Spring Tex Private Limited vs ...
2015 Latest Caselaw 9587 Del

                   IN THE HIGH COURT OF DELHI
                  COMPANY PETITION NO. 408/2015
                                     Reserved on 9th 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 Section 391 to 394 of the
Companies Act, 1956

Scheme of Amalgamation of:

Spring Tex Private Limited
                                           Petitioner/Transferor Company
      WITH

Navair International Private Limited
                                          Petitioner/Transferee Company

                                Through Mr. Saurabh Kalia with
                                Mr.Gursat Singh, Advocates 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 Sections 391 to 394 of the

Companies Act, 1956 by the petitioner companies seeking sanction of

the Scheme of Amalgamation of Spring Tex Private Limited (hereinafter

referred to as the transferor company) with Navair International 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 2nd September, 2005 with the Registrar of Companies, NCT

of Delhi & Haryana at New Delhi.

4. The transferee company was originally incorporated under the

Companies Act, 1956 on 23rd April, 1982 with the Registrar of

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

style of Navair Private Limited. Thereafter, the word 'Private' was deleted

from the name of the company. The company changed its name to

Navair International Limited and obtained the fresh certificate of

incorporation on 28th May, 1992. Learned counsel for the petitioners

submitted that thereafter the company became a private limited company

and the word 'Private' was added in the name of the company.

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

Rs.2,00,00,000/- divided into 20,00,000 equity shares of Rs.10/- each.

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

Rs.1,20,25,000/- divided into 12,02,500 equity shares of Rs.10/- each.

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

Rs.3,00,00,000/- divided into 29,00,000 equity shares of Rs.10/- each

aggregating to Rs.2,90,00,000/- and 10,000 non cumulative preference

shares of Rs.100/- each aggregating to Rs.10,00,000/-. The issued,

subscribed and paid-up share capital of the company is Rs.2,45,04,000/-

divided into 24,50,400 equity shares of Rs.10/- each.

7. Copies of Memorandum and Articles of Association of the

transferor and transferee companies have been filed on record with the

joint application, being CA(M) 76/2015, 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, 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 petition and the accompanying affidavit. It is claimed by

the petitioners that the proposed amalgamation will enable both the

companies to consolidate their business operations and provide

significant impetus to their growth since both companies are engaged in

same line of business and under the same management. It is further

claimed that the proposed amalgamation will result in reduction in

overheads, administrative, managerial and other expenditure, and bring

about operational rationalization, efficiency and optimal utilization of

various resources.

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

provides that the transferor company is a wholly owned subsidiary of the

transferee company and the entire share capital of the transferor

company is held by the transferee company. Accordingly, pursuant to

amalgamation, no shares of the transferee company shall be allotted in

respect of its holding in the transferor company and all the shares held by

the transferee company in the transferor company shall stand cancelled

upon this Scheme becoming effective.

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

Sections 235 to 251 of the Companies Act, 1956 and under Sections 206

to 229 of the Companies Act, 2013 are pending against the petitioner

companies.

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

in their separate meetings held on 5th February, 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 petitioner companies had earlier filed CA (M) No. 76/2015

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 25th May, 2015, this court

allowed the application and dispensed with the requirement of convening

and holding the meetings of the equity shareholders, secured and

unsecured creditors of the petitioner companies, there being no secured

creditor of the transferor company, to consider and, if thought fit,

approve, with or without modification, the proposed Scheme of

Amalgamation.

13. The petitioner companies have thereafter filed the present petition

seeking sanction of the Scheme of Amalgamation. Vide order dated 7th

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 'Business Standard' (English) and

(Hindi) Delhi 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 9th September, 2015. Copies of

the newspaper clippings containing the publications have been filed

along with the affidavit of service.

14. 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 18th 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.

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 26th November, 2015. Relying on Clause

9 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 6 of Part-II 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 14 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.

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

from any other party. The petitioner companies, in the affidavit dated 30th

November, 2015 of Sh. Asheet Taneja, 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 9th September, 2015.

17. Considering the approval accorded by the 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 of Amalgamation, i.e. 1st April, 2014, the transferor

company shall stand dissolved without undergoing the process of winding

up.

18. 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 09.12.2015, the petitioners shall deposit a sum of Rs.1,00,000/- by

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

19. The petition is allowed in the above terms.

Dasti.

SUDERSHAN KUMAR MISRA, J.

December 23, 2015