Lms India Engineering Solutions ... vs ...
2015 Latest Caselaw 9570 Del

                   IN THE HIGH COURT OF DELHI
                  COMPANY PETITION NO. 430/2015

                                     Reserved on 8th December, 2015
                         Date of pronouncement: 23rd December, 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:

LMS India Engineering Solutions Private Limited
                                    Non-Petitioner/Transferor Company
     WITH

Siemens Industry Software (India) Private Limited
                                          Petitioner/Transferee Company

                                Through Mr. Sharad Vaid, 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 petition has been filed under Sections 391 to 394 of the

Companies Act, 1956 by the petitioner/transferee company seeking

sanction of the Scheme of Amalgamation of LMS India Engineering

Solutions Private Limited (hereinafter referred to as the transferor

company) with Siemens Industry Software (India) Private Limited

(hereinafter referred to as the petitioner/transferee company).

2. The registered office of the petitioner/transferee company is

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

registered office of the transferor company is situated at Chennai, Tamil

Nadu, outside the jurisdiction of this Court. Learned counsel for the

petitioner submits that a separate petition has been filed by the transferor

company in the court of competent jurisdiction seeking sanction of the

Scheme of Amalgamation in respect of the transferor company.

3. The petitioner/transferee company was originally incorporated

under the Companies Act, 1956 on 8th June, 1998 with the Registrar of

Companies, NCT of Delhi & Haryana at New Delhi under the name and

style of SDRC India Private Limited. The company changed its name to

UGS India Private Limited and obtained the fresh certificate of

incorporation on 9th January, 2006. The company again changed its

name to Siemens Product Lifecycle Management Software (India) Private

Limited and obtained the fresh certificate of incorporation on 8th May,

2008. The company finally changed its name to Siemens Industry

Software (India) Private Limited and obtained the fresh certificate of

incorporation on 22nd December, 2010.

4. The present authorized share capital of the petitioner/transferee

company is Rs.12,50,00,000/- divided into 1,25,00,000 equity shares of

Rs.10/- each. The issued, subscribed and paid-up share capital of the

company is Rs.12,10,64,020/- divided into 1,21,06,402 equity shares of

Rs.10/- each.

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

transferor and transferee companies have been filed on record with the

application, being CA(M) 99/2015, earlier filed by the petitioner. The

audited balance sheets, as on 31st March, 2014, along with the reports of

the auditors, and the unaudited financial statements, as on 28th February,

2015, of the transferor and transferee companies, had also been filed.

6. 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 petitioner that the proposed amalgamation will result in rationalization

of Siemens group structure in India because the businesses of providing

test and mechatronic simulation software and product lifecycle

management software shall be combined in one legal entity, instead of

having two different entities. It is further claimed that the proposed

amalgamation will enable appropriate consolidation of the activities of the

petitioner companies with pooling and more efficient utilization of their

resources, greater economies of scale, reduction in overheads and other

expenses and improvement in various operating parameters.

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

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

petitioner/transferee company shall issue and allot equity shares to the

shareholders of the transferor company in the following ratio:

"63 equity shares of Rs.10/- each of the transferee company fully paid-up for every 10 fully paid-up equity shares of Rs.10/- each held in the transferor company."

8. It has been submitted by the petitioner that no proceedings under

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

transferor and transferee companies.

9. The Board of Directors of the transferor company and the

transferee company in their separate meetings held on 21st November,

2014 and 12th November, 2014 respectively 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.

10. The petitioner/transferee company had earlier filed CA (M) No.

99/2015 seeking directions of this court to dispense with the requirement

of convening the meetings of its equity shareholders, secured and

unsecured creditors, which are statutorily required for sanction of the

Scheme of Amalgamation. Vide order dated 29th May, 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 petitioner/transferee company, there being no secured

creditors of the petitioner company, to consider and, if thought fit,

approve, with or without modification, the proposed Scheme of

Amalgamation.

11. The petitioner/transferee company has thereafter filed the present

petition seeking sanction of the Scheme of Amalgamation. Vide order

dated 10th July, 2015, notice in the petition was directed to be issued to

the Regional Director, Northern Region. 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 also regarding publication of citations in the aforesaid newspapers

on 9th September, 2015. Copies of the newspaper clippings containing

the publications have been filed along with the said affidavit.

12. 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 4th December, 2015. Relying on Clause

1(viii) of Part-I 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 5.1.2 of Part-V of the Scheme, it has been stated that the

transferee company shall follow the method of Accounting as prescribed

for the pooling of interest method under Accounting Standard-14 as

notified under the Companies (Accounting Standard) Rules, 2006. He

has further submitted that in Clause 3.5 of Part-III 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.

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

from any other party. The petitioner company, in the affidavit dated 3rd

December, 2015 of Mr. Ashish Mishra, Company Secretary and the

Authorized Signatory of the petitioner/transferee company, has submitted

that neither the petitioner company nor their counsel have received any

objection pursuant to the citations published in the newspapers on 9th

September, 2015.

14. Considering the approval accorded by the shareholders and

creditors of the petitioner company to the proposed Scheme of

Amalgamation and the affidavit filed by 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, subject to

sanction of the Scheme in respect of the transferor company from the

court of competent jurisdiction, 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. This sanction will be

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

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

least Rs.50,000/- should be paid by the petitioner keeping in view the fact

that the matter has involved examination of extensive records and also

prioritized hearings. Learned counsel for the petitioner states that the

same is acceptable to him. As already directed vide order dated

08.12.2015, petitioner shall deposit a sum of Rs.50,000/-, by way of

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

16. The petition is allowed in the above terms.

Dasti.

SUDERSHAN KUMAR MISRA, J.

December 23, 2015