Delhi High Court
Sugam Exim Private Limited vs ... on 2 September, 2016
IN THE HIGH COURT OF DELHI
COMPANY PETITION NO. 142/2016
Reserved on 3rd 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(2) & 394 read with
Sections 100 to 104 of the Companies Act,
1956
Scheme of Arrangement between:
Sugam Exim Private Limited
Petitioner/Transferor Company No. 1
Unicraft Merchandise Private Limited
Petitioner/Transferor Company No. 2
Crazy Merchandise Private Limited
Petitioner/Transferor Company No. 3
Careful Merchants Private Limited
Petitioner/Transferor Company No. 4
AND
Atlas Constructions Private Limited
Petitioner/Transferee Company
Through Mr. Rajeev K. Goel, Advocate
for the petitioners
Ms. Aparna Mudiam, Asstt. Registrar
of Companies for the Regional Director
Mr. Sanjay Katyal, Advocate for the
Official Liquidator
SUDERSHAN KUMAR MISRA, J.
1. This joint petition has been filed under Sections 391(2) & 394 read
with Sections 100 to 104 of the Companies Act, 1956 by the petitioner
companies seeking sanction of the Scheme of Arrangement between
Sugam Exim Private Limited (hereinafter referred to as the transferor
company no. 1); Unicraft Merchandise Private Limited (hereinafter
referred to as the transferor company no. 2); Crazy Merchandise Private
Limited (hereinafter referred to as the transferor company no. 3) and
Careful Merchants Private Limited (hereinafter referred to as the
transferor company no. 4) and Atlas Constructions 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 originally incorporated under
the Companies Act, 1956 on 26th February, 2008 with the Registrar of
Companies, West Bengal at Kolkata. Thereafter, the company shifted its
registered office from the State of West Bengal to Delhi and obtained a
certificate in this regard from the Registrar of Companies, NCT of Delhi &
Haryana at New Delhi on 7th March, 2014.
4. The transferor company no. 2 was originally incorporated under
the Companies Act, 1956 on 30th April, 2008 with the Registrar of
Companies, West Bengal at Kolkata. Thereafter, the company shifted its
registered office from the State of West Bengal to Delhi and obtained a
certificate in this regard from the Registrar of Companies, NCT of Delhi &
Haryana at New Delhi on 13th March, 2014.
5. The transferor company no. 3 was originally incorporated under
the Companies Act, 1956 on 5th May, 2010 with the Registrar of
Companies, West Bengal at Kolkata. Thereafter, the company shifted its
registered office from the State of West Bengal to Delhi and obtained a
certificate in this regard from the Registrar of Companies, NCT of Delhi &
Haryana at New Delhi on 13th February, 2014.
6. The transferor company no. 4 was originally incorporated under
the Companies Act, 1956 on 5th May, 2010 with the Registrar of
Companies, West Bengal at Kolkata. Thereafter, the company shifted its
registered office from the State of West Bengal to Delhi and obtained a
certificate in this regard from the Registrar of Companies, NCT of Delhi &
Haryana at New Delhi on 18th February, 2014.
7. The transferee company was incorporated under the Companies
Act, 1956 on 21st March, 1988 with the Registrar of Companies, NCT of
Delhi & Haryana at New Delhi.
8. The present authorized share capital of the transferor company
no.1 is Rs.42,00,000/- divided into 4,20,000 equity shares of Rs.10/-
each. The issued, subscribed and paid-up share capital of the company
is Rs.41,95,000/- divided into 4,19,500 equity shares of Rs.10/- each.
9. The present authorized share capital of the transferor company
no.2 is Rs.45,00,000/- divided into 4,50,000 equity shares of Rs.10/-
each. The issued, subscribed and paid-up share capital of the company
is Rs.44,45,000/- divided into 4,44,500 equity shares of Rs.10/- each.
10. The present authorized share capital of the transferor company
no.3 is Rs.1,00,000/- divided into 10,000 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.
11. The present authorized share capital of the transferor company
no.4 is Rs.1,00,000/- divided into 10,000 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.
12. The present authorized share capital of the transferee company is
Rs.7,00,00,000/- divided into 7,00,000 equity shares of Rs.100/- each.
The issued, subscribed and paid-up share capital of the company is
Rs.5,03,47,000/- divided into 5,03,470 equity shares of Rs.100/- each.
13. 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) 16/2016, 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.
14. 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 affidavits. It is submitted by
the petitioners that the transferor and transferee companies are closely
held group companies and the proposed amalgamation would result in
business synergy, pooling of their resources and consolidation of these
companies. It is claimed that the proposed amalgamation will result in
usual economies of a centralized and a large company including
elimination of duplicate work, reduction in overheads, better and more
productive utilization of human and other resources and enhancement of
overall business efficiency. It will enable these companies to combine
their managerial and operating strength, to build a wider capital and
financial base and to promote and secure overall growth of their
businesses.
15. 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:-
"1 equity share of Rs.100/- each of the transferee company,
credited as fully paid up, for every 04 equity shares of Rs.10/-
held in the transferor company no. 1."
"1 equity share of Rs.100/- each of the transferee company,
credited as fully paid up, for every 02 equity shares of Rs.10/-
held in the transferor company no. 2."
"1 equity share of Rs.100/- each of the transferee company,
credited as fully paid up, for every 40 equity shares of Rs.10/-
held in the transferor company no. 3."
"1 equity share of Rs.100/- each of the transferee company,
credited as fully paid up, for every 40 equity shares of Rs.10/-
held in the transferor company no. 4."
16. It has been submitted by the petitioners that no proceedings under
Sections 235 to 251 of the Companies Act, 1956 or under the
corresponding provisions of the Companies Act, 2013 are pending
against the petitioner companies.
17. The Board of Directors of the transferor and transferee companies
in their separate meetings held on 13th June, 2015 & 12th September,
2015 have unanimously approved the proposed Scheme of
Arrangement. Copies of the Resolutions passed at the meetings of the
Board of Directors of the transferor and transferee companies have been
placed on record.
18. The petitioner companies had earlier filed CA (M) No. 16/2016
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 1st February, 2016 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 companies and equity shareholders, secured
and unsecured creditors of the transferee company, there being no
secured creditor of the transferor companies, to consider and, if thought
fit, approve, with or without modification, the proposed Scheme of
Arrangement.
19. The petitioner companies have thereafter filed the present petition
seeking sanction of the Scheme of Arrangement. Vide order dated 22nd
February, 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) Delhi editions. Affidavit of service has been filed by the
petitioners showing compliance regarding service on the Official
Liquidator and the Regional Director, Northern Region and also regarding
publication of citations in the aforesaid newspapers on 26th March, 2016.
Copies of the newspaper clippings containing the publications have been
filed along with the said affidavit.
20. 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 July, 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
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.
21. 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 29th July, 2016 stating that he had no
objection to the proposed Scheme of Arrangement subject to filing of due
balance sheets by the petitioner companies and compliance of relevant
NBFC Rules and Circulars issued by the Reserve Bank of India. The
Regional Director in para 10 of his report has stated that the transferor
companies no. 2, 3 & 4 have not filed their balance sheets at 31.03.2014
and the transferee company has not yet filed its due balance sheet at
31.03.2015. Thus, there is prima facie violation of provisions of Section
137 of the Companies Act, 2013. The Regional Director has further
submitted that the principal business activities of transferor companies
no. 2, 3 & 4 are acquisition of shares and financial assets of these
companies constitute more than 50% of their total assets which
tantamount to NBFCs activity. As such, these companies are required to
be registered with the RBI as NBFCs in terms of Section 45-IA of the RBI
Act. He has further submitted as per the Non-Banking Financial
Companies (Approval of Acquisition of Transfer and Control) Directions,
2015 issued by RBI, these NBFCs are required to obtain prior written
permission of RBI for any Scheme of acquisition/transfer of control.
22. In response to the aforesaid observation, the petitioner companies
in the affidavit dated 30th July, 2016 of Mr. Subhash Gupta, Director of
the transferee company, have submitted that the transferee company has
already filed its audited annual accounts for the year ended 31.03.2015.
Further, the transferor companies no. 2, 3 & 4 are not able to file their
audited annual accounts for the year ended 31.03.2014 with the ROC as
these forms are not available for filing on the MCA Portal after the
implementation of the Companies Act, 2013. It has been further
submitted that as per the information available on the website of MCA,
these forms will be available for filing after mid August, 2016. The
transferor companies no. 2, 3 & 4 have undertaken to file the said forms
with additional filing fee as soon as these forms are available for filing in
the month of August, 2016, before the effective date of the Scheme. The
undertaking is accepted by this Court. With regard to the second
observation, it has been submitted that the transferor companies no. 2, 3
& 4 are engaged in construction business, sale of building material and
other related activities. These companies have also made investments in
group companies and provided loan and advances to group companies.
However, more than 50% of their gross income/turnover is from the
activities relating to construction business and sale of building material
etc. Hence, none of these companies satisfies the dual criteria of
principal business of a NBFC as provided in the circular issued by the
RBI. The petitioner companies have also placed on record the certificates
issued by DMR & Co., Chartered Accountants, certifying that transferor
companies no. 2, 3 & 4 are not a NBFC as defined in the RBI Act, 1934
and the companies are not required to obtain RBI registration or NOC for
the aforesaid Scheme of Arrangement. In view of the aforesaid, the
observations made by the Regional Director stand satisfied.
23. No objection has been received to the Scheme of Arrangement
from any other party. The petitioner companies, in the affidavit dated 16th
July, 2016 of Mr. Subhash Gupta, Director of the transferee company
have submitted that neither the petitioner companies nor their counsel
have received any objection pursuant to the citations published in the
newspapers on 26th March, 2016.
24. 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 Scheme of Arrangement. Consequently,
sanction is hereby granted to the Scheme of Arrangement 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 4 shall stand dissolved without undergoing the
process of winding up.
25. Learned counsel for the Official Liquidator prays that costs of at
least Rs.2,00,000/- 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 03.08.2016, the petitioners shall deposit a sum of Rs.2,00,000/- by
way of costs with the Delhi High Court Bar Association Lawyers Social
Security and Welfare Fund, New Delhi.
26. The petition is allowed in the above terms.
Dasti.
SUDERSHAN KUMAR MISRA, J.
September 02, 2016
