Nano Electrotech Private Limited vs ...
2016 Latest Caselaw 4121 Del

                   IN THE HIGH COURT OF DELHI
                  COMPANY PETITION NO. 374/2015

                                           Reserved on 26th April, 2016
                                Date of pronouncement: 30th May, 2016
In the matter of
The Companies Act, 1956 & the Companies Act, 2013 (to the extent
applicable):

And

Petition under Sections 391 to 394 of the
Companies Act, 1956 read with Rule 79 of the
Companies (Court) Rules, 1959

Scheme of Arrangement between:

Nano Electrotech Private Limited
                                           Petitioner/Transferor Company
      AND
Infopower Technologies Limited
                                          Petitioner/Transferee Company

                               Through      Ms.    Gurkamal    Arora,
                               Advocate for the petitioners
                               Ms. Aparna Mudiam, Asstt. Registrar
                               of Companies for the Regional Director
                               Mr. Ashish Makhija, Advocate for the
                               Official Liquidator

SUDERSHAN KUMAR MISRA, J.

1. This joint petition has been filed under Sections 391 to 394 of the

Companies Act, 1956 read with Rule 79 of the Companies (Court) Rules,

1959 by the petitioner companies seeking sanction of the Scheme of

Arrangement between Nano Electrotech Private Limited (hereinafter

referred to as the transferor company) and Infopower Technologies

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 incorporated under the Companies

Act, 1956 on 12th May, 2005 with the Registrar of Companies, NCT of

Delhi & Haryana at New Delhi.

4. The transferee company was originally incorporated under the

Companies Act, 1956 on 18th April, 1984 with the Registrar of

Companies, NCT of Delhi & Haryana at New Delhi under the name and

style of Sark Synertek Private Limited. The word 'Private' was deleted

from the name of the company w.e.f. 01.08.1990. Thereafter, the

company changed its name to Infopower Technologies Limited and

obtained the fresh certificate of incorporation on 16th July, 2007.

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

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

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

Rs.66,17,000/- divided into 6,61,700 equity shares of Rs.10/- each.

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

Rs.3,75,00,000/- divided into 37,30,000 equity shares of Rs.10/- each

aggregating to Rs.3,73,00,000/- and 20,000 cumulative convertible

preference shares of Rs.10/- each aggregating to Rs.2,00,000/-. The

issued share capital of the company is Rs.3,34,43,200/- divided into

33,44,320 equity shares of Rs.10/- each. The subscribed and paid-up

share capital of the company is Rs.3,27,39,450/- divided into 32,73,945

equity shares of Rs.10/- each.

7. 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) 95/2015 earlier filed by the petitioners. The

audited balance sheets, as on 31st March, 2014, of the transferor and

transferee companies, along with the reports 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 affidavit. It is claimed that

the proposed merger will result in formation of a larger company enabling

further growth and development of the businesses of the said company

thus enabling the said company to obtain greater facilities possessed and

enjoyed by one large company compared to two small companies for

raising capital, securing and conducting trade and business on

favourable terms and other related benefits. It is claimed that the

proposed merger will result in reduction in overheads and other

expenses, reduction in administrative and procedural cost, eliminate

duplication of work, better and more productive utilization of various

resources and will enable the undertakings concerned to attain

economies of scale and optimize productivity.

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 issue and allot equity shares to the shareholders of the

transferor company in the following ratio:

"16 equity shares of Rs.10/- each of the transferee company, credited as fully paid up, for every 01 equity share of Rs.10/- held in the transferor company."

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

Sections 235 to 251 of the Companies Act, 1956 and/or Sections 210 to

224 of the Companies Act, 2013 are pending against the petitioner

companies.

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

in their separate meetings held on 19th January, 2015 have unanimously

approved the proposed Scheme of Arrangement. Thereafter, vide Board

Resolution dated 3rd November, 2015, the Board of Directors of the

petitioner companies have approved the amendment made in para 11(a)

of the Scheme. 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 petitioner companies had earlier filed CA (M) No. 95/2015

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 25th May, 2015 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 company and equity shareholders, secured and

unsecured creditors of the transferee company, there being no secured

creditor of the transferor company, 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 14th

August, 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 on the Official

Liquidator and the Regional Director, Northern Regional and also

regarding publication of citations in the aforesaid newspapers on 15th

September, 2015. Copies of the newspaper clippings containing the

publications have been filed along with the said affidavit.

14. Thereafter, vide CA No. 3679/2015, petitioners sought to place on

record the amended Scheme of Arrangement and the certified copies of

the relevant Board resolutions. It was pointed out by the petitioners that

the Scheme of Arrangement originally placed before this Court contained

a typographical error, and that the additional equity share capital of the

transferee company shall be Rs.10,00,00,000/- divided into 1,00,00,000

equity shares of Rs.10/- each instead of Rs.10/- crore equity shares of

Rs.10/- each. The said application was allowed vide order dated 8th

December, 2015 and the amended Scheme of Arrangement along with

the relevant Board Resolutions were taken on record.

15. 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 20th January,

2016 wherein he has stated that he has not received any complaint

against the proposed Scheme of Arrangement from any person/party

interested in the Scheme in any manner and that the affairs of the

transferor company do not appear to have been conducted in a manner

prejudicial to the interest of its members, creditors or public interest, as

per second proviso of Section 394(1) of the Companies Act, 1956.

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 21st January, 2016. Relying on Clause

15 of the Scheme, he has stated that, upon sanction of the Scheme of

Arrangement, all the employees of the transferor company shall become

the employees of the transferee company without any break or

interruption in their services. He has further submitted that in Clause 10(f)

of the Scheme, it has been stated that the transferee company shall

comply with the accounting treatment as prescribed under Accounting

Standard-14 issued by the Institute of Chartered Accountants of India. He

further submitted that in Clause 23(a) of the Scheme, it has been stated

that upon this scheme becoming effective, the transferor company shall

stand dissolved without the process of winding up.

17. The Regional Director has not raised any objection to the proposed

Scheme. However, in para 5 of his report, he has stated that the Income

Tax Department vide its letter dated 12.10.2015 has informed that certain

demands for the financial year 2007-08, 2008-09, 2009-10, 2010-11 and

2013-14 amounting to Rs.4,51,739/- are pending against the transferor

company. Further, in para 7(i) of his report, he has submitted that as per

para 11(a) and 11(c) of the amended Scheme of Arrangement, the

authorized share capital of the transferee company shall stand increased

by Rs.10,00,00,000/- divided into 1,00,00,000 equity shares of Rs.10/-

each. He, therefore, submits that the authorized share capital of the

company may be increased only after following the procedure prescribed

under the relevant provisions of the Companies Act and on payment of

fee to the Registrar of Companies and stamp duty to the state

government. In response to the aforesaid observations, the petitioner

companies in the affidavit dated 22nd January, 2016 of Ms. Varsha

Manwani, director of the transferee company have submitted that the

transferor company has duly paid the income tax demands for the

financial years 2007-08, 2008-09, 2009-10 and 2010-11 and their

respective receipts are placed on record. She has further submitted that

the assessment proceedings for the financial year 2013-14 are still

pending and as per the proposed Scheme, all the liabilities of the

transferor company shall stand transferred to the transferee company

and the transferee company shall pay all its dues. In response to the

second observation of the Regional Director, Ms. Varsha Manwani on

behalf of the petitioner companies has undertaken to follow the

procedure laid down in the Companies Act, 2013 and rules made

thereunder for increase in the authorized share capital of the transferee

company. In view of the aforesaid, the observations made by the

Regional Director stand satisfied.

18. No objection has been received to the Scheme of Arrangement

from any other party. The petitioner companies, in the affidavit dated 15th

January, 2016 of Ms. Gurkamal Hora Arora, counsel of the petitioner

companies have submitted that neither the petitioner companies nor their

counsel have received any objection pursuant to the citations published

in the newspapers on 15th September, 2015.

19. Considering the approval accorded by the equity shareholders and

creditors of the petitioner companies to the proposed Scheme of

Arrangement and the affidavits filed by the Regional Director, Northern

Region and the Official Liquidator having not raised any objection to the

proposed Scheme of Arrangement, there appears to be no impediment to

the grant of sanction to the amended Scheme of Arrangement.

Consequently, sanction is hereby granted to the amended Scheme of

Arrangement annexed with CA 3679/2015 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, 2014, the transferor company shall stand dissolved without

undergoing the process of winding up.

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

least Rs.1,00,000/- 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 her. As already directed vide order

dated 26.04.2016, the petitioners shall deposit a sum of Rs.1,00,000/- by

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

21. The petition is allowed in the above terms.

Dasti.

SUDERSHAN KUMAR MISRA, J.

May 30, 2016