Kanchenjunga Services Private Limited v. Kanchenjunga Management Solutions Private Limited

1. This joint application has been filed under Sections 391 and 394 of the Companies Act, 1956 read with Rule 9 of the Companies (Court) Rules, 1959 by the applicant companies seeking directions of this court to dispense with the requirement of convening the meetings of their equity shareholders, secured and unsecured creditors to consider and approve, with or without modification, the proposed Scheme of Arrangement between Kanchenjunga Services Private Limited (hereinafter referred to as the demerged company) and Kanchenjunga 2016:DHC:5036 Management Solutions Private Limited (hereinafter referred to as the resulting company).

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 originally incorporated under the Companies Act, 1956 on 20th October, 1982 with the Registrar of Companies, NCT of Delhi & Haryana at New Delhi under the name and style of Adworld (India) Private Limited. The company changed its name to Kanchenjunga Advertising Private Limited and obtained the fresh certificate of incorporation on 5th March, 1986. The company again changed its name to Kanchenjunga Services Private Limited and obtained the fresh certificate of incorporation on 23rd August, 2014.

4. The resulting company was incorporated under the Companies Act, 2013 on 15th September, 2015 with the Registrar of Companies, NCT of Delhi & Haryana at New Delhi.

5. The present authorized share capital of the demerged company is Rs.1,00,00,000/- divided into 1,00,000 equity shares of Rs.100/- each. The issued, subscribed and paid-up share capital of the company is Rs.42,76,300/- divided into 42,763 equity shares of Rs.100/- each.

6. The present authorized share capital of the resulting company is Rs.1,00,00,000/- divided into 10,00,000 equity shares of Rs.10/- each. The issued, subscribed and paid-up share capital of the company is Rs.1,00,000/- divided into 10,000 equity shares of Rs.10/- each.

7. Copies of the Memorandum and Articles of Association of the demerged and resulting companies have been filed on record. The audited balance sheet, as on 31st March, 2015, of the demerged company, along with the report of the auditors, has also been filed. It has been submitted by the applicants that since the resulting company has been incorporated only recently, therefore, no accounts have been prepared for the resulting company.

8. 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 application and the accompanying affidavits. It has been submitted by the applicants that by way of proposed demerger, the manpower and management service business division of the demerged company, described in Annexure/Schedule-I to the Scheme, shall stand transferred to the resulting company. It is claimed that the proposed demerger will strengthen, consolidate and stabilize the business of these companies and will facilitate further expansion and growth of their businesses. It is further claimed that the proposed arrangement would enhance the shareholders’ value of the applicant companies.

9. So far as the share exchange ratio is concerned, the Scheme provides that, upon coming into effect of this Scheme, the resulting company shall issue and allot equity shares to the shareholders of the demerged company in the following ratio: “Equity shares of Rs.10/- each fully paid up of the resulting company shall be allotted to the equity shareholders of the demerged company on pro rata basis equal to an amount of book value of assets net off of liabilities & reserves transferred by the demerged company.”

10. It has been submitted by the applicants that no proceedings under Sections 235 to 251 of the Companies Act, 1956 are pending against the applicant companies.

11. The Board of Directors of the demerged and resulting companies in their separate meetings held on 20th February, 2016 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.

12. The demerged company has 03 equity shareholders and 01 unsecured creditor. All the equity shareholders and the sole unsecured creditor have given their consents/no objections in writing to the proposed Scheme of Arrangement. Their consents/no objections have been placed on record. They have been examined and found in order. In view thereof, the requirement of convening the meetings of the equity shareholders and unsecured creditor of the demerged company to consider and, if thought fit, approve, with or without modification, the proposed Scheme of Arrangement is dispensed with. There is no secured creditor of the demerged company, as on 20th February, 2016.

13. The resulting company has 03 equity shareholders and 01 unsecured creditor. All the equity shareholders and the sole unsecured creditor have given their consents/no objections in writing to the proposed Scheme of Arrangement. Their consents/no objections have been placed on record. They have been examined and found in order. In view thereof, the requirement of convening the meetings of the equity shareholders and unsecured creditor of the resulting company to consider and, if thought fit, approve, with or without modification, the proposed Scheme of Arrangement is dispensed with. There is no secured creditor of the resulting company, as on 20th February, 2016.

14. The application stands allowed in the aforesaid terms. Dasti SUDERSHAN KUMAR MISRA, J. July 19, 2016