Delhi High Court
Futuristic Sales Private Limited vs ... on 19 July, 2016
IN THE HIGH COURT OF DELHI
COMPANY PETITION NO. 72/2015
Reserved on 12th May, 2016
Date of pronouncement: 19th July, 2016
In the matter of
The Companies Act, 1956 & the Companies Act, 2013 (to the extent
applicable):
And
Petition under Sections 391(1) to 394 of the
Companies Act, 1956
Scheme of Arrangement between:
Futuristic Sales Private Limited
Petitioner/Demerged Company
AND
Globe Panel Industries India Private Limited
Petitioner/Resulting Company
Through Mr. Ashish Midha, Advocate
for the petitioners
Ms. Aparna Mudiam, Asstt. Registrar
of Companies for the Regional Director
SUDERSHAN KUMAR MISRA, J.
1. This joint petition has been filed under Sections 391(1) to 394 of
the Companies Act, 1956 by the petitioner companies seeking sanction
of the Scheme of Arrangement between Futuristic Sales Private Limited
(hereinafter referred to as the demerged company) and Globe Panel
Industries India Private Limited (hereinafter referred to as the resulting
company).
2. The registered offices of the demerged and resulting companies
are situated at New Delhi, within the jurisdiction of this Court.
3. The demerged company was incorporated under the Companies
Act, 1956 on 6th July, 2001 with the Registrar of Companies, NCT of
Delhi & Haryana at New Delhi.
4. The resulting company was incorporated under the Companies
Act, 1956 on 28th April, 2010 with the Registrar of Companies, NCT of
Delhi & Haryana at New Delhi.
5. The present authorized share capital of the demerged company is
Rs.75,00,000/- divided into 7,50,000 equity shares of Rs.10/- each. The
issued, subscribed and paid up capital of the company is Rs.74,76,400/-
divided into 7,47,640 equity shares of Rs.10/- each fully paid-up.
6. The present authorized share capital of the resulting company is
Rs.25,00,00,000/- divided into 2,50,00,000 equity shares of Rs.10/- each.
The issued, subscribed and paid up capital of the company is
Rs.18,30,18,420/- divided into 1,83,01,842 equity shares of Rs.10/- each
fully paid-up.
7. Copies of the Memorandum and Articles of Association of the
demerged and resulting companies have been filed on record with the
joint application, being CA(M) 6/2015, earlier filed by the petitioners. The
audited balance sheets, as on 31st March, 2014, of the demerged and
resulting companies, along with the report of the auditors, had also been
filed.
8. A copy of the Scheme of Arrangement has been placed on record
and the salient features of the Scheme have been incorporated and
detailed in the petition and the accompanying affidavits. It is submitted by
the petitioners that the Scheme, inter-alia, provides that except land &
building of demerged company running business activities, assets and
liabilities of plywood and laminate described in Schedule-I of the Scheme
of Arrangement shall be transferred from the appointed date on a going
concern basis with all attachment and liabilities including advance from
customers/tenants, to the resulting company. It is claimed that the
proposed arrangement will strengthen, consolidate and stabilize the
business of these companies and will facilitate further expansion and
growth of their business. It is further claimed that the proposed
arrangement would enhance the shareholder's value of both the
companies.
9. So far as the share exchange ratio is concerned, the Scheme
provides that upon coming into effect of this Scheme, the resulting
company shall issue and allot equity shares of Rs.10/- to the demerged
company equivalent to an amount of net book value of assets transferred
by the demerged company to the resulting company.
10. It has been submitted by the petitioners that no proceedings under
Sections 235 to 251 of the Companies Act, 1956 have been initiated or
are pending against the petitioner companies.
11. The Board of Directors of the demerged and resulting companies
in their separate meetings held on 30th September, 2014 have
unanimously approved the proposed Scheme of Arrangement. Copies of
the Resolutions passed at the meetings of the Board of Directors of the
demerged and resulting companies have been placed on record.
12. The petitioner companies had earlier filed CA (M) No. 6/2015
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 Arrangement. Vide order dated 28th January, 2015 this court
allowed the application and dispensed with the requirement of convening
and holding the meetings of the equity shareholders, secured and
unsecured creditors of the demerged and resulting companies to
consider and, if thought fit, approve, with or without modification, the
proposed Scheme of Arrangement.
13. The petitioner companies have thereafter filed the present petition
seeking sanction of the Scheme of Arrangement. Vide order dated 8th
April, 2015, notice in the petition was directed to be issued to the
Regional Director, Northern Region. Citations were also directed to be
published in 'Business Standard' (English) and (Hindi) editions. An
affidavit has been filed by the petitioners showing compliance regarding
publication of citations in the aforesaid newspapers on 22nd September,
2015. Copies of the newspaper clippings containing the publications have
been filed along with the said affidavit.
14. 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 16th October, 2015. Relying on Clause
8.1 of Part-III of the Scheme, he has stated that, upon sanction of the
Scheme of Arrangement, the permanent employees of the demerged
company engaged in the Demerged Undertaking shall become the
employees of the resulting company without any break or interruption in
their services. He has further submitted that in Clause 13.3 of Part-VI of
the Scheme, it has been stated that all accounting treatment in the books
of the petitioner companies shall be in accordance with the applicable
provisions of the Act read with relevant Accounting Standards issued by
the Institute of Chartered Accountants of India.
15. The Regional Director in Para 10.4 of his report has submitted that
it has been observed from Schedule of assets and liabilities as at
01.04.2014 to be transferred to the resulting company as annexure-1,
that there is a difference of Rs.8,89,20,647.10. Further, as per para 13 of
the Scheme, the difference between the amount of assets and liabilities
so transferred shall be written off against/added to the General Reserve
account in the books of account of the demerged company and this
amount shall be free for distribution as dividend, and shall for all
purposes constitute a part of the free reserves of the resulting company.
The Regional Director has submitted that the surplus arising out of the
Scheme of Arrangement i.e. arrangement/amalgamation reserve is of
capital nature and cannot be considered as general reserve as the same
is free for distribution to the shareholders of a company in the form of
dividend/bonus shares.
16. In response to the aforesaid objection of the Regional Director, the
petitioner companies in the affidavit dated 16th March, 2016 of
Mr.Sourabh Aggarwal, Director of the resulting company, have submitted
that in terms of para 11 of the Scheme, the demerged company shall be
issued shares qua the said surplus value by the resulting company and
therefore, there will be no amount available to be carried to any reserve.
It has been further submitted that the petitioner companies shall not
transfer any amount to the general reserve as for the entire excess
amount of Rs.8,89,20,647.10/-, shares shall be allotted to the
shareholders of the demerged company and after allotting shares, no
excess amount shall be left with the resulting company. The resulting
company also undertakes that if there is any reserve in terms of Clause
13 of the Scheme, the same shall be transferred to the Capital Reserve
and will treat the same accordingly. In view of the aforesaid, the objection
raised by the Regional Director stands satisfied.
17. No objection has been received to the Scheme of Arrangement
from any other party. The petitioner companies, in the affidavit dated 23rd
November, 2015 of Mr. Sourabh Aggarwal, Director of the resulting
company have submitted that neither the petitioner companies nor their
counsel have received any objection pursuant to the citations published
in the newspapers on 22nd September, 2015.
18. Considering the approval accorded by the equity shareholders and
creditors of the petitioner companies to the proposed Scheme of
Arrangement 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 Arrangement. Consequently,
sanction is hereby granted to the Scheme of Arrangement 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 arrangement, i.e. 1st April, 2014, the demerged
undertaking of the demerged company shall stand merged in the
resulting company.
19. The Assistant Registrar of Companies appearing for the Regional
Director prays that costs of at least Rs.50,000/- 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 company states that the same is acceptable to
him. As already directed vide order dated 12.05.2016, the petitioners
shall deposit a sum of Rs.50,000/- by way of costs with the Common
Pool Fund of the Official Liquidator.
20. The petition is allowed in the above terms.
Dasti.
SUDERSHAN KUMAR MISRA, J.
July 19, 2016
