Stratford Academy Limited vs ...
2016 Latest Caselaw 3628 Del

                     IN THE HIGH COURT OF DELHI
                 COMPANY APPLICATION (MAIN) NO. 56/2016
                                            Reserved on 18th April, 2016
                                 Date of pronouncement: 16th May, 2016
In the matter of
The Companies Act, 1956 & the Companies Act, 2013 (to the extent
applicable):
And
Application under Section          391(1)    of the
Companies Act, 1956
Scheme of Amalgamation of:
Stratford Academy Limited
                                             Applicant/Transferor Company
       WITH
FIITJEE Limited
                                             Applicant/Transferee Company
                                 Through Mr. Rajeev K. Goel, Advocate
                                 for the applicants
SUDERSHAN KUMAR MISRA, J.

1. This joint application has been filed under Section 391(1) of the

Companies Act, 1956 by the applicant companies seeking directions of

this court to dispense with the requirement of convening the meetings of

their equity shareholders, secured and unsecured creditors to consider

and approve, with or without modification, the proposed Scheme of

Amalgamation of Stratford Academy Limited (hereinafter referred to as

the transferor company) with FIITJEE 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 was originally incorporated under the

Companies Act, 1956 on 13th December, 2004 with the Registrar of

Companies, Madhya Pradesh and Chattisgarh under the name and style

of Stratford Academy Private Limited. Thereafter, the company shifted its

registered office from the State of Madhya Pradesh to Delhi and obtained

a certificate in this regard from Registrar of Companies, NCT of Delhi &

Haryana at New Delhi on 31st January, 2013. The company changed its

name to Stratford Academy Limited and obtained the fresh certificate of

incorporation on 7th October, 2015.

4. The transferee company was incorporated under the Companies

Act, 1956 on 13th October, 1997 with the Registrar of Companies, NCT of

Delhi & Haryana at New Delhi.

5. The present authorized share capital of the transferor company is

Rs.5,00,000/- divided into 50,000 equity shares of Rs.10/- each. The

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

Rs.5,00,000/- divided into 50,000 equity shares of Rs.10/- each.

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

Rs.62,55,00,000/- divided into 5,84,50,000 equity shares of Rs.10/- each

aggregating Rs.58,45,00,000/-; 40,00,000 Series 'A' equity shares of

Rs.10/- each aggregating Rs.4,00,00,000/-; and 1,00,000 compulsorily

convertible preference shares of Rs.10/- each aggregating

Rs.10,00,000/-. The issued, subscribed and paid-up share capital of the

company is Rs.42,52,99,270/- divided into 3,86,63,570 equity shares of

Rs.10/- each aggregating Rs.38,66,35,700/-; and 38,66,357 Series 'A'

equity shares of Rs.10/- each aggregating Rs.3,86,63,570/-

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

transferor and transferee companies have been filed on record. The

audited balance sheets, as on 31st March, 2015, of the transferor and

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

been filed.

8. 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 application and the accompanying affidavits. It is

submitted by the applicants that the transferor company is a wholly

owned subsidiary of the transferee company and the proposed

amalgamation would result in business synergy, consolidation and

pooling of their resources. It is claimed that the proposed amalgamation

would provide synergistic linkages besides economies in costs and other

benefits resulting from the economies of scale, by combining the

business and operations of the transferor and transferee companies.

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

provides that, upon coming into effect of this Scheme, the transferee

company shall not be required to issue and allot any shares since the

transferor company is a wholly owned subsidiary of the transferee

company.

10. It has been submitted by the applicants that no proceedings under

Sections 235 to 251 of the Companies Act, 1956 or under the

corresponding sections of the Companies Act, 2013 are pending against

the applicant companies.

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

in their separate meetings held on 18th March, 2016 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.

12. The transferor company has 07 equity shareholders and 01

unsecured creditor. All the equity shareholders and the sole unsecured

creditor have given their consents/no objections in writing to the

proposed Scheme of Amalgamation. Their consents/no objections have

been placed on record. They have been examined and found in order. In

view thereof, the requirement of convening the meetings of the equity

shareholders and unsecured creditor of the transferor company to

consider and, if thought fit, approve, with or without modification, the

proposed Scheme of Amalgamation is dispensed with. There is no

secured creditor of the transferor company, as on 24th February, 2016.

13. The transferee company has 11 equity shareholders and 01 Series

'A' equity shareholder. 10 out of 11 equity shareholders, being 90.91% in

number and 94.95% in value, and the sole series 'A' equity shareholder

have given their consents/no objections in writing to the proposed

Scheme of Amalgamation. Their consents/no objections have been

placed on record. They have been examined and found in order. In view

thereof, the requirement of convening the meetings of the equity

shareholders, including series 'A; equity shareholder, of the transferee

company to consider and, if thought fit, approve, with or without

modification, the proposed Scheme of Amalgamation is dispensed with.

14. So far as the secured and unsecured creditors of the transferee

company are concerned, the transferee company has not provided the

list of its secured and unsecured creditors. However, it was pleaded by

learned counsel for the applicants that since the transferor company is a

wholly owned subsidiary of the transferee company; the applicant

companies are not proposing any arrangement with their shareholders

and creditors; and no new shares will be issued on amalgamation,

therefore, the rights of the secured and unsecured creditors of the

transferee company will not be affected. Hence, their consents/NOC are

not required to be obtained for the proposed amalgamation. It is further

submitted by learned counsel for the applicants that, post amalgamation,

the transferee company will continue to pay its creditors and other

liabilities in the normal course of its business. In support of his

submission, learned counsel placed reliance on the judgment of this

court passed in CA(M) 9/2016, wherein under similar circumstances and

relying on the judgment of this court passed in CA(M) 117/2009, the

requirement of convening the meetings of the shareholders and creditors

of the transferee company was dispensed with.

15. I have carefully considered the aforesaid case law cited at the Bar.

In view of the submissions made at the bar, the settled law on the

subject, and considering the Scheme of Amalgamation, the requirement

of convening and holding the meetings of the secured and unsecured

creditors of the transferee company, to consider and if thought fit,

approve, with or without modification, the proposed Scheme of

Amalgamation, is dispensed with.

16. The application stands allowed in the aforesaid terms.

Dasti

SUDERSHAN KUMAR MISRA, J.

May 16, 2016