Full Text
HIGH COURT OF DELHI
COMPANY PETITION NO. 941/2015
The Companies Act, 1956 & the Companies Act, 2013 (to the extent applicable):
And Petition under Sections 391 to 394 of the
Companies Act, 1956 Scheme of Arrangement between:
Elite Townships Private Limited Petitioner/Demerged Company
Proud Buildwell Private Limited Petitioner/Resulting Company No. 1
Wisdom Infrahome Private Limited Petitioner/Resulting Company No. 2
Through Ms. Isha Jha, Advocate for the petitioners
Ms. Aparna Mudiam, Asstt. Registrar of Companies for the Regional Director
SUDERSHAN KUMAR MISRA, J.
JUDGMENT
1. This joint petition has been filed under Sections 391 to 394 of the Companies Act, 1956 by the petitioner companies seeking sanction of the Scheme of Arrangement between Elite Townships Private Limited (hereinafter referred to as the demerged company) and Proud Buildwell Private Limited (hereinafter referred to as the resulting company no. 1) and Wisdom Infrahome Private Limited (hereinafter referred to as the resulting company no. 2). 2016:DHC:6061
2. The registered offices of the demerged and resulting companies are situated at New Delhi, within the jurisdiction of this Court.
3. The demerged company was incorporated under the Companies Act, 1956 on 29th December, 2006 with the Registrar of Companies, NCT of Delhi & Haryana at New Delhi.
4. The resulting company no. 1 was incorporated under the Companies Act, 1956 on 9th October, 2013 with the Registrar of Companies, NCT of Delhi & Haryana at New Delhi.
5. The resulting company no. 2 was incorporated under the Companies Act, 1956 on 8th October, 2013 with the Registrar of Companies, NCT of Delhi & Haryana at New Delhi.
6. The present authorized share capital of the demerged company is Rs.78,00,00,000/- divided into 5,30,00,000 equity shares of Rs.10/- each aggregating to Rs.53,00,00,000/- and 2,50,00,000 1% non-cumulative redeemable preference shares of Rs.10/- each aggregating to Rs.25,00,00,000/-. The issued, subscribed and paid up capital of the company is Rs.75,00,48,620/- divided into 5,07,36,112 equity shares of Rs.10/- each aggregating to Rs.50,73,61,120/- and 2,42,68,750 1% noncumulative redeemable preference shares of Rs.10/- each aggregating to Rs.24,26,87,500/-.
7. The present authorized share capital of the resulting company no.1 is Rs.1,00,000/- divided into 10,000 equity shares of Rs.10/- each. The issued, subscribed and paid up capital of the company is Rs.1,00,000/divided into 10,000 equity shares of Rs.10/- each.
8. The present authorized share capital of the resulting company no.2 is Rs.1,00,000/- divided into 10,000 equity shares of Rs.10/- each. The issued, subscribed and paid up capital of the company is Rs.1,00,000/divided into 10,000 equity shares of Rs.10/- each.
9. Copies of the Memorandum and Articles of Association of the demerged and resulting companies have been filed on record with the joint application, being CA(M) 159/2015, earlier filed by the petitioners. The audited balance sheets, as on 31st March, 2015, of the demerged and resulting companies, along with the report of the auditors, have also been filed.
10. A copy of the Scheme of Arrangement has been placed on record and the salient features of the Scheme have been incorporated and detailed in the petition and the accompanying affidavit. It is submitted by the petitioners that the Scheme, inter alia, provides for transfer of the Vacation Homes and Resorts Project Undertaking of the demerged company into resulting company no. 1 and the transfer of Resorts and Villas Project Undertaking of the demerged company into the resulting company no. 2. It is claimed that the proposed demerger will provide as a measure of corporate restructuring and to provide potential for further growth and diversification to have better synergy and optimization of resources as well as to facilitate fund raising and development of each business in the respective companies. It is further claimed that the proposed demerger will enable a better and more efficient management, control and running of each of the business verticals under a separate corporate umbrella.
11. So far as the share exchange ratio is concerned, the Scheme provides that upon coming into effect of this Scheme, the resulting companies shall issue and allot shares to the shareholders of the demerged company in the following ratio:- “38 equity shares of Rs.10/- each of the resulting company no.1, credited as fully paid up, for every 100 equity shares of Rs.10/- each held in the demerged company.” “32 equity shares of Rs.10/- each of the resulting company no.2, credited as fully paid up, for every 100 equity shares of Rs.10/- each held in the demerged company.”
12. It has been submitted by the petitioners that no proceedings under Sections 235 to 251 of the Companies Act, 1956 and Sections 201 to 227 of the Companies Act, 2013 are pending against the petitioner companies.
13. The Board of Directors of the demerged and resulting companies in their separate meetings held on 8th June, 2015 have unanimously approved the proposed Scheme of Arrangement. Copies of the Resolutions passed at the meetings of the Board of Directors of the demerged and resulting companies have been placed on record.
14. The petitioner companies had earlier filed CA (M) No. 159/2015 seeking directions of this court to dispense with the requirement of convening the meetings of their equity shareholders, preference shareholders, secured and unsecured creditors, which are statutorily required for sanction of the Scheme of Arrangement. Vide order dated 6th November, 2015, this court allowed the application and dispensed with the requirement of convening and holding the meetings of the equity shareholders, preference shareholders and unsecured creditors of the demerged company and equity shareholders of the resulting companies, there being no secured creditor of the demerged company and no secured or unsecured creditor of the resulting companies, to consider and, if thought fit, approve, with or without modification, the proposed Scheme of Arrangement.
15. The petitioner companies have thereafter filed the present petition seeking sanction of the Scheme of Arrangement. Vide order dated 9th December, 2015, notice in the petition was directed to be issued to the Regional Director, Northern Region. Citations were also directed to be published in 'Business Standard' (English) and ‘Veer Arjun’ (Hindi) editions. Affidavit of service has been filed by the petitioners showing compliance regarding service on the Regional Director, Northern Region, and also regarding publication of citations in the aforesaid newspapers on 19th January, 2016. Copies of the newspaper clippings containing the publications have been filed along with the affidavit of service.
16. In response to the notices issued in the petition, Mr. Narender Kumar Bhola, Regional Director, Northern Region, Ministry of Corporate Affairs has filed his report dated 14th July, 2016 stating that the Regional Director has no objection to the proposed Scheme of Amalgamation subject to the compliance of the submissions made by the petitioner companies as stated in para 9 (i) and also subject to compliance of FDI policy as well as other applicable laws. The Regional Director in para 9 (i) of his report has submitted the following:
(i) During the course of processing report, the following discrepancies have been noticed: (a) Refer to Para 1(XIV) of Part I of the proposed Scheme, ‘Resulting/Transferee Companies’ should be defined as Proud Buildwell Private Limited and Wisdom Infrahome Private Limited in place of demerged undertakings; (b) Refer to para 12.1(a) & (b) of the Scheme, the consideration should be paid by the resulting companies instead of mentioning name of Demerged undertakings;
(c) Refer to para 12.2(a) & (b), Vacation Homes and Resorts
Project and Resorts and Villas Project are one of the divisions of the demerged company and do not have any separate authorized share capital. Further, the Regional Director in para 9 (iii) of his report has submitted that as per the balance sheet as at 31.03.2010 of the demerged company, in Note 11 of the Notes of Account, the demerged company during the said year has acquired various land parcels. The Regional Director has submitted that the demerged company is a wholly owned subsidiary of Skyble Ltd., a Mauritius based company and has to be treated as a foreign company for the purposes of Foreign Direct Investment. It has been further submitted that in the Note to para 21 of the Press Note No. 12 ( 2015 series) of Ministry of Industrial Policy & Promotion, FDI is not permitted in an entity which is engaged or proposes to engage in real estate business, construction of farm houses and trading in transferable development rights.
17. In response to the aforesaid observations, the petitioner companies have filed CA 2485/2016 praying for leave to modify the scheme in the light of observations of the Regional Director. A copy of the amended Scheme has also been placed on record along with the said company application. The said CA 2485/2016 was allowed vide a separate order dated 28th July, 2016 and the modified Scheme was taken on record. So far as the second observation of the Regional Director is concerned, the petitioner companies have submitted that the demerged company is a recipient of 100% FDI under automatic route and is undertaking development and construction of hospitality projects across three verticals namely (a) Luxury Resorts and Villas; (b) Vacation Homes and Resorts; and (c) Resorts and Villas, which is in compliance with the FDI Policy issued by the Ministry of Commerce and Industry, Department of Industrial Policy & Promotion as amended from time to time and does not constitute as carrying on the Real Estate business. In view of the aforesaid, the concerns expressed by the Regional Director stand satisfied.
18. No objection has been received to the Scheme of Arrangement from any other party. The petitioner companies, in the affidavit dated 28th April, 2016 of Ms. Yukti Gupta, counsel of the petitioner companies, have submitted that they have not received any objection pursuant to the citations published in the newspapers on 19th January, 2016.
19. Considering the approval accorded by the shareholders and creditors of the petitioner companies to the proposed Scheme of Arrangement and the affidavit filed by the Regional Director, Northern Region, not raising any objection to the proposed Scheme of Arrangement, there appears to be no impediment to the grant of sanction to the amended Scheme of Arrangement. Consequently, sanction is hereby granted to the amended Scheme of Arrangement annexed with CA 2485/2016 under Sections 391 and 394 of the Companies Act, 1956. The petitioner companies will comply with the statutory requirements in accordance with law. Certified copy of this order be filed with the will not be construed as an order granting exemption from payment of stamp duty as payable in accordance with law. Upon the sanction becoming effective from the appointed date of arrangement, i.e. 1st April, 2014, the Vacation Homes and Resorts Project Undertaking and the Resorts and Villas Project Undertaking of the demerged company shall stand transferred into resulting company no. 1 resulting company no. 2 respectively.
20. The petition is allowed in the above terms. Dasti.
SUDERSHAN KUMAR MISRA, J. August 29, 2016