Standard Electrical Limited v. Havells India Limited

1. This second motion joint petition has been filed under Sections 391(2) & 394 of the Companies Act, 1956 (for short 'Scheme') seeking sanction of the Scheme of Amalgamation (for short 'Scheme') of Standard Electrical Limited ('Transferor Company') with Havells India Limited (Transferee Company). Co. Pet. 198 of 2011 2011:DHC:7686 Cl The registered offices of the Petitioner 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, their authorized, issued, subscribed and paid up capital have been given in the Petition. Copies of the Memorandum and Articles of Association as well as the latest audited Annual Accounts for the year ended 31St March, 2010 and the Provisional Balance Sheet for the year ended 3 1st December, 2010 of the Petitioner Companies have also been enclosed with the Petition. Copies of the Resolutions passed by the Board of Directors of the Petitioner Companies approving the Scheme have also been placed on 14 record. It has been submitted that no proceeding under Sections 235 to 251 of the Act is pending against the Petitioner Companies. So far as the share exchange ratio for amalgamation is concerned, the Scheme provides that as per Clause 8(i) of the Scheme "the paid up equity share capital of the Transferor Company, shall be extinguished, as the same shall stand cancelled against the investment of the Transferee Company in the Transferor Company, being a wholly owned subsidiary. Hence, no valuation of shares is necessary and accordingly, no valuation is required to be done."

8. The Petitioner Companies had earlier filed CA (M) No. 26 of 2011 seeking directions of this Court for dispensationlconvening of meetings. Vide order dated 09th February, 2011, this Court allowed the Application and dispensed with the requirement of convening meetings of. Equity Shareholders and Un-secured Creditors of the Transferor Company and directed the meeting to be convened for Secured Creditors of the Transferor Company. The Court further directed the meetings of the Equity Shareholders and Secured Creditors of Transferee Company for the purpose of approving the Scheme and further directed publication in the newspapers namely, "The Statesman" (English) and "Jansatta" (Hindi) on 03d March, 2011 containing the notice of the Petition. The Court further appointed Mr. D.K. Sharma, Ms. Mamta Mehra, Mr. Pawan Bahi, Advocates, as the Chairpersons for the respective meetings. The affidavits of the Chairpersons showing the publication and dispatch of notices convening the meetings and also the reports of the Chairpersons as to the result of the said meetings have been filed along with the present second motion petition. The Petitioner Companies have thereafter filed the present petition seeking sanction of the Scheme. Vide order dated 26th April, 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 'Hindustan Times' (English Edition) and 'Dainik Bhaskar' (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 23 rd May,

2011. Copies of the newspapers' cuttings, in original, containing the publications have been filed along with the affidavit of service. Pursuant 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 06th July, 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 notices issued in the Petition, Mr. B. K. Bansal, Regional Director, Northern Region, Ministry of Corporate Affairs has filed, 1 his Affidavit dated 22nd June, 2011. Relying on Clause 19 of Part F 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 this Court. No objection has been received to the Scheme from any other party. Mr. Surjit Singh, Director of the Petitioner Companies has filed an affidavit dated 20th July, 2011 confirming that neither the Petitioner Companies nor their counsel has received any objection pursuant to citations published in the newspapers. Even today, during the course of hearing, Mr. Ashish Makhija, learned counsel for Official Liquidator and Mr. K.S. Pradhan, Deputy they have no objection to the present Scheme being sanctioned. 40M

14. In view of the approval accorded by the Shareholders and Creditors of the Petitioner Companies; representation/reports 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 the formal 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, all the properties, rights and powers of the Transferor Company be transferred to and vest in the Transferee Company without any further act or deed. Similarly, 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 any other charges, if payable, in accordance with any law; or permission/compliance with any other requirement which may be specifically required under any law. Ms. Shweta Bharti, learned counsel states that the Petitioner Companies would voluntarily deposit a sum of T 1,00,000/- with the Common Pool fund of the Official Liquidator within three weeks from today. The said statement is accepted. The Petition is allowed in the above terms. Order dasti. Li MANMOHANI SEPTEMBER 279 2011 is