Delhi High Court
Karan Exports Private Limited vs ... on 2 September, 2016
IN THE HIGH COURT OF DELHI
COMPANY PETITION NO. 769/2015
Reserved on 11th 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 of the
Companies Act, 1956
Scheme of Amalgamation of:
Karan Exports Private Limited
Petitioner/Transferor Company
WITH
Shree Puja Overseas Private Limited
Petitioner/Transferee Company
Through Mr. Mayank Kumar and
Mr.Awnish Kumar, Advocates for the
petitioners
Ms. Aparna Mudiam, Asstt. Registrar
of Companies for the Regional Director
Mr. Rajiv Bahl, 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 by the petitioner companies seeking sanction of
the Scheme of Amalgamation of Karan Exports Private Limited
(hereinafter referred to as the transferor company) with Shree Puja
Overseas 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 was incorporated under the Companies
Act, 1956 on 11th January, 1990 with the Registrar of Companies, NCT of
Delhi & Haryana at New Delhi.
4. The transferee company was incorporated under the Companies
Act, 1956 on 21st February, 1990 with the Registrar of Companies, NCT
of Delhi & Haryana at New Delhi.
5. The present authorized share capital of the transferor company is
Rs.10,00,000/- divided into 10,000 equity shares of Rs.100/- each. The
issued, subscribed and paid-up share capital of the company is
Rs.8,50,000/- divided into 8,500 equity shares of Rs.100/- each.
6. The present authorized share capital of the transferee company is
Rs.20,00,000/- divided into 20,000 equity shares of Rs.100/- each. The
issued, subscribed and paid-up share capital of the company is
Rs.10,00,000/- divided into 10,000 equity shares of Rs.100/- 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) 125/2015, earlier filed by the petitioners.
The audited balance sheets, as on 31st March, 2014, along with the
reports of the auditors, and the audited provisional balance sheets, as on
31st January, 2015, of the transferor and transferee companies had also
been filed.
8. A copy of the Scheme of 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 amalgamation will make available to the
transferee company the consolidated shareholdings and finances so as
to achieve a size commensurate to meet the competition from multi
nationals in the field. It is further claimed that the amalgamation will also
bring the much required integration of the management activities and
would reduce the overall administrative costs.
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:
"02 equity shares of Rs.100/- each of the transferee company
for every 05 equity shares of Rs.100/- each held by the
shareholders in the transferor company."
10. It has been submitted by the petitioners that no proceedings under
Sections 235 to 250A of the Companies Act, 1956 are pending against
the petitioner companies.
11. The Board of Directors of the transferor and transferee companies
in their separate meetings held on 30th March, 2015 have unanimously
approved the proposed Scheme of 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.
12. The petitioner companies had earlier filed CA (M) No. 125/2015
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 Amalgamation. Vide order dated 11th September, 2015, this
court allowed the application and dispensed with the requirement of
convening and holding the meetings of the equity shareholders of the
transferor company and equity shareholders and unsecured creditors of
the transferee company, there being no secured or unsecured creditors
of the transferor company and no secured creditor of the transferee
company, to consider and, if thought fit, approve, with or without
modification, the proposed Scheme of Amalgamation.
13. The petitioner companies have thereafter filed the present petition
seeking sanction of the Scheme of Amalgamation. Vide order dated 13th
October, 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 'Indian Express' (English) and 'Veer
Arjun' (Hindi) editions. An affidavit has been filed by the petitioners
showing compliance regarding service on the Regional Director, Northern
Region and the Official Liquidator, and also regarding publication of
citations in the aforesaid newspapers on 25th February, 2016 and 19th
February, 2016. Copies of the newspaper clippings containing the
publications have been filed along with the affidavit of service.
14. 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 17th March, 2016
wherein he has stated that he has not received any complaint against the
proposed Scheme of Amalgamation from any person/party interested in
the Scheme in any manner and subject to submissions made in para 6 &
6 of his report, 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.
15. 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 22nd March, 2016 stating that the
Regional Director has no objection to the proposed Scheme of
Amalgamation subject to the necessary amendment in the Scheme and
compliance of Companies (Accounting Standards) Rules, 2006 by the
petitioner companies. The Regional Director in para 10 of his report has
prayed that the transferee company may be directed to comply with the
Accounting Standard-14 as prescribed under the Companies (Accounting
Standards) Rules, 2006 issued by the Central Government.
16. The Official Liquidator in para 6 of his report has submitted that the
details of the issued, subscribed and paid-up share capital of the
transferee company mentioned in the Scheme and petition was not
calculated correctly. As per the share exchange ratio, it should be
Rs.13,40,000/- instead of Rs.11,68,900/-. The Official Liquidator has
prayed that the petitioner companies may be asked to clarify the position.
The Official Liquidator in para 7 of his report has submitted that there was
no provision in the Scheme regarding the continuity of services of the
employees of the transferor company in the transferee company. Similar
observations have also been made by the Regional Director in his report.
The Official Liquidator and the Regional Director have prayed that the
petitioner companies may be asked to make such provisions in the
Scheme.
17. In response to the aforesaid observations, the petitioner
companies have moved an application being CA 2533/2016 seeking to
place on record the amended Scheme of Amalgamation in view of the
observations made by the Official Liquidator and the Regional Director,
Northern Region. The Board of Directors of the petitioner companies
have approved the amended Scheme of Amalgamation in their meetings
held on 16th March, 2016 and 30th March, 2016. Copies of the said Board
Resolutions have been placed on record. The application CA 2533.2016
was allowed by this Court vide order dated 22nd July, 2016 and the
amended Scheme was taken on record. In view of the aforesaid, the
objections raised by the Official Liquidator and the Regional Director,
Northern Region do not survive.
18. No objection has been received to the Scheme of Amalgamation
from any other party. The petitioner companies, in the affidavit dated 19th
March, 2016 of Sh. Awnish Kumar, counsel for the petitioner companies,
have submitted that they have not received any objection pursuant to the
citations published in the newspapers on 25th February, 2016 and 19th
February, 2016.
19. Considering the approval accorded by the equity shareholders and
creditors of the petitioner companies to the proposed Scheme of
Amalgamation and there being no surviving objection to the same by the
Regional Director, Northern Region, and the Official Liquidator, there
appears to be no impediment to the grant of sanction to the amended
Scheme of Amalgamation. Consequently, sanction is hereby granted to
the amended Scheme of Amalgamation annexed with CA 2533/2016
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
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.75,000/- 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 11.08.2016, the petitioners shall deposit a sum of Rs.75,000/- by
way of costs with Delhi High Court Bar Association Lawyers Social
Security and Welfare Fund, New Delhi.
21. The petition is allowed in the above terms.
Dasti.
SUDERSHAN KUMAR MISRA, J.
September 02, 2016
