Pranjal Fabrication Private ... vs ...
2015 Latest Caselaw 8434 Del

                    IN THE HIGH COURT OF DELHI
                   COMPANY PETITION NO. 726/2014

                                        Reserved on 13th October, 2015
                            Date of pronouncement: 6th November, 2015
In the matter of
The Companies Act, 1956 & the Companies Act, 2013 (to the extent
applicable):

And

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

Scheme of Amalgamation of:

Pranjal Fabrication Private Limited
                                             Petitioner/Transferor Company
      WITH

Pranjal Projects Private Limited
                                             Petitioner/Transferee Company

                                 Through Mr. P. Nagesh and Mr. Anand
                                 M.    Mishra,    Advocates for   the
                                 petitioners
                                 Mr. Manish Bishnoi, Advocate for the
                                 Official Liquidator

SUDERSHAN KUMAR MISRA, J.

1. This joint petition has been filed under Sections 391 & 394 of the

Companies Act, 1956 by the petitioner companies seeking sanction of

the Scheme of Amalgamation of Pranjal Fabrication Private Limited

(hereinafter referred to as the transferor company) with Pranjal Projects

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 14th December, 2007 with the Registrar of

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

style of R B S. Impex Private Limited. The company changed its name to

Pranjal Fabrication Private Limited and obtained the fresh certificate of

incorporation on 24th January, 2011.

4. The transferee company was originally incorporated under the

Companies Act, 1956 on 13th May, 2002 with the Registrar of

Companies, NCT of Delhi & Haryana at New Delhi. Thereafter, the

company shifted its registered office from the State of Haryana to Delhi

and obtained a certificate in this regard on 19th October, 2007.

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

Rs.2,50,00,000/- each divided into 25,00,000 equity shares of Rs.10/-

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

is Rs.2,49,00,000/- each divided into 24,90,000 equity shares of Rs.10/-

each.

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

Rs.2,54,50,000/- each divided into 25,45,000 equity shares of Rs.10/-

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

is Rs.13,01,950/- each divided into 1,30,195 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, 2013, 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 by

the petitioners that the proposed amalgamation will result in

establishment of a larger company with large resources, larger capital

base and a greater capacity to raise funds for expansion, modernization

and development of the businesses of the companies concerned. It is

further claimed that the proposed amalgamation will enable the

undertakings and businesses of the said companies to obtain greater

facilities possessed and enjoyed by one large company for securing and

conducting its business on favourable terms and other benefits.

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:

"01 equity share of Rs.10/- each in the transferee company, credited as fully paid up, for every 114.47 equity shares of Rs.10/- each held by them in the transferor company."

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

Sections 235 to 251 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 12th February, 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. 120/2014

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 4th September, 2014, this

court allowed the application and dispensed with the requirement of

convening and holding the meetings of the equity shareholders, secured

and unsecured creditors of the transferor and transferee companies, to

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

proposed Scheme of Amalgamation. Since the written consents/NOC

given by the secured creditors of the transferee company, namely SIDBI

and ICICI Bank, were not supported by Board Resolutions, the Court

directed the petitioners to issue specific notice to the said secured

creditors at the time of moving of the second motion petition calling for

their objection, if any, to the Scheme.

13. The petitioner companies have thereafter filed the present petition

seeking sanction of the Scheme of Amalgamation. Vide order dated 24th

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 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 6th December, 2014. Copies of

the newspaper clippings containing the publications have been filed

along with the said affidavit. The petitioners have also submitted that

notices, in terms of order dated 4th September, 2014, have also been

served to the secured creditors of the transferee company.

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 26th 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 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 2nd March, 2015. Relying on Clause

3.1.1 (vii) of Part-III of the Scheme, he has stated that, upon sanction of

the Scheme of Amalgamation, all permanent 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 5.20 of Part-V of the Scheme, it has been stated

that, subject to other clauses 5.21 to 5.22 of the Scheme, the

amalgamation would be accounted for by applying the "Pooling of

Interest Method" of accounting as contained in the "Accounting Standard-

14: Accounting for Amalgamation" issued by the Institute of Chartered

Accountants of India. 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. No objection has been received to the Scheme of Amalgamation

from any other party. The petitioner companies, in the affidavit dated 3rd

March, 2015 of Mr. Vikas Bhatia, 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 6th December, 2014.

17. 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.

18. Learned counsel for the Official Liquidator prays that costs of at

least Rs.1,00,000/- should be paid by the petitioners keeping in view the

fact that the matter has involved examination of extensive records and

also prioritized hearings. Learned counsel for the petitioner companies

states that the same is acceptable to him. Looking to the circumstances,

the petitioners shall deposit a sum of Rs.1,00,000/- by way of costs with

the Common Pool Fund of the Official Liquidator within three weeks.

19. The petition is allowed in the above terms.

Dasti.

SUDERSHAN KUMAR MISRA, J.

November 06, 2015