Delhi High Court
Jaisingh Wires Private Limited vs ... on 11 September, 2015
IN THE HIGH COURT OF DELHI
COMPANY APPLICATION (MAIN) NO. 138/2015
Reserved on 7th August, 2015
Date of pronouncement: 11th 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:
Jaisingh Wires Private Limited
Non-Applicant/Transferor Company No. 1
Polycab Wire Industries Private Limited
Non-Applicant/Transferor Company No. 2
Polycab Electrical Industries Private Limited
Non-Applicant/Transferor Company No. 3
Datar Nouveau Energietechnik Limited
Non-Applicant/Transferor Company No. 4
Polycab Electronics Private Limited
Applicant/Transferor Company No. 5
WITH
Polycab Wires Private Limited
Non-Applicant/Transferee Company
Through Mr. Mahesh Agarwal,
Advocate for the applicant
SUDERSHAN KUMAR MISRA, J.
1. This 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/transferor company no. 5 seeking directions
of this court to dispense with the requirement of convening the meetings
of its equity shareholders, secured and unsecured creditors to consider
and approve, with or without modification, the proposed Scheme of
Amalgamation of Jaisingh Wires Private Limited (hereinafter referred to
as the transferor company no. 1); Polycab Wire Industries Private Limited
(hereinafter referred to as the transferor company no. 2); Polycab
Electrical Industries Private Limited (hereinafter referred to as the
transferor company no. 3); Datar Nouveau Energietechnik Limited
(hereinafter referred to as the transferor company no. 4); and Polycab
Electronics Private Limited (hereinafter referred to as the
applicant/transferor company no. 5) with Polycab Wires Private Limited
(hereinafter referred to as the transferee company) and to dispense with
the requirement of the transferee company to approach this Court for
seeking sanction of the Scheme of Amalgamation.
2. The registered offices of the applicant/transferor company and the
transferee company are situated at New Delhi, within the jurisdiction of
this Court. However, the registered offices of the transferor company nos.
1 to 4 are situated at Maharashtra, outside the jurisdiction of this Court.
Learned counsel for the applicant submitted that separate application has
been filed by the transferor company nos. 1 to 4 in the Bombay High
Court for sanction of the Scheme of Amalgamation in their respect.
3. The applicant/transferor company no. 5 was originally incorporated
under the Companies Act, 1956 on 11th November, 2005 with the
Registrar of Companies, NCT of Delhi & Haryana at New Delhi under the
name and style of Vengaboys Electronics Private Limited. The company
changed its name to Popli G Electronics Private Limited and obtained the
fresh certificate of incorporation on 19th July, 2011. The company again
changed its name to Polycab Electronics Private Limited and obtained
the fresh certificate of incorporation on 21st June, 2014.
4. The present authorized share capital of the applicant/transferor
company no. 5 is Rs.15,00,00,000/- divided into 1,50,00,000 equity
shares of Rs.10/- each. The present issued, subscribed and paid-up
share capital of the company is Rs.10,00,000/- divided into 1,00,000
equity shares of Rs.10/- each.
5. 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
applicant/transferor company no. 5 and the transferee company, along
with the report of the auditors, have also been filed.
6. 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 is submitted
by the applicant that all the transferor companies are wholly owned
subsidiaries of the transferee company. It is claimed that the proposed
amalgamation will result in simplicity & reduction in regulatory
compliances which shall improve the compliance culture and governance
structure and result in quick decision making. It is further claimed that the
proposed amalgamation will result in improved financial efficiency i.e.
financial resources shall be efficiently merged & pooled leading to more
effective management of funds and rationalization of administrative &
manpower expenses and overheads.
7. So far as the share exchange ratio is concerned, the Scheme
provides that the transferor company is a wholly owned subsidiary of the
transferee company, and the entire issued, subscribed and paid-up share
capital of the transferor company is held by the transferee company.
Therefore, the transferee company would not be required to issue and
allot any shares to the shareholders of the transferor company and the
shares so held by the transferee company shall stand cancelled and
extinguished pursuant to implementation of the Scheme.
8. It has been submitted by the applicant that no proceedings under
Sections 235 to 251 of the Companies Act, 1956 or corresponding
provisions under the Companies Act, 2013 are pending against the
applicant/transferor company no. 5.
9. The Board of Directors of the applicant/transferor company no. 5
and the transferee company in their separate meetings held on 7th May,
2015 have unanimously approved the proposed Scheme of
Amalgamation. Copies of the Resolutions passed at the meetings of the
Board of Directors of applicant/transferor company no. 5 and the
transferee company have been placed on record.
10. The applicant/transferor company no. 5 has 02 equity shareholders
and 01 unsecured creditor. Both the equity shareholders and the sole
unsecured creditor 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 meetings of the
equity shareholders and unsecured creditor of the applicant/transferor
company no. 5 to consider and, if thought fit, approve, with or without
modification, the proposed Scheme of Amalgamation is dispensed with.
There is no secured creditor of the applicant/transferor company no. 5,
as on 31st May, 2015.
11. The applicant also seeks dispensation of requirement of the
transferee company to approach this Court for sanction of Scheme of
Amalgamation under Sections 391-394 of the Companies Act, 1956 on
the ground that the Scheme does not entail or involve any arrangement
between the transferee company and its shareholders since all the
transferor companies are wholly owned subsidiaries of the transferee
company; no new shares will be issued by the transferee company in lieu
of the shares of the transferor companies; and there will be no change in
the control and management of the transferee company, therefore, the
rights of the shareholders of the transferee company will not be affected
in any manner whatsoever by the Scheme. It has been further submitted
that aggregate of assets of all the companies are more than sufficient to
meet their respective and combined aggregate liabilities towards their
respective creditors. Therefore, the rights of the creditors of the
transferee company will not be adversely affected.
12. In support of his submissions, learned counsel placed reliance on
the judgments of several High Courts, including this Court, in many cases
such as Prosell Field Marketing Pvt. Ltd. [CA(M) 63/2012]; Auto Tools
India Pvt. Ltd. [CA(M) 41/2010]; Sharat Hardware Industries Pvt. Ltd.
(1978), 48 Com. Cas 23 (Delhi); Mahaamba Investments Ltd. V. IDI
Limited (2001) 105 Com Cas. 16 (Bom.); and Andhra Bank Housing
Finance Ltd. (2004) 118 Com. Cas. 295 (AP), wherein it has been held
that there is no requirement to file a separate or joint application on
behalf of the transferee company for sanction of the Scheme.
13. I have carefully considered the aforesaid case laws cited at the
Bar, wherein the transferee company, being the holding company, has
been granted exemption from taking out separate proceedings under
Section 391(2) of the Companies Act, 1956. In view of this settled legal
position and considering the Scheme of Amalgamation, the requirement
of the transferee company having to approach this Court under Section
391(2) of the Companies Act, 1956 for sanction of the Scheme of
Amalgamation is dispensed with.
14. The application stands allowed in the aforesaid terms.
Dasti
SUDERSHAN KUMAR MISRA, J.
September 11, 2015
