Hcl Technologies Limited vs ...
2016 Latest Caselaw 5080 Del

                  IN THE HIGH COURT OF DELHI
             COMPANY APPLICATION (MAIN) NO. 100/2016

                                          Reserved on 19th July, 2016
                             Date of pronouncement: 3rd August, 2016
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 Arrangement and Amalgamation between:

Geometric Limited
                           Non-Applicant/Demerged/Transferor Company
       AND

HCL Technologies Limited
                                    Applicant/Transferee Company No. 1

3D PLM Software Solutions Limited
                             Non-Applicant/Transferee Company No. 2

                               Through Mr. Gyanendra Kumar,
                               Ms.Shikha Tandon and Ms. Samapika
                               Biswal, Advocates 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/transferee company no. 1 seeking

directions of this court to dispense with the requirement of convening the

meeting of its secured creditors and for convening separate meetings of

its equity shareholders and unsecured creditors to consider and approve,

with or without modification, the proposed Scheme of Arrangement and

Amalgamation between Geometric Limited (hereinafter referred to as the

demerged/transferor company); HCL Technologies Limited (hereinafter

referred to as the applicant/transferee company no. 1) and 3D PLM

Software Solutions Limited (hereinafter referred to as the transferee

company no. 2).

2. The registered office of the applicant/transferee company no. 1 is

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

registered offices of the demerged/transferor company and transferee

company no. 2 are situated at Mumbai, outside the jurisdiction of this

Court. Learned counsel for the applicant submits that separate

applications have been filed by the demerged/transferor company and

the transferee company no. 2 in the court of competent jurisdiction

seeking sanction of the Scheme of Arrangement and Amalgamation.

3. The applicant/transferee company no. 1 was originally

incorporated under the Companies Act, 1956 on 12th November, 1991

with the Registrar of Companies, NCT of Delhi & Haryana at New Delhi

under the name and style of HCL Overseas Limited. The company

changed its name to HCL Consulting Limited and obtained the fresh

certificate of incorporation on 14th July, 1994. The company finally

changed its name to HCL Technologies Limited and obtained the fresh

certificate of incorporation on 6th October, 1999.

4. The present authorized share capital of the applicant/transferee

company no.1 is Rs.3,00,00,00,000/- divided into 1,50,00,00,000 equity

shares of Rs.2/- each. The issued, subscribed and paid-up share capital

of the company is Rs.2,82,07,62,628/- divided into 1,41,03,81,314 equity

shares of Rs.2/- each.

5. A copy of the Memorandum and Articles of Association of the

applicant/transferee company no. 1 has been filed on record. The audited

balance sheets, as on 30th June, 2015 and 31st March, 2016, of the

applicant/transferee company no. 1, along with the report of the auditors,

have also been filed.

6. A copy of the Scheme of Arrangement and Amalgamation has

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

incorporated and detailed in the application and the accompanying

affidavits. It has been submitted by the applicants that the Scheme, inter

alia, provides (i) Demerger of the Demerged Business Undertaking of the

demerged company and its merger into the applicant/transferee company

no. 1, and (ii) amalgamation of the transferor company comprising the

remaining undertaking, post demerger, with the transferee company

no.2. It is claimed that the proposed demerger will widen the market and

expertise and the combined entity will be able to offer its customers a

unique blend of services and solutions around PLM, engineering

software, embedded software, mechanical engineering and geometry

related technologies.

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

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

transferee company no. 1 shall issue and allot equity shares to the

shareholders of the demerged company in the following ratio:

"10 equity shares of Rs.2/- each of the transferee company no. 1, fully paid up, for every 43 equity shares of Rs.2/- each held by the shareholders in the demerged company."

It has been further provided that the transferee company no. 2 shall

issue and allot shares to the shareholders of the transferor company in

the following ratio:

"01 fully paid up redeemable preference share of Rs.68/- each for every 01 fully paid up equity share held in the transferor company."

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

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

sections of the Companies Act, 2013 are pending against the

applicant/transferee company no. 1.

9. The Board of Directors of the applicant/transferee company no. 1

in their separate meetings held on 1st April, 2016 have unanimously

approved the proposed Scheme of Arrangement and Amalgamation. A

copy of the Resolutions passed at the meeting of the Board of Directors

of the applicant/transferee company no. 1 has also been placed on

record.

10. The applicant/transferee company no. 1 has 02 secured creditors.

Both the secured creditors have given their consents/no objections in

writing to the proposed Scheme of Arrangement and 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 meeting of the secured creditor of the applicant/transferee

company no. 1 to consider and, if thought fit, approve, with or without

modification, the proposed Scheme of Arrangement and Amalgamation is

dispensed with.

11. The applicant/transferee company no. 1 is a listed company and as

on 31st March, 2016 has 1,49,951 equity shareholders and a direction is

sought to convene and hold their meeting to seek their approval to the

proposed Scheme of Arrangement and Amalgamation. Considering the

facts and circumstances aforesaid, the meeting of the equity

shareholders of the applicant/transferee company no. 1 shall be held on

10th September, 2016 at 10:00 a.m. at Shri Satya Sai Auditorium,

Bhishma Pitamah Marg, Lodhi Road, New Delhi - 110003. Mr. N.P.S.

Chawla, Advocate, (Mobile No. 9911140302) is appointed as the

Chairperson and Mr. Ranjeet Singh Sahney, Advocate, (Mobile No.

9350276000) is appointed as the Alternate Chairperson to conduct the

said meeting. Keeping in view the fact that out of the total issued,

subscribed and paid up capital of the applicant company, 50 major

shareholders hold approx. 76.4% of the total equity share capital,

therefore, the quorum of the meeting of the equity shareholders of the

applicant/transferee company no. 1 shall be fixed at 100 in number and

more than 25% in value of the total equity share capital.

12. The applicant/transferee company no. 1 has 2267 unsecured

creditors and a direction is sought to convene and hold their meeting to

seek their approval to the proposed Scheme of Arrangement and

Amalgamation. Considering the facts and circumstances aforesaid, the

meeting of the unsecured creditors of the applicant/transferee company

no. 1 shall be held 10th September, 2016 at 03:00 p.m. at Shri Satya Sai

Auditorium, Bhishma Pitamah Marg, Lodhi Road, New Delhi - 110003.

Mr. Rajeev Kumar, Advocate, (Mobile No. 9810466870) is appointed as

the Chairperson and Ms. Isha Jha, Advocate, (Mobile No. 8447448222)

is appointed as the Alternate Chairperson to conduct the said meeting.

The Quorum of the meeting of the unsecured creditors of the

applicant/transferee company no. 1 shall be 200 in number and more

than 25% in value of the total unsecured debt.

13. The applicants also seek a direction of this Court to provide to its

equity shareholders with the facility to exercise their right to vote by

electronic means, in terms of Section 108 of the Companies Act, 2013

read with Rule 20 of the Companies (Management and Administration)

Rules, 2014 and Regulation 44(1) of the SEBI (Listing Obligations and

Disclosure Requirements) Regulations, 2015 and prayed that such voting

may be considered as a valid exercise of their vote on the Scheme in

accordance with Section 391 of the Companies Act, 1956. Section 108 of

the Companies Act, 2013 read with Rule 20 of the Companies

(Management and Administration) Rules, 2014 makes it mandatory for

certain class of companies to compulsorily provide to its members the

facility to exercise their right to vote on resolutions proposed to be

considered at general meetings by electronic means. A perusal of the

said Rule shows that the Rule is applicable only in case of the general

meetings convened by the company and not the Court convened

meetings. Since provisions relating to Compromise and Arrangement as

provided in the Companies Act, 2013 have yet not been notified, they are

still being governed by Sections 391-394 of the Companies Act, 1956

and the Companies (Court) Rules, 1959. Rule 77 of the Companies

(Court) Rules, 1959 provides that the decision of the meeting or meetings

held in pursuance of the order made under Rule 69 (directions at hearing

of summons) on all resolutions shall be ascertained only by taking a poll.

Therefore, Rule 77 clearly provides that the decision in a court convened

meeting(s) shall only by taking a poll and not by any other method, which

could only be possible when a person is present physically either in

person or through proxy in the said meeting. It is also noticed that sub-

rule 4 of Rule 20 of the Companies (Management and Administration)

Rules, 2014 provides that a company which provides the facility to its

members to exercise voting by electronic means shall send the notice of

the meeting to its members either through registered post or speed post,

or through electronic means or by courier service and not by ordinary

post. On the one hand the applicants are seeking permission to provide

to its equity shareholders with the facility to exercise their right to vote by

electronic means but on the other hand they also seek permission to

send the individual notices to its shareholders by ordinary post, which is

contrary to Rule 20(4) of the Companies (Management and

Administration) Rules, 2014. Keeping in view the aforesaid provision, I

am not inclined to allow the prayer of the applicants to provide to its

equity shareholders with the facility to exercise their right to vote by

electronic means. However, since there is no bar of sending the notices

by ordinary post in a court convened meeting, therefore, the second

prayer of the applicants regarding sending of notices to its members and

creditors by ordinary post is accepted.

14. In case the quorum as noted above for the meetings is not present,

then the meetings shall be adjourned by half an hour, and thereafter the

persons present and voting shall be deemed to constitute the quorum.

For the purpose of computing the quorum, the valid proxies shall also be

considered, if the proxy in the prescribed form duly signed by the person

entitled to attend and vote at the meetings is filed with the registered

office of the applicant company at least 48 hours before the meetings.

The Chairpersons and Alternate Chairpersons shall ensure that the proxy

registers are properly maintained.

15. The Chairpersons and Alternate Chairpersons shall ensure that

notices for convening the aforesaid meetings of the equity shareholders

and unsecured creditors of the applicant/transferor company no. 1, along

with copies of the Scheme of Arrangement and Amalgamation and the

statement under Section 393 of the Companies Act, 1956, are sent to the

equity shareholders and unsecured creditors of the applicant/transferor

company no. 1 by ordinary post at their registered or last known

addresses at least 21 days before the date appointed for the meeting, in

their presence or in the presence of their authorized representatives.

Notice of the meeting shall also be published in the Delhi editions of the

newspapers "Financial Express" (English) and "Navbharat Times" (Hindi)

in terms of the Companies (Court) Rules, 1959 at least 21 days before

the date appointed for the meetings.

16. The Chairpersons and Alternate Chairpersons will be at liberty to

issue suitable directions to the management of the applicant company so

that the aforesaid meetings of the equity shareholders and unsecured

creditors of the applicant/transferor company no. 1 are conducted in a

just, free and fair manner.

17. The fee of the Chairpersons and the Alternate Chairpersons for the

aforesaid meetings shall be Rs.50,000/- each in addition to meeting their

incidental expenses. The Chairpersons will file their reports within two

weeks from the date of holding of the aforesaid meetings.

18. The application stands allowed in the aforesaid terms.

Dasti

SUDERSHAN KUMAR MISRA, J.

August 03, 2016