Delhi High Court
Ahipl Management Consulting ... vs ... on 12 August, 2016
IN THE HIGH COURT OF DELHI
COMPANY PETITION NO. 702/2015
Reserved on 11th July, 2016
Date of pronouncement: 12th August, 2016
In the matter of
The Companies Act, 1956 & the Companies Act, 2013 (to the extent
applicable):
And
Petition under Sections 391 to 394(A) of the
Companies Act, 1956
Scheme of Amalgamation and Arrangement between:
AHIPL Management Consulting Private Limited
Petitioner/Transferor Company
AND
Fabindia Overseas Private Limited
Petitioner/Transferee Company
Through Mr. Aman Sinha, Sr. Advocate
with Mr. Dipankar Vig, Mr. Kunal
Juneja and Mr. Pravesh Thakur,
Advocates 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 to 394(A) of
the Companies Act, 1956 by the petitioner companies seeking sanction
of the Scheme of Amalgamation and Arrangement between AHIPL
Management Consulting Private Limited (hereinafter referred to as the
transferor company) and Fabindia Overseas 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 was originally incorporated under the
Companies Act, 1956 on 20th May, 2011 with the Registrar of
Companies, NCT of Delhi & Haryana at New Delhi under the name and
style of Fabindia Franchise & Consulting Private Limited. The company
changed its name to Artisans Holdings and Investment Private Limited
and obtained the fresh certificate of incorporation on 25th November,
2011. The company again changed its name to AHIPL Management
Consulting Private Limited and obtained the fresh certificate of
incorporation on 11th November, 2013.
4. The transferee company was incorporated under the Companies
Act, 1956 on 14th December, 1976 with the Registrar of Companies, NCT
of Delhi & Haryana at New Delhi.
5. The present authorized share capital of the transferor company is
Rs.12,50,00,000/- divided into 1,25,00,000 equity shares of Rs.10/- each.
The present issued, subscribed and paid-up share capital of the
company is Rs.12,50,00,000/- divided into 1,25,00,000 equity shares of
Rs.10/- each.
6. The present authorized share capital of the transferee company is
Rs.2,50,00,000/- divided into 25,00,000 equity shares of Rs.10/- each.
The present issued, subscribed and paid-up share capital of the
company is Rs.2,36,51,700/- divided into 23,65,170 equity shares of
Rs.10/- each.
7. 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) 128/2015, earlier filed by the petitioners.
The audited balance sheets, as on 31st March, 2015 and 31st March,
2014 of the transferor and transferee companies respectively, along with
the report of the auditors, had also been filed.
8. A copy of the Scheme of Amalgamation and Arrangement and
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 claimed that the proposed amalgamation will
provide better financial and growth prospects through consolidation of
resource base and improvement in generation, mobilization and
utilization of physical resources, financial resources, human resources,
knowledge, information and other important tangible and intangible
resources. It is further claimed that the proposed amalgamation will
reduce managerial overlaps, which are necessarily involved in running
multiple entities.
9. So far as the share exchange ratio is concerned, the Scheme
provides that the transferee company shall issue and allot equity shares
to the shareholders of the transferor company in the following ratio:
"01 equity share of Rs.10/- each of the transferee company for
every 100 equity shares of Rs.10/- each held by the
shareholders in the transferor company."
10. 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.
11. The Board of Directors of the transferor and transferee companies
in their separate meetings held on 29th April, 2015 have unanimously
approved the proposed Scheme of Amalgamation and Arrangement and
Arrangement. Copies of the Resolutions passed at the meetings of the
Board of Directors of the transferor and transferee companies have been
placed on record.
12. The petitioner companies had earlier filed CA (M) No. 128/2015
seeking directions of this court to dispense with the requirement of
convening the meetings of their equity shareholders, secured and
unsecured creditors and to convene a meeting of the unsecured creditors
of the transferee company, which are statutorily required for sanction of
the Scheme of Amalgamation and Arrangement. Vide order dated 27th
July, 2015, this court allowed the application and dispensed with the
requirement of convening and holding the meetings of the equity
shareholders of the transferor and transferee companies, there being no
secured or unsecured creditors of the transferor company and no
secured creditor of the transferee company, and directed convening of a
meeting of the unsecured creditor of the transferee company, to consider
and, if thought fit, approve, with or without modification, the proposed
Scheme of Amalgamation and Arrangement.
13. The Chairperson of the ordered meeting of the unsecured creditors
of the transferee company has filed his report stating that the meeting
was duly held on 3rd September, 2015, as directed, and that the Scheme
of Amalgamation and Arrangement has been approved unanimously by
the unsecured creditors of the transferee company, present and voting, in
the meeting.
14. The petitioner companies have thereafter filed the present petition
seeking sanction of the Scheme of Amalgamation and Arrangement. Vide
order dated 16th September, 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. Affidavit of service has been
filed by the petitioners 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 7th
October, 2015. Copies of the newspaper clippings containing the
publications have been filed along with the said affidavit.
15. 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 7th January, 2016
wherein he has stated that he has not received any complaint against the
proposed Scheme of Amalgamation and Arrangement from any
person/party interested in the Scheme in any manner and that the affairs
of the transferor company do not appear to have been conducted in a
manner prejudicial to the interest of its members, creditors or public
interest, as per second proviso of Section 394(1) of the Companies Act,
1956.
16. 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 2nd February, 2016. Although the
Regional Director has not raised any objection to the proposed Scheme
but in para 10 of his report he has stated that, as per Clause 13 of the
Scheme, the petitioner companies are required to comply with the
provisions of Accounting Standard-14 related to pooling of interest
method as prescribed under Section 211(3C) of the Companies Act,
1956 and under Section 133 of the Companies Act, 2013. Further, in
para 11 of the his report he has prayed that the transferee company may
be directed to continue all the employees of the transferor company on
existing or similar terms and conditions as to remuneration and other
benefits, without any breach or interruption of service, as provided in
Clause 16 of the Scheme. So far as the aforesaid observations of the
Regional Director are concerned, no specific directions are required to be
passed by this Court, since as per Clause 3.8 read with Clause 16 of the
Scheme, the petitioner companies have already undertaken to continue
the services of all the employees of the transferor company in the
transferee company on the terms and conditions, which will not be less
favourable to them, then those applicable to them, as on the effective
date. Further, in Clause 13 of the Scheme, the transferee company has
undertaken to follow the Purchase Method for accounting as provided in
Accounting Standard-14. In view of the aforesaid, the observations raised
by the Regional Director do not subsist.
17. No objection has been received to the Scheme of Amalgamation
and Arrangement from any other party. The petitioner companies, in the
affidavit dated 2nd February, 2016 of Ms. Monica Uppal Arora, authorized
signatory 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 7th October,
2015.
18. Considering the approval accorded by the equity shareholders and
creditors of the petitioner companies to the proposed Scheme of
Amalgamation and Arrangement and the affidavits filed by the Regional
Director, Northern Region, and the Official Liquidator not raising any
objection to the proposed Scheme of Amalgamation and Arrangement,
there appears to be no impediment to the grant of sanction to the
Scheme of Amalgamation and Arrangement. Consequently, sanction is
hereby granted to the Scheme of Amalgamation and Arrangement 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, 2015, the transferor
company shall stand dissolved without undergoing the process of winding
up.
19. 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 company
states that the same is acceptable to him. As already directed vide order
dated 11.07.2016, the petitioners 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.
20. The petition is allowed in the above terms.
Dasti.
SUDERSHAN KUMAR MISRA, J.
August 12, 2016
