Smartvalue Ventures Private ... vs Smart Global Corporate Holding ...
2017 Latest Caselaw 407 Del

            IN THE HIGH COURT OF DELHI AT NEW DELHI

                                            Order reserved on:23.11.2016
                                            Order delivered on:24.01.2017



CO. APPL. (M) 159/2016

IN THE MATTER OF:


SMARTVALUE VENTURES PRIVATE LIMITED

                                  ...... Applicant/Transferor Company No.1



                                  AND



PROSPECTIVE INFRASTRUCTURES PRIVATE LIMITED

                                   ...... Applicant/Transferor Company No.2



                                  WITH



SMART GLOBAL CORPORATE HOLDING PRIVATE LIMITED

                                      ....... Applicant/Transferee Company



                       Through:    Mr. Saurabh Kaila, Mr. Hemant Sharma
                                   & Mr. Palash Agarwal, Advocates for
                                   Applicant Companies.



CO.APPL.(M) 159/2016                                             Page 1 of 9
 CORAM:
HON'BLE MR. JUSTICE SIDDHARTH MRIDUL


SIDDHARTH MRIDUL, J.

1. The present application has been filed jointly, under Sections 391 to 394

of the Companies Act, 1956 (hereinafter referred to as 'the Act'), by

SmartValue Ventures Private Limited (hereinafter referred to as 'Transferor

Company No.1'), Prospective Infrastructures Private Limited (hereinafter

referred to as 'Transferor Company No.2') and Smart Global Corporate Holding

Private Limited (hereinafter referred to as 'Transferee Company'), in

connection with the scheme of amalgamation (hereinafter referred to as 'the

Scheme') of Transferor Company No.1 and Transferor Company No.2 with the

Transferee Company.

2. Transferor Company No.1, Transferor Company No.2 and the Transferee

Company will hereinafter collectively be referred to as 'the Applicants'.

3. The registered offices of the Applicants are situated within the National

Capital Territory of Delhi and thus, this Court has the necessary jurisdiction to

adjudicate the matter.

4. Transferor Company No.1 was originally incorporated under the Act on

16.05.2007 under the name and style of 'Bharat Holdings Private Limited' with

the Registrar of Companies, Uttar Pradesh & Uttaranchal. Thereafter, the name

of the Company was changed to 'Spice Investments & Finance Advisors Private

Limited' and a fresh certificate of incorporation was issued by Registrar of

Companies, Uttar Pradesh & Uttaranchal on 07.08.2008. Thereafter, the name

of the Company was again changed to 'SmartValue Ventures Private Limited'

and a fresh certificate of incorporation was issued by Registrar of Companies,

Uttar Pradesh on 26.06.2013. Thereafter, the registered office of the company

was shifted from state of Uttar Pradesh to National Capital Territory of Delhi,

for which a fresh Certificate of incorporation was issued by Registrar of

Companies, National Capital Territory of Delhi and Haryana on 03.08.2016.

5. Transferor Company No.2 was incorporated under the Act on 07.10.2008

with the Registrar of Companies, NCT of Delhi and Haryana.

6. The Transferee Company was originally incorporated under the Act on

18.06.2001 under the name and style of 'Indian Televentures Private Limited'

with the Registrar of Companies, National Capital Territory of Delhi and

Haryana. Thereafter, name of the Company was changed to 'Spice Global

Investments Private Limited' and a fresh certificate of incorporation was issued

by Registrar of Companies, National Capital Territory of Delhi and Haryana on

16.07.2009. Thereafter, name of the Company was changed to 'Smart Global

Corporate Holding Private Limited' and a fresh certificate of incorporation was

issued by Registrar of Companies, National Capital Territory of Delhi and

Haryana on 08.08.2014.

7. The authorized share capital of Transferor Company No.1 as on

31.03.2016 is Rs.9,00,00,00,000/-, divided into 50,00,00,000 equity shares of

Rs.10/- each and 40,000 3% Non-Cumulative Redeemable Optionally

Convertible Preference Shares of Rs.1,00,000/- each. The issued, subscribed

and paid-up share capital of the company as on 31.03.2016 is

Rs.800,01,00,000/-, divided into 40,00,10,000 equity shares of Rs.10/- each,

and 40,000 3% Non-Cumulative Redeemable Optionally Convertible Preference

Shares of Rs.1,00,000/- each.

8. The authorized share capital of Transferor Company No.2 as on

31.03.2016 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 company as on

31.03.2016, is Rs.1,98,000/-, divided into 19,800 equity shares of Rs.10/- each.

9. The authorized share capital of Transferee Company as on 31.03.2016 is

Rs.5,13,00,00,000/-, divided into 51,30,00,000 equity shares of Rs.10/- each.

The issued, subscribed and paid-up share capital of the company as on

31.03.2016 is Rs.3,94,11,960/-, divided into 39,41,196 equity shares of Rs.10/-

each.

10. Copies of the Memorandum of Association and Articles of Association,

the latest audited annual accounts for the year ended 31.03.2016, pertaining to

the Applicants, have been placed on record.

11. It has been stated that no proceedings under sections 235 to 251 of the

Act (or corresponding provisions of the Companies Act, 2013) are pending

against the Applicants as on the date of institution of the present Application.

12. A copy of the Scheme of Amalgamation has been placed on record and

salient features of the Scheme have been incorporated in the affidavit in support

of the summons for directions under sections 391 to 394 of the Act. It has been

stated on behalf of the Applicants that the proposed amalgamation will simplify

management; would lead to cost savings resulting from rationalization,

standardization and simplification of business processes. It has been further

stated that the proposed Scheme would inter alia, lead to improved

organizational capability arising from pooling of financial, managerial and

technical resources and that Amalgamation would maximize the overall

shareholders value by strengthening its core competencies.

13. So far as the share exchange ratio is concerned, the Scheme provides that

there will be no issue and allotment of shares by the Transferee Company in

consideration of amalgamation of the Transferor Companies with the former

due to the following reasons:

 The entire share capital of Transferor Company No. 1 is held by the Transferee Company;

 The entire share capital of Transferor Company No.2 is held by Transferor Company No.1;

 About 16% of the paid up share capital of the Transferee Company is held by Transferor Company No.2;

 Upon the scheme becoming effective, the investment of Transferor Company No.1 in Transferor Company No.2 shall stand cancelled;  Upon the scheme becoming effective, the investment of the Transferee Company in Transferor Company No.1 shall stand cancelled;

 Upon the scheme becoming effective, the investment of Transferor Company No.2 in the Transferee Company shall stand cancelled.

14. The Board of Directors of the Transferor Company No.1, Transferor

Company No.2 and the Transferee Company, in their separate meetings, held on

30.09.2016, 29.09.2016 and 01.10.2016, respectively, have unanimously

approved the proposed Scheme. Copies of the Resolutions passed at the

meetings of the Board of Directors of the Applicants whereby the scheme has

been approved have been filed with the application and the same are on record.

15. The status showing the number of equity shareholders, secured and

unsecured creditors of the Applicants along with the consent obtained

therefrom, have been set out in the following table:

 Company        No. of   Consent       No.        Consent    No. of     Consent No. of        Consent
              Equity     Given     Preference     Given    Secured      given  Un-            given
              Share-              Shareholders             Creditors           Secured
              holders                                                          Creditors

Transferor      2         ALL          1          ALL        NIL        N.A       NIL           NA
Company
  No.1


Transferor      2         ALL         NIL         N.A.       NIL        N.A        1           ALL
Company
  No.2

Transferee
Company         8         ALL         NIL         N.A.       NIL        N.A       NIL          N.A

16. A prayer has been sought seeking dispensation of the requirement of

convening meetings of the shareholders, secured and unsecured creditors of the

Applicant Companies.

17. Transferor Company No.1 has 02 equity shareholders and 01 preference

shareholder. All the shareholders (equity and preference) have given their

written consents/NOCs to the proposed Scheme. The written consents/NOCs

have been placed on record. The same have been examined and found in order.

18. In view of the foregoing, the requirement of convening the meetings of

equity and preference shareholders of Transferor Company No.1, to consider

and if thought fit, approve, with or without modifications, the Scheme, is

dispensed with.

19. Transferor Company No.1 does not have any secured or unsecured

creditor. Therefore, the question of requirement of convening meetings thereof

does not arise.

20. Transferor Company No.2 has 02 equity shareholders. Both the equity

shareholders have given their written consents/NOCs to the proposed Scheme.

The written consents/NOCs have been placed on record. The same have been

examined and found in order.

21. In view of the foregoing, the requirement of convening the meeting of the

equity shareholders of Transferor Company No.2, to consider and, if thought fit,

approve, with or without modification, the proposed Scheme, is dispensed with.

22. Transferor Company No.2 does not have any secured creditor. Therefore,

the question of requirement of convening a meeting thereof does not arise.

23. Transferor Company No.2 has 01 unsecured creditor. The sole unsecured

creditor has given its written consent/NOC, to the proposed Scheme. The

written consent/NOC has been placed on record. The same has been examined

and found in order.

24. In view of the foregoing, the requirement of convening the meeting of the

unsecured creditor of Transferor Company No. 2, to consider and, if thought fit,

approve, with or without modification, the proposed Scheme, is dispensed with.

25. The Transferee Company has 08 equity shareholders. All the equity

shareholders have given their written consents/NOCs, to the proposed Scheme.

The written consents/NOCs have been placed on record. The same have been

examined and found in order.

26. In view of the foregoing, the requirement of convening the 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.

27. The Transferee Company does not have any secured or unsecured

creditor. Therefore, the question of requirement of convening meetings thereof

does not arise.

28. The Application stand allowed in the aforesaid terms and is disposed of

accordingly.

SIDDHARTH MRIDUL, J

JANUARY 24, 2017 sb/mk