Elite Townships Private Limited vs ...
2016 Latest Caselaw 5600 Del

                   IN THE HIGH COURT OF DELHI
                  COMPANY PETITION NO. 941/2015

                                          Reserved on 28th July, 2016
                            Date of pronouncement: 29th 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 of the
Companies Act, 1956

Scheme of Arrangement between:

Elite Townships Private Limited
                                            Petitioner/Demerged Company
      AND

Proud Buildwell Private Limited
                                       Petitioner/Resulting Company No. 1

Wisdom Infrahome Private Limited
                                       Petitioner/Resulting Company No. 2

                                  Through Ms. Isha Jha, Advocate for
                                  the petitioners
                                  Ms. Aparna Mudiam, Asstt. Registrar
                                  of Companies for the Regional Director

SUDERSHAN KUMAR MISRA, J.

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

Companies Act, 1956 by the petitioner companies seeking sanction of

the Scheme of Arrangement between Elite Townships Private Limited

(hereinafter referred to as the demerged company) and Proud Buildwell

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

and Wisdom Infrahome Private Limited (hereinafter referred to as the

resulting company no. 2).

2. The registered offices of the demerged and resulting companies

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

3. The demerged company was incorporated under the Companies

Act, 1956 on 29th December, 2006 with the Registrar of Companies, NCT

of Delhi & Haryana at New Delhi.

4. The resulting company no. 1 was incorporated under the

Companies Act, 1956 on 9th October, 2013 with the Registrar of

Companies, NCT of Delhi & Haryana at New Delhi.

5. The resulting company no. 2 was incorporated under the

Companies Act, 1956 on 8th October, 2013 with the Registrar of

Companies, NCT of Delhi & Haryana at New Delhi.

6. The present authorized share capital of the demerged company is

Rs.78,00,00,000/- divided into 5,30,00,000 equity shares of Rs.10/- each

aggregating to Rs.53,00,00,000/- and 2,50,00,000 1% non-cumulative

redeemable preference shares of Rs.10/- each aggregating to

Rs.25,00,00,000/-. The issued, subscribed and paid up capital of the

company is Rs.75,00,48,620/- divided into 5,07,36,112 equity shares of

Rs.10/- each aggregating to Rs.50,73,61,120/- and 2,42,68,750 1% non-

cumulative redeemable preference shares of Rs.10/- each aggregating to

Rs.24,26,87,500/-.

7. The present authorized share capital of the resulting company no.1

is Rs.1,00,000/- divided into 10,000 equity shares of Rs.10/- each. The

issued, subscribed and paid up capital of the company is Rs.1,00,000/-

divided into 10,000 equity shares of Rs.10/- each.

8. The present authorized share capital of the resulting company no.2

is Rs.1,00,000/- divided into 10,000 equity shares of Rs.10/- each. The

issued, subscribed and paid up capital of the company is Rs.1,00,000/-

divided into 10,000 equity shares of Rs.10/- each.

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

demerged and resulting companies have been filed on record with the

joint application, being CA(M) 159/2015, earlier filed by the petitioners.

The audited balance sheets, as on 31st March, 2015, of the demerged

and resulting companies, along with the report of the auditors, have also

been filed.

10. 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 petitioners that the Scheme, inter alia, provides for transfer of the

Vacation Homes and Resorts Project Undertaking of the demerged

company into resulting company no. 1 and the transfer of Resorts and

Villas Project Undertaking of the demerged company into the resulting

company no. 2. It is claimed that the proposed demerger will provide as a

measure of corporate restructuring and to provide potential for further

growth and diversification to have better synergy and optimization of

resources as well as to facilitate fund raising and development of each

business in the respective companies. It is further claimed that the

proposed demerger will enable a better and more efficient management,

control and running of each of the business verticals under a separate

corporate umbrella.

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

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

companies shall issue and allot shares to the shareholders of the

demerged company in the following ratio:-

"38 equity shares of Rs.10/- each of the resulting company no.1, credited as fully paid up, for every 100 equity shares of Rs.10/- each held in the demerged company."

"32 equity shares of Rs.10/- each of the resulting company no.2, credited as fully paid up, for every 100 equity shares of Rs.10/- each held in the demerged company."

12. It has been submitted by the petitioners that no proceedings under

Sections 235 to 251 of the Companies Act, 1956 and Sections 201 to

227 of the Companies Act, 2013 are pending against the petitioner

companies.

13. The Board of Directors of the demerged and resulting companies

in their separate meetings held on 8th June, 2015 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.

14. The petitioner companies had earlier filed CA (M) No. 159/2015

seeking directions of this court to dispense with the requirement of

convening the meetings of their equity shareholders, preference

shareholders, secured and unsecured creditors, which are statutorily

required for sanction of the Scheme of Arrangement. Vide order dated 6th

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

the requirement of convening and holding the meetings of the equity

shareholders, preference shareholders and unsecured creditors of the

demerged company and equity shareholders of the resulting companies,

there being no secured creditor of the demerged company and no

secured or unsecured creditor of the resulting companies, to consider

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

Scheme of Arrangement.

15. The petitioner companies have thereafter filed the present petition

seeking sanction of the Scheme of Arrangement. Vide order dated 9th

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

Regional Director, Northern Region. Citations were also directed to be

published in 'Business Standard' (English) and 'Veer Arjun' (Hindi)

editions. Affidavit of service has been filed by the petitioners showing

compliance regarding service on the Regional Director, Northern Region,

and also regarding publication of citations in the aforesaid newspapers

on 19th January, 2016. Copies of the newspaper clippings containing the

publications have been filed along with the affidavit of service.

16. In response to the notices issued in the petition, Mr. Narender

Kumar Bhola, Regional Director, Northern Region, Ministry of Corporate

Affairs has filed his report dated 14th July, 2016 stating that the Regional

Director has no objection to the proposed Scheme of Amalgamation

subject to the compliance of the submissions made by the petitioner

companies as stated in para 9 (i) and also subject to compliance of FDI

policy as well as other applicable laws. The Regional Director in para 9 (i)

of his report has submitted the following:

(i) During the course of processing report, the following discrepancies

have been noticed:

(a) Refer to Para 1(XIV) of Part I of the proposed Scheme,

'Resulting/Transferee Companies' should be defined as Proud

Buildwell Private Limited and Wisdom Infrahome Private Limited in

place of demerged undertakings;

(b) Refer to para 12.1(a) & (b) of the Scheme, the consideration

should be paid by the resulting companies instead of mentioning

name of Demerged undertakings;

(c) Refer to para 12.2(a) & (b), Vacation Homes and Resorts

Project and Resorts and Villas Project are one of the divisions of

the demerged company and do not have any separate authorized

share capital.

Further, the Regional Director in para 9 (iii) of his report has

submitted that as per the balance sheet as at 31.03.2010 of the

demerged company, in Note 11 of the Notes of Account, the demerged

company during the said year has acquired various land parcels. The

Regional Director has submitted that the demerged company is a wholly

owned subsidiary of Skyble Ltd., a Mauritius based company and has to

be treated as a foreign company for the purposes of Foreign Direct

Investment. It has been further submitted that in the Note to para 21 of

the Press Note No. 12 ( 2015 series) of Ministry of Industrial Policy &

Promotion, FDI is not permitted in an entity which is engaged or proposes

to engage in real estate business, construction of farm houses and

trading in transferable development rights.

17. In response to the aforesaid observations, the petitioner

companies have filed CA 2485/2016 praying for leave to modify the

scheme in the light of observations of the Regional Director. A copy of

the amended Scheme has also been placed on record along with the

said company application. The said CA 2485/2016 was allowed vide a

separate order dated 28th July, 2016 and the modified Scheme was taken

on record. So far as the second observation of the Regional Director is

concerned, the petitioner companies have submitted that the demerged

company is a recipient of 100% FDI under automatic route and is

undertaking development and construction of hospitality projects across

three verticals namely (a) Luxury Resorts and Villas; (b) Vacation Homes

and Resorts; and (c) Resorts and Villas, which is in compliance with the

FDI Policy issued by the Ministry of Commerce and Industry, Department

of Industrial Policy & Promotion as amended from time to time and does

not constitute as carrying on the Real Estate business. In view of the

aforesaid, the concerns expressed by the Regional Director stand

satisfied.

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

from any other party. The petitioner companies, in the affidavit dated 28th

April, 2016 of Ms. Yukti Gupta, counsel of the petitioner companies, have

submitted that they have not received any objection pursuant to the

citations published in the newspapers on 19th January, 2016.

19. Considering the approval accorded by the shareholders and

creditors of the petitioner companies to the proposed Scheme of

Arrangement and the affidavit filed by 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 amended Scheme of Arrangement. Consequently, sanction is

hereby granted to the amended Scheme of Arrangement annexed with

CA 2485/2016 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 arrangement, i.e. 1st April,

2014, the Vacation Homes and Resorts Project Undertaking and the

Resorts and Villas Project Undertaking of the demerged company shall

stand transferred into resulting company no. 1 resulting company no. 2

respectively.

20. The petition is allowed in the above terms.

Dasti.

SUDERSHAN KUMAR MISRA, J.

August 29, 2016