Ssg Multiproducts Private ... vs ...
2016 Latest Caselaw 1272 Del

                  IN THE HIGH COURT OF DELHI
                 COMPANY PETITION NO. 401/2015

                                       Reserved on 6th January, 2016
                         Date /of pronouncement: 18th February, 2016
In the matter of
The Companies Act, 1956 & the Companies Act, 2013 (to the extent
applicable):

And

Petition under Section 391(2) & 394 of the
Companies Act, 1956

Scheme of Amalgamation of:

SSG Multiproducts Private Limited
                                    Petitioner/Transferor Company No. 1

SSG Entrepreneurs Private Limited
                                    Petitioner/Transferor Company No. 2
      WITH

SSG Pharma Private Limited
                                         Petitioner/Transferee Company

                              Through Mr. Sanjay K. Maria and
                              Mr.Anant Vijay Maria, Advocates for
                              the petitioners
                              Ms.     Aparna     Mudiam, Assistant
                              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(2) & 394 of

the Companies Act, 1956 by the petitioner companies seeking sanction

of the Scheme of Amalgamation of SSG Multiproducts Private Limited

(hereinafter referred to as the transferor company No. 1) and SSG

Entrepreneurs Private Limited (hereinafter referred to as the transferor

company No. 2) with SSG Pharma 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 19th August, 2008 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 11th December, 2007 with the Registrar of

Companies, NCT of Delhi & Haryana at New Delhi.

5. The transferee company was incorporated under the Companies

Act, 1956 on 19th February, 1997 with the Registrar of Companies, NCT

of Delhi & Haryana at New Delhi.

6. The present authorized share capital of the transferor company

no.1 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 company

is Rs.42,00,000/- divided into 4,20,000 equity shares of Rs.10/- each.

7. The present authorized share capital of the transferor company

no.2 is Rs.10,00,000/- divided into 1,00,000 equity shares of Rs.10/-

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

is Rs.9,50,000/- divided into 95,000 equity shares of Rs.10/- each.

8. The present authorized share capital of the transferee company is

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

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

Rs.1,38,50,000/- divided into 13,85,000 equity shares of Rs.10/- each.

9. Copies of 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, of the transferor and

transferee companies, along with the report of the auditors, have also

been filed.

10. 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 petitioners that the Scheme is proposed as a measure of corporate

restructuring and to develop potential for further growth and

diversification and to achieve the object of carrying on the businesses of

the two companies more smoothly and profitably by rationalization of the

management and financial structure and obtaining economies of scale for

further modernization growth and expansion of the respective

businesses. It is claimed that the proposed amalgamation shall also

result in the better and optimum utilization of the properties and assets of

all the companies by pooling their resources and spreading their

overheads.

11. 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 companies in the following ratio:-

"259 equity shares of Rs.10/- each of the transferee company, credited as fully paid up, for every 1000 equity shares of Rs.10/- each fully paid up held by the shareholders in the transferor company no. 1."

"346 equity shares of Rs.10/- each of the transferee company, credited as fully paid up, for every 1000 equity shares of Rs.10/- each fully paid up held by the shareholders in the transferor company no. 2."

12. It has been submitted by the petitioners that no proceedings under

Sections 235 to 251 of the Companies Act, 1956 are pending against the

petitioner companies.

13. The Board of Directors of the transferor company no. 1 in their

separate meetings held on 15th December, 2014 and 10th February,

2015; the Board of Directors of the transferor company no. 2 in their

separate meetings held on 15th December, 2014 & 16th February, 2015;

and the Board of Directors of the transferee company in their separate

meetings held on 20th December, 2014 and 10th February, 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.

14. The petitioner companies had earlier filed CA (M) No. 61/2015

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 21st May, 2015, this court

allowed the application and dispensed with the requirement of convening

and holding the meetings of the equity shareholders and creditors of the

transferor and transferee companies, there being no secured creditors of

the transferor companies, to consider and, if thought fit, approve, with or

without modification, the proposed Scheme of Amalgamation.

15. The petitioner companies have thereafter filed the present petition

seeking sanction of the Scheme of Amalgamation. Vide order dated 3rd

July, 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 'Statesman' (English) and „Veer

Arjun‟ (Hindi) editions. Affidavit of service has been filed by the

petitioners showing compliance regarding service one the Official

Liquidator and the Regional Director, Northern Region and also regarding

publication of citations in the aforesaid newspapers on 23rd November,

2015. Copies of the newspaper clippings containing the publications have

been filed along with the affidavit of service.

16. 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 7th December,

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.

17. 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 December, 2015. Relying on Clause

7.2 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 further submitted that in Clause 13.1 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.

18. The Regional Director in para 13 of his report has stated that the

petitioner companies have not mentioned the method of Accounting as

prescribed under the Accounting Standard-14 as notified under the

Companies (Accounting Standards) Rules, 2006. In response to the

above objection, the petitioner companies in the affidavit dated 11th

January, 2016 of Mr. Sunil Kumar Mittal, Director of the petitioner

companies, have stated that Clause 5.1 of the Scheme provides that all

the assets and liabilities of the transferor companies, as on the appointed

date, shall be transferred to the transferee company and the same shall

be recorded in the books of account of the transferee company according

to the pooling of interest method and the petitioner companies shall

comply with the Accounting Standards as prescribed under the Act and

the governing Rules. The petitioners undertake to comply with the same

accounting method as provided in para 5.1 of the Scheme and shall

remain abide by the same. In view of the aforesaid, the objection raised

by the Regional Director stands satisfied.

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

from any other party. The petitioner companies, in the affidavit dated 5th

December, 2015 of Mr. Sunil Kumar Mittal, Director of the petitioner

companies, have submitted that the petitioner companies have not

received any objection pursuant to the citations published in the

newspapers on 23rd November, 2015.

20. 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 proposed 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

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. 1st April, 2014, the transferor companies no. 1 & 2 shall stand

dissolved without undergoing the process of winding up.

21. Learned counsel for the Official Liquidator prays that costs of at

least Rs.75,000/- should be paid by the petitioners keeping in view the

fact that the matter has involved examination of extensive records and

also prioritized hearings. Learned counsel for the petitioner companies

states that the same is acceptable to him. As already directed vide order

dated 06.01.2016, the petitioners shall deposit a sum of Rs.75,000/- by

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

22. The petition is allowed in the above terms.

Dasti.

SUDERSHAN KUMAR MISRA, J.

February 18, 2016