Dolphin Holdings Private Limited vs ...
2015 Latest Caselaw 6868 Del

                    IN THE HIGH COURT OF DELHI
                   COMPANY PETITION NO. 49/2015
                                      Reserved on 13th 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

Petition under Sections 391(1) to 394 read
with Section 100 of the Companies Act, 1956

Scheme of Amalgamation of:

Dolphin Holdings Private Limited
                                        Petitioner/Transferor Company No. 1

Kakade Holdings Private Limited
                                        Petitioner/Transferor Company No. 2

Garud Impex Private Limited
                                        Petitioner/Transferor Company No. 3
      WITH

Dolphin International Private Limited
                                             Petitioner/Transferee Company

                               Through Mr. Ashish Middha,         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(1) to 394 read

with Section 100 of the Companies Act, 1956 by the petitioner companies

seeking sanction of the Scheme of Amalgamation of Dolphin Holdings

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

Kakade Holdings Private Limited (hereinafter referred to as the transferor

company no. 2) and Garud Impex Private Limited (hereinafter referred to

as the transferor company no. 3) with Dolphin International 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 4th March, 1991 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 10th June, 1992 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 1st November, 1989 with the Registrar of

Companies, NCT of Delhi & Haryana at New Delhi.

6. The transferee company was originally incorporated under the

Companies Act, 1956 on 2nd March, 1990 with the Registrar of

Companies, NCT of Delhi & Haryana under the name and style of

Dolphin Sales Private Limited. The company changed its name to

Dolphin International Private Limited and obtained a fresh certificate of

incorporation on 8th January, 1991. Thereafter, the word 'Private' was

deleted from the name of the company w.e.f. 28th June, 1992.

Subsequently, the company was converted into Public Limited Company

w.e.f. 10th August, 2004. The company finally converted into a private

limited company and changed its name to Dolphin International Private

Limited and obtained a fresh certificate in this regard on 21st February,

2013.

7. The authorized share capital of the transferor company no. 1, as

on 31st March, 2014, was Rs.7,00,000/- divided into 70,000 equity shares

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

company is Rs.6,62,000/- divided into 66,200 equity shares of Rs.10/-

each fully paid-up.

8. The authorized share capital of the transferor company no. 2, as

on 31st March, 2014, was Rs.1,00,00,000/- divided into 10,00,000 equity

shares of Rs.10/- each. The issued, subscribed and paid up capital of the

company is Rs.5,45,200/- divided into 54,520 equity shares of Rs.10/-

each fully paid-up.

9. The authorized share capital of the transferor company no. 3, as

on 31st March, 2014, was Rs.10,00,000/- divided into 1,00,000 equity

shares of Rs.10/- each. The issued, subscribed and paid up capital of the

company is Rs.5,18,000/- divided into 51,800 equity shares of Rs.10/-

each fully paid-up.

10. The authorized share capital of the transferee company, as on 31st

March, 2014, was Rs.6,00,00,000/- divided into 60,00,000 equity shares

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

company is Rs.5,42,43,000/- divided into 54,24,300 equity shares of

Rs.10/- each fully paid-up.

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) 1/2015, 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 petitioner and the accompanying affidavit. It is submitted

by the petitioners that the transferee company is a recognized export

house and it has been considered appropriate to eliminate multiplicity of

companies by merging the transferor companies into the transferee

company, so as to be able to work more cohesively, efficiently and

effectively as a single unit and thereby bring about overall economy and

reduction in costs and at the same time enable the management to give

better focus on its core business and improve and enhance its working

and operations. It is claimed that the proposed amalgamation would

enable pooling of physical, financial and human resources of these

companies for their most beneficial utilization in the combined entity

which would result in usual economies of a centralized and 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.10/- each of the transferee company, credited as fully paid up, for every 3 (three) equity shares of Rs.10/- each held in the transferor company no. 1."

"2 (two) equity shares of Rs.10/- each of the transferee company, credited as fully paid up, for every 5 (five) equity shares of Rs.10/- each held in the transferor company no. 2."

"2 (two) equity shares of Rs.10/- each of the transferee company, credited as fully paid up, for every 5 (five) equity shares 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 and the Companies Act,

2013 (to the extent application) have been initiated or are pending

against the applicant companies.

15. The Board of Directors of the transferor and transferee companies

in their separate meetings held on 2nd June, 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. 1/2015

seeking directions of this court to dispense with the requirement of

convening the meetings of their equity shareholders, secured and

unsecured creditors, which are statutorily required for sanction of the

Scheme of Amalgamation. Vide order dated 20th January, 2015, this

court allowed the application and dispensed with the requirement of

convening and holding the meetings of the equity shareholders of the

transferor companies and equity shareholders and secured creditors of

the transferee company, there being no secured or unsecured creditors

of the transferor companies and no unsecured creditors of the transferee

company, 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 3rd

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) editions. The petitioners have filed an affidavit showing

compliance regarding publication of citations in the aforesaid newspapers

on 9th March, 2015. Copies of the newspaper clippings containing the

publications have been filed along with the said affidavit.

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 14th July, 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 14.1

of Part-III 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 7.5 of Part-II of the Scheme, it has been stated that the transferee

company shall account for amalgamation in accordance with Accounting

Standards notified under the Companies (Accounting Standards) Rules,

2006, for the time being in force and/or the converged international

Financial Reporting Standards (IFRS) issued by the Institute of Chartered

Accountants of India from time to time. He further submitted that in

Clause 9 of Part-II of the Scheme, it has been stated that upon this

scheme becoming effective, the transferor companies no. 1 to 3 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 17th

July, 2015 of Mr. K. V. Rao, Director of the transferee company, have

submitted that neither the petitioner companies nor their counsel have

received any objection pursuant to the citations published in the

newspapers on 9th March, 2015.

21. Considering the approval accorded by the equity 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 having not raised 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 to 3 shall stand dissolved without undergoing the

process of winding up.

22. Learned counsel for the Official Liquidator prays that keeping in

view the fact that the matter has involved examination of extensive

records and also prioritized hearings, costs of at least Rs.1,00,000/-

should be paid by the petitioners. Learned counsel for the petitioners

submits that he has no objection to the prayer being granted. Considering

the facts and circumstances of the case, 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 11, 2015