Avl India Softwares Private ... vs ...
2015 Latest Caselaw 9564 Del

                    IN THE HIGH COURT OF DELHI
                   COMPANY PETITION NO. 251/2015

                                     Reserved on 16th December, 2015
                          Date of pronouncement: 23d December, 2015
In the matter of
The Companies Act, 1956 & the Companies Act, 2013 (to the extent
applicable):

And

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

Scheme of Amalgamation of:

AVL India Softwares Private Limited
                                             Petitioner/Transferor Company
      WITH

AVL India Private Limited
                                            Petitioner/Transferee Company

                                 Through Mr. Kunal Juneja, Advocate
                                 for the petitioners
                                 Mr. Sanjay Bose, Dy. 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 Section 391 to 394 of the

Companies Act, 1956 by the petitioner companies seeking sanction of

the Scheme of Amalgamation of AVL India Softwares Private Limited

(hereinafter referred to as the transferor company) with AVL India 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 was incorporated under the Companies

Act, 1956 on 10th July, 1990 with the Registrar of Companies, NCT of

Delhi & Haryana at New Delhi.

4. The transferee company was incorporated under the Companies

Act, 1956 on 28th April, 1984 with the Registrar of Companies, NCT of

Delhi & Haryana at New Delhi.

5. The present authorized share capital of the transferor company is

Rs.25,00,000/- divided into 25,000 equity shares of Rs.100/- each. The

issued, subscribed and paid-up share capital of the company is

Rs.1,00,000/- divided into 1,000 equity shares of Rs.100/- each.

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

Rs.1,50,00,000/- divided into 1,50,000 equity shares of Rs.100/- each.

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

Rs.1,30,00,000/- divided into 1,30,000 equity shares of Rs.100/- each.

7. 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) 169/2014, 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.

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 claimed by

the petitioners that the proposed amalgamation would result in synergy

and cost efficiencies and would prevent duplication of efforts in running

the business. Further, it shall provide significant impetus to the growth of

the transferor undertaking with focused operations, judicious utilization of

resources and operational efficiencies. It is further claimed that the

amalgamation will provide a larger asset base to the transferee company

and thereby enable it to raise resources for future growth and expansion

of the business and should also result in economies of scale and

optimum utilization of available resources.

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 issue and allot equity shares to the shareholders of the

transferor company in the following ratio:-

"14 equity shares of Rs.100/- each of the transferee company for every 01 (one) equity share of Rs.100/- each in the transferor company."

10. It has been submitted by the petitioners that no investigation

proceedings under Sections 235 to 251 of the Companies Act, 1956 are

pending against the petitioner companies.

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

in their separate meetings held on 25th July, 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.

12. The petitioner companies had earlier filed CA (M) No. 169/2014

seeking directions of this court to dispense with the requirement of

convening the meetings of the equity shareholders, secured and

unsecured creditors of the transferor company and equity shareholders

and secured creditors of the transferee company and for convening a

meeting the unsecured creditors of the transferee company, which are

statutorily required for sanction of the Scheme of Amalgamation. Vide

order dated 20th February, 2015, 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

company and equity shareholders of the transferee company, there being

no secured creditor of the petitioner companies, and directed convening

a meeting of the unsecured creditors of the transferee company, to

consider and, if thought fit, approve, with or without modification, the

proposed Scheme of Amalgamation.

13. The Chairperson of the ordered meeting of the unsecured creditors

of the transferee company have filed his report stating that the meeting

was duly held on 4th April, 2015, as directed, and that the Scheme of

Amalgamation has been approved unanimously by the unsecured

creditors of the transferee company, present and voting, in the meeting.

14. The petitioner companies have thereafter filed the present petition

seeking sanction of the Scheme of Amalgamation. Vide order dated 21st

July, 2015, 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 'Financial Express' (English) and

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

petitioners showing compliance regarding service on the Regional

Director, Northern Region and the Official Liquidator and also regarding

publication of citations in the aforesaid newspapers on 18th Auugst, 2015.

Copies of the newspaper clippings containing the publications have been

filed along with the said affidavit.

15. 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 5th November,

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 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.

16. 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 10th December, 2015. Relying on Clause

6(h) of Part-III 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 15 of Part-III of the Scheme, it has been stated that the transferee

company shall follow pooling of interest method for accounting as per

Accounting Standard-14 on 'Accounting for Amalgamation' prescribed

under Companies (Accounting Standards) Rules, 2006. He further

submitted that in Clause 18(d) of Part-IV of the Scheme, it has been

stated that upon this scheme becoming effective, the transferor company

shall stand dissolved without the process of winding up.

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

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

December, 2015 of Mr. Ashwani Mittal, 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 18th August, 2015.

18. 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 having not raised 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 of Amalgamation, i.e. 1st April, 2014, the transferor

company shall stand dissolved without undergoing the process of winding

up.

19. Learned counsel for the Official Liquidator prays that costs of at

least Rs.1,00,000/- should be paid by the petitioners keeping in view the

fact that the matter has involved examination of extensive records and

also prioritized hearings. Learned counsel for the petitioner companies

states that the same is acceptable to him. As already directed vide order

dated 16.12.2015, the petitioners shall deposit a sum of Rs.1,00,000/- by

way of costs with the Common Pool Fund of the Official Liquidator.

20. The petition is allowed in the above terms.

Dasti.

SUDERSHAN KUMAR MISRA, J.

December 23, 2015