Delhi High Court
Legend Travels Private Limited vs ... on 27 July, 2016
IN THE HIGH COURT OF DELHI
COMPANY PETITION NO. 518/2015
Reserved on 24th May, 2016
Date of pronouncement: 27th July, 2016
In the matter of
The Companies Act, 1956 & the Companies Act, 2013 (to the extent
applicable):
And
Petition under Section 391(2) & 394 read with
Sections 100 to 104 of the Companies Act,
1956
Scheme of Arrangement between:
Legend Travels Private Limited
Petitioner/Demerged Company
AND
Legend Travel Solutions Private Limited
Petitioner/Resulting Company No. 1
Prestige Webnet Solution Private Limited
Petitioner/Resulting Company No. 2
Through Mr. Rajeev K. Goel, Advocate
for the petitioners
Ms. Aparna Mudiam, Asstt. Registrar
of Companies for Regional Director
Mr. Manish Bishnoi, Advocate for the
Official Liquidator
SUDERSHAN KUMAR MISRA, J.
1. This joint petition has been filed under Sections 391(2) & 394 read
with Sections 100 to 104 of the Companies Act, 1956 by the petitioner
companies seeking sanction of the Scheme of Arrangement between
Legend Travels Private Limited (hereinafter referred to as the demerged
company) and Legend Travel Solutions Private Limited (hereinafter
referred to as the resulting company no. 1) and Prestige Webnet Solution
Private Limited (hereinafter referred to as the resulting company no. 2).
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 21st October, 1997 with the Registrar of Companies, NCT of
Delhi & Haryana at New Delhi.
4. The resulting company no. 1 was incorporated under the
Companies Act, 2013 on 24th December, 2014 with the Registrar of
Companies, NCT of Delhi & Haryana at New Delhi.
5. The resulting company no. 2 was incorporated under the
Companies Act, 1956 on 31st March, 2014 with the Registrar of
Companies, NCT of Delhi & Haryana at New Delhi.
6. The present authorized share capital of the demerged company is
Rs.1,40,00,000/- divided into 14,00,000 equity shares of Rs.10/- each.
The issued, subscribed and paid-up share capital of the company is
Rs.1,39,99,980/- divided into 13,99,998 equity shares of Rs.10/- each.
7. The present authorized share capital of the resulting company no.1
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.1,00,000/- divided into 10,000 equity shares of Rs.10/- each.
8. The present authorized share capital of the resulting company no.2
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.
9. 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) 115/2015, earlier filed by the petitioners.
The audited balance sheet, as on 31st March, 2014, of the demerged
company has also been filed. It has been submitted by the petitioners
that since the resulting companies no. 1 & 2 have been incorporated only
recently, therefore, no accounts have been prepared for the resulting
companies no. 1 & 2.
10. 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 affidavit. It is submitted by
the petitioners that the Scheme, inter alia, provides demerger of the
Travel Business and Real Estate Business of the demerged company
and their merger in the resulting company no. 1 and resulting company
no. 2 respectively. It is claimed that the proposed demerger will provide
scope for independent expansion without committing the existing
organization in entirety. It is further claimed that the proposed demerger
will provide scope for independent expansion of various businesses and
will strengthen, consolidate and stabilize the business of these
companies and will also facilitate further expansion and growth of their
businesses.
11. So far as the share exchange ratio is concerned, the Scheme
provides that, upon coming into effect of this Scheme, the resulting
company no. 1 and 2 shall issue and allot equity shares to the
shareholders of the demerged company in the following ratio:-
"01 equity share of Rs.10/- each of the resulting company no.1,
credited as fully paid up, for every 10 equity shares of Rs.10/-
each held by the shareholders in the demerged company."
"01 equity share of Rs.10/- each of the resulting company no.2,
credited as fully paid up, for every 10 equity shares of Rs.10/-
each held by the shareholders in the demerged company."
12. It has been submitted by the petitioners that no proceedings under
Sections 235 and 251 of the Companies Act, 1956 are pending against
the petitioner companies.
13. The Board of Directors of the demerged company and resulting
companies no. 1 & 2 in their separate meetings held on 30th April, 2015
and 9th May, 2015 respectively 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.
14. The petitioner companies had earlier filed CA (M) No. 115/2015
seeking directions of this court to dispense with the requirement of
convening the meetings of their shareholders, secured and unsecured
creditors, which are statutorily required for sanction of the Scheme of
Arrangement. Vide order dated 21st July, 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 company and equity shareholders of the
resulting companies, there being no secured or unsecured creditors of
the resulting companies, to consider and, if thought fit, approve, with or
without modification, the proposed Scheme of Arrangement.
15. The petitioner companies have thereafter filed the present petition
seeking sanction of the Scheme of Arrangement. Vide order dated 17th
August, 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 'Business Standard'
(Hindi) editions. Affidavit of service has been filed by the petitioners
showing compliance regarding service on the Regional Director, Northern
Region, and also regarding publication of citations in the aforesaid
newspapers on 10th September, 2015. Copies of the newspaper clippings
containing the publications have been filed along with the affidavit of
service.
16. 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 15th February, 2016 stating that the ROC
has not made any adverse comments to the Scheme of Arrangement and
that the Regional Director has no objection to the proposed Scheme.
17. No objection has been received to the Scheme of Arrangement
from any other party. The petitioner companies, in the affidavit dated 8th
February, 2016 of Sh. Gurbinder Singh, Director of the demerged
company have submitted that neither the petitioner companies nor their
counsel have received any objection pursuant to the citations published
in the newspapers on 10th September, 2015.
18. Considering the approval accorded by the equity shareholders,
secured and unsecured creditors of the petitioner companies to the
proposed Scheme of Arrangement and the affidavit filed by the Regional
Director, Northern Region, not raising any objection to the proposed
Scheme of Arrangement, 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 Section 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
Arrangement, i.e. 1st April, 2015, the 'Travel Business/Travel Division
(demerged business-1) and the Real Estate Business/Real Estate
Division (demerged business-2) of the demerged company shall stand
merged in the resulting company no. 1 and resulting company no. 2
respectively.
19. Learned counsel for the Official Liquidator 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 24.05.2016, the petitioners shall deposit a sum of Rs.50,000/- by
way of costs with the Delhi High Court Bar Association Lawyers Social
Security and Welfare Fund, New Delhi.
20. The petition is allowed in the above terms.
Dasti.
SUDERSHAN KUMAR MISRA, J.
July 27, 2016
