Dcm Engineering Limited vs ....
2015 Latest Caselaw 6487 Del

                   IN THE HIGH COURT OF DELHI
              COMPANY APPLICATION (MAIN) NO. 130/2015
                                          Reserved on 21st July, 2015
                          Date of pronouncement: 1st September, 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 read with Rules 6 & 9 of
the Companies (Court) Rules, 1959

Scheme of Amalgamation of:

DCM Engineering Limited
                                          Applicant/Transferor Company
       WITH

DCM Limited
                                          Applicant/Transferee Company

                               Through Mr. Mahesh Agarwal and
                               Mr.Rajeev 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 read with Rules 6 & 9 of the Companies

(Court) Rules, 1959 by the applicant companies seeking directions of this

court to dispense with the requirement of convening the meeting of the

equity shareholders of the transferor company and for convening of

separate meetings of the secured and unsecured creditors of the

transferor company and the equity shareholders, secured and unsecured

creditors of the transferee company to consider and approve, with or

without modification, the proposed Scheme of Amalgamation of DCM

Engineering Limited (hereinafter referred to as the transferor company)

with DCM 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 5th September, 1990 with the Registrar of

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

style of DCM Precision Engineering Private Limited. The company

changed its name to DCM Precision Engineering Limited and obtained

the fresh certificate of incorporation on 5th February, 1998. The company

again changed its name to DCM Engineering Limited and obtained the

fresh certificate of incorporation on 23rd March, 2004.

4. The transferee company was originally incorporated under the

provisions of Indian Companies Act, 1882 on 26th March, 1889 with the

Registrar, Joint Stock Companies, Punjab under the name and style of

Delhi Cloth & General Mills Company Limited. The company changed its

name to DCM Limited and obtained a certificate in this regard from the

Registrar of Companies, NCT of Delhi & Haryana at New Delhi on 6th

October, 1983.

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

Rs.24,00,00,000/- divided into 2,39,99,000 equity shares of Rs.10/- each

aggregating to Rs.23,99,90,000/- and 100 13.50% redeemable

cumulative preference shares of Rs.100/- each aggregating to

Rs.10,000/-. The issued, subscribed and paid-up share capital of the

company is Rs.20,05,00,000/- divided into 2,00,50,000 equity shares of

Rs.10/- each fully paid up.

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

Rs.80,00,00,000/- divided into 6,00,00,000 equity shares of Rs.10/- each

aggregating to Rs.60,00,00,000/-; 3,20,000 9.5% - 6th redeemable

cumulative preference shares of Rs.25/- each aggregating to

Rs.80,00,000/-; 36,80,000 preference shares of Rs.25/- each

aggregating to Rs.9,20,00,000/- and 10,00,000 cumulative convertible

preference shares of Rs.100/- each aggregating to Rs.10,00,00,000/-.

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

Rs.17,37,59,195/- divided into 1,73,79,037 equity shares of Rs.10/- each

fully paid up aggregating to Rs.17,37,90,370/- less calls in arrears of

Rs.31,175/-.

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, of the transferor and

transferee companies, along with the reports 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 application and the accompanying affidavit. It has been

submitted by the applicants that the transferor company is a subsidiary of

the transferee company which holds approx. 75.06% of the share capital

of the transferor company. It is claimed that the proposed Scheme would

result in creation of a single entity with better financial strength which

would result in improving the competitive position of the businesses of

the combined entity. It is further claimed that the proposed amalgamation

would result in consolidation of the businesses presently being carried on

by the transferor company and the transferee company would help in

diversification of business risks and would also help in cost optimization

in the system.

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:

"20 equity shares of Rs.10/- each fully paid up of the transferee company for every 77 equity shares of Rs.10/- each

fully paid up held by the shareholders in the transferor company."

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

Sections 235 to 251 of the Companies Act, 1956 or under Sections 210,

212(1) to (7) & (11) to (17), 214, 215, 216(1) & (3), 217, 219, 220, 223,

224(1), (3) and (4) and 225 or any other applicable provisions 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 8th December, 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 transferor company has 18 equity shareholders. All the equity

shareholders 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 meeting of the equity

shareholders 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 04 secured creditors and a direction is

sought to convene and hold their meeting to seek their approval to the

proposed Scheme of Amalgamation. Considering the facts and

circumstances aforesaid, the meeting of the secured creditors of the

transferor company shall be held on 17th October, 2015 at 12:30 p.m. at

Ghalib Auditorium Aiwan-E-Ghalib, Mata Sundari Lane, New Delhi-

110002. Mr. U. K. Shandilya, Advocate, (Mobile No. 9810137662) is

appointed as the Chairperson and Ms. Anju Lal, Advocate, (Mobile No.

9810430756) is appointed as the Alternate Chairperson to conduct the

said meeting. The Quorum of the meeting of the secured creditors of the

transferor company shall be 02 in number and more than 25% in value of

the total secured debt.

14. The transferor company has 274 unsecured creditors and a

direction is sought to convene and hold their meeting to seek their

approval to the proposed Scheme of Amalgamation. Considering the

facts and circumstances aforesaid, the meeting of the unsecured

creditors of the transferor company shall be held on 17th October, 2015 at

02:00 p.m. at Ghalib Auditorium Aiwan-E-Ghalib, Mata Sundari Lane,

New Delhi-110002. Mr. Rahul Chauhan, Advocate, (Mobile No.

9650802472) is appointed as the Chairperson and Ms. Pallavi Sharma,

Advocate, (Mobile No. 9899447004) is appointed as the Alternate

Chairperson to conduct the said meeting. The Quorum of the meeting of

the unsecured creditors of the transferor company shall be 50 in number

and more than 25% in value of the total unsecured debt.

15. The transferee company has 44297 equity shareholders and a

direction is sought to convene and hold their meeting to seek their

approval to the proposed Scheme of Amalgamation. Considering the

facts and circumstances aforesaid, the meeting of the equity

shareholders of the transferee company shall be held on 17th October,

2015 at 10:00 a.m. at Ghalib Auditorium Aiwan-E-Ghalib, Mata Sundari

Lane, New Delhi-110002. Mr. Suryakant Singhla, Advocate, (Mobile No.

9810075888) is appointed as the Chairperson and Ms. Kanika Agnihotri,

Advocate, (Mobile No. 9810980027) is appointed as the Alternate

Chairperson to conduct the said meeting. The Quorum of the meeting of

the equity shareholders of the transferee company shall be 100 in

number and more than 25% in value of the total equity share capital.

16. The transferee company has 05 secured creditors and a direction

is sought to convene and hold their meeting to seek their approval to the

proposed Scheme of Amalgamation. Considering the facts and

circumstances aforesaid, the meeting of the secured creditors of the

transferee company shall be held on 17th October, 2015 at 11:00 a.m. at

Ghalib Auditorium Aiwan-E-Ghalib, Mata Sundari Lane, New Delhi-

110002. Mr. Naresh Mathur, Advocate, (Mobile No. 9810170878) is

appointed as the Chairperson and Mr. Anuj Rajput, Advocate, (Mobile

No. 9312508815) is appointed as the Alternate Chairperson to conduct

the said meeting. The Quorum of the meeting of the secured creditors of

the transferee company shall be 02 in number and more than 25% in

value of the total secured debt.

17. The transferee company has 497 unsecured creditors and a

direction is sought to convene and hold their meeting to seek their

approval to the proposed Scheme of Amalgamation. Considering the

facts and circumstances aforesaid, the meeting of the unsecured

creditors of the transferee company shall be held on 17th October, 2015

at 04:00 p.m. at Ghalib Auditorium Aiwan-E-Ghalib, Mata Sundari Lane,

New Delhi-110002. Mr. Subhash Oberoi, Advocate, (Mobile No.

9810083354) is appointed as the Chairperson and Mr. Abdul Aleem,

Advocate, (Mobile No. 9871416520) is appointed as the Alternate

Chairperson to conduct the said meeting. The Quorum of the meeting of

the unsecured creditors of the transferee company shall be 100 in

number and more than 25% in value of the total unsecured debt.

18. In case the quorum as noted above for the above meetings is not

present at the meetings, then the meetings shall be adjourned by half an

hour, and thereafter the persons present and voting shall be deemed to

constitute the quorum. For the purpose of computing the quorum the

valid proxies shall also be considered, if the proxy in the prescribed form

duly signed by the person entitled to attend and vote at the meetings is

filed with the registered offices of the applicant companies at least 48

hours before the meetings. The Chairpersons and Alternate

Chairpersons shall ensure that the proxy registers are properly

maintained.

19. The Chairpersons and Alternate Chairpersons shall ensure that

notices for convening the aforesaid meetings of the secured and

unsecured creditors of the transferor company and the equity

shareholders, secured and unsecured creditors of the transferee

company, along with copies of the Scheme of Amalgamation and the

statement under Section 393 of the Companies Act, 1956, shall be sent

to the secured and unsecured creditors of the transferor company and

the equity shareholders, secured and unsecured creditors of the

transferee company by ordinary post at their registered or last known

addresses at least 21 days before the date appointed for the meetings, in

their presence or in the presence of their authorized representatives.

Notice of the meetings shall also be published in the Delhi editions of the

newspapers "Business Standard" (English) and "Jansatta" (Hindi) in

terms of the Companies (Court) Rules, 1959 at least 21 days before the

date appointed for the meetings. It is, however, clarified that the

requirement of sending personal notices to the equity shareholders of the

transferee company, who are holding less than 100 shares, is dispensed

with.

20. The Chairpersons and Alternate Chairpersons will be at liberty to

issue suitable directions to the management of the applicant companies

so that the aforesaid meetings of the secured and unsecured creditors of

the transferor company and the equity shareholders, secured and

unsecured creditors of the transferee company are conducted in a just,

free and fair manner.

21. The fee of the Chairpersons and the Alternate Chairpersons for the

aforesaid meetings shall be Rs.50,000/- each in addition to meeting their

incidental expenses. The Chairpersons will file their reports within two

weeks from the date of holding of the aforesaid meetings.

22. The application stands allowed in the aforesaid terms.

Dasti

SUDERSHAN KUMAR MISRA, J.

September 01, 2015