Hitachi Metglas (India) Private ... vs ...
2015 Latest Caselaw 2452 Del

                    IN THE HIGH COURT OF DELHI
                  COMPANY PETITION NO. 784/2014

                                       Reserved on 26th February, 2015
                              Date of pronouncement: 23rd March, 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:

Hitachi Metglas (India) Private Limited
                                          Petitioner/Transferor Company
      WITH

Hitachi Metals (India) Private Limited
                                          Petitioner/Transferee Company

                                Through Mr. Satwinder Singh and
                                Mr.N.P.S. Chawla, Advocates for the
                                petitioners
                                Ms.     Aparna     Mudiam, Assistant
                                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 Hitachi Metglas (India) Private Limited

(hereinafter referred to as the transferor company) with Hitachi Metals

(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 originally incorporated under the

Companies Act, 1956 on 6th June, 2003 with the Registrar of Companies,

NCT of Delhi & Haryana at New Delhi under the name and style of

FineMetglas Solutions India Private Limited. The company changed its

name to Hitachi Metglas (India) Private Limited and obtained the fresh

certificate of incorporation on 5th January, 2004.

4. The transferee company was incorporated under the Companies

Act, 1956 on 30th January, 2006 with the Registrar of Companies, NCT of

Delhi & Haryana at New Delhi.

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

Rs.12,15,00,000/- divided into 1,21,50,000 equity shares of Rs.10/- each.

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

Rs.12,00,00,000/- divided into 1,20,00,000 equity shares of Rs.10/- each.

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

Rs.90,00,000/- divided into 9,00,000 equity shares of Rs.10/- each. The

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

Rs.90,00,000/- divided into 9,00,000 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) 161/2014, 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 that

the proposed amalgamation will simplify management structure, leading

to better administration and reduction in costs resulting from more

focused operational efforts, standardization and simplification of business

process and the elimination of duplication and rationalization of

administrative expenses. It is further claimed that the proposed

amalgamation would provide synergistic linkages besides economies in

costs and other benefits resulting from the economies of scale, by

combining the businesses and operations of the transferor company and

the transferee company.

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:

"01 equity share of Rs.10/- each fully paid up of the transferee company for every 19 equity shares of Rs.10/- each fully paid up held by the shareholders 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

transferor and transferee companies.

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

in their separate meetings held on 26th September, 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. 161/2014

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 1st December, 2014, 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 and transferee companies, there

being no secured creditors of the petitioner 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 16th

December, 2014, 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. Affidavit of service has been filed by the petitioner

showing compliance regarding service on the Official Liquidator and the

Regional Director, Northern Region and also regarding publication of

citations in the aforesaid newspapers on 13th January, 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 20th February,

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 24th February, 2015. Relying on Clause

13.1 of Part-II 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 16 of Part-III of the Scheme, it has been stated that accounting

treatment as given in Clause 16 is in compliance with the 'Pooling of

Interest Method' as prescribed under Accounting Standard-14 i.e.

'Accounting for Amalgamation' governed by the Companies (Accounting

Standards) Rules, 2006. He further submitted that in Clause 19 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.

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

from any other party. The petitioner companies, in the affidavit dated 24th

February, 2015 of Mr. Gaurav Varma, Counsel 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 13th January, 2015.

17. Considering the approval accorded by the equity shareholders and

unsecured 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. The petition is allowed in the above terms.

Dasti.

SUDERSHAN KUMAR MISRA, J.

March 23, 2015