Brewton Consultants Private ... vs True Value Propmart Private ...
2016 Latest Caselaw 6507 Del

            IN THE HIGH COURT OF DELHI AT NEW DELHI

                                 Judgment delivered on: 18.10.2016

CO. PET._NO. 169/2016

IN THE MATTER OF:-

BREWTON CONSULTANTS PRIVATE LIMITED
                    ..... Petitioner /Transferor Company No. 1.

                             AND

DACHA DEVELOPERS PRIVATE LIMITED
                     ..... Petitioner /Transferor Company No. 2.

                             AND

PINKCITY SALES PRIVATE LIMITED
                       ..... Petitioner /Transferor Company No. 3.

                             AND

RIVER PROPERTIES PRIVATE LIMITED
                      ..... Petitioner/ Transferor Company No. 4.

                             AND

RSS PETRO CHEM PRIVATE LIMITED
                      ..... Petitioner/ Transferor Company No. 5.

                             AND

SHIVAM PLASTOCRAFT PRIVATE LIMITED
                      ..... Petitioner/ Transferor Company No. 6

                             WITH



CO.PET.169/2016                                         Page 1 of 17
 TRUE VALUE PROPMART PRIVATE LIMITED
                         ..... Petitioner /Transferee Company

                           Through:      Mr Mukesh Sukhija, Advocate for the
                                         petitioners.
                                         Ms Aparna Mudiam, Asst. ROC for
                                         RD.
                                         Mr Rajiv Bahl, Advocate for OL.
CORAM:
HON'BLE MR JUSTICE SIDDHARTH MRIDUL

                               JUDGMENT

SIDDHARTH MRIDUL, J.

CO.APPL. 2847/2016_& CO.APPL. 3622/2016_(Condonation of delay) The delay which is stated to be of 99 days, on the part of the Official

Liquidator, in filing his report, and of 102 days, on the part of the Regional

Director, in filing the affidavit, is condoned.

The aforesaid report and affidavit are taken on record.

The applications are disposed of accordingly.

CO.PET. 169 OF 2016_

1. The present is a Second Motion Petition filed jointly, by Brewton

Consultants Private Limited (hereinafter referred to as "Transferor Company

no.1"), Dacha Developers Private Limited (hereinafter referred to as

"Transferor Company no.2"), Pinkcity Sales Private Limited (hereinafter

referred to as "Transferor Company no.3"), River Properties Private Limited

(hereinafter referred to as "Transferor Company no.4"), RSS Petro Chem

Private Limited (hereinafter referred to as "Transferor Company no.5"),

Shivam Plastocraft Private Limited (hereinafter referred to as "Transferor

Company no.6") and True Value Propmart Private Limited (hereinafter

referred to as "Transferee Company") under Sections 391(2) & 394 of the

Companies Act, 1956 (hereafter referred to as 'the Act') for approval of the

Scheme of Amalgamation between Transferor Companies Nos. 1 to 6 with

the Transferee Company (hereinafter referred to as 'Scheme').

2. The Transferor Companies and the Transferee Company have been

hereinafter, jointly, referred to as 'Petitioner Companies'.

3. The registered offices of the Petitioner Companies are situated in the

National Capital Territory of Delhi, and therefore, this Court has the

necessary jurisdiction to adjudicate the present petition.

4. The details of the authorized share capital, issued, subscribed and paid

up capital qua Petitioner Companies, have been set out in detail in the

present Petition.

5. The Transferor Company No.1 was originally incorporated under the

Act, on 25.06.2007 with the Registrar of Companies, NCT of Delhi and

Haryana, New Delhi.

6. The Transferor Company No.2 was originally incorporated under the

Act, on 16.09.2006 with the Registrar of Companies, NCT of Delhi and

Haryana, New Delhi.

7. The Transferor Company No.3 was originally incorporated under the

Act, on 7.01.2008 with the Registrar of Companies, West Bengal. Thereafter

Transferor Company No.3 from the state of West Bengal to the Registrar of

Companies NCT of Delhi and Haryana, New Delhi on 27.10.2015.

8. The Transferor Company No.4 was originally incorporated under the

Act, on 5.03.2007 with the Registrar of Companies, NCT of Delhi and

Haryana, New Delhi.

9. The Transferor Company No.5 was originally incorporated under the

Act, on 30.06.2003 with the Registrar of Companies, NCT of Delhi and

Haryana, New Delhi.

10. The Transferor Company No.6 was originally incorporated under the

Act, on 21.04.2005 with the Registrar of Companies, NCT of Delhi and

Haryana, New Delhi.

11. The authorized share capital of the Transferor Company No.1 is

Rs.10,00,000/- (Rupees Ten Lacs), divided into 1,00,000 shares of Rs. 10/-

each, as on 31.03.2015. The issued, subscribed and paid-up share capital of

the Transferor Company No.1 is Rs.3,50,000/- ( Rupees Three Lac Fifty

Thousand), divided into 35,000 shares of Rs.10/- each, as on 31.03.2015.

12. The authorized share capital of the Transferor Company No.2 is

Rs.25,00,000/- ( Rupees Twenty Five Lacs), divided into 2,50,000 shares of

Rs.10/- each, as on 31.03.2015. The issued, subscribed and paid-up share

capital of the Transferor Company No.2 is Rs.15,15,000/- (Rupees Fifteen

Lacs Fifteen Thousand), divided into 1,51,500 shares of Rs.10/- each, as on

31.03.2015.

13. The authorized share capital of the Transferor Company No.3 is

Rs.25,00,000/- (Rupees Twenty Five Lacs Only), divided into 2,50,000

shares of Rs.10/- each, as on 31.03.2015. The issued, subscribed and paid-up

share capital of the Transferor Company No.3 is Rs.25,00,000/- (Rupees

Twenty Five Lacs Only), divided into 2,50,000 shares of Rs.10/- each, as on

31.03.2015.

14. The authorized share capital of the Transferor Company No.4 is

Rs.25,00,000/- (Rupees Twenty Five Lacs Only), divided into 2,50,000

shares of Rs.10/- each, as on 31.03.2015. The issued, subscribed and paid-up

share capital of the Transferor Company No.4 is Rs.10,33,750/- (Rupees Ten

Lacs Thirty Three Thousand Seven Hundred Fifty Only), divided into

1,03,375 shares of Rs.10/- each, as on 31.03.2015.

15. The authorized share capital of the Transferor Company No.5 is

Rs.1,00,00,000/- (Rupees One Crore), divided into 10,00,000 shares of

Rs.10/- each, as on 31.03.2015. The issued, subscribed and paid-up share

capital of the Transferor Company No.5 is Rs.82,20,000/- ( Rupees Eighty

Two Lacs Twenty Thousand Only), divided into 8,22,000 shares of Rs.10/-

each, as on 31.03.2015.

16. The authorized share capital of the Transferor Company No.6 is

Rs.1,00,00,000/- (Rupees One Crore), divided into 10,00,000 shares of

Rs.10/- each, as on 31.03.2015. The issued, subscribed and paid-up share

capital of the Transferor Company No.6 is Rs.3,50,000/- (Rupees Three Lacs

Fifty Thousand Only), divided into 35,000 shares of Rs.10/- each, as on

31.03.2015.

17. The Transferee Company was originally incorporated under the

Companies Act, 1956 on 28.03.2007 with the Registrar of Companies, NCT

of Delhi and Haryana, New Delhi.

18. The authorized share capital of Transferee Company is

Rs.1,00,00,000/- (Rupees One Crore), divided into 10,00,000 shares of

Rs.10/- each, as on 31.03.2015. The issued, subscribed and paid-up share

capital of the Transferee Company is Rs.21,35,000/- (Rupees Twenty One

Lacs Thirty Five Thousand Only), divided into 2,13,500 shares of Rs.10/-

each, as on 31.03.2015.

19. It has been averred on behalf of the Petitioner Companies that there

are no proceedings pending against them, under Sections 235 to 251 of the

Act (including their corresponding sections of the Companies Act, 2013).

20. It has been further submitted on behalf of the Petitioner Companies

that the Scheme has been approved by the respective Board of Directors

(BODs) of the Petitioner Companies. Copies of the BODs resolutions dated

14.01.2016 have been filed and the same are on record.

21. The copies of Memorandum of Association and Articles of

Association as well as the latest audited annual accounts for the year ended

31.03.2015 of the petitioner companies have been filed and the same are on

record.

22. A copy of the Scheme has been duly placed on record and the salient

features of the Scheme, have been incorporated and detailed, in the present

petition and the accompanying affidavit. It has been averred on behalf of the

Petitioner Companies that the proposed amalgamation would, inter alia,

enable pooling of physical, financial and human resources of the companies

for the most beneficial utilization of these factors in the combined entity.

Further, it has been averred that the proposed scheme would lead to usual

economies of a centralised and a large company; would lead to combining

managerial and operating strength to build a wider capital and financial base.

23. It has been stated on behalf of the Petitioner companies that the

proposed amalgamation, would further aid in strengthening, consolidating

and stabilising the business of the companies in order for the resulting

company to be able to become more profitable and competitive in the

market.

24. The Share Exchange Ratio for the Amalgamation has been provided

for in the Scheme which is as under :

 1 (One) Equity Share of Rs. 10/- (Rupees Ten) each of Transferee Company for every 4 (Four) Equity Shares of Rs. 10/- (Rupees Ten) each held in the Transferor Company No. 1- BREWTON CONSULTANTS PRIVATE LIMITED.

 4 (Four) Equity Shares of Rs. 10/- (Rupees Ten) each of Transferee Company for every 5 (Five) Equity Shares of Rs. 10/- (Rupees Ten) each held in the Transferor Company No. 2- DACHA DEVELOPERS PRIVATE LIMITED.

 4 (Four) Equity Shares of Rs. 10/- (Rupees Ten) each of Transferee Company for every 1 (One) Equity Shares of Rs. 10/- (Rupees Ten) each held in the Transferor Company No. 3 - PINKCITY SALES PRIVATE LIMITED.

 1 (One) Equity Shares of Rs. 10/- (Rupees Ten) each of Transferee Company for every 8 (Eight) Equity Shares of Rs. 10/- (Rupees Ten) each held in the Transferor Company No. 4 - RIVER PROPERTIES PRIVATE LIMITED.

 1 (One) Equity Shares of Rs. 10/- (Rupees Ten) each of Transferee Company for every 2 (Two) Equity Shares of Rs. 10/- (Rupees Ten) each held in the Transferor Company No. 5 - RSS PETROCHEM PRIVATE LIMITED.

 1 (One) Equity Shares of Rs. 10/- (Rupees Ten) each of Transferee Company for every 40 (Forty) Equity Shares of Rs. 10/- (Rupees Ten) each held in the Transferor Company No. 6 - SHIVAM PLASTOCRAFT PRIVATE LIMITED.

25. To recapitulate, the Petitioner Companies had, in the earlier round,

filed an application (i.e. application for the First Motion), being Company

Application (M) No. 24 of 2016, whereby a prayer was sought, for

dispensation of the requirement of convening of meetings of the equity

shareholders, secured and unsecured creditors of the Petitioner Companies.

26. This Court by way of order dated 10.02.2016, allowed the said

application and dispensed with the requirement of convening meetings of

Shareholders, secured and unsecured creditors of the Petitioner Companies.

The transferor company no. 1 has 03 equity shareholders and 1 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. There is no secured creditor of the transferor company no. 1.

27. The transferor company no. 2 has 04 equity shareholders and 02

unsecured creditors. All the equity shareholders and both the unsecured

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

Scheme of Amalgamation. There is no secured creditor of the transferor

company no. 2.

28. The transferor company no. 3 has 02 equity shareholders. Both the

equity shareholders have given their consents/no objections in writing to the

proposed Scheme of Amalgamation. There is no secured or unsecured

creditor of the transferor company no. 3.

29. The transferor company no. 4 has 02 equity shareholders and 02

unsecured creditors. Both the equity shareholders and both the unsecured

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

Scheme of Amalgamation. There is no secured creditor of the transferor

company no. 4.

30. The transferor company no. 5 has 02 equity shareholders and 01

unsecured creditor. Both the equity shareholders and lone unsecured creditor

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

Amalgamation. There is no secured creditor of the transferor company no. 5.

31. The transferor company no. 6 has 02 equity shareholders and 02

unsecured creditors. Both the equity shareholders and both the unsecured

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

Scheme of Amalgamation. There is no secured creditor of the transferor

company no. 6.

32. The transferee company has 02 equity shareholders and 02 unsecured

creditors. Both the equity shareholders and both the unsecured creditors have

given their consents/no objections in writing to the proposed Scheme of

Amalgamation. There is no secured creditor of the transferee company.

33. Pursuant to the same, the Petitioner Companies have filed the instant

petition (i.e. Second Motion Petition). Notice in the present petition was

issued by this Court, by way of the order dated 14.03.2016. Notice in the

present petition was accepted on behalf of the Official Liquidator (OL) and

the Regional Director (RD), Northern Region.

34. Furthermore, vide order of this Court dated 14.03.2016, citations were

directed to be published. It has been noted that Citations were published, in

Delhi Editions of the newspapers, namely, 'Business Standard' (English,

Delhi Edition) and 'Jansatta' (Hindi, Delhi Edition), on 14.05.2016, in

compliance with the said order. An affidavit dated 04.08.2016,

demonstrating service of the petition on the Official Liquidator, Registrar of

Companies and the Regional Director, Northern Region and publishing of

the citations has been filed and the same is on record.

35. Pursuant to the issuance of notices in the present petition, report of the

Official Liquidator (OL) has been filed on 04.08.2016, wherein, inter alia, it

has been stated that the office of the OL has not received any complaint

against the proposed Scheme from any person/party interested in the Scheme

in any manner and that the affairs of the Petitioner Companies do not appear

to have been conducted in a manner prejudicial to the interest of its

members, creditors or to public interest.

36. In other words, it has been averred by the OL in the report that the

affairs of the Petitioner Companies, do not fall foul of the provisions of the

Second Proviso to Section 394(1) of the Act. Thus, it has been submitted on

behalf of the OL, in effect, that no objection would be raised on behalf of the

OL, if this Court were to sanction the Scheme.

37. Further, in response to the notices issued in the present Petition,

Mr. N. K. Bhola, Regional Director, Northern Region, Ministry of Corporate

Affairs, (RD) filed an affidavit dated 05.08.2016 wherein, inter alia, it has

been stated that, the Income Tax Department has brought to their notice that

Transferor Company No.4 is under scrutiny for the assessment year 2014-

2015, which is under process and time barring on 31.12.2016. It has further

been averred by the office of the RD in the said affidavit that a demand of

Rs.591/- FBT for the assessment year 2008-2009 as stated by the Income

Tax Department, is outstanding and that the scrutiny assessment for the

assessment year 2015-16 is pending.

38. Further, it has been stated in the said affidavit filed by the RD that

they would have no objection in the event, this Court were to grant a

sanction to the proposed Scheme, subject however, to the abovementioned

observations.

39. In response to the observations made by the RD, the transferee

company filed an affidavit dated 20.09.2016, wherein, it has been stated that

the pursuant to the Scheme becoming effective, all liabilities, provisions,

duties and obligations including Income Tax and other statutory liabilities, if

any, of every kind, nature and description of the Transferor Companies

whether provided for or not in the books of accounts of the Transferor

Companies shall devolve and shall stand transferred or be deemed to be

transferred without any further act or deed, to the Transferee Company with

effect from the Appointed Date on which the Scheme will become effective

and shall be the liabilities, provisions, duties and obligations of the

Transferee Company. Further, it has been stated in the said affidavit, the

Transferee Company undertakes to repay all liabilities in respect of the

income tax standing due or arising after the assessment for the Assessment

Year 2014-15 qua the Transferor Company No. 4, subject to rights of appeal

and challenge available to it as per the law. It has further been stated that the

transferee company has undertaken to extend all possible cooperation to

Income Tax Department in completing pending assessment proceedings of

Transferor company no.4 or in any other proceedings, if any initiated.

40. Learned counsel appearing on behalf of the petitioner companies

undertakes to discharge all the liabilities qua the Income Tax demands which

stand due or which may arise. Further learned counsel appearing on behalf of

the petitioner companies undertakes that the Transferee Company shall

discharge the liability of Rs.591/- FBT for the assessment year 2008-2009 as

raised by the Income Tax Department within a period of 04 weeks from

today.

41. Ms. Aparna Mudiam, Assistant ROC appearing on behalf of the RD,

states that, in view of the undertaking given in this Court today, and in view

of the averments made in the affidavit dated 20.09.2016 by the Transferee

Company, the objections raised by the Regional Director stand satisfied.

42. Thus, it is evident that neither the Regional Director nor the Official

Liquidator has any objection remaining to the grant of relief, as prayed for

by the petitioner, in the present petition.

43. It has been noted that no objections have been received to the Scheme

from any other party. It has been submitted by the Petitioner Companies,

vide affidavit dated 04.08.2016, that neither the Petitioner Companies nor

their counsel have received any objection pursuant to the citations published

in the newspapers.

44. In view of the foregoing, upon considering the approval accorded by

the members and creditors of the Petitioner Companies to the proposed

Scheme, and the affidavits filed by the Regional Director, Northern Region,

Ministry of Corporate Affairs and the Official Liquidator attached to this

Court, whereby no objections have been raised to the proposed Scheme by

the OL, and in view of the circumstance that the objections rasied by the RD

stand satisfied, there appears to be no impediment to the grant of sanction to

the Scheme.

45. Consequently, sanction is hereby granted to the Scheme under sections

391 and 394 of the Act. The Petitioner Companies will however, comply

with the statutory requirements, in accordance with law.

46. A certified copy of this order, sanctioning the Scheme, be filed with

the ROC, within thirty (30) days of its receipt.

47. Resultantly, it is hereby directed that the Petitioner Companies will

comply with all provisions of the Scheme and, in particular, those which are

referred to hereinabove.

48. In any event, notwithstanding what has been stated on behalf of the

Petitioner Companies hereinabove, the Transferee Company will file an

undertaking with this Court, within two weeks from today, stating therein,

that it will take over and defray all liabilities of the Transferor Companies. It

is also made clear, that the concerned Statutory Authority will be entitled to

proceed against the Transferee Companies qua any liability which it would

have fastened onto the Transferor Companies for the relevant period, and

that, which may arise on account of the Scheme being sanctioned.

49. Notwithstanding the above, if there is any deficiency found or,

violation committed qua any enactment, statutory rule or regulation, the

sanction granted by this Court to the Scheme will not come in the way of

action being taken, albeit, in accordance with law, against the concerned

persons, directors and officials of the Petitioner Companies.

50. The Transferor Companies shall stand dissolved without being wound

up.

51. It is made clear, that this order shall not be construed as an order

granting exemption, inter alia, from, payment of stamp duty or, taxes or, any

other charges, if, payable, as per the relevant provisions of law or, from any

applicable permissions that may have to be obtained or, even compliances

that may have to be made, as per the mandate of law.

52. Learned counsel appearing on behalf of the Official Liquidator prays

that costs of at least Rs.2,00,000/- may be paid by the Petitioner Companies,

keeping in view the fact, that the matter called for examination of extensive

records and prioritised hearings. Learned counsel appearing on behalf of the

Petitioner Companies state that the same is acceptable to them.

53. In view of the foregoing, the Petitioner Companies shall deposit a sum

of Rs.2,00,000/-, by way of costs, in Common Pool Fund maintained by the

Official Liquidator, Delhi.

54. Consequently, the petition is allowed and disposed of, in the aforesaid

terms.

SIDDHARTH MRIDUL, J OCTOBER 18, 2016 sb/mk