Crystal Phosphates Ltd. v. Crystal Crop Protection Private Limited

1. This joint petition has been filed under Sections 391 to 394 of the Companies Act, 1956 (for short 'the Act'). seeking sanction of the Scheme of Arrangement of Crystal Phosphates Limited ('Transferor Company' ) with Crystal Crop Protection Private Limited ('Transferee Company'). 2011:DHC:7116 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, 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 audited Annual Accounts for the year ended 31st March, 2010 of the Transferor and Transferee Companies have also been enclosed with the petition. Copies of Resolutions passed by the Board of Directors of the petitioner Companies approving the Scheme of Arrangement have also been placed on record. It has been submitted that no proceedings under Sections 235 to 251 of the Act are pending against the petitioner companies. 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: "7 (Seven) Equity shares of Rs.100/- (Rupees Hundred) each in Transferee Company for every 1000 (One Thousand) Equity shares of Rs.10/- (Rupees Ten) each held by them in Transferor Company." The petitioner companies had earlier filed C.A. (M) NO. 75 of 2011 seeking directions of this Court for dispensation of meetings. Vide order dated 6th April 2011, this Court allowed the application and dispensed with the requirement of convening meetings of share holders, Secured creditors of the Transferor and Transferee companies and dispensed with requirement of convening meetings of Unsecured creditors of Transferor Company. The Transferee Company does not have any Unsecured Creditors. The Transferor and Transferee companies have thereafter filed the present petition seeking sanction of the Scheme of Arrangement. Vide order dated 02.05.2011, 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, 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 News papers on 15th July, 2011. Copies of the newspapers' cuttings, in original, containing the publications have been filed with the affidavit of service.

10. 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 27.07.2011 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. No objection has been received to the Scheme of Arrangement from any other party. Mr. Vivek Kumar, Authorized Signatory of Transferor and Transferee companies has filed an affidavit dated 25th July 2011 confirming that neither the petitioner companies nor their Counsel has received any objection pursuant to the citations published in the Newspapers. In response to the notices issued in the Petition, Regional Director, Northern Region, Ministry of Corporate Affairs has filed his affidavit / report dated 23d June 2011. Relying on clause 2.17 of Part-Il of the Scheme of Arrangement, he has stated that, upon sanction of the Scheme of Arrangement all the employees of the Transferor company shall become the employees of Transferee Company without any break or interruption in their services upon sanctioning of the Scheme of arrangement by the Court. In Para No.4.[1] of the affidavit dated 23id June 2011,Mr. B.K. Bansal has observed that the face value of a Company can be changed /altered only after following the procedure prescribed under the relevant provisions of the Act. In reply to the following observation, a rejoinder affidavit dated 25th July 2011 has been filed on behalf of the Transferee Company by Mr. Vivek Kumar, Authorized signatory of Transferor and Transferee Companies. It is submitted that approval of Scheme in terms of Sections 391-394 of the Act is a 'single window Clearance' and no further act on the part of company is required to be done after the approval of the scheme by the members of the Transferee Company. The Transferee Company further undertakes that pursuant to the sanction of the scheme, it will within a period of 30 days file requisite form with showing the Sub Division of shares from Rs. 100/- to Rs. 10/- each. In the opinion of this Court, as the Transferee Company has undertaken to file the relevant form with the the shares has been approved by all the shareholders, no further requirement is to be complied with. Even today, during the course of hearing, no further objection has been raised to the Scheme either by the Official Liquidator or by the Regional Director. In view of the approval accorded by the Shareholders and Creditors of the petitioner Companies, representations/ reports filed by the Regional Director, Northern Region and the official liquidator, attached with this court to the proposed scheme of Amalgamation, there appears to be no impediment to the grant of sanction to the Scheme of Arrangement. Consequently sanction is hereby granted to the Scheme of Arrangement under Section 391 and 394 of the Act. The petitioner companies will comply with the statutory requirements in accordance with law. Certified copy of the order be filed with the Registrar of Companies within S 30 days from 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 undertaking, the property, rights and powers of the Transferor company 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. 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 law. Learned counsel for the petitioners states that the petitioner Companies would voluntarily deposit a sum of Rs. 50,000/- with the Common Pool Fund of the Official Liquidator within three weeks from today. The statement is accepted. The petition is allowed in the above terms. Order Dasti iLl MANMOThTNJ AUGUST 02, 2011 NG