Grand Builders Private Limited & Ors. v. Jindal Dyechem Industries Private Limited

1. This second motion joint Petition has been filed under sections 391 to 394 of the Companies Act, 1956 (“Act”) seeking sanction to the Scheme of Arrangement (“Scheme”) of Grand Builders Private Limited (hereinafter referred to as Demerged Company), Lumex Caplease Private Limited (hereinafter referred to as Transferor Company) with 2014:DHC:3735 CO.PET. 203/2014 2 Jindal Dyechem Industries Private Limited (hereinafter referred to as Transferee Company) (collectively referred as the Petitioner Companies). A copy of the Scheme has been enclosed with the petition.

2. The registered offices of the Petitioner Companies are situated at New Delhi, within the jurisdiction of this Court.

3. The details of respective dates of incorporation of the Petitioner Companies, their authorised, issued, subscribed and paid up capital have been set out in the petition.

4. The copies of the Memorandum and Articles of Association of the Petitioner Companies have been enclosed with the petition.

5. The copies of Resolutions passed by the Board of Directors of the Petitioner Companies approving the Scheme have also been filed along with the petition.

6. Learned counsel for the Petitioner Companies submits that no proceedings under sections 235 to 251 of the Companies Act, 1956 is pending against the Petitioner Companies. CO.PET. 203/2014 3

7. The Petitioner Companies had earlier filed C.A. (M) No. 38 of 2014 seeking directions of this Court for dispensation of the meetings. Vide Order dated 26th February, 2014, this Court allowed the Application and dispensed with the requirement of convening meetings of Equity Shareholders, Secured Creditors and Unsecured Creditors of the Petitioner Companies.

8. The Petitioner Companies have thereafter filed the present Petition seeking sanction of the Scheme of Arrangement. Vide order dated 31st March, 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 “Indian Express” (English, Delhi Edition) and “Jansatta” (Hindi, Delhi Edition). Affidavit of Service and Publication has been filed by the Petitioners showing compliance regarding service of the petition on the Regional Director, Northern Region and the Official Liquidator and also regarding Publication of Citations in the aforesaid Newspapers on 5th May, 2014. Copies of the newspapers cuttings, in original, containing the publications have been filed with the affidavit of service. CO.PET. 203/2014 4

9. In response to the notices issued, the Official Liquidator sought information from the Petitioner Companies. Based on the information received the Official Liquidator has filed his report dated 26th May, 2014, wherein he has stated that he has not received any complaint against the proposed Scheme from any person/party interested in the Scheme in any manner and that the affairs of the Demerged Company and Transferor Company do not appear to have been conducted in a manner prejudicial to the interest of its members, creditors or to public interest as per 2nd proviso of Section 394(1) of the Act.

10. In response to the notices issued in the Petition, the Regional Director, Northern Region, Ministry of Corporate Affairs has filed his affidavit/report dated 26th May, 2014 observing as under: i. That the Petitioner Companies vide their letter-dated 02.05.2014 has intimated that certain charges are proposed to be transferred from the de-merged company to the Resulting Company. It is submitted that the name of the company cannot be substituted in the charged documents as such for satisfaction of charge; the company is required to file form no. 17. In view of this the petitioner company may be asked to comply with the relevant provisions of the companies act, 1956 for satisfaction and creation of charge in CO.PET. 203/2014 5 transferor demerged company and resulting company respectively. ii. That it has been observed that as per the Petition the De-merged Company and the Transferor Company do not have any Secured Creditor whereas as per erecords maintained in his office, both these companies have created charge on 08.01.2011 and 06.01.2011 and 09.07.2011 respectively and not filed satisfaction of charge so far, hence both the companies may be asked as to how it has complied with the provision of section 138 of the Companies Act, 1956.”

11. In reply to the aforesaid observations of the Regional Director, the Petitioner Companies have filed an Affidavit dated 12th July 2014 stating that the Demerged Company has satisfied the charge which was existing as mentioned by the Regional Director. The concern of the Regional Director is accordingly addressed. Further, it has been stated in the Affidavit that the said charge was created for the non-fund based L/C facility provided by YES Bank, to the Transferee Company i.e. Jindal Dyechem Industries Private Limited and which was never availed by the Demerged Company, therefore, YES Bank has not been shown as a secured creditor. Further, the balance sheet of the Demerged Company and the Transferor Company also do not CO.PET. 203/2014 6 show any Secured Creditors as the said charge was against non-fund based facility and that the Demerged Company has already satisfied the said charge and has filed the requisite documents and forms with the Ministry of Corporate Affairs.

12. In view of the aforesaid clarifications given by the Petitioner Companies, the concern of the Regional Director has been duly addressed.

13. The Regional Director submits that despite notice, the Income Tax Authorities have not raised any objection with regard to the Scheme.

14. Learned Counsel for the Petitioner Companies submits that no objection has been received to the Scheme of Arrangement from any other party confirming that neither the Petitioner Companies nor their Counsel has received any objection pursuant to Citations published in the newspapers.

15. In view of the approval accorded by the Shareholders and Creditors of the Petitioner Companies; representation/reports filed by the Regional Director, Northern Region 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 CO.PET. 203/2014 7 granted to the Scheme of Arrangement under sections 391 and 394 of the Companies Act, 1956. The Petitioner Companies will comply with the statutory requirements in accordance with law.