Efficient Frontier Technology ... vs ...
2015 Latest Caselaw 3757 Del

                   IN THE HIGH COURT OF DELHI
                  COMPANY PETITION NO. 193/2014

                                              Reserved on 6th April, 2015
                                   Date of pronouncement: 8th May, 2015
In the matter of
The Companies Act, 1956 & the Companies Act, 2013 (to the extent
applicable):

And

Petition under Sections 391(2) & 394 of the
Companies Act, 1956

Scheme of Amalgamation of:

Efficient Frontier Technology India Private Limited
                                       Non-Petitioner/Transferor Company
       WITH

Adobe Systems India Private Limited
                                           Petitioner/Transferee Company

                                  Through     Mr.    Saurabh    Leekha,
                                  Advocate for the petitioners
                                  Ms.    Aparna     Mudiam,    Assistant
                                  Registrar of Companies for the
                                  Regional Director

SUDERSHAN KUMAR MISRA, J.

1. This petition has been filed under sections 391(2) & 394 of the

Companies Act, 1956 by the petitioner/transferee company seeking

sanction of the Scheme of Amalgamation of Efficient Frontier Technology

India Private Limited (hereinafter referred to as the transferor company)

with Adobe Systems India Private Limited (hereinafter referred to as the

petitioner/transferee company).

2. The registered office of the petitioner/transferee company is

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

registered office of the transferor company is situated at Chennai, outside

the jurisdiction of this Court. Learned counsel for the petitioner submitted

that separate proceedings on behalf of the transferor company have

been filed in the High Court of Judicature at Madras for sanction of the

Scheme of Amalgamation.

3. The petitioner/transferee company was incorporated under the

Companies Act, 1956 on 30th July, 1997 with the Registrar of Companies,

NCT of Delhi & Haryana at New Delhi.

4. The present authorized share capital of the petitioner/transferor

company is Rs.1,25,00,00,000/- divided into 12,50,00,000 equity shares

of Rs.10/- each. The issued, subscribed and paid-up share capital of the

company is Rs.1,14,90,78,000/- divided into 11,49,07,800 equity shares

of Rs.10/- each.

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

transferor company and petitioner/transferee company have been filed on

record with the joint application, being CA(M) 32/2014, earlier filed by the

petitioner. The audited balance sheets, as on 31st March, 2013, of the

transferor company and petitioner/transferee company, along with the

report of the auditors, had also been filed.

6. 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 petitioner that the transferor and transferee companies are carrying

on the same business i.e. software development. It is claimed that the

proposed amalgamation enables combining and pooling of software

development, financial and other resources of the two companies

together for deriving optimum benefits. It is further claimed that the

amalgamation will result in increased financial strength and flexibility and

enhance the ability of the amalgamated entity to expand its activities,

thereby contributing to enhancement of future business potential.

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

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

petitioner/transferee company shall issue and allot equity shares to the

shareholders of the transferor company in the following ratio:

"21 equity shares of Rs.10/- each of the transferee company, credited as fully paid up, for every 01 equity share of Rs.10/- each held by the shareholders in the transferor company."

8. It has been submitted by the petitioner that no proceedings under

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

petitioner/transferee company.

9. The Board of Directors of the petitioner/transferee company, by

Circulation on 20th January, 2014, have unanimously approved the

proposed Scheme of Amalgamation. A copy of the Resolution passed by

the Board of Directors of the petitioner/transferee company had been

placed on record.

10. The petitioner/transferee company had earlier filed CA (M) No.

32/2014 seeking directions of this court to dispense with the requirement

of convening the meetings of its equity shareholders, secured and

unsecured creditors, which are statutorily required for sanction of the

Scheme of Amalgamation. Vide order dated 21st February, 2014, this

court allowed the application and dispensed with the requirement of

convening and holding the meeting of the equity shareholders of the

petitioner/transferee company, there being no secured or unsecured

creditors of the petitioner company, to consider and, if thought fit,

approve, with or without modification, the proposed Scheme of

Amalgamation.

11. The petitioner/transferee company has thereafter filed the present

petition seeking sanction of the Scheme of Amalgamation. Vide order

dated 21st March, 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. Thereafter, vide order dated 11th

September, 2014, in view of the fact that the transferor company had filed

the petition before the High Court of Judicature at Madras since its

registered office is in Chennai, it was held that no notice was required to

be issued to the Official Liquidator and no response is required from him.

Affidavit of service has been filed by the petitioner showing compliance

regarding service on the Regional Director, Northern Region, and also

regarding publication of citations in the aforesaid newspapers on 3rd July,

2014. Copies of the newspaper clippings containing the publications have

been filed along with the said affidavit.

12. 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 July, 2014. Relying on Clause 7.1 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.

13. Although no objection has been raised by the Regional Director,

but in Para 4 of his report, he has submitted that on perusal of the

shareholding pattern of both the companies, it has been observed that all

the shares are held by foreign companies. He, therefore, prayed that the

petitioner company may be asked to give an undertaking for all

compliances from Reserve Bank of India as required under FEMA for

above transactions involving foreign banks/entities. Further, in para 5 of

the report, he has pointed out that the petitioner has not filed the requisite

e-form 32 (DIR 12) regarding regularization of their Additional Director,

namely Sh. Raman Nagpal. In reply to the aforesaid, the petitioner has

undertaken to comply with the statutory provisions under the FEMA and

the RBI Act, and the rules and regulations framed thereunder. The same

is accepted and the petitioner shall remain bound by the same. The

Assistant Registrar of Companies has submitted that the petitioner has

also filed the relevant e-form 32 (DIR 12) with regard to the Director, Sh.

Raman Nagpal for regularization of his directorship. In view of the

aforesaid, the observations raised by the Regional Director, Northern

Region stand satisfied.

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

from any other party. The petitioner companies, in the affidavits dated 9th

September, 2014 of Mr. Naresh Chand Gupta, authorized signatory of

the petitioner/transferee company, have submitted that neither the

petitioner companies nor their counsel have received any objection

pursuant to the citations published in the newspapers on 3rd July, 2014.

15. 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 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, subject to

sanction of the Scheme of Amalgamation in respect of the transferor

company from the court of competent jurisdiction, sanction is hereby

granted to the Scheme of Amalgamation under Sections 391 and 394 of

the Companies Act, 1956. The petitioner company 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. The sanction

will be effective from the appointed date of amalgamation, that is 1st April,

2013.

16. The petition is allowed in the above terms.

Dasti.

SUDERSHAN KUMAR MISRA, J.

May 08, 2015