Jindal Polymer Products Private ... vs Annapurna Steels Private Limited
2017 Latest Caselaw 527 Del

          IN THE HIGH COURT OF DELHI AT NEW DELHI

                                           Judgment Reserved On: 08.12.2016
                                        Judgment Pronounced On: 30.01.2017


CO.PET.692/2016


JINDAL POLYMER PRODUCTS PRIVATE LIMITED
                         .....Petitioner/Transferor Company No.1

                                      AND

SHATABDI PAPER MILLS PRIVATE LIMITED
                          .....Petitioner/Transferor Company No.2

                                      AND

ANNAPURNA STEELS PRIVATE LIMITED
                             .....Petitioner/Transferee Company

                                 Through:     Mr. Rajeev K. Goel, Advocate for
                                              Petitioners.
                                              Ms. Aparna Mudiam, Assistant
                                              ROC.

CORAM:
HON'BLE MR. JUSTICE SIDDHARTH MRIDUL

                               JUDGMENT

SIDDHARTH MRIDUL, J.

1. The present petition has been filed jointly under Sections 391 and 394 &

sections 100 to 104 of the Companies Act, 1956 (hereinafter referred to as 'the

Act') by Jindal Polymer Products Private Limited (hereinafter referred to as

'Transferor Company No.1'), Shatabdi Paper Mills Private Limited

(hereinafter referred to as 'Transferor Company No.2') and Annapurna Steels

Private Limited (hereinafter referred to as 'Transferee Company') seeking

sanction of the scheme of arrangement (hereinafter referred to as 'the

Scheme') for the Demerger of the Investments Business of Transferor

Companies into the Transferee Company; and the Demerger of the Investments

Business of the Transferee Company into Transferor Company No.1.

2. The registered offices of each of the Petitioner Companies are situated at

Delhi, within the jurisdiction of this Court.

3. Transferor Company No.1 was incorporated under the Act and a

certificate in this behalf was issued on 21.04.1980 by the Registrar of

Companies, Uttar Pradesh at Kanpur. Thereafter, the registered office of

Transferor Company No.1 was shifted to Delhi and a fresh certificate in this

behalf was issued on 12.11.2015 by the Assistant Registrar of Companies,

NCT of Delhi and Haryana at New Delhi.

4. Transferor Company No.2 was incorporated under the Act and a

certificate in this behalf was issued on 19.04.1989 by the Registrar of

Companies, NCT of Delhi and Haryana at New Delhi.

5. The Transferee Company was incorporated under the Act vide

certificate of incorporation dated 05.09.1985, issued by the Registrar of

Companies, NCT of Delhi and Haryana under the name of Annapurna Steels

Private Limited. Thereafter, the name of the Transferee Company was changed

to Annapurna Steels Limited and a fresh certificate was issued in this behalf on

15.12.2006. The name of the Transferee Company was again changed to

Annapurna Steels Private Limited, its present name, and a fresh certificate in

this behalf was obtained on 30.10.2014.

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

31.03.2015 is Rs.1,20,00,000/- divided into 1,20,000 shares of Rs.100/- each.

The issued, subscribed and paid up share capital of Transferor Company No.1

as on 31.03.2015 is Rs.98,05,700/- divided into 98,057 shares of Rs.100/-

each.

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

31.03.2015 is Rs.50,00,000/- divided into 5,00,000 shares of Rs.10/- each. The

issued, subscribed and paid up share capital of Transferor Company No.2 as on

31.03.2015 is Rs.18,15,000/- divided into 1,81,500 shares of Rs.10/- each.

8. The authorized share capital of the Transferee Company as on

31.03.2015 is Rs.1,10,00,000/- divided into 1,10,000 equity shares of Rs.100/-

each. The issued, subscribed and paid up share capital of the Transferee

Company as on 31.03.2015 is Rs.77,70,800/- divided into 77,708 equity shares

of Rs.100/- each.

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

the audited annual accounts for the year ended 31.03.2015, alongwith the

reports of the Auditors, pertaining to the Transferor Companies and the

Transferee Company have been enclosed with the application that earlier came

to be filed by the Petitioner Companies, being Company Application (Main)

No.87 of 2016.

10. Learned Counsel appearing on behalf of the Petitioner Companies has

stated that no proceedings under sections 235 to 251 of the Act (or

corresponding provisions of the Companies Act, 2013) are pending against

them as on the date of institution of the present petition.

11. It has further been stated on behalf of the Petitioner Companies that the

scheme has been approved by their respective Board of Directors (BOD).

Copies of the resolutions dated 25.04.2016 of the Petitioner Companies,

whereby the scheme has been approved have been filed with the present

petition.

12. A copy of the Scheme has been enclosed with the petition and its salient

features have been incorporated in the petition. It has stated on behalf of the

Petitioners that the proposed Scheme, inter alia, provides for demerger of the

respective Investments Business of Transferor Companies and their merger

into the Transferee Company and demerger of the Investment Business of the

Transferee Company and its merger into Transferor Company No.1. It has

been stated on behalf of the Petitioner Companies that the proposed demerger

will simplify the corporate structure and will ensure seamless integration of

transferor business with the respective companies. It has been further stated

that the proposed demerger will strengthen, consolidate and stabilize the

business of these companies and will facilitate further expansion and growth of

their business.

13. 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 shares to the shareholders of the transferor companies no. 1 & 2

in the following ratio:

"22 10% non-cumulative compulsorily redeemable preference shares of Rs.100/- each of the Transferee Company, credited as fully paid up, for every 1000 equity shares of Rs.100/- each held in Transferor Company No.1. 10% non-cumulative compulsory redeemable preference shares of Rs.100/- each will be redeemed at a price of Rs.547.68/- per share [Rs.100/- face value and redemption premium of Rs.447.68/- per share] within a period of 20 years with a put and call option to the shareholders of the issuer company."

"19 10% non-cumulative compulsorily redeemable preference shares of Rs.100/- each of the Transferee Company, credited as fully paid up, for every 1000 equity shares of Rs.10/- each held in Transferor Company No.2. 10% non-cumulative compulsory redeemable preference shares of Rs.100/- each will be redeemed at a price of Rs.547.68/- per share [Rs.100/- face value and redemption premium of Rs.447.68/- per share] within a period of 20 years with a put and call option to the shareholders of the issuer company."

It has been further provided that in consideration of the demerger of the

Investment Business of the transferee company and its merger into the

transferor company no. 1, the transferor company no. 1 shall issue and allot

shares to the shareholders of the transferee company in the following ratio:

"72 10% non-cumulative compulsorily redeemable preference shares of Rs.100/- each of Transferor Company No.1, credited as fully paid up, for every 100 equity shares of Rs.10/- each held in the Transferee Company. 10% noncumulative compulsory redeemable preference shares of Rs.100/- each will be redeemed at a price of Rs.396.29/- per share [Rs.100/- face value and redemption premium of Rs.296.29/- per share] within a period of 20 years with a put and call option to the shareholders of the issuer company."

14. The Petitioner Companies by way of Company Application (Main) No.

87 of 2016 sought directions of this Court for dispensation of meetings of the

shareholders, secured creditors and unsecured creditors of the Petitioner

Companies. This Court vide order dated 03.08.2016 dispensed with the

requirement of convening meetings of the, shareholders of each of the

Petitioner Companies; unsecured creditors of the Transferor Companies; and

secured creditors of Transferor Company No.1 (there being no secured and

unsecured creditors of the Transferee Company; and no secured creditor of

Transferor Company No.2).

15. Thereafter, the present petition came to be filed by the Petitioner

Companies. Notice in the present petition was issued to the Regional Director

and the Registrar of Companies vide order dated 09.08.2016. Further, this

Court by way of the said order directed that the citations be published in the

Delhi editions of 'Business Standard' (English Edition) and 'Business

Standard' (Hindi Edition).

16. An affidavit dated 22.09.2016 has been filed by the Petitioner

Companies showing service of notice upon the Regional Director & the

Registrar of Companies and showing that citations were published in the said

newspapers on 30.08.2016. The said affidavit is on record.

17. Pursuant to the notice being issued in the Petition, the Regional Director

has filed its representation/affidavit dated 06.12.2016, not raising any

objections to the grant of the proposed Scheme.

18. An affidavit dated 03.12.2016 showing that no objections have been

received by the Petitioner Companies or their counsel, from any person/party

to the proposed Scheme, pursuant to the publication of citations in the

newspapers has been filed by Transferor Company No.1 and the same is on

record.

19. In view of the foregoing and in view of the approval accorded by the

shareholders and creditors of the Petitioner Companies and the

representation/affidavit filed by the Regional Director, raising no objections to

the proposed Scheme; there appears to be no impediment to grant of sanction

to the Scheme. Consequently, sanction is hereby granted to the Scheme the

provisions of section 391 to 394 & sections 100 to 104 of the Act.

20. 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 proposed 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.

21. 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.

22. Resultantly, it is hereby directed that the Petitioner Companies will

comply with all the provisions of the proposed scheme and, in particular, those

which are referred to hereinabove. The petitioners shall also comply with the

statutory requirements in accordance with law.

23. A certified copy of this order be filed with the Registrar of Companies

within 30 days from the date of receipt of the same.

24. The Petitioner Companies are directed to deposit a sum of Rs.25,000/-

with the Delhi High Court Bar Association Lawyers' Social Security and

Welfare Fund, New Delhi within a period of two weeks from today.

25. The Petition is allowed in the above terms and is accordingly disposed

of.

SIDDHARTH MRIDUL, J JANUARY 30, 2017 sb/mk