Apex Safety Glass Private Limited vs ..
2015 Latest Caselaw 7551 Del

                   IN THE HIGH COURT OF DELHI
                  COMPANY PETITION NO. 294/2015

                                    Reserved on 15th September, 2015
                            Date of pronouncement: 5th October, 2015
In the matter of
The Companies Act, 1956 & the Companies Act, 2013 (to the extent
applicable):

And

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

Scheme of Amalgamation of:

Apex Safety Glass Private Limited
                                    Petitioner/Transferor Company No. 1

Narang Academic Private Limited
                                    Petitioner/Transferor Company No. 2

S P Solutions Private Limited
                                    Petitioner/Transferor Company No. 3
      WITH

New Delhi Realcon Private Limited
                                         Petitioner/Transferee Company

                                Through      Mr.    Mukesh    Sukhija,
                                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(2) & 394 of

the Companies Act, 1956 by the petitioner companies seeking sanction

of the Scheme of Amalgamation of Apex Safety Glass Private Limited

(hereinafter referred to as the transferor company No. 1), Narang

Academic Private Limited (hereinafter referred to as the transferor

company No. 2), and S P Solutions Private Limited ( hereinafter referred

to as the transferor company No. 3) with New Delhi Realcon 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 5th March, 2003 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 22 nd August, 2005 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 2 nd February, 2011 with the Registrar of

Companies, NCT of Delhi & Haryana at New Delhi.

6. The transferee company was incorporated under the Companies

Act, 1956 on 23rd April, 2009 with the Registrar of Companies, NCT of

Delhi & Haryana at New Delhi.

7. The present authorized share capital of the transferor company

no.1 is Rs.50,00,000/- divided into 5,00,000 equity shares of Rs.10/-

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

is Rs.46,44,500/- divided into 4,64,450 equity shares of Rs.10/- each.

8. The present authorized share capital of the transferor company

no.2 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.16,00,000/- divided into 1,60,000 equity shares of Rs.10/- each.

9. The present authorized share capital of the transferor company

no.3 is Rs.10,00,000/- divided into 1,00,000 equity shares of Rs.10/-

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

is Rs.9,00,000/- divided into 90,000 equity shares of Rs.10/- each.

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

Rs.1,00,00,000/- divided into 10,00,000 equity shares of Rs.10/- each.

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

Rs.43,01,100/- divided into 4,30,110 equity shares of Rs.10/- each.

11. Copies of Memorandum and Articles of Association of the

transferor and transferee companies have been filed on record with the

joint application, being CA(M) 55/2015, 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, ha d also

been filed.

12. 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 petitioners that the transferor companies no. 1 to 3 are having an

interest income and the transferee company is engaged in the business

of Real Estates and also having an interest income. It is claimed that the

proposed Amalgamation would result in business synergy and

consolidation of these companies into one large company with a stronger

asset base. It is further claimed that the proposed Amalgamation will

result in usual economies of a centralized and a large company including

elimination of duplicate work, reduction in overheads, better and more

productive utilization of human and other resource and enhancement of

overall business efficiency. It will enable these Companies to combine

their managerial and operating strength, to build a wider capital and

financial base and to promote and secure overall growth of their

businesses.

13. 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:-

"01 equity share of Rs.10/- each of transferee company for every 02 equity shares of Rs.10/- each held in the transferor company no. 1."

"02 equity shares of Rs.10/- each of transferee company for every 05 equity shares of Rs.10/- each held in the transferor company no. 2."

"24 equity shares of Rs.10/- each of transferee company for every 01 equity share of Rs.10/- each held in the transferor company no. 3."

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

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

petitioner companies.

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

in their separate meetings held on 1st January 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.

16. The petitioner companies had earlier filed CA (M) No. 55/2015

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 5th May, 2015, 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.

17. The petitioner companies have thereafter filed the present petition

seeking sanction of the Scheme of Amalgamation. Vide order dated 20th

May, 2015, 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) Delhi editions. Affidavit of service has been filed by the petitioners

showing compliance regarding service on the Regional Director, Northern

Region and the Official Liquidator, and also regarding publication of

citations in the aforesaid newspapers on 25th June, 2015. Copies of the

newspaper clippings containing the publications have been filed along

with the affidavit of service.

18. 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 7th September,

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.

19. 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 11 th September, 2015. Relying on

Clause 8(a) of Section D 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 15(a) of Section G of the Scheme, it has

been stated that amalgamation shall be an 'amalgamation in the nature

of merger' as defined in Accounting Standard-14 issued by the Institute of

Chartered Accountants of India and shall be accounted for under the

'pooling of interest' method in accordance with the said AS-14. He further

submitted that in Clause 10 of Section E of the Scheme, it has been

stated that upon this scheme becoming effective, the transferor

companies shall stand dissolved without the process of winding up.

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

Northern Region, however, in Para 8 of his report, he has observed that

the present authorized share capital of the transferee company is not

sufficient for allotment of shares to the shareholders of the transferor

companies. However, as per Clause 14.1 and 14.2 in the Scheme

regarding merger of the authorized share capital of the transferor

companies with the transferee company and further increase/modification

in the latter's authorized share capital for implementing the terms of

Scheme, to the extent necessary. The Assistant Registrar of Companies

also pointed out that the petitioners are obliged to effect appropriate

increase in the authorized capital to bring it within the norms prescribed.

In response to the aforesaid observation, learned counsel for the

petitioner states that the relevant increase in the authorized capital as

required is contemplated in paragraph 14.2 of the Scheme propounded

and the said increase shall be duly effected by the transferee company

and all necessary steps in connection therewith shall be duly taken. The

statement of the counsel for the petitioners is accepted by this Court. In

view of the aforesaid, the observation raised by the Regional Director

stands satisfied.

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

from any other party. The petitioner companies, in the affidavit dated 11th

September, 2015 of Sh. Naveen Narang, Director of the transferor

companies no. 1 & 2 and the 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 25th

June, 2015.

22. Considering the approval accorded by the 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, 2015, the transferor

companies no. 1, 2 & 3 shall stand dissolved without undergoing the

process of winding up.

23. 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 c ompanies

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 two weeks.

24. The petition is allowed in the above terms.

Dasti.

SUDERSHAN KUMAR MISRA, J.

October 05, 2015