Bharat Foils Limited vs ...
2015 Latest Caselaw 2581 Del

                       IN THE HIGH COURT OF DELHI
              COMPANY APPLICATION (MAIN) NO. 17/2015

                                       Reserved on 25th February, 2015
                              Date of pronouncement: 26th March, 2015
In the matter of
The Companies Act, 1956 & the Companies Act, 2013 (to the extent
applicable):

And

Application under Sections 391 to 394 read
with Sections 100 to 104 of the Companies
Act, 1956

Scheme of Arrangement between:

Bharat Foils Limited
                                           Applicant/Demerged Company
       AND

Bansal Engineers (Grain Milling) Private Limited
                                            Applicant/Resulting Company

                                Through Mr. Chander Shekhar Mishra,
                                Advocate for the applicants

SUDERSHAN KUMAR MISRA, J.

1. This joint application has been filed under Sections 391 to 394

read with Sections 100 to 104 of the Companies Act, 1956 by the

applicant companies seeking directions of this court to dispense with the

requirement of convening the meetings of their equity shareholders,

secured and unsecured creditors to consider and approve, with or

without modification, the proposed Scheme of Arrangement between

Bharat Foils Limited (hereinafter referred to as the Demerged Company)

and Bansal Engineers (Grain Milling) Private Limited (hereinafter referred

to as the Resulting Company).

2. The registered offices of the Demerged and Resulting companies

are situated at New Delhi, within the jurisdiction of this Court.

3. The Demerged Company was originally incorporated under the

Companies Act, 1956 on 10th August, 1981 with the Registrar of

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

style of Bharat Foils Private Limited. The company was converted into

public limited company and obtained a certificate in this regard on 27th

August, 2003.

4. The Resulting Company was incorporated under the Companies

Act, 1956 on 10th October, 2013 with the Registrar of Companies, NCT of

Delhi & Haryana at New Delhi.

5. The present authorized share capital of the Demerged Company is

Rs.5,00,00,000/- divided into 50,00,000 equity shares of Rs.10/- each.

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

company is Rs.2,29,18,300/- divided into 22,91,830 equity shares of

Rs.10/- each.

6. The present authorized share capital of the Resulting Company is

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

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

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

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

Demerged and Resulting companies have been filed on record. The

audited balance sheets, as on 31st March, 2014, of the Demerged and

Resulting companies have also been filed.

8. A copy of the Scheme of Arrangement has been placed on record

and the salient features of the Scheme have been incorporated and

detailed in the application and the accompanying affidavit. It is submitted

by the applicants that the main objects of the Scheme is: (1) demerger of

the 'Manufacturing Unit' of the demerged company situated at Kundli,

Haryana into the resulting company; and (2) reduction of share capital of

the demerged company. It is claimed that the proposed demerger will

enable the demerged company in increasing the operational efficiency of

its unit situated at Karnal Road through optimum use of resources in a

focused manner, thus leading to an increase in its overall productivity. It

is further claimed that the proposed demerger will equip the resulting

company with a specialized business comprising of assets enabling it to

actualize the growth plan conceived by it for increasing profitability of the

unit.

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

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

Company shall issue and allot equity shares to the shareholders of the

Demerged Company in the following ratio:-

"01 equity share of Rs.10/- each of the Resulting Company, credited as fully paid up, for every 04 fully paid up equity shares of Rs.10/- each held in the Demerged Company."

It is further provided that to give effect to the demerger in its books

of accounts, the demerged company will cancel its existing issued and

paid up share capital shall, without any further act or deed, issue and allot

03 equity shares of Rs.10/- each credited as fully paid-up, to its

shareholders for every 04 equity shares of Rs.10/- each held in the

demerged company as on the record date mentioned in the Scheme.

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

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

applicant companies.

11. The Board of Directors of the Demerged and Resulting companies

in their separate meetings held on 2nd August, 2014 have unanimously

approved the proposed Scheme of Arrangement. Copies of the

Resolutions passed at the meetings of the Board of Directors of the

Demerged and Resulting companies have been placed on record.

12. The Demerged Company has 07 equity shareholders and 01

secured creditor. All the equity shareholders and the only secured

creditor have given their consents/no objections in writing to the

proposed Scheme of Arrangement. Their consents/no objections have

been placed on record. They have been examined and found in order. In

view thereof, the requirement of convening the meetings of the equity

shareholders and the secured creditor of the Demerged Company to

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

proposed Scheme of Arrangement is dispensed with.

13. The Resulting Company has 06 equity shareholders. All the equity

shareholders have given their consents/no objections in writing to the

proposed Scheme of Arrangement. Their consents/no objections have

been placed on record. They have been examined and found in order. In

view thereof, the requirement of convening the meeting of the equity

shareholders of the Resulting Company to consider and, if thought fit,

approve, with or without modification, the proposed Scheme of

Arrangement is dispensed with. There is no secured or unsecured

creditor of the Resulting Company, as on 31st July, 2014.

14. The demerged company has 168 unsecured creditors, out of which

the applicants have placed on record the consents of only 25 unsecured

creditors. On examination of the said consents, it is noticed that the

consents given by the corporate creditors are not supported by any board

resolution authorizing the persons, who have given the said consents.

Therefore, the consents of only 17 unsecured creditors holding 67.5% of

the total unsecured debt are found to be in order. I do not find the

consents sufficient to justify dispensation of the meeting of the unsecured

creditors. Under the circumstances, the applicant/demerged company is

directed to convene and hold the meeting of its unsecured creditors to

seek their approval to the proposed Scheme of Arrangement. The

meeting of the unsecured creditors of the demerged company shall be

held on 7th May, 2015 at 11:30 am at the registered office of the company

at 8-A, Rajasthani Udyog Nagar, G.T. Karnal Road, New Delhi - 110033.

Mr. Rahul Pandey, Advocate, (Mobile No. 8010368164) is appointed as

the Chairperson and Ms. Alka Srivastava, Advocate, (Mobile No.

9811950380) is appointed as the Alternate Chairperson to conduct the

said meeting. The Quorum of the meeting of the unsecured creditors of

the demerged company shall be 20 in number and more than 15% in

value of the total unsecured debt.

15. In case the quorum as noted above for the above meeting is not

present at the meeting, then the meeting shall be adjourned by half an

hour, and thereafter the persons present and voting shall be deemed to

constitute the quorum. For the purpose of computing the quorum the

valid proxies shall also be considered, if the proxy in the prescribed form

duly signed by the person entitled to attend and vote at the meeting is

filed with the registered office of the demerged company at least 48 hours

before the meeting. The Chairperson and Alternate Chairperson shall

ensure that the proxy register is properly maintained.

16. The Chairperson and Alternate Chairperson shall ensure that

notices for convening the aforesaid meeting of the unsecured creditors of

the demerged company, along with copies of the Scheme of

Arrangement and the statement under Section 393 of the Companies

Act, 1956, shall be sent to the unsecured creditors of the demerged

company by speed post at their registered or last known addresses at

least 21 days before the date appointed for the meeting, in their presence

or in the presence of their authorized representatives. Notice of the

meeting shall also be published in the Delhi editions of the newspapers

"Statesman" (English) and "Veer Arjun" (Hindi) in terms of the Companies

(Court) Rules, 1959 at least 21 days before the date appointed for the

meeting.

17. The Chairperson and Alternate Chairperson will be at liberty to

issue suitable directions to the management of the demerged company

so that the aforesaid meeting of the unsecured creditors of the demerged

company is conducted in a just, free and fair manner.

18. The fee of the Chairperson and the Alternate Chairperson for the

aforesaid meeting shall be Rs.50,000/- each in addition to meeting their

incidental expenses. The Chairperson will file his report within two weeks

from the date of holding of the aforesaid meeting.

19. The application stands allowed in the aforesaid terms.

Dasti

SUDERSHAN KUMAR MISRA, J.

March 26, 2015