Delhi High Court
Csl Holdings Private Limited vs Csl Finance Limited on 21 September, 2016
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* IN THE HIGH COURT OF DELHI AT NEW DELHI
Reserved on: 14th September, 2016
Pronounced on: 21st September, 2016
+ CO.APPL. (M) 125/2016
IN THE MATTER OF:
CSL HOLDINGS PRIVATE LIMITED
.........Applicant No.1/Transferor Company
AND
CSL FINANCE LIMITED
........Applicant No. 2/Transferee Company
Through : Ms.Gurkamal Hora Arora,
Advocate for the applicants
CORAM:
HON'BLE MR. JUSTICE R. K. GAUBA
1.
This is a first motion application jointly filed under Sections 391
and 394 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 a meeting of the equity shareholders of the Transferor
company and also of the secured and unsecured creditors of the
transferee company and to issue directions for convening and holding a
meeting of the equity shareholders of the Transferee company to
consider and approve, with or without modifications, the proposed
Scheme of Arrangement of CSL Holdings Private Limited (hereinafter
referred to as the applicant/Transferor company) with CSL Finance
Limited (hereinafter referred to as Transferee company).
2. The registered offices of the Transferor Company and Transferee
Company are situated at New Delhi, within the jurisdiction of this
Court.
3. The Transferor company was originally incorporated under the
Companies Act, 1956 on 2nd July, 1992 with the Registrar of
Companies, NCT of Delhi & Haryana at New Delhi under the name
and style "Mundra Credit & Investment Private Limited. Subsequently,
the name of the said company was changed to CSL Holdings Private
Limited and a fresh Certificate of Incorporation consequent upon
change of name was issued on 11th November, 2013 by the Registrar of
Companies, NCT of Delhi & Haryana at New Delhi.
4. The Transferor Company is a Non Banking Financial Company
registered with the Reserve Bank of India (RBI). A certificate of
registration in this regard was issued by the RBI to the Transferor
Company on 13.10.2001 and further a fresh certificate was issued by
RBI on 20.01.2014 pursuant to the change of name of the company.
5. The present authorized share capital of the Transferor
company is Rs.2,40, 00,000/- divided into 24,00,000 equity shares of
Rs.10/- each. The issued , subscribed and paid-up share capital of the
company is Rs.98,59,300/- divided into 9,85,930 equity shares of
Rs.10/- each.
6. The Transferee Company was originally incorporated under the
Companies Act, 1956 on 28th day of December, 1992 with the
Registrar of Companies, NCT of Delhi & Haryana at New Delhi under
the name and style 'Consolidated Securities Limited'. Subsequently, the
name of the company was changed to CSL Finance Limited and a fresh
Certificate of Incorporation consequent upon change of name was
issued on 5th day of January, 2016 by the Registrar of Companies,
Delhi.
7. The Transferee Company is also stated to be a Non-Banking
Financial Company registered with the Reserve Bank of India (RBI). A
certificate of registration in this regard was also issued by the RBI to
the Transferee Company on 03.03.2003 and further a Fresh Certificate
was issued by RBI on 23.03.2016 pursuant to the change in name of
the company from „Consolidated Securities Limited‟ to „CSL Finance
Limited‟.
8. The Transferor company and Transferee companies are thus
described as Non Banking Financial companies registered with the
Reserve Bank of India (RBI). RBI has given its no objection to the said
Scheme vide its letter dated 25.07.2016. The copy of the said letter has
been filed and is on record (Annexure 25).
9. The Transferee company is listed with the Bombay Stock
Exchange. The Bombay Stock Exchange has conveyed its „no-
objection‟ vide letter dated 14.12.2015 to the said scheme of
arrangement subject to its approval by the shareholders . The copy of
the said letter has been filed and is on record (Annexure 22).
10. The present authorized share capital of the Transferee company
is Rs.7, 00, 00,000/- divided into 70,00,000 equity shares of Rs.10/-
each. The issued, subscribed and paid-up share capital of the company
is Rs.4,68,22,070/- divided into 46,82,207 equity shares of Rs.10/-.
11. The copies of the Memorandum and Articles of Association of
the Transferor (Annexure 2) and Transferee companies (Annexure 11)
have been filed and are on record. The audited balance sheets, as on
31st March, 2015 of the Transferor (Annexure 5) and Transferee
companies (Annexure 14), along with the reports of the auditors, have
also been filed.
12. A copy of the Scheme of Arrangement (Annexure 1) has been
filed and the salient features set out in detail in the application and
supported by the accompanying affidavit. It is submitted by the
applicant companies that implementation of the Scheme will result in
formation of a larger Company enabling further growth and
development of the businesses of the said Amalgamated Company.
The Scheme will enable the undertakings and business of the said
Amalgamated Company to obtain greater facilities possessed and
enjoyed by one large Company compared to two small Companies, for
raising capital, securing and conducting trade and business on
favorable terms and other related benefits.
13. The status of the shareholders, secured and unsecured creditors
of the Transferor and Transferee companies are declared in the
application and supported by documents filed therewith may be
tabulated as under:
Company No. of Consent No. of Consent No. of Consent
Shareholders given to secured given to Unsecured given to
(as per list the Creditors the Scheme creditors The
Vide Scheme With Scheme
Annexure With reference With
Mentioned reference To annexure reference
in the To To petition To
Parenthesis) annexure annexure
To To
petition petition
Transferor 07 All Nil NA Nil NA
Company (Annexure (Annexure
7) 8)
Transferee 1182 NA 02 All - 09 All
Company (Annexure (Meeting (Annexure unconditional (Annexure (Annexure
16) is 18) by one and 18) 19)
to be conditional
convened) by the other
(Annexure
and
Annexure A
to CA
3349/2016)
14. As per the valuation report of the Chartered Accountant
(Annexure 23) on the issue of the share exchange ratio, the application
states and the Scheme of arrangement provides that:
(a) 34,33,363 fully paid up equity shares of Rs.10/- each of CSL
Finance Limited to be issued and allotted to the equity shareholders of
CSL Holdings Private Limited in proportion of their holding in CSL
Holdings Private Limited, for 9,85,930 fully paid up equity shares of
Rs.10/- each of CSL Holdings Private Limited in the event of
Amalgamation of CSL Holdings Private Limited into CSL Finance
Limited.
(b) In case CSL Holdings Private Limited acquires additional shares
of CSL Finance Limited before the effective date without incurring
additional liability such number of fully paid up equity shares of Rs.
10/- each of CSL Finance Limited as the additional shares acquired,
will also be issued and allotted to the equity shareholders of CSL
Holdings Private Limited in proportion of their holding.
15. It has been submitted by the applicants that no investigation
proceedings under Sections 210 to 224 of the Companies Act, 2013
(corresponding to Section 235 to 251 of the Companies Act, 1956) are
pending against the transferor and transferee companies.
16. The Board of Directors of the Transferor Company and
Transferee Company in their separate meetings held on 13.07.2015
have unanimously approved the proposed Scheme of Arrangement.
Copies of the Resolutions passed at the meetings of the Board of
Directors of the Transferor Company (Annexure 3) and Transferee
Company (Annexure 12) have been placed on record.
17. The Transferor company has 07 (seven) equity shareholders
(Annexure 7). Each of the said seven equity shareholders have given
their consents/no objections in writing to the proposed Scheme of
Arrangement, which documents (Annexure 8) have been examined and
found in order. In view thereof, the requirement of convening the
meetings of the equity shareholders of the Transferor company to
consider and, if thought fit, approve, with or without modification, the
proposed Scheme of arrangement is dispensed with.
18. As per the averments on record, there are no secured creditor
and unsecured creditors of the Transferor company as on 30th June,
2016.
19. The Transferee company has 1182 (One thousand one hundred
eighty two) equity shareholders. The consent of the equity shareholders
of the Transferee Company were sought for the said scheme of
arrangement by way of a postal ballot (Annexure 17). However, the
learned counsel for the applicants submitted at the hearing that the
prayer for meeting to be dispensed with in view of the consents
obtained through postal ballot is not pressed. A direction is, instead
sought to convene and hold their meeting to seek their approval to the
Scheme of Arrangement.
20. It is directed that the meeting of the 1182 (One thousand one
hundred eighty two) equity shareholders of the Transferee Company
shall be held under the supervision of the Court on 06th November,
2016 at 11:00 a.m. at "Hotel Jivitesh", 11, Pusa Road, New Delhi -
110005, the venue proposed and suggested by the learned counsel for
the applicants. Mr. Anuj Tyagi, Advocate (Mobile No.9871281055) is
appointed as the Chairperson and Mr.Annirudh Sharma, Advocate
(Mobile No.9999080715) is appointed as the Alternate Chairperson for
the said meeting. They would be paid by the applicant a fee of
₹75,000/- each for the meeting of the equity shareholders of the
transferee company, thus scheduled. Mr. Dharmender Singh (Mobile
No.9911747643) and Mr. Chander Pal (Mobile No. 9811510140) are
nominated to provide secretarial assistance to the Chairperson and the
Alternate Chairperson to conduct the said meeting. They shall be paid
a fee of ₹10,000/- each for the services rendered.
21. The Quorum for the meeting of the equity shareholders of the
Transferee Company shall be 300 in number and more than 25% in
value. In case the said quorum for the meeting is not secured by the
appointed hour, the meeting shall be adjourned by half an hour, and
thereafter, the persons present and voting shall be deemed to constitute
the requisite quorum. For the purpose of computing the quorum the
valid proxies shall also be considered, if the authorization for the proxy
in the prescribed form duly signed by the person entitled to attend and
vote at the meetings is filed with the registered office of the applicant
company at least 48 (forty eight) hours before the meeting. The
Chairperson and Alternate Chairperson shall ensure that the proxy
registers are properly maintained.
22. The Transferee company has 09 (nine) unsecured creditors
(Annexure 18). Each of the said unsecured creditors have given their
consents/no objections in writing to the proposed Scheme of
Arrangement, which documents (Annexure 19) have been examined
and found in order. In view thereof, the requirement of convening the
meetings of the unsecured creditors of the Transferee company to
consider and, if thought fit, approve, with or without modification, the
proposed Scheme of arrangement is dispensed with.
23. Further, the transferee company has 02 (two) secured creditors
(Annexure 18). One of the said secured creditors, i.e. Kotak Mahindra
Bank Ltd. with stake amounting to 98.03% by value has given its
consent/no objection in writing to the proposed Scheme of arrangement
which document (Annexure 20) which has been examined and found in
order. Though by way of a separate application (CA 3349/2016), the
learned counsel for the applicant has placed on record the conditional
consent of the second secured creditor, i.e. ICICI Bank Limited. The
major stake holder (Kotak Mahindra Bank Ltd.) having consented, the
requirement of convening the meeting of the secured creditors of the
Transferee company to consider and, if thought fit, approve, with or
without modification, the proposed Scheme of Arrangement is
dispensed with.
24. The applications stand disposed of in the aforesaid terms.
25. Dasti under the signatures of Court Master.
R. K. GAUBA, J.
SEPTEMBER 21, 2016
