ARKAY INDUSTRIES v. ARKAY FABSTEEL SYSTEMS PRIVATE LIMITED

1. This second motion joint Petition has been filed under Sections 391 & 394 of the Companies Act, 1956 (for short 'Act') seeking sanction of the Scheme of Amalgamation (for short 'Scheme') of ARKAY INDUSTRIES (hereinafter referred to as 'Transferor Company') with ARKAY FABSTEEL Co. Pet. 292 of2011 2011:DHC:9135 SYSTEMS PRIVATE LIMITED (hereinafter referred to as 'Transferee Company'). The registered offices of the Transferor and Transferee Companies are situated at New Delhi, within the jurisdiction of this Court. Details with regard to the date of incorporation of Transferor and Transferee Companies, the fixed capital of the Transferor Company and authorized, issued, subscribed and paid up capital of the Transferee Company have been given in the Petition. Copies of the reconstituted Partnership Deed and Memorandum and Articles of Association as well as the latest audited Annual Accounts for the financial year ended 3 1St March, 2010 of the Transferor and Transferee Companies have also been enclosed with the Petition. If

5. Copies of the Resolutions passed by the Partners and Board of Directors of the Transferor and Transferee Companies approving the Scheme have also been placed on record.

6. It has been submitted that no proceeding under Sections 235 to 251 of the Act is pending against the Petitioner Companies.

7. So far as the share exchange ratio for amalgamation is concerned, the Scheme provides that, upon the Scheme finally coming into effect, the Transferee Company shall issue shares in the following manner: allot to all the Partners of Transferor Company 66,83,500 Equity Share of Rs. 10/- each, which amounted to Rs. 6,68,35,000/- (Rupees Six crores sixty eight lacs thirty five thousand only). every Partner of the Transferor Company holding (2) Two shares of Rs. 10/- each shall be allotted (1) One Equity Share of Rs. 10/- each by the Transferee Company.

8. The Petitioner Companies had earlier filed CA (M) No. 78 of 2011 seeking directions of this Court for dispensation of meetings of the Partners of the Transferor Company and Equity Shareholders of the Transferee Company. Vide orders datedl9th April, 2011 and 061h May, 2011, this Court allowed the Application and dispensed with the requirement of convening meetings of Partners of the Transferor Company and Equity Shareholders of I' Co. Pet. 292 of2O]1 the Transferee Company and directed to convene the meetings of the Secured and Un-secured Creditors of the Transferor and •Transferee Companies. The Chairpersons of the ordered meetings of the Secured and Unsecured Creditors of the Transferor and Transferee Companies have filed their reports stating that the meetings were duly held on 28th May, 2011, as directed, and that the Scheme has been approved by the Secured and Unsecured Creditors of the Transferor and Transferee Companies who were present and voted in the said meetings. The Petitioner Companies have thereafter filed the present Petition seeking sanction of the Scheme. Vide order dated 15th July, 2011, 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 edition) and 'Jansatta' (Hindi, 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 04th August, 201 1.. Copies of the newspapers' cuttings, in original, containing the publications have been filed along with the Affidavit of Service. Pursuant to the notice issued, the Official Liquidator sought information from the Petitioner Companies. Based on the information received, the Official Liquidator has filed his report dated 05 " October, 2011, 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 Transferor Company do not appear to have been conducted in a manner prejudicial to the interest of its members, creditors or to public interest. In response to the notice issued, Mr. B. K. Bansal, Regional Director, Northern Region, Ministry of Corporate Affairs has filed his Affidavit dated 30th September, 2011. Relying on Clause 15.[1] of Part- II of the Scheme, he has stated that all the employees of the Transferor Company shall become the employees of the Transferee Company without any break or interruption in their services upon sanctioning of the Scheme by the Court. Co.Pet. 292 of2011 Page5of[9] so The Regional Director points out that Para 11.[2] of Part—IT of the Scheme regarding issue and allotment of shares by the Transferee Company to the Partners of the Transferor Company states, "Shares issued to then partners/ members of the Transferor Company shall be deemed to have been held by such partners from Appointed Date". He, therefore, submitted that how it is possible that shares allotted after coming into effect of the Scheme will be deemed to be held from the Appointed Date i.e. OlstMay, 2010. In response to the above objection, learned counsel for the Petitioners, on instructions, submits that the Petitioner Companies are willing to modify Clause 11.[2] of the Scheme to the extent that shares allotted to the partners/members of the Transferor Company in pursuance of the said Clause of the Scheme shall be deemed to be held from the date of allotment instead of the Appointed Date. The Directors of the Transferor and Transferee Companies have also filed affidavits accepting the aforesaid modification. In view thereof, Mr. Atma Sah, Assistant Registrar of Companies appearing for Regional Director, Northern Region states that he has no objection to the sanction of the present Scheme. I No objection has been received to the Scheme from any other party. Mr. Verinder Kumar Choudhari, Partner of the Transferor Company and Mr. Rajeev Choudhari, Director of the Transferee Company have filed affidavits dated 10th October, 2011, confirming that neither the Petitioner Companies nor their Counsel has received any objection pursuant to citations published in the newspapers. Mr. Sandeep Bhuraria, learned counsel for Petitioner Companies also filed an affidavit confirming that no objection has been received by him pursuant to the citations published in the newspapers. Even today, during the course of hearing, Mr. Kanwal Chaudhary, learned counsel for Official Liquidator states that he has no objection to the present Scheme being sanctioned. In view of the approval accorded by the Shareholders and Creditors of the Petitioner Companies; affidavit/ report filed by the Regional Director, Northern Region and the Official Liquidator, attached with this Court to the proposed Scheme, there appears to be no impediment to the grant of sanction to the Scheme. Consequently, sanction is hereby granted to the Scheme under Sections 391 and 394 of the Act. 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 from the date of receipt of the same. In terms of the provisions of Sections 391 and 394 of the Act, and in terms of the Scheme, the whole or part of the undertakings, the properties, rights and powers of the Transferor Company 10, be transferred to and vest in the Transferee Company without any further act or deed. Similarly, in terms of the Scheme, all the liabilities and duties of the Transferor Company be transferred to the Transferee Company without any further act or deed. Upon the Scheme coming into effect, the Transferor Company shall stand dissolved without winding up. It is, however, clarified that this order will not be construed as an order granting exemption from payment of stamp duty or taxes or any other charges, if payable in accordance with any law; or permissionl compliance with any other requirement which may be specifically required under any law.

18. Mr. Sandeep Bhuraria, learned counsel states that the Petitioner Companies would voluntarily deposit a sum of T 50,000/- with the Commàn Pool fund of the Official Liquidator within three weeks from today. The said statement is accepted. Co. Per 292 of2011

19. The Petition is allowed in the above terms Order dasti,L-eL MANMOWANJ OCTOBER 14, 2011 is I Co. Per 292 of2011 Page 9of[9]