Delhi High Court
Cyclonic Bicycles Private ... vs ... on 12 August, 2016
IN THE HIGH COURT OF DELHI
COMPANY PETITION NO. 519/2015
Reserved on 13th 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(2) & 394 of the
Companies Act, 1956
Scheme of Amalgamation of:
Cyclonic Bicycles Private Limited
Petitioner/Transferor Company No. 1
Ethan Agencies Private Limited
Petitioner/Transferor Company No. 2
Mulberry Fab Text Private Limited
Petitioner/Transferor Company No. 3
WITH
Onset Interiors Private Limited
Petitioner/Transferee Company
Through Mr. Rajeev K. Goel, Advocate
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 joint petition has been filed under Sections 391(2) & 394 of
the Companies Act, 1956 by the petitioner companies seeking sanction
of the Scheme of Amalgamation of Cyclonic Bicycles Private Limited
(hereinafter referred to as the transferor company no. 1); Ethan Agencies
Private Limited (hereinafter referred to as the transferor company no. 2)
and Mulberry Fab Text Private Limited (hereinafter referred to as the
transferor company no. 3) with Onset Interiors 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 3rd August, 2004 with the Registrar of
Companies, NCT of Delhi & Haryana at New Delhi.
4. The transferor company no. 2 was originally incorporated under
the Companies Act, 1956 on 25th August, 2003 with the Registrar of
Companies, NCT of Delhi & Haryana at New Delhi under the name and
style of Rich Soya Foods Private Limited. The company changed its
name to Ethan Agencies Private Limited and obtained the fresh
certificate of incorporation on 14th October, 2011.
5. The transferor company no. 3 was originally incorporated under
the Companies Act, 1956 on 21st September, 1987 with the Registrar of
Companies, NCT of Delhi & Haryana at New Delhi under the name and
style of Saldi Chits Private Limited. The company changed its name to
Mulberry Fab Text Private Limited and obtained the fresh certificate of
incorporation on 8th February, 2012. Thereafter, the company shifted its
registered office from the state of Haryana to Delhi and obtained a
certificate in this regard on 20th August, 2014.
6. The transferee company was incorporated under the Companies
Act, 2013 on 3rd January, 2015 with the Registrar of Companies, NCT of
Delhi & Haryana at New Delhi.
7. The present authorized share capital of the transferor company
no.1 is Rs.25,00,000/- divided into 2,50,000 equity shares of Rs.10/-
each. The issued, subscribed and paid-up share capital of the company
is Rs.25,00,000/- divided into 2,50,000 equity shares of Rs.10/- each.
8. The present authorized share capital of the transferor company
no.2 is Rs.1,00,000/- divided into 10,000 equity shares of Rs.10/- each.
The issued, subscribed and paid-up share capital of the company is
Rs.1,00,000/- divided into 10,000 equity shares of Rs.10/- each.
9. The present authorized share capital of the transferor company
no.3 is Rs.1,01,00,000/- divided into 1,01,000 equity shares of Rs.100/-
each. The issued, subscribed and paid-up share capital of the company
is Rs.1,00,00,000/- divided into 1,00,000 equity shares of Rs.100/- each.
10. The present authorized share capital of the transferee company is
Rs.10,00,000/- divided into 1,00,000 equity shares of Rs.10/- each. The
issued, subscribed and paid-up share capital of the company is
Rs.1,00,000/- divided into 10,000 equity shares of Rs.10/- each.
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) 114/2015, earlier filed by the petitioners.
The audited balance sheets, as on 31st March, 2015, 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 petition and the accompanying affidavits. It is submitted by
the petitioners that the transferor and transferee companies are closely
held group companies and the proposed amalgamation would result in
business synergy, consolidation and pooling of their resources. It is
claimed that the proposed amalgamation will result in usual economies of
a centralized and a 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:-
"1,612 equity share of Rs.10/- each of the transferee company,
credited as fully paid up, for every 1,000 equity shares of
Rs.10/- held in the transferor company no. 1."
"2,338 equity share of Rs.10/- each of the transferee company,
credited as fully paid up, for every 100 equity shares of Rs.10/-
held in the transferor company no. 2."
"623 equity share of Rs.10/- each of the transferee company,
credited as fully paid up, for every 100 equity shares of
Rs.100/- 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 are pending against the
petitioner companies.
15. The Board of Directors of the transferor and transferee companies
in their separate meetings held on 16th May, 2015 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. 114/2015
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 21st July, 2015 this court
allowed the application and dispensed with the requirement of convening
and holding the meetings of the equity shareholders and unsecured
creditors of the transferor and transferee companies, there being no
secured creditors of the petitioner companies, 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 17th
August, 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 10th September, 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 12th February,
2016 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 15th February, 2016 stating that the
Registrar of Companies has not made any adverse comments to the
proposed Scheme. Although the Regional Director has not raised any
objection to the proposed Scheme of Amalgamation but in para 5 of his
report, while referring to the letter dated 27.10.2015 of Income Tax
Officer (Hqrs-7), he has submitted that the transferee company has not
filed its income tax returns till date. In response to the aforesaid
observation, the petitioner companies in the affidavit dated 2nd July, 2016
of Mr. Anish Malhotra, Director of the transferee company, have
submitted that the transferee company has filed its income tax return for
the financial year ended 31st March, 2015 with the income tax authorities.
A copy of ITR acknowledgement evidencing filing of the income tax
return is enclosed with the affidavit. In view of the aforesaid, the
observation made by the Regional Director stands satisfied.
20. No objection has been received to the Scheme of Amalgamation
from any other party. The petitioner companies, in the affidavit dated 8th
February, 2016 of Mr. Kulvinder Pal Singh Bhatia, 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 10th September, 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 not raising 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, 2015, 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 costs of at
least Rs.50,000/- 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 13.07.2016, the petitioners shall deposit a sum of Rs.50,000/- by
way of costs with the Delhi High Court Bar Association Lawyers Social
Security and Welfare Fund, New Delhi.
23. The petition is allowed in the above terms.
Dasti.
SUDERSHAN KUMAR MISRA, J.
August 12, 2016
