Uttam Sucrotech International ... vs Uttam Sucrotech International ...
2016 Latest Caselaw 7561 Del

         IN THE HIGH COURT OF DELHI AT NEW DELHI

                                        Judgment Reserved On: 18.11.2016
                                        Judgment Delivered On: 23.12.2016


COMPANY PETITION NO. 70 OF 2016


IN THE MATTER OF

UTTAM SUCROTECH INTERNATIONAL PRIVATE LIMITED
                             Petitioner /Transferor Company

AND

UTTAM SUCROTECH INTERNATIONAL HOLDINGS
PRIVATE LIMITED
                              Petitioner /Transferee Company

                                        Through - Mr. P. Nagesh with Mr.
                                        Ashutosh Gupta Advocates for the
                                        Petitioner Company Ms. Aparna
                                        Mudiam, Assistant Registrar of
                                        Companies for the Regional Director
                                        Mr. Rajiv Bahl, Advocate for the
                                        Official Liquidator

CORAM:
HON'BLE MR JUSTICE SIDDHARTH MRIDUL

                              JUDGMENT

SIDDHARTH MRIDUL, J

1. The present petition has been filed jointly, under Sections 391 and 394

of the Companies Act, 1956 (hereinafter referred to as 'the Act'), by Uttam

Sucrotech International Private Limited (hereinafter referred to as

'Transferor Company') and Uttam Sucrotech International Holdings Private

Limited (hereinafter referred to as 'Transferee Company'), for approval of

the Scheme of Arrangement (hereinafter referred to as 'the Scheme')

between the Transferor and Transferee Company.

2. The Transferor Company and the Transferee Company are hereinafter,

collectively, referred to as 'Petitioner Companies'.

3. The registered offices of the Petitioner Companies are situated in the

National Capital Territory of Delhi, and therefore, this Court has the

necessary jurisdiction to adjudicate the present petition.

4. The Transferor Company was originally incorporated under the Act on

21.04.2005, with the Registrar of Companies, NCT of Delhi and Haryana at

New Delhi.

5. The Transferee Company was incorporated under the Act on

14.12.2011, with the Registrar of Companies, NCT of Delhi & Haryana at

New Delhi.

6. The authorised share capital of the Transferor Company as on

30.06.2014 is Rs.30,00,00,000/-, divided into 3,00,00,000 equity shares of

Rs.10/- each. The issued, subscribed and paid-up share capital of the

Transferor Company as on 30.06.2014 is Rs.25,00,00,000/-, divided into

2,50,00,000 equity shares of Rs.10/- each.

7. The authorised share capital of the Transferee Company as on

31.03.2014 is Rs.50,00,000/-, divided into 5,00,000 equity shares of Rs.10/-

each. The issued, subscribed and paid-up share capital of the Transferee

Company as on 31.03.2014 is Rs.3,30,000/-, divided into 33,000 equity

shares of Rs.10/- each.

8. The Copies of the Memorandum of Association and Articles of

Association, of the Petitioner Companies, have been annexed with Company

Application (Main) No. 157 of 2015, which earlier came to be filed by the

Petitioner Companies. The same are on record. The audited balance sheets,

as on 30.06.2014 along with the auditor's reports, pertaining to the

Transferor Company have been filed alongwith Company Application

(Main) No. 157 of 2015; and the audited balance sheets, as on 31.03.2014

along with the auditor's reports, pertaining to the Transferee Company have

also been duly filed alongwith Company Application (Main) No. 157 of

2015. The same are on record.

9. A copy of the Scheme has been placed on record and the salient

features of the Scheme have been incorporated and set out in detail in the

present petition. It has been stated on behalf of the Petitioner Companies that

the majority of equity shares of the Petitioner Companies are held by

common group of shareholders and that the Petitioner Companies are

managed by common groups of shareholders. It has been stated that the

Scheme would, inter alia, result in reduction of various administrative

overheads and increase the operating efficiencies of the Petitioner

Companies. It has further been stated that the Scheme will lead to optimum

and efficient utilization of capital, resources, assets and facilities;

consolidation of businesses and enhancement of economic value addition

and shareholder value; obtaining synergy benefits and better management

and enhanced focus on growing the businesses.

10. 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:-

01 Compulsory convertible preference share of face value of Rs.10/-

each, in the Transferee Company for every 01 equity share of face

value Rs.10/- each, held by them in the Transferor Company.

11. It has been stated on behalf of the Petitioner Companies that no

proceedings under Sections 235 to 251 of the Act (or under corresponding

provisions of the Companies Act, 2013) are pending against the Petitioner

Companies as on the date of filing of the present petition.

12. The Board of Directors (BOD) of the Transferor Company and

Transferee Company, on 17.03.2015 and 18.03.2015, respectively, have

unanimously approved the proposed Scheme. Copies of the said Resolutions

approving the Scheme of the Petitioner Companies have been placed on

record.

13. The Petitioner Companies had, in the earlier round, filed an

application, being Company Application (Main) No. 157 of 2015, seeking

directions of this Court to dispense with the requirement of convening the

meetings of the equity shareholders of the Petitioner Companies; to dispense

with the requirement of convening meetings of the secured and unsecured

creditors of the Transferee Company. Further, a prayer was also made in the

said Application to convene meetings of secured and unsecured creditors of

the Transferor Company. By way of order dated 06.11.2015, this Court

allowed the application and dispensed with the requirement of convening

meeting of the equity shareholders of both the Petitioner Companies and the

single unsecured creditor of the Transferee Company. The Transferee

Company has no secured creditors. Further, by way of the said order, this

Court directed convening of the meetings of the secured and unsecured

creditors of the Transferor Company to consider and, if thought fit, approve

with or without modification, the proposed Scheme.

14. The meetings of the secured and unsecured creditors of the Transferor

Company were duly convened and the Scheme was approved without any

modifications, by the requisite majority of the secured and unsecured

creditors, present and voting at the respective meetings, in terms of Section

391(2) of the Companies Act, 1956. The Chairpersons of the said meetings

have duly filed their reports dated 07.01.2016 and 08.01.2016, which reflect

the results of the said meetings held on 26.12.2015. The same are on record.

15. The Petitioner Companies have thereafter filed the present petition

seeking sanction of the Scheme. Vide order dated 01.02.2016, notice in the

present petition was issued by this Court and was accepted on behalf of the

Official Liquidator (OL) and the Regional Director (RD), Northern Region.

Citations were directed to be published in the Delhi Editions of 'Business

Standard' (English) and 'Jansatta' (Hindi). It has been noted that an affidavit

dated 23.05.2016, demonstrating service of the petition on the Official

Liquidator, Registrar of Companies and the Regional Director, Northern

Region, and further demonstrating that citations were published in

compliance with order dated 01.02.2016, has been filed and the same is on

record. It has been noted that Citations were published, on 12.04.2016, in

Delhi Editions of the newspapers, namely, 'Business Standard' (English) and

'Jansatta' (Hindi), in compliance with the said order dated 01.02.2016.

16. Pursuant to the issuance of notices in the present petition, the Official

Liquidator sought information from the Petitioner Companies. Based on the

information received, the Official Liquidator (OL) has filed a report dated

25.05.2016, wherein it has been stated that the OL has not received any

complaint qua the Scheme from any interested person or party. Further, it

has been stated in the said report that on the basis of information supplied by

the Petitioner Companies, it appears, that the affairs of the transferor

company have been conducted in a manner which could not be construed as

being prejudicial to either the interest of their members or the public at large.

17. In other words, it has been stated by the OL in the report that the

affairs of the transferor company, do not fall foul of the provisions of the

Second Proviso to Section 394(1) of the Act. Thus, it has been averred on

behalf of the OL, in effect, that he would have no objections, if this Court

were to sanction the Scheme.

18. In response to the notices issued in the Petition, the Regional Director,

Northern Region, Ministry of Corporate Affairs, filed a report dated

25.05.2016 wherein, inter alia, it has been stated that:

i. There has been transfer of 100% shareholding of the Transferee

Company to IU International Holdings Pvt. Ltd. i.e. non-

resident entity from the Appointed date;

ii. The Income Tax department has initiated proceedings under

Sections 276 C (1) and 278 B of the Income Tax Act, 1961,

against two directors of the company, pending before the

Special Chief Judicial Magistrate, Meerut, Uttar Pradesh;

iii. Transferor Company is a core investment company (CIC);

iv. Transferee Company shall separately comply with the

provisions under the Companies Act, 2013 and the Guidelines

issued by the Ministry of Corporate Affairs from time to time,

qua the change of name of the Transferee Company and file

relevant e-Forms, accordingly; and

v. Transferee Company shall also separately comply with the

procedure as contemplated under Companies Act, 2013 and the

guidelines issued by the Ministry of Corporate Affairs, qua the

change in the Main Objects in the Memorandum of Association

of the Transferee Company.

19. In reply to the aforesaid observations of the RD, the petitioner

companies have filed a rejoinder affidavit dated 27.05.2016 wherein it has

been averred as follows:

i. That the said transfer was made in accordance with law and

there is no legal bar to the said transfer of shares. Hence such

transfer of shares has no bearing of the present scheme;

ii. That the Income Tax department has initiated proceedings

against the Directors of the Petitioner Companies in their

personal capacity. Thus the same cannot be taken as an

impediment for the sanction of the Scheme;

iii. As per the Core Investment Companies (Reserve Bank)

Directions, 2011, CICs which are not covered under the

definition of 'systematically important CIC', are not required to

be registered with RBI. In the present case, the Transferee

Company is not a systematically important core investment

company under clause 3(h) of the CIC Directions, 2011 hence

no NOC/registration/intimation from RBI was/is required to be

taken from the RBI.

20. In response to the observations made on behalf of the RD, an

undertaking by way of an affidavit dated 15.11.2016 has also been filed and

the same is on record. It has been averred in the said affidavit that the

Transferee Company shall comply with the provisions of the Companies

Act, 2013 and the rules made thereunder with regard to the change of name

of the Transferee Company and change in the Main Objects in the

Memorandum of Association of the Transferee Company.

21. In view of the above, it has been stated on behalf of the Regional

Director that the observations of the Regional Director stand satisfied.

22. It has been noted that no other objections have been received to the

Scheme from any other party. The Petitioner Companies, vide affidavit dated

23.05.2016, have submitted that neither the Petitioner Companies nor their

counsel have received any objection to the Scheme pursuant to the citations

published in the newspapers on 12.04.2016.

23. In view of the foregoing, and upon considering the approval accorded

by the members and creditors of the Petitioner Companies to the Scheme; the

circumstance that the objections raised by way of the affidavit filed by the

Regional Director, Northern Region, Ministry of Corporate Affairs have

been satisfied; and the report Official Liquidator attached to this High Court

whereby no objections have been raised, there appears to be no impediment

to the grant of sanction to the Scheme. Consequently, sanction is hereby

granted to the Scheme under sections 391 and 394 of the Companies Act,

1956. The Petitioner Companies will however, comply with the statutory

requirements, in accordance with law.

24. A certified copy of the order, sanctioning the scheme, be filed with the

ROC, within thirty (30) days of its receipt.

25. Resultantly, it is hereby directed that the Petitioner Companies will

comply with all provisions of the scheme and, in particular, those which are

referred to hereinabove.

26. Notwithstanding the above, if there is any deficiency found or,

violation committed qua any enactment, statutory rule or regulation, the

sanction granted by this court to the scheme will not come in the way of

action being taken, albeit, in accordance with law, against the concerned

persons, directors and officials of the Petitioner Companies.

27. The Transferor Company shall stand dissolved without being wound

up.

28. It is made clear, that this order shall not be construed as an order

granting exemption, inter alia, from, payment of stamp duty or, taxes or, any

other charges, if, payable, as per the relevant provisions of law or, from any

applicable permissions that may have to be obtained or, even compliances

that may have to be made, as per the mandate of law.

29. The Petitioner Companies shall deposit a sum of Rs.1,00,000/- with

Delhi High Court Bar Association Lawyers' Social and Welfare Fund, New

Delhi, within a period of two weeks from today.

30. Consequently, the petition is allowed in the aforesaid terms and is

according disposed of.

SIDDHARTH MRIDUL, J DECEMBER 23, 2016 dn/sb