Auro I.T. Solution Private ... vs Auro Sugar Private Limited
2016 Latest Caselaw 6171 Del

85
        IN THE HIGH COURT OF DELHI AT NEW DELHI

                                        Judgment delivered on: 22.09.2016

CO.PET. 802/2014

IN THE MATTER OF:-

AURO I.T. SOLUTION PRIVATE LIMITED
                            Petitioner No.1/Transferor Company


                                  AND


AURO SUGAR PRIVATE LIMITED
                          Petitioner No.2/Transferee Company

                               Through:    Mr Kailash Sharma & Mr M.
                                           Salim,       Advocates     for
                                           petitioners.
                                           Ms. Aparna Mudiam, Asst.
                                           ROC for Regional Director.

CORAM:
HON'BLE MR JUSTICE SIDDHARTH MRIDUL

                             JUDGMENT

SIDDHARTH MRIDUL, J

1. The present is a Second Motion Petition filed jointly by Auro I.T.

Solution Private Limited (hereinafter referred to as 'Transferor Company')

with Auro Sugar Private Limited (hereinafter referred to as 'Transferee

Company'), under Sections 391 to 394 of the Companies Act, 1956

(hereinafter referred to as 'the Act') read with Rule 9 of the Company

(Court) Rules, 1959, for approval of the Scheme of Arrangement (hereinafter

referred to as 'Scheme').

2. The Transferor Company 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 qua the authorized share capital, issued, subscribed and

paid up capital of the Petitioner companies, have been set out in paragraph 4

of the Scheme.

5. The Transferor Company was incorporated under the provisions of

Act on 22.03.2010. The authorized share capital of the Transferor Company

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 Transferor company is

Rs.1,00,000/-, divided into 10,000 equity shares of Rs.10/- each.

6. Transferee Company was incorporated under the provisions of

Companies Act, 1956 on 24.04.1979. The authorized share capital of

Transferee Company is Rs.15,00,000/-, divided into 5000 equity shares of

Rs.100/- each and 10,000 (9% cumulative) redeemable preference shares

of Rs.100/- each. The issue, subscribed and paid-up share capital of the

Transferee company is Rs.1,00,000/-, divided into 1000 equity shares of

Rs.100/- each.

7. 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).

8. It has been further submitted on behalf of the Petitioner companies

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

(BOD) of the Petitioner companies. A copy of the BOD resolution dated

28.02.2014 has been filed and the same is on record.

9. The Copies of the Memorandum of Association and Articles of

Association, of each of the Petitioner companies, have been duly filed as

Annexures to Company Application (M) No. 137 of 2014 (Application for

First Motion), which earlier came to be filed by the Petitioner companies.

The same are on record.

10. The audited financial statements, as on 31st March, 2013 pertaining to

each of the Petitioner companies and unaudited provisional Balance Sheet as

at 28th February, 2014 have also been duly filed by the Petitioner companies

and the same are on record.

11. A copy of the Scheme has been duly placed on record. It has been

urged on behalf of the Petitioner companies that the proposed merger of the

Petitioner companies would enable the consolidated entity to carry on the

business more efficiently and effectively and meet the regulatory norms for

the business. It would further strengthen the financials and lead to optimal

utilisation of resources whilst leveraging the operational, capital and

corporate synergies.

12. The Share Exchange Ratio for the Amalgamation has been provided in

the valuation report submitted by the Chartered Accountant dated

01.03.2014 which has been approved by the Board of Directors of the

petitioner companies vide Resolutions dated 05.03.2014. The Share

Exchange Ratio has been summarised hereinbelow:

i. 01 (One) Equity Share of Auro Sugar Pvt. Ltd. of Rs.100/- each fully

paid up for every 10 Equity Share of Auro IT Solutions Pvt. Ltd. of

Rs.10/- each fully paid up.

13. 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. 137 of 2014, whereby a prayer was sought, seeking

directions of this court to dispense with the requirement of convening the

meetings of their respective shareholders, secure and unsecured creditors.

This Court vide order dated 01.12.2014 was pleased to allow the application

and dispensed with the requirement of convening meetings of the equity

shareholders, secured and unsecured creditors of the Petitioner companies.

14. 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 22.12.2014. Notice was

accepted on behalf of the Official Liquidator (OL), the Registrar of

Companies and the Regional Director (RD), Northern Region.

15. Furthermore, vide order of this Court dated 22.12.2014, citations were

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

'Business Standard' (English Edition) on 10.01.2015 and 'Jansatta' (Hindi,

Edition) on 11.01.2015, in compliance with the order of this Court dated

22.12.2014.

16. Pursuant to the notices issued, report of the Official Liquidator (OL)

dated 18.03.2015 has been filed, wherein, inter alia, it has been stated that

the OL has not received any complaint qua the Scheme from any person or

party interested in the Scheme in any manner. Further, it has been stated in

the said report dated 18.03.2015, that on the basis of information supplied

by the petitioner companies, it appears, that the affairs of the petitioner

companies have been conducted in a manner which could not be construed

as being prejudicial to either the interest of their members or the public at

large.

17. In other words, it has been stated by the OL in the report dated

18.03.2015 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 averred on behalf of the OL, in effect, that he would have no

objections, if this Court were to sanction the Scheme, subject to the

objections raised vide paragraphs 15 to 17 of the OL's Report dated

18.03.2016.

18. Further, in response to the notices issued in the Petition,

Sh. A. K. Chaturvedi, Regional Director, Northern Region, Ministry of

Corporate Affairs, filed affidavits dated 19.03.2015, wherein, inter alia, it

has been stated that there are no objections to the sanction of the proposed

Scheme, except the objections enumerated in paragraphs 15 to 18 of the said

report.

19. It has further been stated on behalf of the OL and the RD that the

Share Exchange Ratio has not been incorporated in the proposed Scheme.

20. It has been averred on behalf of the petitioner companies that vide an

affidavit dated 15.07.2016, the petitioner companies have stated that due to

an inadvertent error, the Share Exchange Ratio was not incorporated in the

Scheme and the same has been placed on record vide a valuation report of

the Chartered Accountant dated 01.03.2014 accompanied by a Resolutions

of the Board of Directors of the petitioner companies dated 05.03.2014

approving the said valuation report of the Chartered Accountant.

21. Having heard Ms. Aparna Mudiam, Assistant ROC, who appears on

behalf of the RD, it is evident that all the objections raised on their behalf

have been satisfactorily dealt with by the petitioner companies in terms of

affidavit dated 15.07.2016. It is observed that paragraph 6 of the said

affidavit dated 15.07.2016 clearly postulates that "In case, if it is found that

there is any demand against the transferor company by the income tax

authorities, the transferee company undertakes to pay the same."

22. Therefore, in view of the above, no further objections on behalf of the

RD, to the present Scheme, remain.

23. It has been noted that no objection has been received to the Scheme

from any other party. The Petitioner companies, vide affidavit dated

15.07.2016, have submitted that neither the Petitioner companies nor their

counsel have received any objection pursuant to the citations published in

the newspapers dated 10.01.2015 and 11.01.2015.

24. 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

High Court, whereby no objections have been raised to the proposed

Scheme, there appears to be no impediment to the grant of sanction to the

Scheme.

25. Consequently, sanction is hereby granted to the Scheme under section

391 and 394 of the Companies Act, 1956. The Petitioner companies will

however, comply with the statutory requirements in accordance with law.

26. A certified copy of the order, sanctioning the scheme, be filed with the

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

27. 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.

28. 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 company. It is

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

proceed against the transferee company qua any liability which it would

have fastened onto the transferor company for the relevant period, and that,

which may arise on account of the scheme being sanctioned.

29. 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.

30. The transferor company shall stand dissolved without being wound up.

31. 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.

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

that costs of at least Rs.1,00,000/- 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 states that the same is acceptable to him.

33. In view of the foregoing, the petitioner companies shall deposit a sum

of Rs.1,00,000/- by way of costs, with the Common Pool Fund of the OL,

Delhi.

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

terms. Pending applications, if any, stand disposed of.

SIDDHARTH MRIDUL, J * SEPTEMBER 22, 2016 dn

* The date stands corrected vide order dated 28.11.2016 passed in Co.Pet.802/2014.