Delhi High Court
Estio Builders & Developers ... vs ... on 10 February, 2016
Author: Sudershan Kumar Misra
IN THE HIGH COURT OF DELHI
COMPANY PETITION NO. 597/2014
Reserved on 10th 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 Sections 391 & 394 of the
Companies Act, 1956
Scheme of Amalgamation of:
Estio Builders & Developers Private Limited
Petitioner/Transferor Company No. 1
Fadey Builders & Developers Private Limited
Petitioner/Transferor Company No. 2
Farica Builders & Developers Private Limited
Petitioner/Transferor Company No. 3
Gareth Builders & Constructions Private Limited
Petitioner/Transferor Company No. 4
Goodvalue Properties Private Limited
Petitioner/Transferor Company No. 5
Harinakshi Estates Developers Private Li mited
Petitioner/Transferor Company No. 6
Kimothy Builders and Developers Private Limited
Petitioner/Transferor Company No. 7
Mayukhi Real Estates Private Limited
Petitioner/Transferor Company No. 8
Melisenda Builders & Developers Private Limited
Petitioner/Transferor Company No. 9
Passion Builders and Developers Private Limited
Petitioner/Transferor Company No. 10
Purandar Estates Developers Private Limited
Petitioner/Transferor Company No. 11
CP 597/2014 Page 1 of 16
Tusti Builders & Developers Private Limited
Petitioner/Transferor Company No. 12
Vedavrata Builders & Constructions Private Limited
Petitioner/Transferor Company No. 13
Zenobia Builders & Developers Private Limited
Petitioner/Transferor Company No. 14
Zubeda Real Estates Private Limited
Petitioner/Transferor Company No. 15
WITH
Felicite Builders & Constructions Private Limited
Petitioner/Transferee Company
Through Mr. Ravi Bassi, Advocate for
the petitioners
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 joint petition has been filed under Sections 391 & 394 of the
Companies Act, 1956 by the petitioner companies seeking sanction of
the amended Scheme of Amalgamation of Estio Builders & Developers
Private Limited (hereinafter referred to as the transferor company no. 1);
Fadey Builders & Developers Private Limited (hereinafter referred to as
the transferor company no. 2); Farica Builders & Developers Private
Limited (hereinafter referred to as the transferor company no. 3); Gareth
Builders & Constructions Private Limited (hereinafter referred to as the
transferor company no. 4); Goodvalue Properties Private Limited
(hereinafter referred to as the transferor company no. 5); Harinakshi
Estates Developers Private Limited (hereinafter referred to as the
transferor company no. 6); Kimothy Builders and Developers Private
Limited (hereinafter referred to as the transferor company no. 7);
Mayukhi Real Estates Private Limited (hereinafter referred to as the
transferor company no. 8); Melisenda Builders & Developers Private
Limited (hereinafter referred to as the transferor company no. 9); Passion
Builders and Developers Private Limited (hereinafter referred to as the
transferor company no. 10); Purandar Estates D evelopers Private
Limited (hereinafter referred to as the transferor company no. 11); Tusti
Builders & Developers Private Limited (hereinafter referred to as the
transferor company no. 12); Vedavrata Builders & Constructions Private
Limited (hereinafter referred to as the transferor company no. 13);
Zenobia Builders & Developers Private Limited (hereinafter referred to as
the transferor company no. 14); and Zubeda Real Estates Private Limited
(hereinafter referred to as the transferor company no. 1 5) with Felicite
Builders & Constructions 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 no. 1 was incorporated under the
Companies Act, 1956 on 23rd January, 2007 with the Registrar of
Companies, NCT of Delhi & Haryana at New Delhi.
4. The transferor company no. 2 was incorporated under the
Companies Act, 1956 on 21st March, 2006 with the Registrar of
Companies, NCT of Delhi & Haryana at New Delhi.
5. The transferor company no. 3 was incorporated under the
Companies Act, 1956 on 21st March, 2006 with the Registrar of
Companies, NCT of Delhi & Haryana at New Delhi.
6. The transferor company no. 4 was incorporated under the
Companies Act, 1956 on 28th March, 2006 with the Registrar of
Companies, NCT of Delhi & Haryana at New Delhi.
7. The transferor company no. 5 was incorporated under the
Companies Act, 1956 on 27th April, 2005 with the Registrar of
Companies, NCT of Delhi & Haryana at New Delhi.
8. The transferor company no. 6 was incorporated under the
Companies Act, 1956 on 21st March, 2006 with the Registrar of
Companies, NCT of Delhi & Haryana at New Delhi.
9. The transferor company no. 7 was incorporated under the
Companies Act, 1956 on 29th March, 2006 with the Registrar of
Companies, NCT of Delhi & Haryana at New Delhi.
10. The transferor company no. 8 was incorporated under the
Companies Act, 1956 on 29th March, 2006 with the Registrar of
Companies, NCT of Delhi & Haryana at New Delhi.
11. The transferor company no. 9 was incorporated under the
Companies Act, 1956 on 28th March, 2006 with the Registrar of
Companies, NCT of Delhi & Haryana at New Delhi.
12. The transferor company no. 10 was incorporated under the
Companies Act, 1956 on 27 th May, 2005 with the Registrar of
Companies, NCT of Delhi & Haryana at New Delhi.
13. The transferor company no. 11 was incorporated under the
Companies Act, 1956 on 21st March, 2006 with the Registrar of
Companies, NCT of Delhi & Haryana at New Delhi.
14. The transferor company no. 12 was incorporated under the
Companies Act, 1956 on 10th March, 2006 with the Registrar of
Companies, NCT of Delhi & Haryana at New Delhi.
15. The transferor company no. 13 was incorporated under the
Companies Act, 1956 on 30th March, 2006 with the Registrar of
Companies, NCT of Delhi & Haryana at New Delhi.
16. The transferor company no. 14 was incorporated under the
Companies Act, 1956 on 17th March, 2006 with the Registrar of
Companies, NCT of Delhi & Haryana at New Delhi.
17. The transferor company no. 15 was incorporated under the
Companies Act, 1956 on 16th March, 2006 with the Registrar of
Companies, NCT of Delhi & Haryana at New Delhi.
18. The transferee company was incorporated under the Companies
Act, 1956 on 28 th March, 2006 with the Registrar of Companies, NCT of
Delhi & Haryana at New Delhi.
19. The present authorized share capital of the transferor company
no.1 is Rs.2,00,000/- divided into 20,000 equity shares of Rs.10/- each.
The issued, subscribed and paid-up share capital of the company is
Rs.1,00,000/- divided into 10,000 equity shares of Rs.10/- each.
20. The present authorized share capital of the transferor company
no.2 is Rs.7,00,000/- divided into 70,000 equity shares of Rs.10/- each.
The issued, subscribed and paid-up share capital of the company is
Rs.6,80,000/- divided into 68,000 equity shares of Rs.10/- each.
21. The present authorized share capital of the transferor company
no.3 is Rs.62,00,000/- divided into 6,20,000 equity shares of Rs.10/-
each. The issued, subscribed and paid-up share capital of the company
is Rs.44,53,310/- divided into 4,45,331 equity shares of Rs.10/- each.
22. The present authorized share capital of the transferor company
no.4 is Rs.1,00,000/- divided into 10,000 equity shares of Rs.10/- each.
The issued, subscribed and paid-up share capital of the company is
Rs.1,00,000/- divided into 10,000 equity shares of Rs.10/- each.
23. The present authorized share capital of the transferor company
no.5 is Rs.1,00,000/- divided into 10,000 equity shares of Rs.10/- each.
The issued, subscribed and paid-up share capital of the company is
Rs.1,00,000/- divided into 10,000 equity shares of Rs.10/- each.
24. The present authorized share capital of the transferor company
no.6 is Rs.83,00,000/- divided into 8,30,000 equity shares of Rs.10/-
each. The issued, subscribed and paid-up share capital of the company
is Rs.82,19,260/- divided into 8,21,926 equity shares of Rs.10/- each.
25. The present authorized share capital of the transferor company
no.7 is Rs.1,00,000/- divided into 10,000 equity shares of Rs.10/- each.
The issued, subscribed and paid-up share capital of the company is
Rs.1,00,000/- divided into 10,000 equity shares of Rs.10/- each.
26. The present authorized share capital of the transferor company
no.8 is Rs.68,00,000/- divided into 6,80,000 equity shares of Rs.10/-
each. The issued, subscribed and paid-up share capital of the company
is Rs.4,28,660/- divided into 42,866 equity shares of Rs.10/- each.
27. The present authorized share capital of the transferor company
no.9 is Rs.1,00,000/- divided into 10,000 equity shares of Rs.10/- each.
The issued, subscribed and paid-up share capital of the company is
Rs.1,00,000/- divided into 10,000 equity shares of Rs.10/- each.
28. The present authorized share capital of the transferor company
no.10 is Rs.1,00,000/- divided into 10,000 equity shares of Rs.10/- each.
The issued, subscribed and paid-up share capital of the company is
Rs.1,00,000/- divided into 10,000 equity shares of Rs.10/- each.
29. The present authorized share capital of the transferor company
no.11 is Rs.84,00,000/- divided into 8,40,000 equity shares of Rs.10/-
each. The issued, subscribed and paid-up share capital of the company
is Rs.83,93,510/- divided into 8,39,351 equity shares of Rs.10/- each.
30. The present authorized share capital of the transferor company
no.12 is Rs.1,00,000/- divided into 10,000 equity shares of Rs.10/- each.
The issued, subscribed and paid-up share capital of the company is
Rs.1,00,000/- divided into 10,000 equity shares of Rs.10/- each.
31. The present authorized share capital of the transferor company
no.13 is Rs.1,00,000/- divided into 10,000 equity shares of Rs.10/- each.
The issued, subscribed and paid-up share capital of the company is
Rs.1,00,000/- divided into 10,000 equity shares of Rs.10/- each.
32. The present authorized share capital of the transferor company
no.14 is Rs.44,00,000/- divided into 4,40,000 equity shares of Rs.10/-
each. The issued, subscribed and paid-up share capital of the company
is Rs.1,00,000/- divided into 10,000 equity shares of Rs.10/- each.
33. The present authorized share capital of the transferor company
no.15 is Rs.1,00,000/- divided into 10,000 equity shares of Rs.10/- each.
The issued, subscribed and paid-up share capital of the company is
Rs.1,00,000/- divided into 10,000 equity shares of Rs.10/- each.
34. The present authorized share capital of the transfer ee 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.2,01,00,000/- divided into 20,10,000 equity shares of Rs.10/- each.
35. 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) 89/2014, earlier filed by the petitioners.
The audited balance sheets, as on 31st March, 2013, of the transfer or
and transferee companies, along with the report of the auditors, had also
been filed.
36. A copy of the amended 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
by the petitioners that the proposed amalgamation will achieve size,
scale, integration and greater financial strength as well as flexibility and
maximizing the shareholders value. It is further claimed that the financial,
managerial and technical resources pooling together in the merged entity
will lead to increase in competitive strength, cost reduction and
efficiencies. It is also claimed that with enhanced capabilities and
resources at its disposal, the transferee company will have greater
flexibility and strength and will be able to compete more effectively as an
efficient entity.
37. So far as the share exchange ratio is concerned, the Scheme
provides that since all the transferor companies are direct or indirect
wholly owned subsidiaries of the transferee company, therefore, the
entire share capital of all the transferor companies shall automatically
stand cancelled and extinguished, upon sanction of the Scheme and the
transferee company shall not allot any shares to the shareholders of the
transferor companies.
38 It has been submitted by the petitioners that no proceedings under
Sections 235 to 251 of the Companies Act, 1956 are pending against the
transferor and transferee companies.
39. The Board of Directors of the transferor companies and the
transferee company in their separate meetings held on 11th March, 2014
and 12th March, 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.
40. The petitioner companies had earlier filed CA (M) No. 89/2014
seeking directions of this court to dispense with the requirement of
convening the meetings of their equity shareholders, secured and
unsecured creditors, which are statutorily required for sanction of the
Scheme of Amalgamation. Vide order dated 19th May, 2014, 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 and transferee companies, there being no
secured creditors of the petitioner companies, to consider and, if thought
fit, approve, with or without modification, the proposed Scheme of
Amalgamation. Thereafter, vide order dated 16th September, 2014
passed in CA 2126/2014, the transferor company no. 12 was allowed to
withdraw from the Scheme and its name stand deleted and the amended
Scheme of Amalgamation was taken on record.
41. The petitioner companies have thereafter filed the present petition
seeking sanction of the amended Scheme of Amalgamation. Vide order
dated 27th October, 2014, 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 ' Statesman' (English) and
'Veer Arjun' (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 23rd December,
2014. Copies of the newspaper clippings containing the publications have
been filed along with the said affidavit.
42. 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 3rd 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
companies do not appear to have been conducted in a manner
prejudicial to the interest of their members, creditors or public interest, as
per second proviso of Section 394(1) of the Companies Act, 1956.
43. 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 7th September, 2015. Relying on Clause
7 of Part-IV of the Scheme, he has stated that, upon sanction of the
Scheme of Amalgamation, all the employees of the transferor companies
shall become the employees of the transferee company , without any
break or interruption in their services. He has further submitted that in
Clauses 4.10 of Part-IV of the Scheme, it has been stated that the
transferee company shall follow the Accounting Standards and Principles
issued by Institute of Chartered Accountants of India. He further
submitted that in Clause 17.1 of Part-IV of the Scheme, it has been
stated that upon this scheme becoming effective, the transferor
companies shall stand dissolved without the process of winding up.
44. The Regional Director in para 8 of his report has stated that
various letters have been received from the Income Tax Department
stating as under:
(i) the Income Tax Department must be permitted to retain its
recourse for recovery in respect of any existing or future tax liabilities of
the transferor companies or the transferee company, in respect of the
assets so sought to be transferred under the proposed Scheme, and this
protection must be made explicit by this Court in its final order and has to
bind all the parties to the Scheme, particularly the transferor and
transferee companies. There should be no limitation on the powers of the
Income Tax Department for recovery, including imposition of penalties
etc.;
(ii) That without prejudice to the above the approval of the Scheme,
should in no manner affect the tax treatments of the transactions under
the Income Tax Act, 1961 or any other applicable taxing statute, nor
would sanction of the scheme of the effect thereof serve as a defense for
the companies against tax treatment under the aforesaid status.
45. In response to the aforesaid objections, the transferee company in
the affidavit dated 7th November, 2015 of Mr. Rajesh Bhatia, authorized
signatory of the transferee company, has undertaken that in case of any
liability, which may be legally assessed and payable by the transferor
companies to the Income Tax Department, the same shall be paid by the
transferee company. They further undertake that none of the provisions
of the Scheme, shall prejudice the income tax dues and the income tax
department shall be free to recover the said tax, if any, from the
transferee company. The undertaking given by the transferee company is
accepted and it shall remain bound by the same. In view of the aforesaid,
the objection raised by the Regional Director stands satisfied.
46. No objection has been received to the Scheme of Amalgamation
from any other party. The transferee company in the affidavit dated 7 th
November, 2015 of Mr. Rajesh Bhatia, authorized signatory of the
transferee company, has submitted that neither the petitioner companies
nor their counsel have received any objection pursuant to the citations
published in the newspapers on 23rd December, 2014.
47. Considering the approval accorded by the equity shareholders and
creditors of the petitioner companies to the proposed Scheme of
Amalgamation; the affidavit filed by the Official Liquidator not raising any
objection to the amended Scheme of Amalgamation; and there being no
surviving objection to the same by the Regional Director, Northern
Region, there appears to be no impediment to the grant of sanction to the
amended Scheme of Amalgamation. Consequently, sanction is hereby
granted to the amended 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, 2013, the transferor
companies no. 1 to 15 shall stand dissolved without undergoing the
process of winding up.
48. 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 states that
the same is acceptable to him. As already directed vide order dated
10.12.2015, petitioner shall deposit a sum of Rs.1,00,000/-, by way of
costs, with the Common Pool Fund of the Official Liquidator.
49. The petition is allowed in the above terms.
Dasti.
SUDERSHAN KUMAR MISRA, J.
February 10, 2016
