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HIGH COURT OF DELHI
COMPANY PETITION NO. 32/2015
The Companies Act, 1956 & the Companies Act, 2013 (to the extent applicable):
And Petition under Sections 391(2) and 394 read with Section 100 of the Companies Act, 1956
Scheme of Arrangement between:
Multani Properties and Investments Company Private Limited
Petitioner/Demerged Company AND H Thirty Six Enterprises Private Limited
Petitioner/Resulting Company
Through Ms. Aditi Sharma, Advocate for the petitioners
Ms. Aparna Mudiam, Assistant Regional Director
Mr. Rajiv Bahl, Advocate for the Official Liquidator
SUDERSHAN KUMAR MISRA, J.
JUDGMENT
1. This joint petition has been filed under Sections 391(2) and 394 read with Section 100 of the Companies Act, 1956 by the petitioner companies seeking sanction of the Scheme of Arrangement between Multani Properties and Investments Company Private Limited (hereinafter referred to as the demerged company) and H Thirty Six Enterprises Private Limited (hereinafter referred to as the resulting company). 2015:DHC:9070
2. The registered offices of the demerged and resulting companies are situated at New Delhi, within the jurisdiction of this court.
3. The demerged company was incorporated under the Companies Act, 1956 on 30th June, 1976 with the Registrar of Companies, NCT of Delhi & Haryana at New Delhi.
4. The resulting company was incorporated under the Companies Act, 1956 on 27th December, 2013 with the Registrar of Companies, NCT of Delhi & Haryana at New Delhi.
5. The present authorized share capital of the demerged company is Rs.50,00,000/- divided into 50,000 equity shares of Rs.100/- each. The issued, subscribed and paid-up share capital of the company is Rs.35,27,400/- divided into 35,274 equity shares of Rs.100/- each.
6. The present authorized share capital of the resulting company is Rs.1,00,000/- divided into 1,000 equity shares of Rs.100/- each. The issued, subscribed and paid-up share capital of the company is Rs.1,00,000/- divided into 1,000 equity shares of Rs.100/- each.
7. Copies of the Memorandum and Articles of Association of the demerged and resulting companies have been filed on record with the joint application, being CA(M) 172/2014, earlier filed by the petitioners. The audited balance sheets, as on 31st March, 2014, of the demerged and resulting companies, along with the report of the auditors, had also been filed.
8. A copy of the Scheme of Arrangement has been placed on record and the salient features of the Scheme have been incorporated and detailed in the petition and the accompanying affidavit. It is submitted that the Scheme, inter alia, provides for demerger of the Jewellery Business (Demerged Undertaking) of the demerged company into the resulting company. It has been submitted by the petitioners that considering the size of the demerged company and the significant growth in its business operations, it would be rational to demerge the jewellery division and merge it into the resulting company, so that focused attention can be given to the jewellery business, to help it grow faster. It is claimed that the reorganization will ensure better operational management and focus on accelerated growth of individual units, with higher returns to the shareholders, creditors, employees and also to the public in general.
9. So far as the share exchange ratio is concerned, the Scheme provides that, upon coming into effect of this Scheme, the resulting company shall issue and allot an aggregate of 17,637 equity shares of Rs.100/- each to the shareholders of the demerged company, such that, for every 02 equity shares of Rs.100/- each held in the demerged company the shareholders will:
(i) hold 01 equity share of Rs.100/- each, credited as fully paid up, in the demerged company; and
(ii) receive 01 equity share of Rs.100/- each, credited as fully paid up, in the resulting company.
10. It has been submitted by the petitioners that no proceedings under Sections 235 to 251 of the Companies Act, 1956 (corresponding to Sections 210 to 227 of the Companies Act, 2013) are pending against the demerged and resulting companies.
11. The Board of Directors of the demerged and resulting companies in their separate meetings held on 3rd November, 2014 have unanimously approved the proposed Scheme of Arrangement. Copies of the Resolutions passed at the meetings of the Board of Directors of the demerged and resulting companies have been placed on record.
12. The petitioner companies had earlier filed CA (M) No. 172/2014 seeking directions of this court to dispense with the requirement of convening the meetings of their equity shareholders, secured and unsecured creditors, which are statutorily required for sanction of the Scheme of Arrangement. Vide order dated 22nd December, 2014, this court allowed the application and dispensed with the requirement of convening and holding the meetings of the equity shareholders and unsecured creditors of the demerged and resulting companies, there being no secured creditors of the petitioner companies, to consider and, if thought fit, approve, with or without modification, the proposed Scheme of Arrangement.
13. The petitioner companies have thereafter filed the present petition seeking sanction of the Scheme of Arrangement. Vide order dated 27th January, 2015, notice in the petition was directed to be issued to the Official Liquidator and the Regional Director, Northern Region. Citations were also directed to be published in 'Business Standard' (English) and ‘Jansatta’ (Hindi) Delhi editions. Affidavit of services has been filed by the petitioners showing compliance regarding service on the Regional Director, Northern Region, and also regarding publication of citations in the aforesaid newspapers on 13th March, 2015. Copies of the newspaper clippings containing the publications have been filed along with the said affidavit.
14. 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 8th May, 2015 wherein he has stated that the Scheme involves only a demerger whereby an undertaking of the demerged company will get demerged into the resulting company and no company will be dissolved, pursuant to this Scheme.
15. In response to the notices issued in the petition, Mr. A. K. Chaturvedi, Regional Director, Northern Region, Ministry of Corporate Affairs has filed his report dated 8th May, 2015. Relying on Clause 3.9.[1] of the Scheme, he has stated that, upon sanction of the Scheme of Arrangement, all the employees of the demerged company engaged in the Demerged Undertaking shall become the employees of the resulting company without any break or interruption in their services.
16. No objection has been received to the Scheme of Arrangement from any other party. The petitioner companies, in the affidavit dated 13th August, 2015 of Ms. Aditi Sharma, counsel for the petitioner companies, have submitted that no objection have been received pursuant to the citations published in the newspapers on 13th March, 2015.
17. Considering the approval accorded by the shareholders and creditors of the petitioner companies to the proposed Scheme of Arrangement and the affidavits filed by the Official Liquidator and the Regional Director, Northern Region, not raising any objection to the proposed Scheme of Arrangement, there appears to be no impediment to the grant of sanction to the Scheme of Arrangement. Consequently, sanction is hereby granted to the Scheme of Arrangement under Sections 391 and 394 read with Section 100 of the Companies Act, 1956. The petitioner companies will comply with the statutory requirements in accordance with law. Certified copy of this order be filed with the will not be construed as an order granting exemption from payment of stamp duty as payable in accordance with law. Upon the sanction becoming effective from the appointed date of Arrangement, i.e. 1st April, 2014, the Demerged Undertaking of the demerged company shall stand merged in the resulting company.
18. Learned counsel for the Official Liquidator prays that costs may also be imposed keeping in view the fact that the matter has involved examination of extensive records and prioritized hearings. He submits that at least costs of Rs.50,000/- should be paid by the petitioners. Learned counsel for the petitioners states that the same is acceptable to her. Looking to the circumstances, the petitioners shall deposit a sum of Rs.50,000/- by way of costs in the Common Pool Fund of the Official Liquidator, within three weeks.
19. The petition is allowed in the above terms. Dasti.
SUDERSHAN KUMAR MISRA, J. November 02, 2015