by the Scheme.
It is further submitted that the assets of all the companies are more than
sufficient to meet their respective and combined aggregate liabilities
towards their respective creditors, therefore, the rights of the creditors of
the transferee company will not be adversely affected. Learned counsel
has also placed on record the pre and post amalgamation net worth of
the transferee company showing that the net worth of the transferee
company, post amalgamation, will be increased from Rs.518.03 crores to
Rs.596.05 crores.
15. In support of his submissions, learned counsel placed reliance on
the judgment of this Court in CA(M) 29/2015 titled as Satyam Cineplexes
Limited with Inox Leisure Limited wherein this court under similar
circumstances, and relying on the judgments of several High Courts
including this Court in many cases such as eMeter India Pvt. Ltd.;
(CA(M) 179/2012) Auto Tools India Pvt. Ltd. [CA(M) 41/2010], Sharat
Hardware Industries Pvt. Ltd. (1978), 48 Com.Cas 23 (Delhi),
Mahaamba Investments Ltd. V. IDI Limited (2001) 105 Com Cas. 16
(Bom.), Andhra Bank Housing Finance Ltd. (2004) 118 Com.Cas.
295(AP) and Prosell Field Marketing Pvt. Ltd. [CA(M) 63/2012], had
dispensed with the requirement of the transferee company to approach
the High Court of Gujarat under Section 391(2) of the Companies Act,
1956 for sanction of the Scheme of Amalgamation.
16. I have considered the aforesaid case law cited at the Bar, wherein
the transferee company, being the holding company, has been granted
exemption from taking out separate proceedings under Section 391(2) of
the Companies Act, 1956. In view of the settled legal position and
considering the Scheme of Amalgamation, the requirement of the
transferee company having to approach this Court under Section 391(2)
of the Companies Act, 1956 for sanction of the Scheme of Amalgamation
is dispensed with.
17. The application stands allowed in the aforesaid terms.
Dasti
SUDERSHAN KUMAR MISRA, J.
August 28, 2015
