JHS Svendgaard Hygiene Products Limited v. Waves Hygiene Products

1. This second motion petition has been filed under Sections 391 to 394 of the companies Act, 1956, (for short 'Act') seeking sanction of the Scheme of Arrangement (for short 'scheme') of JHS Svendgaard Hygiene Products Limited (Transferor Company No.1) and Waves Hygiene Products (Transferor Company No.2) fcollectively as 'Petitioner Transferor Co. Pet.99 of 201I Page I of[9] 2011:DHC:7617 v (Transferee,Y companies,] with JHS Svendgaard Laboratories Limited Company).

2. The registered offices of both the Petitioner Transferor are situated at New Delhi, within the jurisdiction of this court'

5. Copies of the Petitioner Transferor placed on record. Companies

3. Details with regard to the date of incorporation of the Petitioner Transferor Companies, their authorized, issued, subscribed, paid up and partnerscapitalcontributionhavebeengiveninthePetition. 4,CopiesoftheMemorandumandArticlesofAssociationof Transferor Company No.l and Partnership Deed of Transferor Company No.2 as well as the latest audited Annual Accounts for the year ended 31't March, 2OlO of both the Petitioner Transferor Companies have also been enclosed with the Petition' Resolution passed by the Board of Directors of the Companies approving the Scheme have also been Co. Pet.99 of 2011

6. Mr. P. Nagesh submits that no proceedings under Sections 235 Io 251 of the Act are pending against the Petitioner Transferor Companies'

7. Qo far as the share exchange ratio for amalgamation is concerned' the Scheme provides that, upon the Scheme finally coming into effect' the Transferee company shail issue shares to the sharehorders of the petitioner Transferor Companies in the following manner: >> The Transferee company shall issue and allot 158 (one Hundred Fifqy Eight) tutly paid-up Equity shares of Rs. 10/- each (Rupees Ten)forevery100(oneHundred)Eq,,rtysharesofRs.lo/- (Rupees Ten) held in Transferor Company No'1 }TheTransfereeCompanyshallissueandallotlT,92,T46 (Seventeen Lacs Ninety Two Thousand Seven Hundred Forty Six) Equrty shares of Rs' 10/- (Rupees Ten) to partners of the Transferor company No.2 in their capital contribution ratio' g. The Petitioner Transferor companies had earlier filed cA (M) No' 202 of2010 seeking directions of this court for dispensation of meetings' vide order dated 17ft January,2011, this court allowed the Application and dispensed with the requirement of convening meetings of Co. Pet.99 of 201 I b / shareholders/Partners, secured and lJn-secured creditors of the Petitoner Transferor ComPanies' g. The Petitioner Transferor companies thereafter filed the present Petition seeking sanction of the scheme. vide order dated 28th February' z[I:,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 'The Statesman' (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 official Liquidator andalsoregardingpublicationofcitationsintheaforesaidnewspaperson 13th July, 20lL Copies of the newspapers' cuttings' in original' containing the publication have been filed along with the affidavit of service'

10. Pursuant to the notice issued, Official Liquidator sought information from the Petitioner Transferor Companies' Based on the information received, Official Liquidator has filed his report dated 26th August' 2011 wherein he has stated that he has not received any complaint against the proposedSchemefromanypersonlpuwinterestedintheSchemeinany Co. Pet.99 of 20Il Page 4 of[8] manner and that the affairs of the Petitioner Transferor Companies do not appear to have been conducted in a manner prejudicial to the interest of their members, creditors or to public interest'

11. In response to the notices issued in the Petition, Regional Director, Northem Region, Ministry of corporate Affairs has filed his Affidavit/Report dated Og'h Augrrst, 2011. Relying on clause 3.15 of Part-II of the Scheme, Regional Director stated that, upon sanctioning of the scheme by this court, all employees of the Petitioner Transferor companies shall become the employees of the Transferee company without any break or intemrption in their services. Regional Director further stated that the shares of Transferee Company are listed at Bombay Stock Exchange and National Stock Exchanges. The Bombay Stock Exchange vide letter dated 29,h November, 20IO has given its 'No Objection' to the proposed Scheme stating that the Company has undertaken to lock in 25% of new equlty shares pursuant to the Scheme for a period of three years from the date of listing of new shares at Bombay Stock Exchange'

12. In reply to the aforesaid observation, an affidavit dated 20ft August, 20IL has been fi|ed on behalf of Petitioner Transferor Companies by Mr' Co. Pet.99 of 2011 \7 Niklil Nanda, Director of Transferor No.l and Partner with Transferor No'2 company. It is submitted that the Petitioner companies undertake to comply with the conditions imposed by the stock Exchanges'

13. No objection has been received to the Scheme from any other parfy' \4r. Nikhil Nanda, has also filed an affrdavit dated 20th August' 2011' confirming that neither the Petitioner Transferor companies nor their counsel has received any objection pursuant to citations published in the newspapers.

14. Even today, during the course of hearing, IMr' K'S' Pradhan' Deputy Raisuddin, Deputy official Liquidator appearing for official Liquidator state that they have no objection to the present Scheme being sanctioned'

15. In view of the approval accorded by the Shareholders and Creditors of the petitioner Transferor companies; representation/reports frled by the Regional Director, Northern Region, Ministry of corporate Affairs and the Official Liquidator attached to this Court, there appears to be no impediment Co. Pet.99 of 201 I rl U to the grant of sanction to the Scheme. Consequently, sanction is hereby granted to the Scheme 391 and 394 of the Act. The Registrar of Firms, NCT of Delhi shall transfer all the documents relating to Transferor Company No.2 to the Registrar of companies, NCT of Delhi and Haryana, who shall consolidate the files of Transfer Company No.2 accordingly. The Petitioner Transferor Companies will comply with the statutory requirements in accordance with law. Certified copy of the order be filed with the Registrar of Companies within thirty days from the date of receipt of the same' In terms of the provisions of Sections 391 and 394 ofthe Act, and interms of the Scheme, the whole or part of the undertaking, the properly, rights and powers of the Petitioner Transferor Companies 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 Petitioner Transferor Companies be transferred to the Transferee Company without any further act or deed. 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 permission/compliance with any other requirement which may be specifically required under any Iaw. Co. Pet.99 of 2011 Page 7 ofB V

16. Further, since the jurisdiction of the Transferee Company is before the High court of Himachal Pradesh at Shimla and according \4r. P. Nagesh, the Transferee Company has already moved a petition over there' this order is subject to the sanction of the Scheme by the High Court of Himachal Pradesh at Shimla.

17. Mr. P. Nagesh, learned counsel for the Petitioner Companies states that the petitioner Transferor Companies would voluntarily deposit a sum of Rs.1,00,000/- with the common Pool fund of the official Liquidator within three weeks from today. The said statement is accepted.

18. The Petition is allowed in the above terms' Order dasti. t ^-( MANMOITATtil AUGUST 30, 2011 js € Fioth c* >oh/ rr /,Leazr fnele' s/ f u € €r'*sh @ z-oa/u fW bpf. Co. Pet.99 of 201 I Page I of 8