M/s. Ganges Concast Industries Limited v. M/s. Salasar Stainless Limited

1. This application has been filed under Sections 391(1) & 394 of the Companies Act, 1956 by the applicant/transferee company seeking directions of this court to dispense with the requirement of convening the meetings of its equity shareholders, secured and unsecured creditors to consider and approve, with or without modification, the proposed Scheme of Amalgamation of M/s. Ganges Concast Industries Limited (hereinafter referred to as the transferor company) with M/s. Salasar Stainless Limited (hereinafter referred to as the applicant/transferee company). 2015:DHC:1228

2. The registered office of the applicant/transferee company is situated at New Delhi, within the jurisdiction of this Court. However, the registered office of the transferor company is situated at Uttar Pradesh, outside the jurisdiction of this court.

3. The applicant/transferee company was incorporated under the Companies Act, 1956 on 9th April, 2010 with the Registrar of Companies, NCT of Delhi & Haryana at New Delhi.

4. The present authorized share capital of the applicant/transferee company is Rs.5,00,00,000/- divided into 50,00,000 equity shares of Rs.10/- each. The issued, subscribed and paid up capital of the company is Rs.4,99,90,000/- divided into 49,99,000 equity shares of Rs.10/- each.

5. Copy of the Memorandum and Articles of Association of the applicant/transferee company has been filed on record. The audited balance sheet, as on 31st March, 2014, of the applicant/transferee company, along with the report of the auditors, has also been filed.

6. 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 application and the accompanying affidavit. It is submitted by the applicant that the transferor company is a wholly owned subsidiary of the transferee company. It is claimed that the proposed amalgamation would result in business synergy, pooling of resources and consolidation of these companies. It is further claimed that the proposed amalgamation will result in usual economies of a centralized and a large company including elimination of duplicate work, reduction in overheads, better and more productive utilization of human and other resources and enhancement of overall business efficiency. It will enable these companies to combine their managerial and operating strength, to build a wider capital and financial base and to promote and secure overall growth of their businesses.

7. So far as the share exchange ratio is concerned, the Scheme provides that since the transferor company is a wholly owned subsidiary of the transferee company, no shares will be issued by the transferee company pursuant to this Scheme.

8. It has been submitted by the applicant that no proceedings under Sections 235 to 251 of the Companies Act, 1956 are pending against the applicant company.

9. The Board of Directors of the applicant/transferee company in their meetings held on 20th December, 2014 have unanimously approved the proposed Scheme of Amalgamation. A copy of the Resolution passed at the meeting of the Board of Directors of the applicant/transferee company has been placed on record.

10. The applicant/transferee company has 07 equity shareholders. All the equity shareholders have given their consents/no objections in writing to the proposed Scheme of Amalgamation. Their consents/no objections have been placed on record. They have been examined and found in order. In view thereof, the requirement of convening the meeting of the equity shareholders of the applicant/transferee company to consider and, if thought fit, approve, with or without modification, the proposed Scheme of Amalgamation is dispensed with.

11. The applicant/transferee company has certain secured and unsecured creditors, whose details are not mentioned in the application. Learned counsel for the applicant however submitted that the transferor company is a wholly owned subsidiary of the transferee company and since it is an amalgamation of the wholly owned subsidiary company with its holding company, therefore, rights of secured and unsecured creditors of the transferee company will not be affected adversely. It is further submitted that no new shares will be issued on amalgamation and the transferor and transferee companies are not proposing any arrangement with their shareholders and creditors, hence, consents/no objections of secured and unsecured creditors of the applicant/transferee company are not required to be obtained for the purpose of amalgamation. He, therefore, prays that the requirement of convening and holding the meetings of the secured and unsecured creditors of the applicant/transferee company may kindly be dispensed with.

12. In support of his submission, learned counsel for the applicant placed reliance on the judgment of this court dated 19th January, 2010, in the matter of M/s. Prasneeta Engineering Private Limited & Anr. [CA(M)3/2010] wherein in similar circumstances, this court, has dispensed with the requirement of convening and holding the meetings of the secured and unsecured creditors of the transferee company without obtaining their consents/no objection to the proposed Scheme of Amalgamation. A similar view has also been espoused by the court in the matter of Imperia Homes Private Limited and Anr. [CA(M) 78/2014].

13. In view of the submissions made at the bar and the settled law on the subject, the requirement of convening and holding the meetings of the secured and unsecured creditors of the applicant/transferee company, to consider and if though fit, approve, with or without modification, the proposed Scheme of Amalgamation, is dispensed with.

14. The application stands allowed in the aforesaid terms. Dasti SUDERSHAN KUMAR MISRA, J. February 06, 2015