Satyam Cineplexes Limited vs ...
2016 Latest Caselaw 1042 Del

                   IN THE HIGH COURT OF DELHI
                  COMPANY PETITION NO. 195/2015
                                     Reserved on 15th December, 2015
                          Date of pronouncement: 10th February, 2016
In the matter of
The Companies Act, 1956 & the Companies Act, 2013 (to the extent
applicable):
And
Petition under Section 391 to 394 of the
Companies Act, 1956

Scheme of Amalgamation of:

Satyam Cineplexes Limited
                                          Petitioner/Transferor Company
      WITH

Inox Leisure Limited
                                     Non-Petitioner/Transferee Company

                               Through Mr. Rajiv Nayar, Sr. Advocate
                               with Mr. Darpan Wadhwa, Advocate for
                               the petitioner
                               Mr. Sanjay Bose, Dy. Registrar of
                               Companies for the Regional Director
                               Mr. Rajiv Bahl, Advocate for the
                               Official Liquidator

SUDERSHAN KUMAR MISRA, J.

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

Companies Act, 1956 by the petitioner/transferor company seeking

sanction of the Scheme of Amalgamation of Satyam Cineplexes Limited

(hereinafter referred to as the petitioner/transferor company) with Inox

Leisure Limited (hereinafter referred to as the transferee company)

2. The registered office of the petitioner/transferor company is

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

registered office of the transferee company is situated at Gujarat, outside

the jurisdiction of this Court.

3. The petitioner/transferor company was originally incorporated

under the Companies Act, 1956 on 9th June, 2000 with the Registrar of

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

style of Satyam Cineplex Limited. The company changed its name to

Satyam Cineplex Private Limited and obtained the fresh certificate of

incorporation on 28th December, 2003. The company was again

converted into a public limited company and obtained the fresh certificate

of incorporation on 23rd December, 2008. Thereafter, the company

changed its name to Satyam Cineplexes Limited and obtained the fresh

certificate of incorporation on 15th January, 2009.

4. The present authorized share capital of the petitioner/transferor

company is Rs.6,00,00,000/- divided into 60,00,000 equity shares of

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

of the company is Rs.4,59,55,330/- divided into 45,95,533 equity shares

of Rs.10/- each fully paid up.

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

petitioner/transferor company and the transferee company have been

filed on record with the application, being CA(M) 29/2015, earlier filed by

the petitioner. The audited balance sheets, as on 31st March, 2014, of

petitioner/transferor company and the transferee company, along with the

report of the auditors, had also been filed.

6. 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 submitted by

the petitioner that the nature of business of the transferor company and

the transferee company is similar to each other, and the transferor

company is a wholly owned subsidiary of the transferee company. It is

claimed that the proposed amalgamation will enable better and more

economic and efficient management control and running of the

businesses of the companies concerned and will assist in the exploitation

and realization of the potential of the common businesses of the

companies to the fullest extent. It is further claimed that the proposed

amalgamation would enable a focused business approach for the

maximization of benefit to all stakeholders and afford the advantages of

synergies of business.

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

provides that the transferor company is a wholly owned subsidiary of the

transferee company, and the entire issued, subscribed and paid-up share

capital of the transferor company is held by the transferee company.

Therefore, the transferee company would not be required to issue and

allot any shares to the shareholders of the transferor company and the

shares so held by the transferee company shall stand cancelled and

extinguished pursuant to implementation of the Scheme.

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/transferor company.

9. The Board of Directors of the transferor and transferee companies

in their separate meetings held on 25 th September, 2014 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.

10. The petitioner/transferor company had earlier filed CA (M) No.

29/2015 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 Amalgamation. Vide order dated 25 th March, 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 company, there being no secured creditor of the

petitioner company, to consider and, if thought fit, approve, with or

without modification, the proposed Scheme of Amalgamation. Vide the

said order, this Court also dispensed with the requirement of the filing a

separate petition by the transferee company.

11. The petitioner/transferor company has thereafter filed the present

petition seeking sanction of the Scheme of Amalgamation. Vide order

dated 20th April, 2015, notice in the petition was directed to be issued to

the Regional Director, Northern Region, and the Official Liquidator.

Citations were also directed to be published in ' Financial Express'

(English) and 'Jansatta' (Hindi) editions. Affidavit of service has been filed

by the petitioner showing compliance regarding service on the Official

Liquidator and the Regional Director, Northern Region and also regarding

publication of citations in the aforesaid newspapers on 10th June, 2015.

Copies of the newspaper clippings containing the publications have b een

filed along with the said affidavit.

12. Pursuant to the notices issued, the Official Liquidator sought

information from the petitioner company. Based on the information

received, the Official Liquidator has filed a report dated 7 th July, 2015

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.

13. 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 13th July, 2015. Relying on Clause 5 of

Part-II the Scheme, he has stated that, upon sanction of the Scheme of

Amalgamation, all the employees of the transferor company shall

become the employees of the transferee company without any break or

interruption in their services. He has further submitted that in Clause

10(b) of Part-III of the Scheme, it has been stated that amalgamation of

the transferor company shall be accounted for in accordance with

'Pooling of Interest method' of accounting as per Accounting Standard-14

as notified under Section 133 of the Companies Act, 2013. He further

submitted that in Clause 13 of Part-III of the Scheme, it has been stated

that upon this scheme becoming effective, the transferor company shall

stand dissolved without the process of winding up.

14. Although no objection has been raised by the Regional Director to

the proposed Scheme of Amalgamation, but he had filed his additional

report dated 19 th August, 2015 stating that after filing of the earlier report,

he had received a letter dated 05.08.2015 from the Income Tax Office

Ward-22(4) enclosing the demand outstanding report in the case of the

transferor company wherein the total outstanding amount shown is

Rs.11,77,190/-. In response to the aforesaid observation, the petitioner in

the affidavit dated 16th September, 2015 of Mr. Upen Shah, Director of

the transferor company has stated that in terms of para 3.8(a) of the

Scheme, all the debts, liabilities, dues and obligations of the transferor

company shall become corresponding liability, dues and obligations etc.

of the transferee company and further that any outstanding dues of the

transferor company to the Income Tax Department will also become

debts, liabilities, dues and obligations of the transferee company. Further

in para 5.3 of the said affidavit, it is also pointed out that the net worth of

the transferee company as on 31st March, 2014 was Rs.39,090.12 lacs

and as on 30th September, 2015 was Rs.55.657.10 lacs and, therefore, it

would be in a position to pay off all the outstanding dues that may be

payable by the transferor company to the Income Tax Department even

after the amalgamation with the transferee company. In view of the

aforesaid, the observation raised by the Regional Director stands

satisfied.

15. No objection has been received to the Scheme of Amalgamation

from any other party. The petitioner company in the affidavit dated 13th

July, 2015 of Mr. Upen Shah, Director of the transferor company, has

submitted that neither the petitioner company nor its advocates have

received any objection pursuant to the citations published in the

newspapers on 10th June, 2015.

16. Considering the approval accorded by the equity shareholders and

creditors of the petitioner company to the proposed Scheme of

Amalgamation; and the affidavits filed by the Regional Director, Northern

Region, and the Official Liquidator 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

company 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. 8th August, 2014, the transferor

company shall stand dissolved without undergoing the process of winding

up.

17. 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 15.12.2015, the petitioner shall deposit a sum of Rs.1,00,000/- by

way of costs with the Common Pool Fund of the Official Liquidator.

18. The petition is allowed in the above terms.

Dasti

SUDERSHAN KUMAR MISRA, J.

February 10, 2016