Delhi High Court
Medicare Investments Limited vs .. on 2 September, 2016
IN THE HIGH COURT OF DELHI
COMPANY PETITION NO. 423/2016
Reserved on 2nd August, 2016
Date of pronouncement: 2nd September, 2016
In the matter of
The Companies Act, 1956 & the Companies Act, 2013 (to the extent
applicable):
And
Petition under Sections 391 to 394 read with
Section 100 of the Companies Act, 1956
Composite Scheme of Capital Reduction and Amalgamation of:
Medicare Investments Limited
Petitioner/Transferor Company No. 1
Maxopp Investments Limited
Petitioner/Transferor Company No. 2
Cheminvest Limited
Petitioner/Transferor Company No. 3
Pen Investments Limited
Petitioner/Transferor Company No. 4
P.V.T. Investment Limited
Petitioner/Transferor Company No. 5
Pivet Finances Limited
Petitioner/Transferor Company No. 6
Maxpak Investment Limited
Petitioner/Transferor Company No. 7
Moav Investment Limited
Petitioner/Transferor Company No. 8
WITH
Max Ventures Investment Holdings Private Limited
Petitioner/Transferee Company
Through Mr. Mukul Talwar, Sr.
Advocate with Mr. Vatsalya Rai,
Advocate for the petitioners
Ms. Aparna Mudiam, Asstt. Registrar
of Companies for the Regional Director
Mr. Sanjay Kayal, Advocate for the
Official Liquidator
CP 423/2016 Page 1 of 18
SUDERSHAN KUMAR MISRA, J.
1. This joint petition has been filed under Sections 391 to 394 read
with Section 100 of the Companies Act, 1956 by the petitioner companies
seeking sanction of the Composite Scheme of Capital Reduction and
Amalgamation of Medicare Investments Limited (hereinafter referred to
as the transferor company no. 1); Maxopp Investments Limited
(hereinafter referred to as the transferor company no. 2); Cheminvest
Limited (hereinafter referred to as the transferor company no. 3); Pen
Investments Limited (hereinafter referred to as the transferor company
no. 4); P.V.T. Investment Limited (hereinafter referred to as the transferor
company no. 5); Pivet Finances Limited (hereinafter referred to as the
transferor company no. 6); Maxpak Investment Limited (hereinafter
referred to as the transferor company no. 7) and Moav Investment
Limited (hereinafter referred to as the transferor company no.8) with Max
Ventures Investment Holdings Private 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 no. 1 was incorporated under the
Companies Act, 1956 on 21st December, 1983 with the Registrar of
Companies, NCT of Delhi & Haryana at New Delhi.
4. The transferor company no. 2 was originally incorporated under the
Companies Act, 1956 on 21st December, 1983 with the Registrar of
Companies, NCT of Delhi & Haryana at New Delhi under the name and
style of Ranbaxy Investments Limited. The company changed its name to
Maxopp Investments Limited and obtained the fresh certificate of
incorporation on 14th February, 1991.
5. The transferor company no. 3 was incorporated under the
Companies Act, 1956 on 21st December, 1983 with the Registrar of
Companies, NCT of Delhi & Haryana at New Delhi.
6. The transferor company no. 4 was originally incorporated under the
Companies Act, 1956 on 24th February, 1988 with the Registrar of
Companies, Punjab, H.P. & Chandigarh at Jalandhar. Thereafter, the
company shifted its registered office from the State of Punjab to Delhi
and obtained a certificate in this regard from the Registrar of Companies,
NCT of Delhi & Haryana at New Delhi on 4th August, 2003.
7. The transferor company no. 5 was originally incorporated under the
Companies Act, 1956 on 2nd March, 1988 with the Registrar of
Companies, Punjab, H.P. & Chandigarh at Jalandhar. Thereafter, the
company shifted its registered office from the State of Punjab to Delhi
and obtained a certificate in this regard from the Registrar of Companies,
NCT of Delhi & Haryana at New Delhi on 4th August, 2003.
8. The transferor company no. 6 was originally incorporated under the
Companies Act, 1956 on 2nd March, 1988 with the Registrar of
Companies, Punjab, H.P. & Chandigarh at Jalandhar. Thereafter, the
company shifted its registered office from the State of Punjab to Delhi
and obtained a certificate in this regard from the Registrar of Companies,
NCT of Delhi & Haryana at New Delhi on 4th August, 2003.
9. The transferor company no. 7 was incorporated under the
Companies Act, 1956 on 20th May, 1988 with the Registrar of
Companies, NCT of Delhi & Haryana at New Delhi.
10. The transferor company no. 8 was incorporated under the
Companies Act, 1956 on 20th May, 1988 with the Registrar of
Companies, NCT of Delhi & Haryana at New Delhi.
11. The transferee company was originally incorporated under the
Companies Act, 1956 on 26th February, 1988 with the Registrar of
Companies, NCT of Delhi & Haryana at New Delhi under the name and
style of Dynavest India Private Limited. The company changed its name
to Max Ventures Investment Holdings Private Limited and obtained the
fresh certificate of incorporation on 1st May, 2015.
12. The present authorized share capital of the transferor company
no.1 is Rs.11,90,00,000/- divided into 3,10,00,000 equity shares of Rs.1/-
each aggregating to Rs.3,10,00,000/-; 2,50,000-12.5% non cumulative
redeemable preference shares of Rs.100/- each aggregating to
Rs.2,50,00,000/-; 3,80,000-5% non cumulative redeemable preference
shares of Rs.100/- each aggregating to Rs.3,80,00,000/-; and 2,50,000-
7% compulsory convertible preference shares of Rs.100/- each
aggregating to Rs.2,50,00,000/-. The issued, subscribed and paid-up
share capital of the company is Rs.9,32,24,706/- divided into 3,03,79,940
equity shares of Rs.1/- each aggregating to Rs.3,03,79,940/- less
allotment money receivable of Rs.1,55,234/-; 3,80,000-5% non
cumulative redeemable preference shares of Rs.100/- each aggregating
to Rs.3,80,00,000/-; and 2,50,000-7% compulsory convertible preference
shares of Rs.100/- each aggregating to Rs.2,50,00,000/-.
13. The present authorized share capital of the transferor company
no.2 is Rs.8,50,00,000/- divided into 3,10,00,000 equity shares of Rs.1/-
each aggregating to Rs.3,10,00,000/-; 2,50,000-12.5% non cumulative
redeemable preference shares of Rs.100/- each aggregating to
Rs.2,50,00,000/-; 40,000-5% non cumulative redeemable preference
shares of Rs.100/- each aggregating to Rs.40,00,000/-; and 2,50,000-7%
compulsory convertible preference shares of Rs.100/- each aggregating
to Rs.2,50,00,000/-. The issued, subscribed and paid-up share capital of
the company is Rs.5,91,55,192/- divided into 3,03,79,940 equity shares
of Rs.1/- each aggregating to Rs.3,03,79,940/- less allotment money
receivable of Rs.2,24,748/-; 40,000-5% non cumulative redeemable
preference shares of Rs.100/- each aggregating to Rs.40,00,000/-; and
2,50,000-7% compulsory convertible preference shares of Rs.100/- each
aggregating to Rs.2,50,00,000/-.
14. The present authorized share capital of the transferor company
no.3 is Rs.14,92,50,000/- divided into 3,10,00,000 equity shares of Rs.1/-
each aggregating to Rs.3,10,00,000/-; 2,50,000-12.5% non cumulative
redeemable preference shares of Rs.100/- each aggregating to
Rs.2,50,00,000/-; 6,82,500-5% non cumulative redeemable preference
shares of Rs.100/- each aggregating to Rs.6,82,50,000/-; and 2,50,000-
7% compulsory convertible preference shares of Rs.100/- each
aggregating to Rs.2,50,00,000/-. The issued, subscribed and paid-up
share capital of the company is Rs.12,35,19,279/- divided into
3,03,79,940 equity shares of Rs.1/- each aggregating to Rs.3,03,79,940/-
less allotment money receivable of Rs.1,10,661/-; 6,82,500-5% non
cumulative redeemable preference shares of Rs.100/- each aggregating
to Rs.6,82,50,000/-; and 2,50,000-7% compulsory convertible preference
shares of Rs.100/- each aggregating to Rs.2,50,00,000/-.
15. The present authorized share capital of the transferor company
no.4 is Rs.7,50,00,000/- divided into 60,00,000 equity shares of Rs.10/-
each aggregating to Rs.6,00,00,000/- and 1,50,000-7% non cumulative
compulsory convertible preference shares of Rs.100/- each aggregating
to Rs.1,50,00,000/-. The issued, subscribed and paid-up share capital of
the company is Rs.4,62,85,248/- divided into 31,53,150 equity shares of
Rs.10/- each aggregating to Rs.3,15,31,500/- less allotment money
receivable of Rs.2,46,253/- and 1,50,000-7% non cumulative compulsory
convertible preference shares of Rs.100/- each aggregating to
Rs.1,50,00,000/-.
16. The present authorized share capital of the transferor company
no.5 is Rs.6,50,00,000/- divided into 34,95,000 equity shares of Rs.10/-
each aggregating to Rs.3,49,50,000/-; 500-9% non cumulative
redeemable preference shares of Rs.100/- each aggregating to
Rs.50,000/-; 1,50,000-12.5% non cumulative redeemable preference
shares of Rs.100/- each aggregating to Rs.1,50,00,000/-; 1,00,000-10%
non cumulative redeemable preference shares of Rs.100/- each
aggregating to Rs.1,00,00,000/-; and 50,000-7% compulsory convertible
preference shares of Rs.100/- each aggregating to Rs.50,00,000/-. The
issued, subscribed and paid-up share capital of the company is
Rs.4,63,72,658/- divided into 31,53,150 equity shares of Rs.10/- each
aggregating to Rs.3,15,31,500/- less allotment money receivable of
Rs.1,58,843/-; 1,00,000-10% non cumulative redeemable preference
shares of Rs.100/- each aggregating to Rs.1,00,00,000/-; and 50,000-7%
compulsory convertible preference shares of Rs.100/- each aggregating
to Rs.50,00,000/-.
17. The present authorized share capital of the transferor company
no.6 is Rs.12,25,00,000/- divided into 94,95,000 equity shares of Rs.10/-
each aggregating to Rs.9,49,50,000/-; 500-9% non cumulative
redeemable preference shares of Rs.100/- each aggregating to
Rs.50,000/-; 1,50,000-12.5% non cumulative redeemable preference
shares of Rs.100/- each aggregating to Rs.1,50,00,000/-; 75,000-10%
non cumulative redeemable preference shares of Rs.100/- each
aggregating to Rs.75,00,000/-; and 50,000-7% compulsory convertible
preference shares of Rs.100/- each aggregating to Rs.50,00,000/-. The
issued, subscribed and paid-up share capital of the company is
Rs.4,22,38,563/- divided into 31,53,150 equity shares of Rs.10/- each
aggregating to Rs.3,15,31,500/- less allotment money receivable of
Rs.1,92,938/-; 59,000-10% non cumulative redeemable preference
shares of Rs.100/- each fully paid up aggregating to Rs.59,00,000/-; and
50,000-7% compulsory convertible preference shares of Rs.100/- each
aggregating to Rs.50,00,000/-.
18. The present authorized share capital of the transferor company
no.7 is Rs.6,11,50,000/- divided into 1,00,000 equity shares of Rs.10/-
each aggregating to Rs.10,00,000/-; 20,000-12% non cumulative
redeemable preference shares of Rs.100/- each aggregating to
Rs.20,00,000/-; and 5,81,500-5% non cumulative redeemable preference
shares of Rs.100/- each aggregating to Rs.5,81,50,000/-. The issued,
subscribed and paid-up share capital of the company is Rs.6,01,50,900/-
divided into 90 equity shares of Rs.10/- each fully paid up aggregating to
Rs.900/-; 20,000-12% non cumulative redeemable preference shares of
Rs.100/- each aggregating to Rs.20,00,000/-; and 5,81,500-5% non
cumulative redeemable preference shares of Rs.100/- each aggregating
to Rs.5,81,50,000/-.
19. The present authorized share capital of the transferor company
no.8 is Rs.5,46,50,000/- divided into 1,00,000 equity shares of Rs.10/-
each aggregating to Rs.10,00,000/-; 20,000-12% non cumulative
redeemable preference shares of Rs.100/- each aggregating to
Rs.20,00,000/-; 4,30,000-5% non cumulative redeemable preference
shares of Rs.100/- each aggregating to Rs.4,30,00,000/- and 86,500-6%
non cumulative redeemable preference shares of Rs.100/- each
aggregating to Rs.86,50,000/-. The issued, subscribed and paid-up share
capital of the company is Rs.5,36,50,900/- divided into 90 equity shares
of Rs.10/- each fully paid up aggregating to Rs.900/-; 20,000-12% non
cumulative redeemable preference shares of Rs.100/- each aggregating
to Rs.20,00,000/-; 4,30,000-5% non cumulative redeemable preference
shares of Rs.100/- each aggregating to Rs.4,30,00,000/- and 86,500-6%
non cumulative redeemable preference shares of Rs.100/- each
aggregating to Rs.86,50,000/-.
20. The present authorized share capital of the transferee company is
Rs.87,20,00,000/- divided into 8,72,00,000 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.
21. 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) 27/2016, earlier filed by the petitioners.
The audited balance sheets, as on 31st March, 2015, of the transferor
and transferee companies, along with the report of the auditors, had also
been filed.
22. A copy of the Composite Scheme of Capital Reduction and
Amalgamation 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 by the petitioners that the proposed
amalgamation will simplify the promoters holding in the Max India,
eliminating multiple entities and the inter se cross-holding amongst them.
It is further claimed the proposed amalgamation will lead to reduction of
administrative cost and overhead expenses which would further lead to
greater and effective executive control, synergy of operations and
optimum utilization of the available resources.
23. 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 companies in the following ratio:
"01 equity share of Rs.10/- each of the transferee company
for every 2423 equity shares of Rs.1/- each held in the
transferor company no. 1."
"01 equity share of Rs.10/- each of the transferee company
for every 2158 equity shares of Rs.1/- each held in the
transferor company no. 2."
"01 equity share of Rs.10/- each of the transferee company
for every 2854 equity shares of Rs.1/- each held in the
transferor company no. 3."
"01 equity share of Rs.10/- each of the transferee company
for every 1417 equity shares of Rs.10/- each held in the
transferor company no. 4."
"01 equity share of Rs.10/- each of the transferee company
for every 2278 equity shares of Rs.10/- each held in the
transferor company no. 5."
"01 equity share of Rs.10/- each of the transferee company
for every 51,111 equity shares of Rs.10/- each held in the
transferor company no. 6."
"05 equity shares of Rs.10/- each of the transferee company
for every 01 equity share of Rs.10/- each held in the
transferor company no. 7."
"01 equity share of Rs.10/- each of the transferee company
for every 27,244 equity shares of Rs.10/- each held in the
transferor company no. 8."
Further, upon coming into effect of this Scheme, the transferee
company shall issue and allot preference shares to the preference
shareholders of the transferor companies in the following ratio:
"3,80,000 5% non-cumulative convertible preference shares
of Rs.100/- each for every 01 fully paid up preference share
of Rs.100/- each held in the transferor company no. 1."
"40,000 5% non-cumulative convertible preference shares of
Rs.100/- each for every 01 fully paid up preference shares of
Rs.100/- each held in the transferor company no. 2."
"6,82,500 5% non-cumulative convertible preference shares
of Rs.100/- each for every 01 fully paid up preference share
of Rs.100/- each held in the transferor company no. 3."
"1,00,000 10% non-cumulative convertible preference
shares of Rs.100/- each for every 01 fully paid up preference
share of Rs.100/- each held in the transferor company no.5."
"59,000 10% non-cumulative convertible preference shares
of Rs.100/- each for every 01 fully paid up preference share
of Rs.100/- each held in the transferor company no. 6."
"20,000 12% non-cumulative convertible preference shares
of Rs.100/- each and 5,81,500 5% non-cumulative
convertible preference shares of Rs.100/- each for every 01
fully paid up preference share of Rs.100/- each held in the
transferor company no. 7; and
"20,000 12% non-cumulative convertible preference shares
of Rs.100/- each; 86,500 6% non-cumulative convertible
preference shares of Rs.100/- each and 4,30,000 5% non-
cumulative convertible preference shares of Rs.100/- each
for every 01 fully paid up preference share of Rs.100/- each
held in the transferor company no. 8; and
24 It has been submitted by the petitioners that no proceedings under
Sections 237, 250, 250A and 251 of the Companies Act, 1956 and
Sections 235, 236, 238, 239 and 241-247 of the Companies Act, 2013
are pending against the transferor and transferee companies.
25. The Board of Directors of the transferor and transferee companies
in their separate meetings held on 10th August, 2015 have unanimously
approved the proposed Composite Scheme of Capital Reduction and
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.
26. The petitioner companies had earlier filed CA (M) No. 27/2016
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 Composite
Scheme of Capital Reduction and Amalgamation. Vide order dated 16th
March, 2016, this court allowed the application and dispensed with the
requirement of convening and holding the meetings of the shareholders
and creditors of the transferor and transferee companies; there being no
secured creditors of the transferor companies no. 1, 3 to 8 and the
transferee company, to consider and, if thought fit, approve, with or
without modification, the proposed Composite Scheme of Capital
Reduction and Amalgamation.
27. The petitioner companies have thereafter filed the present petition
seeking sanction of the Composite Scheme of Capital Reduction and
Amalgamation. Vide order dated 16th May, 2016, 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
'Business Standard' (English) and 'Jansatta' (Hindi) editions. An affidavit
has been filed by the petitioners showing compliance regarding
publication of citations in the aforesaid newspapers on 26th June, 2016.
Copies of the newspaper clippings containing the publications have been
filed along with the said affidavit.
28. 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 18th July, 2016
wherein he has stated that he has not received any complaint against the
proposed Composite Scheme of Capital Reduction and Amalgamation
from any person/party interested in the Scheme in any manner and that
the affairs of the transferor companies do not appear to have been
conducted in a manner prejudicial to the interest of their members,
creditors or public interest, as per second proviso of Section 394(1) of the
Companies Act, 1956.
29. In response to the notices issued in the petition, Mr. Narender
Kumar Bhola, Regional Director, Northern Region, Ministry of Corporate
Affairs has filed his report dated 1st August, 2016 stating that the
Regional Director has no objection to the proposed Scheme of
Amalgamation subject to the objections raised by the Income Tax
Department and compliance of the provisions of the company law by the
petitioner companies. The Regional Director in para 5 of this report has
submitted that an appeal filed by the Revenue against the order of ITAT
passed in the case of transferor company no. 5 is pending adjudication
before the High Court of Punjab & Haryana on the issue of penalty under
Section 271AA of the Act. He has further submitted that the jurisdictional
AO has no objection to the proposed Scheme subject to the condition
that the aforesaid appeal pending against the transferor company no. 5
may be continued against the transferee company and the penalty
amount of Rs.34,67,960/- levied under Section 271AA of the Act along
with interest may be recovered from the transferee company after
amalgamation, in case the Revenue succeeds in appeal in future.
Further, the Regional Director in para 7 of his report has submitted that
the transferor companies no. 1, 2, 3, 5 & 6 are non-banking finance
companies and are required to obtain prior approval from Reserve Bank
of India.
30. In response to the aforesaid observations, learned senior counsel
for the petitioners has submitted that although the Scheme propounded
itself says so, however, with a view to remove any doubts, the transferee
company shall meet all outstanding liabilities, inter alia, of the transferor
company towards income tax dues, if any. Learned senior counsel further
submitted that his client is a non-banking finance company (NBFC) which
already stands registered with the Reserve Bank of India and that the
RBI has not raised any objection to the instant Scheme. He has further
submitted that the petitioner company will function as a core investment
company and that it has also sought registration as a core investment
company and shall take all necessary steps in this behalf pursuant to
sanction of the Scheme by this Court. Since the transferee company is
not the subject matter of dissolution and will remain in existence even
after the sanction of the Scheme, therefore, in case of any default by the
company, the ROC/other statutory authorities would be at liberty to take
appropriate action, as permissible in law, against the petitioner company.
31. No objection has been received to the Composite Scheme of
Capital Reduction and Amalgamation from any other party. The petitioner
companies in the affidavits dated 3rd August, 2016 of Sh. Alok Goel,
authorized signatory of the transferor companies no. 1, 3 and transferee
company and Sh. Arvind Aggarwal, authorized signatory of the transferor
companies no. 2, 4, 5, 6, 7 and 8 have submitted that neither the
petitioner companies nor their counsel have received any objection
pursuant to the citations published in the newspapers on 26th June, 2016.
32. Considering the approval accorded by the shareholders and
creditors of the petitioner companies to the proposed Composite Scheme
of Capital Reduction and Amalgamation and the affidavits filed by the
Regional Director, Northern Region, and the Official Liquidator not raising
any objection to the proposed Composite Scheme of Capital Reduction
and Amalgamation, there appears to be no impediment to the grant of
sanction to the Composite Scheme of Capital Reduction and
Amalgamation. Consequently, sanction is hereby granted to the
Composite Scheme of Capital Reduction and Amalgamation 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, 2015, the transferor
companies no. 1 to 8 shall stand dissolved without undergoing the
process of winding up.
33. 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 companies
states that the same is acceptable to him. As already directed vide order
dated 02.08.2016, the petitioners shall deposit a sum of Rs.1,00,000/- by
way of costs with Delhi High Court Bar Association Lawyers Social
Security and Welfare Fund, New Delhi.
34. The petition is allowed in the above terms.
Dasti.
SUDERSHAN KUMAR MISRA, J.
September 02, 2016
