Tata Internet Services Limited vs ...
2016 Latest Caselaw 1032 Del

                     IN THE HIGH COURT OF DELHI
                 COMPANY APPLICATION (MAIN) NO. 48/2015
                                      Reserved on 28th September, 2015
                            Date of pronouncement: 10th February, 2016
In the matter of
The Companies Act, 1956 & the Companies Act, 2013 (to the extent
applicable):
And
Application under Sections 391 to 394 of the
Companies Act, 1956 read with Rules 6 & 9 of
the Companies (Court) Rules, 1959
Scheme of Amalgamation of:
Tata Internet Services Limited
                                           Applicant/Transferor Company
       WITH
Tata Teleservices Limited
                                          Applicant/Transferee Company

                              Through Mr. Ramji Srinivasan, Sr.
                              Advocate with Mr. Mansoor Ali, Mr.Nitin
                              Kala, Ms. Sara Sundaram & Mr. Kunal
                              Singh, Advocates for the applicant

SUDERSHAN KUMAR MISRA, J.

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

the Companies Act, 1956 read with Rules 6 & 9 of the Companies

(Court) Rules, 1959 by the applicant companies seeking directions of this

court to dispense with the requirement of convening the meetings of their

equity shareholders, preference shareholders, secured and unsecured

creditors to consider and approve, with or without modification, the

proposed Scheme of Amalgamation of Tata Internet Services Limited

(hereinafter referred to as the transferor company) with Tata Teleservices

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 originally incorporated under the

Companies Act, 1956 on 21st June, 1999 with the Registrar of

Companies, NCT of Delhi & Haryana at New Delhi under the name and

style of I S P India Private Limited. The company changed its name to

Tata Internet Services Private Limited and obtained the fresh certificate

of incorporation on 1st May, 2000. The word 'Private' was deleted from

the name of the company w.e.f. 17.04.2000.

4. The transferee company was originally incorporated under the

Companies Act, 1956 on 23rd March, 1995 with the Registrar of

Companies, NCT of Delhi & Haryana at New Delhi under the name and

style of Tata Teleservices Private Limited. The word 'Private' was deleted

from the name of the company w.e.f. 05.06.1995.

5. The present authorized share capital of the transferor company is

Rs.1,50,00,00,000/- divided into 15,00,00,000 equity shares of Rs.10/-

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

is Rs.1,50,00,00,000/- divided into 15,00,00,000 equity shares of Rs.10/-

each.

6. The present authorized share capital of the transf eree company is

Rs.1,50,00,00,00,000/- divided into 7,51,36,82,100 equity shares of

Rs.10/- each aggregating to Rs.75,13,68,21,000/-; 83,63,17,900

redeemable non-cumulative convertible preference shares of Rs.10/-

each aggregating to Rs.8,36,31,79,000/-; 1,50,00,00,000 preference

shares of Rs.10/- each aggregating to Rs.15,00,00,00,000/-;

45,20,00,000 compulsorily convertible non-cumulative preference shares

of Rs.100/- each aggregating to Rs.45,20,00,00,000/- and 63,00,00,000

unclassified shares of Rs.10/- each aggregating to Rs.6,30,00,00,000/-.

The issued, subscribed and paid-up share capital of the company is

Rs.92,12,46,57,930/- divided into 4,71,23,91,413 equity shares of Rs.10/-

each fully paid up aggregating to Rs.47,12,39,14,130/- and 45,00,07,438

compulsory convertible non-cumulative preference shares of Rs.100/-

each fully paid up aggregating to Rs.45,00,07,43,800/-.

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

transferor and transferee companies have been filed on record. The

audited balance sheets, as on 31st March, 2014, along with the report of

the auditors, and unaudited balance sheets, as on 31st December, 2014,

of the transferor and transferee companies have 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 application and the accompanying affidavit. It is submitted

by the applicants that the proposed amalgamation is expected to enable

pooling of resources of the transferor and transferee companies to their

common advantage, resulting in more productive utilization of the said

resources, cost and operational efficiencies which would be beneficial for

all stakeholders. It is claimed that the amalgamation would re sult in better

utilization of skilled manpower and their services can be optimally utilized

thereby reducing costs. It is further claimed that amalgamation will result

in reduction of overall administrative and overhead cost by integrating

activities at all levels.

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

provides that no shares shall be allotted by the transferee company

either to itself or to any other shareholder holding shares in the transferor

company, jointly with the transferee company, since the transferee

company (either held singly or jointly with any other person) holds all the

shares of the transferor company.

10. It has been submitted by the applicants that no proceedings under

Sections 235 to 251 of the Companies Act, 1956 or the relevant

corresponding provisions of the Companies Act, 2013, as notified, are

pending against the applicant companies.

11. The Board of Directors of the transferor company and the

transferee company in their separate meetings held on 14th November,

2014 and 10th November, 2014 respectively 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 transferor company has 07 equity shareholders. All the equity

shareholders have given their consents/no objections in writing to the

proposed Scheme of Amalgamation. Their consents/no objections have

been placed on record. They have been examined and found in order. In

view thereof, the requirement of convening the meeting of the equity

shareholders of the transferor company to consider and, if thought fit,

approve, with or without modification, the proposed Scheme of

Amalgamation is dispensed with. There is no secured or unsecured

creditor of the transferor company, as on 28 th February, 2015.

13. The transferee company has 35 equity shareholders and 01

preference shareholder. 31 out of 35 equity shareholders, being 88.57%

in number and 98.33% in value, and the sole preference shareholder

have given their consents/no objections in writing to the proposed

Scheme of Amalgamation. Their consents/no objections have been

placed on record. They have been examined and found in order. In view

thereof, the requirement of convening the meetings of the equity

shareholders and preference shareholder of the transferee company to

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

proposed Scheme of Amalgamation is dispensed with.

14. The transferee company has 38 secured creditors and 9660

unsecured creditors, whose consents have not been placed on record.

Learned senior counsel for the applicants seeks dispensation of the

meetings of the secured and unsecured creditors of the transferee

company on the ground that the transferor company is a wholly owned

subsidiary of the transferee company; no new shares will be issued by

the transferee company in lieu of the shares of the transferor company;

and there will be no change in the control and man agement of the

transferee company. It has been further submitted that the transferor

company is a profit making concern and aggregate of assets of both the

companies are more than sufficient to meet their combined aggregate

liabilities towards their respec tive creditors. Therefore, the rights of the

creditors of the transferee company will not be adversely affected. He,

therefore, prays that the requirement of convening and holding the

meetings of the secured and unsecured creditors of the transferee

company may kindly be dispensed with.

15. In support of his submissions, learned senior counsel placed

reliance on the judgments of this Court in Prasneeta Engineering

Private Limited & Anr. [CA(M) 3/2010], decided on 19.01.2010;

Imperia Homes Private Limited and Anr. [CA(M) 78/2014], decided on

30.04.2014 and Salasar Stainless Limited [CA(M) 15/2015] decided on

06.02.2015 wherein, this court under similar circumstances, has

dispensed with the requirement of convening and holding the meetings of

the secured and unsecured creditors of the transferee company without

obtaining their consents/no objections to the proposed Scheme of

Amalgamation.

16. I have carefully considered the aforesaid case law cited at the Bar.

In view of the submissions made at the bar, the settled law on the

subject, and considering the Scheme of Amalgamation, the requirement

of convening and holding the meetings of the secured and unsecured

creditors of the transferee company, to consider and if thought fit,

approve, with or without modification, the proposed Scheme of

Amalgamation, is dispensed with.

17. The application stands allowed in the aforesaid terms.

Dasti

SUDERSHAN KUMAR MISRA, J.

February 10, 2016