Times Centre For Learning Limited vs Bennett, Coleman & Company ...
2016 Latest Caselaw 6479 Del

               IN THE HIGH COURT OF DELHI AT NEW DELHI
CO.APPL. (M) 141/2016

IN THE MATTER OF:
TIMES CENTRE FOR LEARNING LIMITED
                                             ... Applicant/ Demerged Company


                                 AND


BENNETT, COLEMAN & COMPANY LIMITED
                                          ... Non Applicant/Resulting Company


                                    Through: Mr. Vikrant Rohilla and Akul
                                             Mehandru, Advocates.

CORAM:
HON'BLE MR JUSTICE SIDDHARTH MRIDUL

                                    ORDER

17.10.2016

1. The present is an application for first motion, filed under Sections 391(1)

and 393 of the Companies Act, 1956, read with Rules 6 and 9 of the Companies

(Court) Rules, 1959, by the Applicant Company seeking directions of this Court

to dispense with the requirement of convening and holding separate meetings of

the Equity Shareholders, Preference Shareholders, Debenture Holders and

Unsecured Creditors of the Applicant Company, to consider and approve, with

or without modifications, the proposed Scheme of Arrangement between Times

Centre for Learning Limited (hereinafter referred to as "Applicant/Demerged

Company") and Bennett, Coleman & Company Limited (hereinafter referred to

as "Non-Applicant/Resulting Company") and their respective shareholders,

whereby and whereunder, the Professional Training Business of the Applicant

Company (referred to as the Demerged Undertaking, as defined in the said

Scheme) shall be de-merged and transferred to the Non-Applicant Company, on

terms as have specifically been incorporated in the said Scheme.

2. The registered office of the Applicant Company is situated at New Delhi,

and, therefore this Court has necessary jurisdiction to adjudicate the matter.

3. The Registered office of the Non-Applicant Company is situated at

Mumbai within the jurisdiction of the Hon'ble High Court of Judicature at

Bombay. It has been stated on behalf of the Applicant Company that the Non-

Applicant Company is instituting appropriate proceedings before the Hon'ble

High Court of Judicature at Bombay, seeking an exemption from separately

filing a petition before the Hon'ble High Court of Judicature at Bombay, in

relation to the said Scheme, in view of the circumstance that the latter is the

Holding company of the former.

4. The Applicant Company was originally incorporated on 26 th June, 2007

under the Companies Act, 1956, in the name and style of Times Yoga Limited

and registered with the Registrar of Companies, NCT of Delhi & Haryana.

Consequently, the name of the Applicant Company was changed to its present

name, 'Times Centre For Learning Limited' and a fresh Certificate of

Incorporation was issued by the Registrar of Companies, NCT of Delhi &

Haryana on 11th September, 2012.

5. The Authorised Share Capital of the Applicant Company, as on

31.03.2016 is Rs.5,00,00,000/-, divided into 30,00,000 Equity Shares of Rs.10/-

each and 20,00,000 Preference Shares of Rs.10/- each. The issued, subscribed

and paid up share capital of the Applicant Company is Rs.1,11,40,000/-, divided

into 10,00,000 Equity Shares of Rs.10/- each, partly paid to the extent of Re.1/-

each and 10,14,000 7% Optionally Convertible Non-Cumulative Preference

Shares of Rs.10/- each, fully paid up. The Non-Applicant Company (together

with its nominees) beneficially holds the entire issued, subscribed and paid up

Equity Share Capital as well as the Preference Share Capital of the Applicant

Company.

6. Copies of the Certificate of Incorporation along with the fresh Certificate

of Incorporation issued pursuant to change of name and Memorandum and

Articles of Association of the Applicant Company have been placed on record.

The audited accounts as on 31st March, 2016, together with report of the

Auditors and the certified copy of the unaudited financial statements of the

Applicant Company as on 30th June, 2016 have also been placed on record.

7. A copy of the Scheme of Arrangement has been filed along with the

present application and the same is on record. The salient features of the

Scheme are set out in detail in the instant application supported by the

accompanying affidavit. It has been submitted by the counsel appearing on

behalf of the Applicant Company that the nature of risk, rewards and

competition involved in the Professional Training Business vis-à-vis the

Government Business is distinct and requires different skill sets, branding,

approach and focus. The Non-Applicant Company has significant financial

resources which can be utilized to fund the expansion plans of the Professional

Training Business and the media business operated by the Non-Applicant

Company, coupled with its brands like Education Times, Ascent, MaTa

Campus, can be leveraged more effectively if the Professional Training

Business is housed within the Non-Applicant Company. It has been therefore

submitted that in view of the rationale of the Scheme, it is considered desirable,

beneficial and expedient to demerge the Professional Training Business of the

Applicant Company to the Non-Applicant Company, in the manner and on the

terms and conditions as stated in the Scheme, with effect from the Appointed

Date i.e. 1st July, 2016.

8. So far as the aspect of consideration is concerned, it has been further

stated on behalf of the Applicant Company that no new shares shall be issued

and allotted by the Non-Applicant Company to the Applicant Company or any

other person, in consideration of the demerger of the Professional Training

Business in terms of the said Scheme, as the Applicant Company is a wholly

owned subsidiary of the non-Applicant Company. Furthermore, as a part of the

Scheme, all the Optionally Fully Convertible Debentures presently issued by the

Applicant Company and held by the Non-Applicant Company, shall stand

reduced and cancelled.

9. It has been averred on behalf of the Applicant Company that no

investigation proceedings have been initiated or are pending in relation to the

Applicant/Demerged Company under Sections 235 to 251 of the Companies

Act, 1956 or corresponding Sections of the Companies Act, 2013.

10. That the Board of Directors of the Applicant Company had, in their

meeting held on 2nd August, 2016, approved the said Scheme and the Board of

Directors of the Non-Applicant Company and the Management Committee of

the Board of Directors of the Non-Applicant Company, had in their respective

meetings held on 8th July, 2016 and 2nd August, 2016, approved the said

Scheme. Copies of the said resolutions passed in the said meetings have been

placed on record.

11. The status of consents obtained from the shareholders, debenture holders,

secured and unsecured creditors of the Applicant company as stated in the

application and supported by documents filed therewith is reproduced as

hereinunder:

                               Number                    Consent
        Equity                 7 (seven)                   All
        Shareholders

        Preference              1 (one)                    All
        Shareholders

        Debenture               1 (one)                    All
        Holders

        Secured                   Nil                      N.A.
        Creditors

        Unsecured          72 (seventy two)        Being 19 in number
        Creditors                                   and 90% in value.

12. A prayer has been sought for dispensation of the requirement of

convening meetings of Equity Shareholders, Preference Shareholders,

Debenture Holders, Secured Creditors.

13. The Applicant Company has 07 (seven) Equity Shareholders. Each of the

said 07 (seven) Equity Shareholders have given their consents/no objections in

writing to the proposed Scheme and have also given their written consents for

dispensing with convening and holding a meeting of the Equity Shareholders of

the Applicant Company for consideration of the said Scheme. The said

documents have been examined and the same have been found in order. In view

of the consents/no objections given by the Equity Shareholders of the Applicant

Company, the requirement of convening a meeting of the Equity Shareholders

of the Applicant Company to consider, and if thought fit, approve, with or

without modifications, the said Scheme, is dispensed with.

14. The Applicant Company has 01 (one) Preference Shareholder. The said

01 (one) Preference Shareholder has given its consent/no objection in writing to

the proposed Scheme and has also given its written consent for dispensing with

convening and holding a meeting of the Preference Shareholders of the

Applicant Company for consideration of the said Scheme. The said document

has been examined and the same has been found in order. In view of the

consent/no objection given by the Preference Shareholder of the Applicant

Company, the requirement of convening a meeting of the Preference

Shareholders of the Applicant Company to consider, and if thought fit, approve,

with or without modifications, the said Scheme is dispensed with.

15. The Applicant Company has 01 (one) Debenture Holder. The said 01

(one) Debenture Holder has given its consent/no objection in writing to the

proposed Scheme and has also given its written consent for dispensing with

convening and holding a meeting of the Debenture Holders of the Applicant

Company for consideration of the said Scheme. The said document has been

examined and the same has been found in order. In view of the consent/no

objection given by the Debenture Holder of the Applicant Company, the

requirement of convening and holding of a meeting of the Debenture Holders of

the Applicant Company to consider, and if thought fit, approve, with or without

modifications, the said Scheme is dispensed with.

16. A perusal of the record reveals that there are no secured creditors of the

Applicant Company as on the date of filing of the instant application and

therefore the question dispensation of the requirement of convening a meeting

of the secured creditors.

17. Learned counsel appearing on behalf of the Applicant Company does not

press the prayer seeking dispensation of the requirement of convening a meeting

of the unsecured creditors of the Applicant Company.

18. In view of the foregoing, the meeting of the unsecured creditors of the

Applicant Company is hereby directed to be convened. The same is to be held

on 19.11.2016at 11.00 a.m., at TimesPro, F-11, South Extension Part 1, Near

McDonalds, New Delhi-110049. The necessary details qua convening the same

are enumerated hereinbelow:

i. Ms Mansi Markandey (Advocate), Mobile No. 9910772005 is appointed

as the Chairperson and Mr Mehul Rathore (Advocate), Mobile No.

7042704279 is appointed as the Alternate Chairperson to conduct the said

meeting.

ii. The Quorum of the meeting of the unsecured creditors company shall be

50% in number and more than 50% in value of the total unsecured debt.

19. In case the quorum as noted above, for the abovesaid meeting is not

present at the meeting, then the meeting shall be adjourned by half an hour, and

thereafter, the persons present and voting shall be deemed to constitute the

quorum. For the purpose of computing the quorum the valid proxies shall also

be considered, if the proxy in the prescribed form duly signed by the person

entitled to attend and vote at the meeting is filed with the registered offices of

the applicant company at least 48 hours before the meeting. The Chairperson

and Alternate Chairperson shall ensure that the proxy registers are properly

maintained.

20. The Chairperson and Alternate Chairperson shall ensure that notices for

convening the aforesaid meeting of the unsecured creditors of the Applicant

Company, along with copies of the Scheme and the statement under Section 393

of the Companies Act, 1956, shall be sent to the unsecured creditors of the

Applicant Company by speed post at their registered or last known addresses at

least 21 days before the date appointed for the meeting, in their presence or in

the presence of their authorized representatives.

21. Notice of the meeting shall also be published in the newspapers, namely,

'Times of India' (English) and 'Nav Bharat Times' (Hindi) in terms of the

Companies (Court) Rules, 1959 at least 21 days before the date appointed for

the meeting.

22. The Chairperson and Alternate Chairperson will be at liberty to issue

suitable directions to the management of the Applicant Company so that the

aforesaid meeting of the unsecured creditors of the Applicant Company is

conducted in a just, free and fair manner.

23. The fee of the Chairperson and the Alternate Chairperson for the

aforesaid meeting shall be Rs.75,000/- each, in addition to meeting their

incidental expenses, to be borne by the Applicant Company. The Chairpersons

will file their reports within two weeks from the date of holding of the aforesaid

meeting.

24. The application stands allowed in the aforesaid terms and is accordingly

disposed of.

25. The copy of the order be given dasti.

SIDDHARTH MRIDUL, J OCTOBER 17, 2016 dn