Delhi High Court
American Express Foreign ... vs ... on 5 May, 2015
IN THE HIGH COURT OF DELHI
COMPANY PETITION NO. 780/2014
Reserved on 26th March, 2015
Date of pronouncement: 5th May, 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:
American Express Foreign Exchange Services India Limited
Petitioner/Transferor Company
WITH
American Express Services India Limited
Petitioner/Transferee Company
Through A. Das, Advocate 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 American Express Foreign Exchange
Services India Limited (hereinafter referred to as the transferor company)
with American Express Services India 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 5th September, 1984 with the Registrar of
Companies, Tamil Nadu under the name and style of T. T. Travels
Private Limited. Thereafter, the word 'Private' was deleted from the name
of the company w.e.f. 1st July, 1995. The company changed its name to
T. T. Forex Limited and obtained the fresh certificate of incorporation on
30th June, 2000. The company again changed its name to American
Express Foreign Exchange Services India Limited and obtained the fresh
certificate of incorporation on 19th May, 2003. Thereafter, the company
shifted its registered office from the State of Tamil Nadu to Delhi and
obtained a certificate in this regard from the Registrar of Companies,
NCT of Delhi & Haryana at New Delhi on 25th November, 2010.
4. The transferee company was originally incorporated under the
Companies Act, 1956 on 31st August, 1999 with the Registrar of
Companies, NCT of Delhi & Haryana at New Delhi under the name and
style of Tata Finance American Express Private Limited. The company
changed its name to Tata Finance Amex Private Limited and obtained
the fresh certificate of incorporation on 12th November, 1999. Thereafter,
the word 'Private' was deleted from the name of the company and the
company became a deemed public company under Section 43A of the
Companies Act, 1956. The name of the company was changed to Tata
Finance Amex Limited and the fresh certificate of incorporation was
issued on 26th December, 2001. The company finally changed its name
to American Express Services India Limited and obtained the fresh
certificate of incorporation on 6th January, 2003.
5. The present authorized share capital of the transferor company is
Rs.14,20,00,000/- divided into 1,42,00,000 equity shares of Rs.10/- each.
The issued, subscribed and paid-up share capital of the company is
Rs.13,42,78,600/- divided into 1,34,27,860 equity shares of Rs.10/- each.
6. The present authorized share capital of the transferee company is
Rs.55,00,00,000/- divided into 5,50,00,000 equity shares of Rs.10/- each.
The issued, subscribed and paid-up share capital of the company is
Rs.54,05,01,810/- divided into 5,40,50,181 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. 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 that
the Scheme will result in faster and effective decision making, better
administration and cost reduction, including reduction in administrative
and other common costs. It is further claimed that the Scheme will also
result in optimal utilization of resources by reallocation towards more
productive assets and greater economies of scale.
9. So far as the share exchange ratio is concerned, the Scheme
provides that no consideration shall be payable by the transferee
company for the shares of the transferor company since the transferee
company (itself, through its nominee or jointly with others) is the
shareholder of the transferor company, and accordingly no shares shall
be allotted by the transferee company either to itself or to the joint
holders of shares or to any of its nominee shareholders holding shares in
the transferor company.
10. It has been submitted by the petitioners that no proceedings under
Sections 235 and 250A 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 7th May, 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. 123/2014
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 22nd September, 2014 which
was modified by order dated 28th November, 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 'Indian Express' (English) and
'Jansatta' (Hindi) editions. Affidavit of service dated 24th February, 2015
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
20th February, 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 4th March, 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 3rd March, 2015. Relying on Clause
3.1.2(vii) 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 3.8.2 of Part-III of the Scheme, it has been stated that the
transferee company shall follow the method of accounting treatment as
prescribed for the 'pooling of interest method' under Accounting
Standard-14 governed by the Companies (Accounting Standards) Rules,
2006. He further submitted that in Clause 3.3 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. Although the Regional Director in his report has not raised any
objection to the proposed Scheme, but in para 7 of his report, he has
pointed out that the petitioner companies in their reply have submitted
that the transferee company is registered as a Tele Marketer with
Telecom Regulatory Authority of India (TRAI) and has to comply with
norms specified by them along with the governance principles laid down
by the corporation. He, therefore, prays that the transferee company may
be directed to give an undertaking that "it has complied with norms
specified by them along with the governance principles laid down by the
corporation (especially around Data integrity & Respect for privacy). In
reply, the petitioner companies have filed an affidavit dated 16th March,
2015 of Mr. Manish Motani, authorized signatory of the petitioner
companies, undertaking to comply with the norms specified by the
Telecom Regulatory Authority of India in terms of the Telecom
Commercial Communications Customer Preference Regulations, 2010
and other applicable regulations, rules or guidelines, as also the
governance principles laid by the TRAI. The aforesaid undertaking is
accepted and the petitioner shall remain bound by the same. In view of
the above, the observation made by the Regional Director stands
satisfied.
17. 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. Vivek Sehgal, 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. Learned counsel for the petitioner
companies also reiterates in Court that no objection has been received
pursuant to the publication in the newspaper.
18. 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 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.
19. Learned counsel for the Official Liquidator prays that costs may
also be imposed keeping in view the fact that the matter has involved
examination of a number of records from the office of the Regional
Director and the office of the Registrar of Companies and for filing the
reports. He submits that at least costs of Rs.1,00,000/- each be imposed.
Learned counsel for the petitioners states that the same is acceptable to
him. Looking to the circumstances, the petitioners shall deposit a sum of
Rs.1.0 lakh each by way of costs in the Common Pool Fund of the
Official Liquidator, within one week from today.
20. The petition is allowed in the above terms.
Dasti.
SUDERSHAN KUMAR MISRA, J.
May 05, 2015
