Uttam Sucrotech Limited vs ...
2016 Latest Caselaw 5079 Del

                   IN THE HIGH COURT OF DELHI
                  COMPANY PETITION NO. 899/2015

                                          Reserved on 31st May, 2016
                             Date of pronouncement: 3rd August, 2016
In the matter of
The Companies Act, 1956 & the Companies Act, 2013 (to the extent
applicable):

And

Petition under Sections 391 & 394 of the
Companies Act, 1956

Scheme of Arrangement between:

Uttam Sucrotech Limited
                                        Non-Petitioner/Demerged Company
      AND

Uttam Sucrotech International Holdings Private Limited
                                           Petitioner/Resulting Company

                               Through      Mr.    P. Nagesh     with
                               Mr.Ashutosh Gupta, Advocates for the
                               petitioners
                               Ms. Aparna Mudiam, Asstt. Registrar
                               of Companies for the Regional Director
                               Mr. Rajiv Bahl, Advocate for the
                               Official Liquidator

SUDERSHAN KUMAR MISRA, J.

1. This petition has been filed under Sections 391 and 394 of the

Companies Act, 1956 by the petitioner/resulting company seeking

sanction of the Scheme of Arrangement between Uttam Sucrotech

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

Sucrotech International Holdings Private Limited (hereinafter referred to

as the petitioner/resulting company).

2. The registered office of the petitioner/resulting company is situated

at New Delhi, within the jurisdiction of this Court. However, the registered

office of the demerged company is situated at Uttar Pradesh, outside the

jurisdiction of this Court. Learned counsel for the petitioner has submitted

that a separate petition has been moved by the demerged company in

the court of competent jurisdiction seeking sanction of the Scheme of

Arrangement in respect of the demerged company.

3. The petitioner/resulting company was incorporated under the

Companies Act, 1956 on 14th December, 2011 with the Registrar of

Companies, NCT of Delhi & Haryana at New Delhi.

4. The present authorized share capital of the petitioner/resulting

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

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

is Rs.3,30,000/- divided into 33,000 equity shares of Rs.10/- each.

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

demerged and resulting companies have been filed on record. The

audited balance sheet, as on 31st March, 2014, of the petitioner/resulting

company, along with the report of the auditors, has also been filed.

6. A copy of the Scheme of Arrangement 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 petitioner that the Scheme, inter alia, provides for demerger of the

Engineering Business Division of the demerged company and its merger

into the resulting company. It is further submitted that the Demerged

Undertaking has the potential of being developed into a parallel and

independent profitable business segment in future and keeping in view its

potential and to unlock the value of shares of all its stakeholders, the

demerged company is being developed into an independent business

segment by hiving-off Demerged Undertaking into the resulting company.

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

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

petitioner/resulting company shall issue and allot shares to the

shareholders of the demerged company in the following ratio:

"01 compulsory convertible preference shares of Rs.10/- each in the resulting company for every 10,000 equity share of Rs.10/- each held by them in the demerged company."

8. It has been submitted by the petitioner that no proceedings under

Sections 235 to 251 of the Companies Act, 1956 and corresponding

provisions of the Companies Act, 2013 are pending against the

petitioner/resulting company.

9. The Board of Directors of the demerged company and the

petitioner/resulting company in their separate meetings held on 22nd May,

2015 and 18th March, 2015 respectively have unanimously approved the

proposed Scheme of Arrangement. Copies of the Resolutions passed at

the meetings of the Board of Directors of the demerged and resulting

companies have been placed on record.

10. The petitioner/resulting company had earlier filed CA (M) No.

166/2015 seeking directions of this court to dispense with the

requirement of convening the meetings of its equity shareholders,

secured and unsecured creditors, which are statutorily required for

sanction of the Scheme of Arrangement. Vide order dated 16th

November, 2015, this court allowed the application and dispensed with

the requirement of convening and holding the meeting of the equity

shareholders and unsecured creditors of the petitioner/resulting

company, there being no secured creditor of the petitioner company, to

consider and, if thought fit, approve, with or without modification, the

proposed Scheme of Arrangement.

11. The petitioner companies have thereafter filed the present petition

seeking sanction of the Scheme of Arrangement. Vide order dated 2nd

December, 2015, notice in the petition was directed to be issued to the

Official Liquidator and the Regional Director, Northern Region. Citations

were also directed to be published in 'Business Standard' (English) and

(Hindi) editions. Affidavit of services has been filed by the petitioner

showing compliance regarding service on the Official Liquidator and the

Regional Director, Northern Region, and also regarding publication of

citations in the aforesaid newspapers on 4th March, 2016. Copies of the

newspaper clippings containing the publications have been filed along

with the said affidavit.

12. 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 1st April, 2016

wherein he has stated that the present Scheme involves demerger of an

undertaking of the demerged company into the resulting company only

whereby no company gets dissolved.

13. 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 8th April, 2016 not raising any objection

to the proposed Scheme of Arrangement.

14. No objection has been received to the Scheme of Arrangement

from any other party. The petitioner/resulting company, in the affidavit

dated 5th April, 2016 of Mr. Anil Datta, Director of the resulting company,

has submitted that the petitioner company has not received any objection

pursuant to the citations published in the newspapers on 4th March, 2016.

15. Considering the approval accorded by the equity shareholders and

creditors of the petitioner/resulting company to the proposed Scheme of

Arrangement, and the affidavits filed by the Official Liquidator and the

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

proposed Scheme of Arrangement, there appears to be no impediment to

the grant of sanction to the Scheme of Arrangement. Consequently,

subject to sanction of the Scheme of Arrangement in respect of the

demerged company by the court of competent jurisdiction, sanction is

hereby granted to the Scheme of Arrangement under Sections 391 and

394 of the Companies Act, 1956. The petitioner company 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. 1st July, 2014, the Engineering Business Division of the

demerged company shall stand merged in the resulting company.

16. Learned counsel for the Official Liquidator prays that costs of at

least Rs.1,00,000/- should be paid by the petitioner keeping in view the

fact that the matter has involved examination of extensive records and

also prioritized hearings. Learned counsel for the petitioner company

states that the same is acceptable to him. As already directed vide order

dated 31.05.2016, the petitioner shall deposit a sum of Rs.1,00,000/- by

way of costs with the Delhi High Court Bar Association Lawyers Social

Security and Welfare Fund, New Delhi.

17. The petition is allowed in the above terms.

Dasti.

SUDERSHAN KUMAR MISRA, J.

August 03, 2016