C. A. Process Industries Private ... vs ...
2015 Latest Caselaw 6753 Del

                     IN THE HIGH COURT OF DELHI
                   COMPANY PETITION NO. 64/2015

                                         Reserved on 6th August, 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(2) & 394 of the
Companies Act, 1956

Scheme of Amalgamation of:

C. A. Process Industries Private Limited
                                     Petitioner/Transferor Company No. 1

Interia Crafts Private Limited
                                        Petitioner/Transferor Company No. 2

Northern Distributors Private Limited
                                        Petitioner/Transferor Company No. 3
      WITH

Jaipuria Beverages & Food Industries 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 C. A. Process Industries Private

Limited (hereinafter referred to as the transferor company no. 1); Interia

Crafts Private Limited (hereinafter referred to as the transferor company

no. 2) and Northern Distributors Private Limited (hereinafter referred to as

the transferor company no. 3) with Jaipuria Beverages & Food Industries

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 28th October, 1988 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 31st December, 1986 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 2nd August, 1991 with the Registrar of

Companies, NCT of Delhi & Haryana at New Delhi.

6. The transferee company was originally incorporated under the

Companies Act, 1913 on 2nd June, 1947 with the Registrar of

Companies, Rajasthan at Jaipur under the name and style of The

Rajputana Stores Limited. The company changed its name to The

Rajputana Stores (Private) Limited and obtained the fresh certificate of

incorporation on 18th August, 1962. Thereafter, the company shifted its

registered office from the State of Rajasthan to NCT of Delhi and

obtained a certificate in this regard from the Registrar of Companies,

NCT of Delhi & Haryana at New Delhi on 4th April, 1991. Subsequently,

the company changed its name to Jaipuria Beverages & Food Industries

Private Limited and obtained the fresh certificate of incorporation on 3rd

June, 2006.

7. The present authorized share capital of the transferor company

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

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

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

each.

8. The present authorized share capital of the transferor company

no.2 is Rs.50,00,000/- divided into 50,000 equity shares of Rs.100/-

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

company is Rs.20,00,000/- divided into 20,000 equity shares of Rs.100/-

each.

9. The present authorized share capital of the transferor company

no.3 is Rs.1,00,00,000/- divided into 9,00,000 equity shares of Rs.10/-

aggregating to Rs.90,00,000/- and 10,00,000 equity shares of Rs.1/-

each aggregating to Rs.10,00,000/-. The present issued, subscribed and

paid-up share capital of the company is Rs.50,00,000/- divided into

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

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

Rs.5,15,00,000/- divided into 40,000 equity shares of Rs.100/- each

aggregating to Rs.40,00,000/-; and 4,75,000 redeemable preference

shares of Rs.100/- each aggregating to Rs.4,75,00,000/-. The present

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

Rs.5,07,27,600/- divided into 32,276 equity shares of Rs.100/- each

aggregating to Rs.32,27,600/- and 4,75,000 redeemable preference

shares of Rs.100/- each aggregating to Rs.4,75,00,000/-.

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

transferor and transferee companies have been filed on record with the

joint application, being CA(M) 9/2015, 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, had 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 not engaged

in any business activity and the transferee company is earning income

from renting of the properties and the dividend 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 resources 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:-

"1 (one) equity share of Rs.100/- each of the transferee company for every 100 fully paid up equity shares of Rs.10/- each held in the transferor company no. 1."

"58 equity shares of Rs.100/- each of the transferee company for every 100 fully paid up equity share of Rs.100/- each held in the transferor company no. 2."

"13 equity shares of Rs.100/- each of the transferee company for every 100 fully paid up 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 31st October, 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.

16. The petitioner companies had earlier filed CA (M) No. 9/2015

seeking directions of this court to dispense with the requirement of

convening the meetings of their equity shareholders, preference

shareholders, secured and unsecured creditors, which are statutorily

required for sanction of the Scheme of Amalgamation. Vide order dated

28th January, 2015, this court allowed the application and dispensed with

the requirement of convening and holding the meetings of the

shareholders and creditors of the transferor and transferee 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 6th

February, 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 4th March, 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 9th June, 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 20th July, 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. No objection has been received to the Scheme of Amalgamation

from any other party. The petitioner companies, in the affidavit dated 20th

July, 2015 of Sh. Vishal Goyal, authorized signatory 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 4th March, 2015.

21. 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, 2014, the transferor

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

process of winding up.

22. 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 two weeks.

23. The petition is allowed in the above terms.

Dasti.

SUDERSHAN KUMAR MISRA, J.

September 09, 2015