Focus Agri-Commodities India ... vs ...
2015 Latest Caselaw 4175 Del

                   IN THE HIGH COURT OF DELHI
                  COMPANY PETITION NO. 684/2014
                                          Reserved on 12th May, 2015
                               Date of pronouncement: 25th 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:

Focus Agri-Commodities India Private Limited
                                   Petitioner/Transferor Company No. 1

Sunder Agri-Commodities India Private Limited
                                   Petitioner/Transferor Company No. 2

Sunny Agri-Commodities India Private Limited
                                  Petitioner/Transferor Company No. 3

Grow More Agri-Commodities India Private Limited
                                 Petitioner/Transferor Company No. 4
     WITH

Prudent Agri-Commodities India Private Limited
                                         Petitioner/Transferee Company

                               Through Mr. Ishwar Mohanty, Proxy
                               Advocate for Ms. Beena Rani Pandey
                               and Mr. Rohit Aggarwal, Advocates for
                               the petitioners

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 Focus Agri-Commodities India Private

Limited (hereinafter referred to as the transferor company no. 1); Sunder

Agri-Commodities India Private Limited (hereinafter referred to as the

transferor company no. 2); Sunny Agri-Commodities India Private Limited

(hereinafter referred to as the transferor company no. 3); and Grow More

Agri-Commodities India Private Limited (hereinafter referred to as the

transferor company no. 4) with Prudent Agri-Commodities 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 no. 1 was incorporated under the

Companies Act, 1956 on 11th December, 2012 with the Registrar of

Companies, NCT of Delhi & Haryana at New Delhi.

4. The transferor company no. 2 was incorporated under the

Companies Act, 1956 on 14th December, 2012 with the Registrar of

Companies, NCT of Delhi & Haryana at New Delhi.

5. The transferor company no. 3 was incorporated under the

Companies Act, 1956 on 10th December, 2012 with the Registrar of

Companies, NCT of Delhi & Haryana at New Delhi.

6. The transferor company no. 4 was incorporated under the

Companies Act, 1956 on 10th December, 2012 with the Registrar of

Companies, NCT of Delhi & Haryana at New Delhi.

7. The transferee company was incorporated under the Companies

Act, 1956 on 12th December, 2012 with the Registrar of Companies, NCT

of Delhi & Haryana at New Delhi.

8. The present authorized share capital of the transferor company

no.1 is Rs.60,00,000/- divided into 6,00,000 equity shares of Rs.10/-

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

is Rs.53,01,000/- divided into 5,30,100 equity shares of Rs.10/- each.

9. The present authorized share capital of the transferor company

no.2 is Rs.60,00,000/- divided into 6,00,000 equity shares of Rs.10/-

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

is Rs.53,01,000/- divided into 5,30,100 equity shares of Rs.10/- each.

10. The present authorized share capital of the transferor company

no.3 is Rs.60,00,000/- divided into 6,00,000 equity shares of Rs.10/-

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

is Rs.53,01,000/- divided into 5,30,100 equity shares of Rs.10/- each.

11. The present authorized share capital of the transferor company

no.4 is Rs.60,00,000/- divided into 6,00,000 equity shares of Rs.10/-

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

is Rs.53,01,000/- divided into 5,30,100 equity shares of Rs.10/- each.

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

Rs.60,00,000/- divided into 6,00,000 equity shares of Rs.10/- each. The

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

Rs.53,01,000/- divided into 5,30,100 equity shares of Rs.10/- each.

13. 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) 145/2014, 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.

14. 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 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. It is further claimed that the

Scheme will enable the companies concerned to rationalize and

streamline their management, businesses and finances and lead to a

better and more economic control, over the running and management of

the businesses and undertakings of the said companies.

15. 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 companies in the following ratio:

"0.243 equity share of Rs.10/- each of the transferee company credited as fully paid up for every 1 equity share of Rs.10/- each held in the transferor company no. 1."

"0.639 equity share of Rs.10/- each of the transferee company credited as fully paid up for every 1 equity share of Rs.10/- each held in the transferor company no. 2."

"0.111 equity share of Rs.10/- each of the transferee company credited as fully paid up for every 1 equity share of Rs.10/- each held in the transferor company no. 3."

"0.103 equity share of Rs.10/- each of the transferee company credited as fully paid up for every 1 equity share of Rs.10/- each held in the transferor company no. 4."

16. It has been submitted by the petitioners that no proceedings under

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

the transferor and transferee companies.

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

in their separate meetings held on 25th August, 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.

18. The petitioner companies had earlier filed CA (M) No. 145/2014

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 27th October, 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.

19. The petitioner companies have thereafter filed the present petition

seeking sanction of the Scheme of Amalgamation. Vide order dated 10th

November, 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 petitioners

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 7th January, 2015. Copies of the

newspaper clippings containing the publications have been filed along

with the said affidavit.

20. 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 10th 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 companies do not appear to have been conducted in a manner

prejudicial to the interest of their members, creditors or public interest, as

per second proviso of Section 394(1) of the Companies Act, 1956.

21. 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 February, 2015. Relying on Clause

7.1 of the Scheme, he has stated that, upon sanction of the Scheme of

Amalgamation, all the employees of the transferor companies shall

become the employees of the transferee company without any break or

interruption in their services. He has further submitted that in Clause 12

of the Scheme, it has been stated that the transferee company shall

follow pooling of interest method of accounting and accounting treatment

shall be in compliance with Accounting Standard-14, Accounting for

Amalgamation, issued by the Institute of Chartered Accountants of India.

He further submitted that in Clause 18 of the Scheme, it has been stated

that upon this scheme becoming effective, the transferor company nos. 1

to 4 shall stand dissolved without the process of winding up.

22. Although the Regional Director in his report has not raised any

objection to the proposed Scheme, but he has raised certain

observations in paras 6, 8 & 9 of his report. In para 6 of his report, he has

stated that the transferor and transferee companies have 100% foreign

participation, therefore, they may be asked to give an undertaking for

necessary compliance from Reserve Bank of India as required under

FEMA. In para 8 of his report, he has stated that the authorized share

capital of the transferee company is not sufficient to allot shares to the

transferor companies, therefore, the transferee company may be directed

to increase the authorized capital for allotment of shares to the transferor

companies, as per the provisions of the Companies Act, 1956/2013. In

para 9 of his report, he has stated that the Board of Directors of the

petitioner companies have approved the proposed Scheme of

Amalgamation in their meetings held on 25th August, 2014 but they have

not filed the said Board Resolutions (eMGT-14) with the Registrar of

Companies. He, therefore, prays that the petitioner companies be

directed to comply with Section 117(3) by filing e-form MGT-14. In reply

to aforesaid, the petitioner companies have filed an affidavit dated 27th

February, 2015 of Mr. Rakesh Aggarwal, Director of the petitioner

companies whereby the transferee company has undertaken to comply

with all the applicable compliances and regulations relating to RBI under

FEMA. Further, in the affidavit it has been submitted that the requisite

MGT-14 forms were duly filed by all the petitioner companies. Copies of

the receipts/challans of filing the said forms are enclosed with the

affidavit. It has been further submitted that the authorized share capital of

the transferor companies shall be merged with the authorized share

capital of the transferee company, post amalgamation, and the merged

capital shall be sufficient to allot the new shares under the Scheme. In

view of the above, the observations raised by the Regional Director stand

satisfied.

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

from any other party. The petitioner companies, in the affidavit dated 27th

February, 2015 of Mr. Rakesh Aggarwal, Director 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 7th January, 2015.

24. 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

companies no. 1 to 4 shall stand dissolved without undergoing the

process of winding up.

25. The Assistant Registrar of Companies prays that costs of at least

Rs.1.0 lakh should be paid by the petitioners keeping in view the fact that

the matter has involved examination of extensive records and also

prioritized hearings. Mr. Hitesh Joshi, Company Secretary of the

petitioner companies states that the same is acceptable to him. Looking

to the circumstances, the petitioner shall deposit a sum of Rs.1.0 lakh by

way of costs with the Common Pool Fund of the Official Liquidator within

two weeks from today.

26. The petition is allowed in the above terms.

Dasti.

SUDERSHAN KUMAR MISRA, J.

May 25, 2015