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HIGH COURT OF DELHI
COMPANY PETITION NO. 684/2014
The Companies Act, 1956 & the Companies Act, 2013 (to the extent applicable):
And Petition under Sections 391 to 394 of the
Companies Act, 1956 Scheme of Amalgamation of:
Focus Agri-Commodities India Private Limited Petitioner/Transferor Company No. 1
Sunder Agri-Commodities India Private Limited
Petitioner/Transferor Company No. 2 Sunny Agri-Commodities India Private Limited
Petitioner/Transferor Company No. 3 Grow More Agri-Commodities India Private Limited
Petitioner/Transferor Company No. 4
Petitioner/Transferee Company
Through Mr. Ishwar Mohanty, Proxy Advocate for Ms. Beena Rani Pandey and Mr. Rohit Aggarwal, Advocates for the petitioners
SUDERSHAN KUMAR MISRA, J.
JUDGMENT
1. This joint petition has been filed under Sections 391 to 394 of the Companies Act, 1956 by the petitioner companies seeking sanction of the Scheme of Amalgamation of Focus Agri-Commodities India Private Limited (hereinafter referred to as the transferor company no. 1); Sunder Agri-Commodities India Private Limited (hereinafter referred to as the 2015:DHC:4710 transferor company no. 2); Sunny Agri-Commodities India Private Limited (hereinafter referred to as the transferor company no. 3); and Grow More Agri-Commodities India Private Limited (hereinafter referred to as the transferor company no. 4) with Prudent Agri-Commodities India Private Limited (hereinafter referred to as the transferee company).
2. The registered offices of the transferor and transferee companies are situated at New Delhi, within the jurisdiction of this court.
3. The transferor company no. 1 was incorporated under the Companies Act, 1956 on 11th December, 2012 with the Registrar of Companies, NCT of Delhi & Haryana at New Delhi.
4. The transferor company no. 2 was incorporated under the Companies Act, 1956 on 14th
5. The transferor company no. 3 was incorporated under the Companies Act, 1956 on 10th
6. The transferor company no. 4 was incorporated under the Companies Act, 1956 on 10th
7. The transferee company was incorporated under the Companies Act, 1956 on 12th December, 2012 with the Registrar of Companies, NCT of Delhi & Haryana at New Delhi.
8. The present authorized share capital of the transferor company no.1 is Rs.60,00,000/- divided into 6,00,000 equity shares of Rs.10/each. The issued, subscribed and paid-up share capital of the company is Rs.53,01,000/- divided into 5,30,100 equity shares of Rs.10/- each.
9. The present authorized share capital of the transferor company no.2 is Rs.60,00,000/- divided into 6,00,000 equity shares of Rs.10/-
10. The present authorized share capital of the transferor company no.3 is Rs.60,00,000/- divided into 6,00,000 equity shares of Rs.10/-
11. The present authorized share capital of the transferor company no.4 is Rs.60,00,000/- divided into 6,00,000 equity shares of Rs.10/-
12. The present authorized share capital of the transferee company is Rs.60,00,000/- divided into 6,00,000 equity shares of Rs.10/- each. The issued, subscribed and paid-up share capital of the company is Rs.53,01,000/- divided into 5,30,100 equity shares of Rs.10/- each.
13. Copies of the Memorandum and Articles of Association of the transferor and transferee companies have been filed on record with the joint application, being CA(M) 145/2014, earlier filed by the petitioners. The audited balance sheets, as on 31st March, 2014, of the transferor and transferee companies, along with the report of the auditors, had also been filed.
14. A copy of the Scheme of Amalgamation 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 claimed that the proposed amalgamation will result in reduction in overheads and other expenses, reduction in administrative and procedural work, eliminate duplication of work, better and more productive utilization of various resources and will enable the undertakings concerned to effect internal economies and optimize productivity. It is further claimed that the Scheme will enable the companies concerned to rationalize and streamline their management, businesses and finances and lead to a better and more economic control, over the running and management of the businesses and undertakings of the said companies.
15. 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 equity shares to the shareholders of the transferor companies in the following ratio: “0.243 equity share of Rs.10/- each of the transferee company credited as fully paid up for every 1 equity share of Rs.10/each held in the transferor company no. 1.” “0.639 equity share of Rs.10/- each of the transferee company each held in the transferor company no. 2.” “0.111 equity share of Rs.10/- each of the transferee company each held in the transferor company no. 3.” “0.103 equity share of Rs.10/- each of the transferee company each held in the transferor company no. 4.”
16. It has been submitted by the petitioners that no proceedings under Sections 235 and 251 of the Companies Act, 1956 are pending against the transferor and transferee companies.
17. The Board of Directors of the transferor and transferee companies in their separate meetings held on 25th August, 2014 have unanimously approved the proposed Scheme of Amalgamation. Copies of the Resolutions passed at the meetings of the Board of Directors of the transferor and transferee companies have been placed on record.
18. The petitioner companies had earlier filed CA (M) No. 145/2014 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 Amalgamation. Vide order dated 27th October, 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 transferor and transferee 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 Amalgamation.
19. The petitioner companies have thereafter filed the present petition seeking sanction of the Scheme of Amalgamation. Vide order dated 10th November, 2014, notice in the petition was directed to be issued to the Regional Director, Northern Region, and the Official Liquidator. Citations were also directed to be published in 'Business Standard' (English) and (Hindi) editions. Affidavit of service has been filed by the petitioners showing compliance regarding service on the Official Liquidator and the Regional Director, Northern Region and also regarding publication of citations in the aforesaid newspapers on 7th January, 2015. Copies of the newspaper clippings containing the publications have been filed along with the said affidavit.
20. 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 10th February, 2015 wherein he has stated that he has not received any complaint against the proposed Scheme of Amalgamation from any person/party interested in the Scheme in any manner and that the affairs of the transferor companies do not appear to have been conducted in a manner prejudicial to the interest of their members, creditors or public interest, as per second proviso of Section 394(1) of the Companies Act, 1956.
21. 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 11th February, 2015. Relying on Clause 7.[1] of the Scheme, he has stated that, upon sanction of the Scheme of Amalgamation, all the employees of the transferor companies shall become the employees of the transferee company without any break or interruption in their services. He has further submitted that in Clause 12 of the Scheme, it has been stated that the transferee company shall follow pooling of interest method of accounting and accounting treatment shall be in compliance with Accounting Standard-14, Accounting for Amalgamation, issued by the Institute of Chartered Accountants of India. He further submitted that in Clause 18 of the Scheme, it has been stated that upon this scheme becoming effective, the transferor company nos. 1 to 4 shall stand dissolved without the process of winding up.
22. Although the Regional Director in his report has not raised any objection to the proposed Scheme, but he has raised certain observations in paras 6, 8 & 9 of his report. In para 6 of his report, he has stated that the transferor and transferee companies have 100% foreign participation, therefore, they may be asked to give an undertaking for necessary compliance from Reserve Bank of India as required under FEMA. In para 8 of his report, he has stated that the authorized share capital of the transferee company is not sufficient to allot shares to the transferor companies, therefore, the transferee company may be directed to increase the authorized capital for allotment of shares to the transferor companies, as per the provisions of the Companies Act, 1956/2013. In para 9 of his report, he has stated that the Board of Directors of the petitioner companies have approved the proposed Scheme of Amalgamation in their meetings held on 25th August, 2014 but they have not filed the said Board Resolutions (eMGT-14) with the Registrar of Companies. He, therefore, prays that the petitioner companies be directed to comply with Section 117(3) by filing e-form MGT-14. In reply to aforesaid, the petitioner companies have filed an affidavit dated 27th February, 2015 of Mr. Rakesh Aggarwal, Director of the petitioner companies whereby the transferee company has undertaken to comply with all the applicable compliances and regulations relating to RBI under FEMA. Further, in the affidavit it has been submitted that the requisite MGT-14 forms were duly filed by all the petitioner companies. Copies of the receipts/challans of filing the said forms are enclosed with the affidavit. It has been further submitted that the authorized share capital of the transferor companies shall be merged with the authorized share capital of the transferee company, post amalgamation, and the merged capital shall be sufficient to allot the new shares under the Scheme. In view of the above, the observations raised by the Regional Director stand satisfied.
23. No objection has been received to the Scheme of Amalgamation from any other party. The petitioner companies, in the affidavit dated 27th February, 2015 of Mr. Rakesh Aggarwal, Director of the petitioner companies, have submitted that neither the petitioner companies nor their counsel have received any objection pursuant to the citations published in the newspapers on 7th January, 2015.
24. Considering the approval accorded by the equity shareholders and creditors of the petitioner companies to the proposed Scheme of Amalgamation and the affidavits filed by the Regional Director, Northern Region, and the Official Liquidator not raising any objection to the proposed Scheme of Amalgamation, there appears to be no impediment to the grant of sanction to the Scheme of Amalgamation. Consequently, sanction is hereby granted to the Scheme of Amalgamation under Sections 391 and 394 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 Registrar of Companies within 30 days. It is also clarified that this order 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 Amalgamation, i.e. 1st April, 2014, the transferor companies no. 1 to 4 shall stand dissolved without undergoing the process of winding up.
25. The Assistant Registrar of Companies prays that costs of at least Rs.1.0 lakh should be paid by the petitioners keeping in view the fact that the matter has involved examination of extensive records and also prioritized hearings. Mr. Hitesh Joshi, Company Secretary of the petitioner companies states that the same is acceptable to him. Looking to the circumstances, the petitioner shall deposit a sum of Rs.1.0 lakh by way of costs with the Common Pool Fund of the Official Liquidator within two weeks from today.
26. The petition is allowed in the above terms. Dasti.
SUDERSHAN KUMAR MISRA, J. May 25, 2015