One Star Realty Private Limited vs ...
2015 Latest Caselaw 7555 Del

                   IN THE HIGH COURT OF DELHI
                  COMPANY PETITION NO. 675/2014

                                     Reserved on 16th 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 Sections 391 & 394 of the
Companies Act, 1956

Scheme of Arrangement between:

One Star Realty Private Limited
                                           Petitioner/Transferor Company
      AND

e 2 e Solutions Private Limited
                                           Petitioner/Transferee Company

                                  Through      Mr.    P.  Nagesh   and
                                  Mr.Ashutosh Gupta, Advocates 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 & 394 of the

Companies Act, 1956 by the petitioner companies seeking sanction of

the Scheme of Arrangement between One Star Realty Private Limited

(hereinafter referred to as the transferor company) and e 2 e Solutions

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 incorporated under the Companies

Act, 1956 on 15th June, 2007 with the Registrar of Companies, NCT of

Delhi & Haryana at New Delhi.

4. The transferee company was incorporated under the Companies

Act, 1956 on 17th August, 2000 with the Registrar of Companies, NCT of

Delhi & Haryana at New Delhi.

5. The present authorized share capital of the transfer or company is

Rs.5,00,000/- each divided into 50,000 equity shares of Rs.10/- each.

The issued, subscribed and paid-up share capital of the companies are

Rs.5,00,000/- each divided into 50,000 equity shares of Rs.10/- each.

6. The present authorized share capital of the transfer ee company is

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

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

are Rs.1,50,000/- each divided into 15,000 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, 2013, of the transfer or and

transferee companies, along with the report of the auditors, have also

been filed.

8. A copy of the Scheme of Arrangement 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 independent operations of transferor company and

transferee company leads to incurrence of significant costs and therefore

the amalgamation would enable economies of scale by attaining critical

mass and achieving cost saving. It is further claimed that the

amalgamation would provide the transferee company a strong and

focused base to undertake the business more advantageously and will

also result in better management and focus on growing the businesses.

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:

"14,410 equity shares of Rs.10/- each in the transferee company for its entire investments in form of share capital and the long term liabilities of Rs.36,08,00,000/- in transferor company."

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

Sections 235 to 251 of the Companies Act, 1956 and the corresponding

applicable provisions of the Companies Act, 2013 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 31st December, 2013 have

unanimously approved the proposed Scheme of Arrangement. 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. 124/2014

seeking directions of this court to dispense with the requirement of

convening the meetings of their equity shareholders, share applicants,

secured and unsecured creditors, which are statutorily required for

sanction of the Scheme of Arrangement. Vide order dated 16th

September, 2014, this court allowed the application and dispensed with

the requirement of convening and holding the meetings of the equity

shareholders, share applicants, 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

Arrangement. Since the written consents/NOC given by the corporate

unsecured creditor s of the transferee company, namely Greenply

Industries Limited, HSBC-Security, Vodafone Mobile Services and

Williams-Sonama India Private Limited were not supported by Board

Resolutions, the Court directed the petitioners to issue specific notice to

the said corporate unsecured 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 Arrangement. Vide order dated 5th

November, 2014, notice in the petition was directed to be issued to the

Regional Direc tor, 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 12th January, 2015. Copies of

the newspaper clippings containing the publications have been filed

along with the said affidavit. The petitioners have also placed on record

the factum of service of notices to the corporate unsecured creditors of

the transferee company, in terms of order dated 16 th September, 2014.

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 24th July, 2015

wherein he has stated that he has not received any complaint against the

proposed Scheme of Arrangement 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 29th July, 2015. Relying on Clause 2.16

of Part-II of the Scheme, he has stated that, upon sanction of the

Scheme of Arrangement, all the 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 2 of Part-III of the Scheme, it has been stated that the

amalgamation of the transferor company with the transferee company

shall be accounted for as per the "Accounting Standard 14: Accounting

for Amalgamation" as prescribed in the Companies (Accounting

Standards) Rules, 2006 issued by the Ministry of Corporate Affairs. He

further submitted that in Clause 4 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 Arrangement

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

27th July, 2015 of Mr. Ashim Sarin and Mr. Amit Garg, authorized

signatory of the transferor company and transferee company

respectively, have submitted that the petitioner companies have not

received any objection pursuant to the citations published in the

newspapers on 12th January, 2015.

17. Considering the approval accorded by the equity shareholders,

share applicants and creditors of the petitioner companies to the

proposed Scheme of Arrangement and the affidavits filed by the Regional

Director, Northern Region, and the Official Liquidator not raising any

objection to the proposed Scheme of Arrangement, there appears to be

no impediment to the grant of sanction to the Scheme of Arrangement.

Consequently, sanction i s hereby granted to the Scheme of Arrangement

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 Co mpanies

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. 01.04.2013, 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.50,000/- 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.50,000/- by way of costs with the

Common Pool Fund of the Official Liquidator within two weeks.

19. The petition is allowed in the above terms.

Dasti.

SUDERSHAN KUMAR MISRA, J.

October 05, 2015