Delhi High Court
Girnar Investment Limited vs Suvrat Trading Co. Limited on 24 January, 2017
IN THE HIGH COURT OF DELHI AT NEW DELHI
Order reserved on:08.12.2016
Order delivered on:24.01.2017
CO. APPL. (M) 164/2016
IN THE MATTER OF:
GIRNAR INVESTMENT LIMITED
...Applicant No.1/Transferor Company
AND
SUVRAT TRADING CO. LIMITED
...Applicant No.2/Transferee Company
Through: Mr. Abhishek Rao, Mr. Shailesh
Suman, Ms. Bhavya Bharti and
Ms. Deepti Bhardwaj, Advocates.
CORAM:
HON'BLE MR. JUSTICE SIDDHARTH MRIDUL
SIDDHARTH MRIDUL, J.
1. The present is an application filed jointly under Sections 391 to 394 of
the Companies Act, 1956 (hereinafter referred to as 'the Act'), by Girnar
Investment Limited (hereinafter referred to as 'Transferor Company') and
Suvrat Trading Co. Limited (hereinafter referred to as 'Transferee Company') in
connection with the proposed Scheme of Arrangement and Demerger
(hereinafter referred to as 'proposed scheme').
2. The Transferor Company and the Transferee Company are hereinafter
collectively referred to as 'Applicant Companies'.
3. The registered offices of the Applicant Companies are situated at New
Delhi, within the jurisdiction of this Court.
4. The Transferor Company was incorporated on 24.06.1972 under the Act,
with the Registrar of Companies, N.C.T. of Delhi and Haryana.
5. The Transferee Company was incorporated on 04.06.2015 under the
Companies Act, 2013 with the Registrar of Companies, N.C.T. of Delhi and
Haryana.
6. The authorized share capital of the Transferor Company, as on
15.10.2016, is Rs.60,00,000/-, divided into 55,200 equity shares of Rs.100/-
each; 400 class B shares of Rs.100/- each; and 4,400 4% Cumulative
Redeemable Preference shares of Rs.100/- each. The issued, subscribed and
paid-up share capital of the Transferor Company, as on 15.10.2016, is
Rs.5,00,000/-, divided into 5,000 equity shares of Rs.100/- each.
7. The authorized share capital of the Transferee Company, as on
15.10.2016, is Rs.5,00,000/-, divided into 50,000 equity shares of Rs.10/- each.
The issued, subscribed and paid-up share capital of the Transferee Company, as
on 15.10.2016, is Rs.5,00,000/-, divided into 50,000 equity shares of Rs.10/-
each.
8. Copies of the Memorandum of Association and Articles of Association of
the Applicant Companies have been filed on record. The audited Financial
Statements for the period ending on 15.10.2016, pertaining to the Applicant
Companies, along with the reports of the auditors, have also been filed and the
same are on record.
9. A copy of the proposed scheme has been enclosed along with the present
application and the same is on record. The rationale behind the proposed
scheme, as stated in para 4 of the proposed scheme, is as follows: -
"GIL is engaged in the business of investment and financing.
The company intends to start trading business and the relevant
approval of the shareholder has already been accorded. It is
therefore now proposed that the investment and financing
business of the company should be carried out in the new
subsidiary i.e. STCL through demerger process and the trading
business be carried out in GIL. The demerger of investment and
financing business of Transferor Company to the Transferee
Company would lead to a more focused business approach and
efficient utilization of resources between GIL's respective
business i.e. trading Business and Demerged undertaking.
It will provide an opportunity to leverage assets and capital in a
better way and to build stronger sustainable businesses.
Moreover, the restructuring of business will enable both the
business segments of GIL to pursue their respective business
plans with a reorganized capital and asset base more effectively
and profitably. In addition, it will also enable the group to have
more focused business approach in the financial sector to realize
its potential to the fullest extent.
The demerger of the Investment & financing Business of GIL
and its vesting in STCL with effect from Appointed Date is in
the interest of the shareholders. The restructuring would enable a
focused business approach and maximization of· benefits to all
the stakeholders along with providing an opportunity for growth
in future."
10. So far as the Share Exchange ratio is concerned, the proposed scheme
provides as follows:
"1. Upon coming into effect of this Scheme, in consideration of
transfer and vesting of the Demerged business of Transferor
Company into Transferee Company pursuant to this Scheme,
existing members of Transferor Company will receive 50,000
Equity Shares Rs. 10.00 each in the same proportion as they are
holding shares in Transferor Company. The vesting of shares in
the shareholders of Transferor Company would be by way of
transfer of entire shares held by Transferor Company and its
nominees & in case of further requirement, if any, the same can
also be allotted by Transferee Company.
2. The Reserves equivalent to the book value of the demerged
business transferred to Transferee Company will also be
transferred from Transferor Company to Transferee Company."
11. It has been stated on behalf of the Applicant Companies that no
proceedings under Sections 235 to 251 of the Act or under corresponding
provisions of the Companies Act, 2013 are pending against the Applicant
Companies, as on the date of filing of the present application.
12. The proposed scheme has been approved by the Board of Directors of the
Applicant Companies in their separate meetings held on 20.10.2016. Copies of
the Resolutions passed at the Board of Directors meetings of the Applicant
Companies have been placed on record.
13. The status of the shareholders and Creditors of the Applicant Companies
and the consents obtained therefrom to the proposed scheme, are set out in a
tabular form as hereinunder:
Company No. of equity Consent No. of Consent No. of Consent
Shareholders Given Secured Given Unsecured Given
Creditors Creditors
Transferor
Company 7 ALL NIL N.A. 1 Consent
Given
Transferee
Company 7 ALL NIL N.A. NIL N.A.
14. A prayer has been sought in the present application for dispensing with
the requirement of convening meetings of the equity shareholders and
Unsecured Creditors of the Transferor Company; and the equity shareholders of
the Transferee Company.
15. The Transferor Company has seven equity shareholders. All the equity
shareholders have given their written consents/NOCs to the proposed scheme.
The said written consents/NOCs have been placed on record. The same have
been examined and found in order.
16. In view of the foregoing, the requirement of convening meeting of the
equity shareholders of the Transferor Company to consider and, if thought fit,
approve with or without modification, the proposed scheme is dispensed with.
17. The Transferor Company has one Unsecured Creditor. The sole
Unsecured Creditor has given its written consent/NOC to the proposed scheme.
The said written consent/NOC has been placed on record. The same have been
examined and found in order.
18. In view of the foregoing, the requirement of convening meeting of the
Unsecured Creditor of the Transferor Company to consider and, if thought fit,
approve with or without modification, the proposed scheme is dispensed with.
The Transferor Company does not have any secured creditors.
19. The Transferee Company has seven equity shareholders. All the equity
shareholders have given their written consents/NOCs to the proposed scheme.
The said written consents/NOCs have been placed on record. The same have
been examined and found in order.
20. In view of the foregoing, the requirement of convening meeting of the
equity shareholders of the Transferee Company to consider and, if thought fit,
approve with or without modification, the proposed scheme is dispensed with.
The Transferee Company does not have any secured or unsecured creditors.
21. Further, a prayer has also been sought in the present application, seeking
dispensation of the requirement of publishing the notices for meetings in
newspapers.
22. In view of the circumstance that the requirement of convening meetings
of the shareholders and creditors has been dispensed with, the requirement of
publishing notices for meetings in newspapers is also dispensed with.
23. Directed accordingly.
24. The application stands allowed in the aforesaid terms and is accordingly
disposed of.
SIDDHARTH MRIDUL, J
JANUARY 24, 2017
ap/mk
