Delhi High Court
Chandpur Enterprises Limited vs ... on 29 August, 2016
IN THE HIGH COURT OF DELHI
COMPANY PETITION NO. 739/2015
Reserved on 2nd August, 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(2) & 394 read with
Sections 100 to 104 of the Companies Act,
1956
Scheme of Arrangement between:
Chandpur Enterprises Limited
Non-Petitioner/Demerged Company
AND
Emdees Foods Limited
Non-Petitioner/Resulting Company No. 1
VKM Industries Limited
Petitioner/Resulting Company No. 2
Through Mr. Rajeev K. Goel, Advocate
for the petitioners
SUDERSHAN KUMAR MISRA, J.
1. This petition has been filed under Sections 391(2) & 394 read with
Sections 100 to 104 of the Companies Act, 1956 by the petitioner/
resulting company no. 2 seeking sanction of the Scheme of Arrangement
between Chandpur Enterprises Limited (hereinafter referred to as the
demerged company) and Emdees Foods Limited (hereinafter referred to
as the resulting company no. 1) and VKM Industries Limited (hereinafter
referred to as the petitioner/resulting company no. 2).
2. The registered office of the petitioner/resulting company no. 2 is
situated at New Delhi, within the jurisdiction of this Court. However, the
registered offices of the demerged company and the resulting company
no. 1 are situated at Uttar Pradesh, outside the jurisdiction of this Court.
Learned counsel for the petitioner submitted that separate application
has been filed by the demerged company and the resulting company
no.1 in the Allahabad High Court for sanction of the Scheme of
Amalgamation in their respect.
3. The petitioner/resulting company no. 2 was originally incorporated
under the Companies Act, 1956 on 9th March, 2012 with the Registrar of
Companies, NCT of Delhi & Haryana at New Delhi under the name and
style of VKM Industries Private Limited. The company changed its name
to VKM Industries Limited and obtained the fresh certificate of
incorporation on 22nd April, 2013.
4. The present authorized share capital of the petitioner/resulting
company no. 2 is Rs.1,50,00,000/- divided into 15,00,000 equity shares
of Rs.10/- each. The issued, subscribed and paid-up share capital of the
company is Rs.33,00,300/- divided into 3,30,030 equity shares of Rs.10/-
each.
5. A copy of the Memorandum and Articles of Association of the
petitioner/resulting company no. 2 has been filed on record with the
application, being CA(M) 135/2015, earlier filed by the petitioner. The
audited balance sheet, as on 31st March, 2014, of the petitioner/resulting
company no. 2, along with the report of the auditors, had 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 has been
submitted by the petitioner that the demerged company has three distinct
businesses/divisions viz. Paper Division, Food Division, and Steel
Division. It has been further submitted that in order to explore the
potential of these businesses to the fullest and to provide focused
leadership and management attention, it is intended to demerge Food
Division and Steel Division of the demerged company into the resulting
companies nos. 1 & 2 respectively. It is claimed that the proposed
demerger will provide scope for independent expansion of various
businesses. It will strengthen, consolidate and stabilize the business of
these companies and will facilitate further expansion and growth of their
business.
7. So far as the share exchange ratio is concerned, the Scheme
provides that, upon coming into effect of this Scheme, the resulting
companies nos. 1 & 2 shall issue and allot equity shares to the
shareholders of the demerged company in the following ratio:-
"24 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."
"147 equity shares of Rs.10/- each of the resulting company
no.2, credited as fully paid up, for every 1000 equity shares of
Rs.10/- each held 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 are pending against the
petitioner/resulting company no. 2.
9. The Board of Directors of the petitioner/resulting company no. 2 in
their meeting held on 20th January, 2015 have unanimously approved the
proposed Scheme of Arrangement. A copy of the Resolution passed at
the meeting of the Board of Directors of the petitioner/resulting company
no. 2 has been placed on record.
10. The petitioner/resulting company no. 2 had earlier filed CA (M) No.
135/2015 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 11th
September, 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 petitioner/resulting company
no. 2, 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/resulting company no. 2 has thereafter filed the
present petition seeking sanction of the Scheme of Arrangement. Vide
order dated 28th September, 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 (Hindi)
Delhi 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 27th October, 2015. Copies of the newspaper clippings
containing the publications have been filed along with the affidavit of
service.
12. 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 February, 2016 stating that the
Regional Director has no objection to the proposed Scheme of
Amalgamation subject to compliance of provisions of section 117(3) and
179(3) of the Companies Act, 2013 by the petitioner/resulting company
no. 2. The Regional Director in para 7 of his report has submitted that the
Board of Directors of the resulting company no. 2 have approved the
proposed Scheme in their Board meeting held on 15.01.2015.
Accordingly, in terms of provisions of Section 117(3) read with 179(3) of
the Companies Act, 2013, the company is required to file such resolution
(e-form MGT-14) with the ROC within 30 days of passing the resolution
whereas the company has not yet filed the said resolution thereby prima
facie violated the provisions of Section 117(3) of the Companies Act,
2013.
13. In response to the aforesaid observation, the petitioner/resulting
company no. 2 in the affidavit dated 4th July, 2016 of Mr. Kshitiz Mittal,
Director of the petitioner company, has submitted that the petitioner
company has moved an application to the Central Government, Ministry
of Corporate Affairs, New Delhi seeking condonation of delay in filing e-
form MGT-14 and undertakes to file the same immediately on receipt of
the requisite approval from the Central Government. It has been further
submitted that the petitioner/resulting company no. 2 is not the subject
matter of dissolution and will remain in existence even after the sanction
of the Scheme. Therefore, if the company fails to file the e-Form MGT-14,
the ROC may initiate appropriate proceedings against the petitioner
company for non filing of e-Form MGT-14. The undertaking given by the
petitioner/resulting company no. 2 to file e-Form MGT-14 on receipt of
approval from the Central Government is accepted. In case of any default
by the company, the ROC would be at liberty to take appropriate action,
as permissible in law, against the petitioner company.
14. No objection has been received to the Scheme of Arrangement
from any other party. The petitioner/resulting company no. 2, in the
affidavit dated 2nd February, 2016 of Mr. Kshitiz Mittal, Director of the
petitioner/resulting company no. 2, has submitted that neither the
petitioner company nor its counsel have received any objection pursuant
to the citations published in the newspapers on 27th October, 2015.
15. Considering the approval accorded by the equity shareholders and
creditors of the petitioner/resulting company no. 2 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 Scheme of Arrangement. Consequently, subject to sanction of the
Scheme from the court of competent jurisdiction in respect of the
demerged company and resulting company no. 1, sanction is hereby
granted to the Scheme of Arrangement under Sections 391 and 394 of
the Companies Act, 1956. The petitioner/resulting company no. 2 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. The sanction of the Scheme will be effective from
the appointed date of arrangement, i.e. 1st April, 2014.
16. Learned counsel for the Official Liquidator prays that costs of at
least Rs.50,000/- 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
02.08.2016, the petitioner shall deposit a sum of Rs.50,000/- by way of
costs with 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 29, 2016
