Stericat Gutstrings Private ... vs ...
2015 Latest Caselaw 6748 Del

                   IN THE HIGH COURT OF DELHI
                  COMPANY PETITION NO. 617/2014
                                          Reserved on 28th July, 2015
                         Date /of pronouncement: 9th September, 2015
In the matter of
The Companies Act, 1956 & the Companies Act, 2013 (to the extent
applicable):
And
Petition under Section 391(1) & 394 of the
Companies Act, 1956

Scheme of Arrangement & Demerger between:

Stericat Gutstrings Private Limited
                                          Petitioner/Demerged Company
      AND

GBK Business Venture Private Limited
                                           Petitioner/Resulting Company

                                Through Mr. Sharad Tyagi and Mr.Amit
                                Goel, Advocates for the petitioners
                                Ms.    Aparna     Mudiam,     Assistant
                                Registrar of Companies for the
                                Regional Director

SUDERSHAN KUMAR MISRA, J.

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

the Companies Act, 1956 by the petitioner companies seeking sanction

of the Scheme of Arrangement & Demerger between Stericat Gutstrings

Private Limited (hereinafter referred to as the demerged company) and

GBK Business Venture Private Limited (hereinafter referred to as the

resulting company).

2. The registered offices of the demerged and resulting companies

are situated at New Delhi, within the jurisdiction of this court.

3. The demerged company was originally incorporated under the

Companies Act, 1956 on 2nd June, 1983 with the Registrar of Companies,

NCT of Delhi & Haryana at New Delhi under the name and style of

Stericat Gutsrings Private Limited. The company changed its name to

Stericat Gutstrings Private Limited and obtained the fresh certificate of

incorporation on 27th December, 1984.

4. The resulting company was incorporated under the Companies

Act, 2013 on 4th August, 2014 with the Registrar of Companies, NCT of

Delhi & Haryana at New Delhi.

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

Rs.50,00,000/- divided into 48,000 equity shares of Rs.100/- each

aggregating to Rs.48,00,000/- and 2,000 preference shares of Rs.100/-

each aggregating to Rs.2,00,000/-. The issued, subscribed and paid-up

share capital of the company is Rs.25,00,000/- divided into 25,000 equity

shares of Rs.100/- each.

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

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

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

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

7. Copies of the Memorandum and Articles of Association of the

demerged and resulting companies have been filed on record with the

joint application, being CA(M) 129/2014, earlier filed by the petitioners.

The audited balance sheet, as on 31st March, 2014, of the demerged

company, along with the report of the auditors, and the unaudited

balance sheet, as on 3rd August, 2014, of the demerged company, had

also been filed. It has been submitted by the petitioners that since the

resulting company has been incorporated only recently, no accounts

have been prepared for the resulting company.

8. A copy of the Scheme of Arrangement & Demerger has been

placed on record and the salient features of the Scheme have been

incorporated and detailed in the petition and the accompanying affidavits.

It has been submitted by the petitioners that the demerged company has

several distinct and diverse businesses one of which is the textile

business/undertaking which requires distinctive focus and strategic

orientation. It is claimed that in order to harness the true potential of the

business, it is necessary to reorganize the demerged company by

demerging the textile undertaking and vesting it in the resulting company.

It is claimed that the proposed demerger will provide greater business

focus for the petitioner companies and will contribute in furthering and

fulfilling the objects of the petitioner companies and lead to the optimum

growth and development of the business of the petitioner companies.

9. So far as the share exchange ratio is concerned, the Scheme

provides that, upon coming into effect of this Scheme, the resulting

company shall issue and allot equity shares to the shareholders of the

demerged company in the following ratio:

"30 equity shares of Rs.10/- each at a premium of Rs.94/- per share of the resulting company, credited as fully paid up, for every 01 equity share of Rs.100/- each held by the shareholders in the demerged 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

demerged and resulting companies.

11. The Board of Directors of the demerged and resulting companies

in their separate meetings held on 4th August, 2014 have unanimously

approved the proposed Scheme of Arrangement & Demerger. Copies of

the Resolutions passed at the meetings of the Board of Directors of the

demerged and resulting companies had been placed on record.

12. The petitioner companies had earlier filed CA (M) No. 129/2014

seeking directions of this court to dispense with the requirement of

convening the meetings of their shareholders, secured and unsecured

creditors, which are statutorily required for sanction of the Scheme of

Arrangement & Demerger. 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, secured

and unsecured creditors of the demerged company and equity

shareholders of the resulting company, there being no secured or

unsecured creditors of the resulting company, to consider and, if thought

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

Arrangement & Demerger. The Court, however, directed the petitioners

to issue specific notice to Citibank N.A., Gurgaon, the secured creditor of

the demerged company and Meta Biomed Co. Ltd., Korea, the unsecured

creditor of the demerged company, at the time of moving of the second

motion petition calling for their objections, if any, to the Scheme.

13. The petitioner companies have thereafter filed the present petition

seeking sanction of the Scheme of Arrangement & Demerger. Vide order

dated 10th October, 2014, notice in the petition was directed to be issued

to the Regional Director, Northern Region. Citations were also directed to

be published in 'Business Standard' (English) and 'Business Standard'

(Hindi) editions. Affidavits have been filed by the petitioners showing

compliance regarding service on Citibank N.A., Gurgaon and Meta

Biomed Co. Ltd., Korea, and also regarding publication of citations in the

aforesaid newspapers on 29th December, 2014. Copies of the newspaper

clippings containing the publications have been filed along with the

affidavit.

14. 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 12th January, 2015. Relying on Clause

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

Scheme of Arrangement & Demerger, all the employees of the demerged

company engaged in or in relation to the Demerged Undertaking shall

become the employees of the resulting company without any break or

interruption in their services.

15. No objection has been received to the Scheme of Arrangement &

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

dated 12th January, 2015 of Sh. Vikram Kapahi, Managing Director of the

demerged company, have submitted that neither the petitioner

companies nor their counsel have received any objection pursuant to the

citations published in the newspapers on 29th December, 2014. So far as

Citi Bank N.A., Gurgaon and Meta Biomed Co. Ltd., Korea are

concerned, learned counsel for the applicants points out that their 'No

Objections' to the Scheme of Arrangement and Demerger has been

placed on record in the first motion petition itself.

16. Considering the approval accorded by the equity shareholders,

secured and unsecured creditors of the petitioner companies to the

proposed Scheme of Arrangement & Demerger and the affidavit filed by

the Regional Director, Northern Region not raising any objection to the

proposed Scheme of Arrangement & Demerger, there appears to be no

impediment to the grant of sanction to the Scheme of Arrangement &

Demerger. Consequently, sanction is hereby granted to the Scheme of

Arrangement & Demerger 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 Arrangement, i.e.

4th August, 2014, the 'Demerged Undertaking' of the demerged company

shall stand merged in the resulting company.

17. The petition is allowed in the above terms.

Dasti.

SUDERSHAN KUMAR MISRA, J.

September 09, 2015