Orient Craft Sweaters Limited vs ..
2015 Latest Caselaw 8224 Del

                   IN THE HIGH COURT OF DELHI
              COMPANY APPLICATION (MAIN) NO. 154/2015

                                    Reserved on 28th September, 2015
                          Date of pronouncement: 2nd November, 2015
In the matter of
The Companies Act, 1956 & the Companies Act, 2013 (to the extent
applicable):

And

Application under Sections 391 to 394 of the
Companies Act, 1956

Scheme of Amalgamation of:

Orient Craft Sweaters Limited
                                           Applicant/Transferor Company
       WITH

O.C. Sweaters Private Limited
                                          Applicant/Transferee Company

                                Through Mr. Deepak Diwan and
                                Mr.Vinod Kumar, Advocates for the
                                applicants

SUDERSHAN KUMAR MISRA, J.

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

Amalgamation of Orient Craft Sweaters Limited (hereinafter referred to

as the transferor company) with O.C. Sweaters 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 26th July, 2011 with the Registrar of

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

style of Orient Craft Sweaters Private Limited. The company changed its

name to Orient Craft Sweaters Limited and obtained the fresh certificate

of incorporation on 24th August, 2011.

4. The transferee company was originally incorporated under the

Companies Act, 1956 on 25th March, 2003 with the Registrar of

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

style of Victoria Realtors Private Limited. The company changed its name

to O.C. Sweaters Private Limited and obtained the fresh certificate of

incorporation on 26th May, 2015.

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

Rs.3,60,00,000/- divided into 36,00,000 equity shares of Rs.10/- each.

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

Rs.3,58,60,870/- divided into 35,86,087 equity shares of Rs.10/- each.

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

Rs.20,00,000/- divided into 2,00,000 equity shares of Rs.10/- each. The

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

Rs.6,00,000/- divided into 60,000 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. The

audited balance sheets, as on 31st March, 2014, along with the reports of

the auditors, and the unaudited provisional accounts, as on 30th June,

2015, of the transferor and transferee companies, 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 application and the accompanying affidavit. It is claimed

by the applicants that the proposed amalgamation will enable the

companies to manage their businesses more efficiently and effectively

and for better coordination of the business activities; to utilize their

resources optimally; and to derive the benefits of synergies arising out of

consolidation of business, such as, enhancement of net worth of the

combined business. It is further claimed that the proposed amalgamation

will enable reduction in managerial overlaps, which are necessarily

involved in running multiple entities.

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:

"09 equity share of Rs.10/- each of the transferee company for every 100 equity shares of Rs.10/- each held by the shareholders in the transferor company."

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

Sections 237, 243, 250, 250A and 251 of the Companies Act, 1956 or

under Sections 210, 214, 215, 216(1), (3) & (4), 217, 219, 220, 223,

224(1), (3) & (4) and 225 of the Companies Act, 2013 are pending

against the applicant companies.

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

in their separate meetings held on 31st July, 2015 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 transferor company has 07 equity shareholders and 24

unsecured creditors. All the equity shareholders and 15 out of 24

unsecured creditors, being 62.5% in number and 98.17% in value, have

given their consents/no objections in writing to the proposed Scheme of

Amalgamation. 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 unsecured creditors of the transferor company to consider and, if

thought fit, approve, with or without modification, the proposed Scheme

of Amalgamation is dispensed with.

13. The transferor company has 01 secured creditor namely State

Bank of Bikaner & Jaipur to whom a sum of Rs.18,11,43,169/- was

payable as on 31st July, 2015. The consent of the said secured creditor is

not placed on record. Learned counsel for the applicants seeks

dispensation of the meeting of the secured creditor on the ground that the

net worth of both the applicant companies is positive and, in fact, will

enhance on amalgamation and, therefore, the rights of the creditors of

both the companies will not be adversely affected. He has further

submitted that, post amalgamation, the assets of the transferee company

will be excess to the combined liabilities. In support of his submission,

learned counsel has placed on record a certificate dated 14th August,

2015 from Sharma Nitesh & Associates, Chartered Accountants certifying

that, post amalgamation, the net worth of the transferee company will

increase from Rs.2,12,54,083/- to Rs.13,40,82,811/-. They have further

certified that, post amalgamation, the value of debt of the transferee

company as on the appointed date of the Scheme is Rs.41,51,27,689/-

whereas the value of its assets is Rs.56,93,14,158/-, and therefore, the

interests of the secured and unsecured creditors of the applicant

companies will not be adversely affected. In view of the submissions

made at Bar and considering the certificate of the Chartered Accountants

placed on record, the requirement of convening the meeting of the

secured creditor of the transferor company to consider and, if thought fit,

approve, with or without modification, the proposed Scheme of

Amalgamation is dispensed with.

14. The transferee company has 04 equity shareholders and 01

unsecured creditor. All the equity shareholders and the sole unsecured

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

proposed Scheme of Amalgamation. 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 unsecured creditor of the transferee company to

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

proposed Scheme of Amalgamation is dispensed with. There is no

secured creditor of the transferee company, as on 31st July, 2015.

15. The application stands allowed in the aforesaid terms.

Dasti

SUDERSHAN KUMAR MISRA, J.

November 02, 2015