Delhi High Court
Trophy Holdings Private Limited vs ... on 29 August, 2016
IN THE HIGH COURT OF DELHI
COMPANY PETITION NO. 219/2016
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 & 394 of the
Companies Act, 1956
Scheme of Amalgamation of:
Trophy Holdings Private Limited
Petitioner/Transferor Company
WITH
Liquid Investment and Trading Company Private Limited
Petitioner/Transferee Company
Through Mr. N. Ganpathy and
Mr.Mukul Talwar, Sr. Advocates with
Ms. Vatsalya Rai and Ms. Anindita Roy
Chowdhary, Advocates for the
petitioners
SUDERSHAN KUMAR MISRA, J.
1. This joint petition has been filed under Sections 391 & 394 of the
Companies Act, 1956 by the petitioner companies seeking sanction of
the Scheme of Amalgamation of Trophy Holdings Private Limited
(hereinafter referred to as the transferor company) with Liquid Investment
and Trading Company 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 incorporated under the Companies
Act, 1956 on 19th February, 2003 with the Registrar of Companies, NCT
of Delhi & Haryana.
4. The transferee company was originally incorporated under the
Companies Act, 1956 on 24th May, 1982 with the Registrar of
Companies, NCT of Delhi & Haryana at New Delhi under the name and
style of Liquid Investment and Trading Company. The company changed
its name to Liquid Investment and Trading Company Private Limited and
obtained the fresh certificate of incorporation on 15th April, 2011.
5. The present authorized share capital of the transferor company is
Rs.3,00,00,000/- divided into 30,00,000 equity shares of Rs.10/- each.
The issued, subscribed and paid-up share capital of the company is
Rs.2,90,24,110/- divided into 29,02,411 equity shares of Rs.10/- each.
6. The present authorized share capital of the transferee company is
Rs.27,00,00,000/- divided into 1,85,00,000 equity shares of Rs.10/- each
aggregating to Rs.18,50,00,000/-; 10,000 11% non-cumulative
redeemable preference shares of Rs.100/- each aggregating to
Rs.10,00,000/-; 3,40,000 12.5% non-cumulative redeemable preference
shares of Rs.100/- each aggregating to Rs.3,40,00,000/-; and 5,00,000
5% non-cumulative redeemable preference shares of Rs.100/- each
aggregating to Rs.5,00,00,000/-. The issued, subscribed and paid-up
share capital of the company is Rs.24,50,27,000/- divided into
1,82,50,600 equity shares of Rs.10/- each aggregating to
Rs.18,25,06,000/-; 210 11% non-cumulative redeemable preference
shares of Rs.100/- each aggregating to Rs.21,000/-; 3,00,000 12.5%
non-cumulative redeemable preference shares of Rs.100/- each
aggregating to Rs.3,00,00,000/-; and 3,25,000 5% non-cumulative
redeemable preference shares of Rs.100/- each aggregating to
Rs.3,25,00,000/-.
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) 177/2015, earlier filed by the petitioners.
The audited balance sheets, as on 31st March, 2015, of the transferor
and transferee companies, along with the reports of the auditors, had
also been filed.
8. 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 affidavit. It is claimed that
the proposed amalgamation would lead to more efficient utilization of
capital and create a stronger capital base for future growth of the
amalgamated entity which will be beneficial for all its stakeholders. It is
further claimed that the proposed amalgamation will lead to reduction of
administrative cost and overhead expenses which would further lead to
greater and effective executive control, synergy of operations and
optimum utilization of available resources.
9. 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 company in the following ratio:
"25 equity shares of Rs.10/- each, credited as fully paid up, of
the transferee company for every 100 equity shares of Rs.10/-
each fully paid up held in the transferor company."
10. It has been submitted by the petitioners that no proceedings under
Sections 237, 250, 250A and 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 10th August, 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.
12. The petitioner companies had earlier filed CA (M) No. 177/2015
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 Amalgamation. Vide order dated
23rd December, 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 company and
equity shareholders, preference shareholders, secured and unsecured
creditors of the transferee company, there being no secured creditor of
the transferor company, to consider and, if thought fit, approve, with or
without modification, the proposed Scheme of Amalgamation.
13. The petitioner companies have thereafter filed the present petition
seeking sanction of the Scheme of Amalgamation. Vide order dated 14th
March, 2016, notice in the petition was directed to be issued to the
Official Liquidator and the Regional Director, Northern Region. Citations
were also directed to be published in 'Business Standard' (English) and
'Jansatta' (Hindi) Delhi editions. An affidavit has been filed by the
petitioners showing compliance regarding publication of citations in the
aforesaid newspapers on 26th June, 2016. Copies of the newspaper
clippings containing the publications have been filed along with the
affidavit of service.
14. 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 29th July, 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 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.
15. 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 7th August, 2016 stating that the
Regional Director has no objection to the proposed Scheme of
Amalgamation subject to the objections, if any, raised by the Income Tax
Department and compliance of the provisions of the company law by the
petitioner companies. The Regional Director in para 10 of this report has
submitted that the transferor company has disputed outstanding demand
of Rs.28,39,691/- as on date for AY 2010-11 pending for tax liability
towards Income Tax. Further, the Regional Director in para 11 of his
report has submitted that the transferee company has not appointed
Whole Time Company Secretary, thereby violated the provisions of
Section 203 of the Companies Act, 2013. It is further submitted that the
transferee company is a loss making company.
16. In response to the aforesaid observations, learned counsel for the
petitioners has submitted that in terms of the Scheme, the liabilities of the
transferor company shall be taken over by the transferee company, which
shall remain in existence even after sanction of the Scheme. Learned
counsel further submitted that the petitioner companies are non-banking
finance companies (NBFC) registered with the Reserve Bank of India,
which has not raised any objection to the proposed Scheme. He has
further submitted that, after amalgamation, the petitioner shall be
functioning as a core investment company and that they have also
sought a registration as a core investment company and shall take all
necessary steps in this behalf pursuant to sanction of the Scheme by this
Court. Since the transferee company is not the subject matter of
dissolution and will remain in existence even after the sanction of the
Scheme, therefore, in case of any default by the company, the
ROC/other statutory authorities would be at liberty to take appropriate
action, as permissible in law, against the petitioner company.
17. No objection has been received to the Scheme of Amalgamation
from any other party. The petitioner companies, in the affidavits dated 3rd
August, 2016 of Mr. Alok Goel, authorized signatory of the transferor
company and Mr. Arvind Aggarwal, 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 26th June, 2016.
18. Considering the approval accorded by the shareholders and
creditors of the petitioner companies to the proposed Scheme of
Amalgamation and the affidavits filed by the Official Liquidator and the
Regional Director, Northern Region, 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
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 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 petitioners shall deposit a sum of Rs.1,00,000/- by
way of costs with 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 29, 2016
