Pinnacle Textiles Private ... vs Indus Garments Private Limited
2017 Latest Caselaw 558 Del

        IN THE HIGH COURT OF DELHI AT NEW DELHI


                                Judgment Reserved on: 14.12.2016
                                Judgment Delivered on: 31.01.2017

CO.PET.325/2016

PINNACLE TEXTILES PRIVATE LIMITED
                         ...Petitioner/Transferor Company No.1

                  AND

MAYA CLOTHING PRIVATE LIMITED
                        ...Petitioner/Transferor Company No.2

                  AND

SAGA TEXTILES PRIVATE LIMITED
                         ...Petitioner/Transferor Company No. 3

                  AND

ZENITH CLOTHING COMPANY PRIVATE LIMITED
                        ...Petitioner/Transferor Company No.4
         AND

D & S HOSIERY & WOLLEN MILLS PRIVATE LIMITED
                        ... Petitioner/Transferor Company No. 5
          WITH

INDUS GARMENTS PRIVATE LIMITED
               ... Petitioner Company No. 6/Transferee Company




CO.PET.325/2016                                          Page 1 of 12
                     Through:    Mr. Praveen K. Mittal, Advocate for
                                Petitioners
                                Ms. Aparna Mudiam, AROC for RD
                                Mr. Rajiv Bahl, Advocate for OL

CORAM:
HON'BLE MR. JUSTICE SIDDHARTH MRIDUL

                               JUDGMENT

SIDDHARTH MRIDUL, J.

1. This joint Petition has been filed under Sections 391 and 394 of the

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

Textiles Private Limited (hereinafter referred to as 'Transferor Company

No.1'), Maya Clothing Private Limited (hereinafter referred to as 'Transferor

Company No.2'), Saga Textiles Private Limited (hereinafter referred to as

'Transferor Company No.3'), Zenith Clothing Company Private Limited

(hereinafter referred to as 'Transferor Company No.4'), D & S Hosiery &

Wollen Mills Private Limited (hereinafter referred to as 'Transferor

Company No.5') and Indus Garments Private Limited (hereinafter referred to

as 'Transferee Company') seeking sanction of this Court to the proposed

scheme of Amalgamation (hereinafter referred to as 'proposed scheme') of

Transferor Company Nos.1 to 5 with the Transferee Company.

2. The Transferor Company Nos. 1 to 5 and the Transferee Company are

hereinafter collectively referred to as 'Petitioner Companies'.

3. The registered offices of the Petitioner Companies are situated at New

Delhi, within the jurisdiction of this Court.

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

13.03.2000, with the Deputy Registrar of Companies, N.C.T. of Delhi and

Haryana at New Delhi.

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

09.08.2005, with the Assistant Registrar of Companies, N.C.T. of Delhi and

Haryana at New Delhi.

6. The Transferor Company No.3 was incorporated under the Act, on

18.12.1996, with the Assistant Registrar of Companies, N.C.T. of Delhi and

Haryana at New Delhi.

7. The Transferor Company No.4 was incorporated under the Act, on

26.04.2000, with the Assistant Registrar of Companies, N.C.T. of Delhi and

Haryana at New Delhi.

8. The Transferor Company No.5 was incorporated under the Act, on

20.05.1999, with the Assistant Registrar of Companies, N.C.T. of Delhi and

Haryana at New Delhi.

9. The Transferee Company was incorporated under the Act, on

12.07.2000, with the Assistant Registrar of Companies, N.C.T. of Delhi and

Haryana at New Delhi.

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

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

each. The issued, subscribed and paid-up capital of the Transferor Company

No.1, as on 31.03.2015, is Rs.1,00,000/- divided into 10,000 equity shares of

Rs.10/- each fully paid-up.

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

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

each. The issued, subscribed and paid-up capital of Transferor Company

No.2, as on 31.03.2015, is Rs.50,00,000/- divided into 5,00,000 equity shares

of Rs.10/- each fully paid-up.

12. The authorized share capital of Transferor Company No.3, as on

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

each. The issued, subscribed and paid-up capital of Transferor Company

No.3, as on 31.03.2015, is Rs.1,00,000/- divided into 10,000 equity shares of

Rs.10/- each fully paid-up.

13. The authorized share capital of Transferor Company No.4, as on

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

The issued, subscribed and paid-up capital of Transferor Company No.4, as

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

each fully paid-up.

14. The authorized share capital of Transferor Company No.5, as on

31.03.2015, is Rs.80,00,000/- divided into 8,00,000 equity shares of Rs.10/-

each. The issued, subscribed and paid-up capital of Transferor Company

No.5, as on 31.03.2015, is Rs.80,00,000/- divided into 8,00,000 equity shares

of Rs.10/- each fully paid-up.

15. The authorized share capital of the Transferee Company, as on

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

each. The issued, subscribed and paid-up capital of Transferee Company, as

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

each fully paid-up.

16. Copies of the Memorandum and Articles of Association of the

Petitioner Companies have been filed on record. The audited balance sheets,

as on 31.03.2015, of the Petitioner Companies, along with the report of the

auditors, have also been filed.

17. A copy of the proposed scheme has been placed on record and the

salient features thereof have been incorporated and detailed in the present

petition. It is stated on behalf of the Petitioner Companies that the

circumstances that justify and/or necessitate the proposed scheme are, inter

alia, as follows:

a) The shareholders of all the Petitioner Companies are almost

common.

b) The proposed scheme will result in pooling of their financial,

commercial and other resources, economies of scale and reduction of

overheads.

c) With enhanced capabilities and resources at its disposal, the

Transferee Company will have greater flexibility and strength to meet

requirements for further growth of business activities.

d) The proposed scheme would be advantageous to combine the

activities of Transferor Company Nos.1 to 5 and the Transferee

Company into a single Company for the benefit for all the companies,

their shareholders, creditors and all concerned.

18. So far as the share exchange ratio is concerned, the proposed scheme

provides that upon coming into effect thereof:-

"The Transferee Company will issue (1) 4 (Four) equity shares of the Transferee Company of the face value of Rs.10/- each credited as fully paid-up in the capital of the Transferee Company to the shareholders of Transferor Company No.1 whose names are recorded in its Register of Members on a date (Record Date) to be fixed by the Board of Directors of the Transferee Company for every 1000 (One Thousand ) equity share of Rs.10/- each held by the said shareholders in the Transferor Company No.1, (2) 12 (Twelve ) equity shares of the Transferee Company of the face value of Rs.10/- each credited as fully paid-up in the capital of the Transferee Company to the shareholders of Transferor No. 2 Company whose names are recorded in its Register of Members on a date (Record Date) to be fixed by the Board of Directors of the Transferee Company for every 1000 (One Thousand ) equity share of Rs.10/- each held by the said shareholders in the Transferor Company No.2, (3) Nil ( Zero) equity shares of the Transferee Company of the face value of Rs.10/- each credited as fully paid-up in the capital of the Transferee Company to the shareholders of Transferor No. 3 Company whose names are recorded in its Register of Members on a date (Record Date) to be fixed by the Board of Directors of the Transferee Company for every 1000 (One Thousand ) equity share of Rs.10/- each held by the said shareholders in the Transferor Company No.3, (4) Nil (Zero) equity shares of the Transferee Company of the face value of Rs.10/- each credited as fully paid-up in the capital of the Transferee Company to the shareholders of Transferor No.4 Company whose names are recorded in its Register of Members on a date (Record Date) to be fixed by the Board of Directors of the Transferee Company for every 1000 (One Thousand) equity share of Rs.10/- each held by the said shareholders in the Transferor Company No.4, (5) 7(Seven) equity shares of the Transferee Company of the face value of Rs.10/- each credited as fully paid-up in the capital of the Transferee Company to

the shareholders of Transferor Company No.5 whose names are recorded in its Register of Members on a date (Record Date) to be fixed by the Board of Directors of the Transferee Company for every 1000 (One Thousand) equity share of Rs.10/- each held by the said shareholders in the Transferor Company No.5.

19. Further, it is stated on behalf of the Petitioner Companies that no

proceedings under Sections 235 to 251 of the Act are pending against the

Petitioner Companies.

20. The Board of Directors of the Petitioner Companies in their separate

meetings held on 11.01.2016 have unanimously approved the proposed

scheme. Copies of the resolutions passed at the meetings of the Board of

Directors of the Petitioner Companies have been placed on record.

21. To recapitulate, the Petitioner Companies had earlier filed a joint

application, being Company Application (M) No.35 of 2016, seeking

directions of this Court to dispense with the requirement of convening

meetings of the equity shareholders and unsecured creditors of the Petitioner

Companies, there being no secured creditors of the Petitioner Companies.

Vide order dated 17.03.2016, this Court allowed the said application and

dispensed with the requirement of convening and holding the meetings of the

shareholders and unsecured creditors of the Petitioner Companies to consider

and, if thought fit, approve, with or without modification the proposed

scheme.

22. Pursuant to the same, the Petitioner Companies have filed the present

petition seeking sanction of this Court to the proposed scheme. Notice in the

present petition was issued by this Court vide order dated 19.04.2016.

Furthermore, citations were directed to be published in the Delhi edition of

the newspapers, namely, 'Statesman' (English) and 'Veer Arjun' (Hindi). An

affidavit dated 22.09.2016 has been filed by the Petitioner Companies

showing compliance regarding publication of citations in the aforesaid

newspapers on 14.07.2016. Copies of the newspapers clippings containing

the publications have been filed alongwith the said affidavit dated

22.09.2016.

23. Pursuant to the notices issued the Official Liquidator sought

information from the Petitioner Companies. Based on the information

received, the Official Liquidator has filed a report dated 26.08.2016, wherein

it has been stated that no complaint has been received against the proposed

scheme from any interested person/party and that the affairs of the

Transferor Company Nos.1 to 5 do not appear to have been conducted in a

manner prejudicial to the interest of their members, creditors or to public

interest as per second proviso of Section 394(1) of the Act.

24. Further, in response to the notices issued in the present petition the

Regional Director, Northern Region, Ministry of Corporate Affairs has filed

its affidavit dated 09.12.2016 not raising any objection to the grant of

sanction to the proposed scheme.

25. It has been noted that no objections have been received to the

proposed scheme from any other party. The Petitioner Companies vide

affidavit dated 22.09.2016, filed by their authorized representative, have

submitted that neither the Petitioner Companies nor their counsel have

received any objection pursuant to publication of citations in the newspapers

on 14.07.2016.

26. Considering the approval accorded by the shareholders and creditors

of the Petitioner Companies to the proposed scheme; the affidavit filed by

the Regional Director, Northern Region and the report filed by the Official

Liquidator, not raising any objection to the proposed scheme, there appears

to be no impediment to the grant of sanction to the proposed scheme.

Consequently, sanction is hereby granted to the proposed scheme. The

Petitioner Companies will comply with all the statutory requirements in

accordance with law. Upon the sanction becoming effective from the

appointed date of the proposed scheme i.e. 1st April, 2015, the Transferor

Company Nos.1 to 5 shall stand dissolved without undergoing the process of

winding up.

27. A certified copy of the order, sanctioning the proposed scheme, be

filed with the Registrar of Companies, within 30 days of its receipt.

28. 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.

29. 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.

30. The Petitioner Companies shall deposit a sum of Rs.1,00,000/- by way

of costs with the Delhi High Court Bar Association Lawyers Social Security

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

31. Consequently, the petition is allowed in the aforesaid terms and is

accordingly disposed of

SIDDHARTH MRIDUL, J JANUARY 31, 2017 dn/ap