Shree Vijay Dyeing & Printing ... vs ...
2015 Latest Caselaw 9594 Del

                   IN THE HIGH COURT OF DELHI
                  COMPANY PETITION NO. 394/2015

                                     Reserved on 15th 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(1) to 394 read
with Section 100 of the Companies Act, 1956

Scheme of Amalgamation of:

Shree Vijay Dyeing & Printing Mills Private Limited
                                           Petitioner/Transferor Company
     WITH
Nath Laminations Private Limited
                                          Petitioner/Transferee Company

                               Through Mr. Ashish Middha, 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 Sections 391(1) to 394 read

with Section 100 of the Companies Act, 1956 by the petitioner companies

seeking sanction of the Scheme of Amalgamation of Shree Vijay Dyeing

& Printing Mills Private Limited (hereinafter referred to as the transferor

company) with Nath Laminations 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 1st November, 1991 with the Registrar of Companies, NCT

of Delhi & Haryana at New Delhi.

4. The transferee company was incorporated under the Companies

Act, 1956 on 27th August, 1997 with the Registrar of Companies, NCT of

Delhi & Haryana at New Delhi.

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

Rs.3,00,00,000/- divided into 30,00,000 equity shares of Rs.10/- each.

The issued and subscribed capital of the company is Rs.97,00,000/-

divided into 9,70,000 equity shares of Rs.10/- each. The paid-up capital

of the company is Rs.92,09,050/- divided into 9,15,450 equity shares of

Rs.10/- each aggregating to Rs.91,54,500/- and 54,550 equity shares

subscribed but not fully paid up of Rs.10/- each Rs.1/- paid-up.

6. The authorized share capital of the transferee company is

Rs.3,00,00,000/- divided into 30,00,000 equity shares of Rs.10/- each.

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

Rs.2,75,78,400/- divided into 27,57,840 equity shares of Rs.10/- 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) 81/2015, 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, 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 petitioners that the proposed scheme will result in formation of a

larger company enabling further growth and development of the business

of the said company thus enabling the said company to obtain greater

facilities possessed and enjoyed by one large company compared to a

small company for raising capital, securing and conducting trade and

business on favourable terms and other related benefits. It is claimed that

the proposed amalgamation will result in reduction in overheads and

other expenses, reduction in administrative and procedural work,

eliminate duplication of work, better and more productive utilization of

various resources and will enable the undertakings concerned to effect

internal economies and optimize productivity.

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:-

"05 equity shares of Rs.10/- each of the transferee company, for every 01 equity share of Rs.10/- each held in the transferor company."

10. It has been submitted by the petitioners that no 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 28th 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. 81/2015

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 and creditors of the

transferor and transferee companies, 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 2nd

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) editions. The petitioners have filed an affidavit showing

compliance regarding publication of citations in the aforesaid newspapers

on 23rd September, 2015. 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 companies. Based on the information

received, the Official Liquidator has filed a report dated 11th December,

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 11th December, 2015. Relying on Clause

10 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

14.11 of the Scheme, it has been stated that amalgamation shall be an

'amalgamation in the nature of merger' as defined in Accounting

Standard-14 as prescribed under Companies (Accounting Standards)

Rules, 2006 and shall be accounted for under the 'pooling of interest'

method in accordance with the said accounting standard. He further

submitted that in Clause 23.1 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 10th

December, 2015 of Mr. Ashish Midha, counsel for the petitioner

companies, have submitted that they have not received any objection

pursuant to the citations published in the newspapers on 23rd September,

2015.

17. 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.

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

least Rs.50,000/- 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 petitioners states that

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

15.12.2015, petitioners shall deposit a sum of Rs.50,000/-, 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