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HIGH COURT OF DELHI
COMPANY PETITION NO. 514/2015
The Companies Act, 1956 & the Companies Act, 2013 (to the extent applicable):
And Petition under Sections 391(2) & 394 of the
Companies Act, 1956 Scheme of Amalgamation of:
Lite Eat Out Foods Private Limited Petitioner/Transferor Company
Through Ms. Meenakshi Singh, Advocate for the petitioners
Ms. Aparna Mudiam, Asstt. Registrar of Companies for the Regional Director
Mr. Raj Pal, Dy. Official Liquidator SUDERSHAN KUMAR MISRA, J.
JUDGMENT
1. This joint petition has been filed under Sections 391(2) & 394 of the Companies Act, 1956 by the petitioner companies seeking sanction of the Scheme of Amalgamation of Lite Eat Out Foods Private Limited (hereinafter referred to as the transferor company) with Lite Bite Foods Private Limited (hereinafter referred to as the transferee company).
2. The registered offices of the transferor and transferee companies are situated at New Delhi, within the jurisdiction of this Court. 2016:DHC:5037
3. The transferor company was incorporated under the Companies Act, 1956 on on 4th December, 2007 with the Registrar of Companies, NCT of Delhi & Haryana at New Delhi.
4. The transferee company was incorporated under the Companies Act, 1956 on 4th February, 2002 with the Registrar of Companies, NCT of Delhi & Haryana at New Delhi.
5. The present authorized share capital of the transferor company is Rs.8,60,00,000/- divided into 86,00,000 equity shares of Rs.10/- each. The issued, subscribed and paid-up share capital of the company is Rs.8,57,41,800/- divided into 85,74,180 equity shares of Rs.10/- each.
6. The present authorized share capital of the transferee company is Rs.1,35,00,00,000/- divided into 13,50,00,000 equity shares of Rs.10/each. The issued, subscribed and paid-up share capital of the company is Rs.1,26,58,94,840/- divided into 12,65,89,484 equity shares of Rs.10/each.
7. Copies of Memorandum and Articles of Association of the transferor and transferee companies have been filed on record with the joint application, being CA(M) 46/2015, earlier filed by the petitioners. The audited balance sheets, as on 31st March, 2014, of the transferor and transferee companies, along with the report of the auditors, have also been filed.
8. A copy of the Scheme of Amalgamation 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 claimed by the petitioners that the proposed Amalgamation would enable pooling of physical, financial and human resources of these companies for their most beneficial utilization in the combined entity. It is further claimed that the proposed Scheme will result in usual economies of a centralized and large company including elimination of duplicate work, reduction in overheads, better and more productive utilization of human and other resources and enhancement of overall business efficiency. It will enable these companies to combine their managerial and operating strength, to build a wider capital and financial base and to promote and secure overall growth of their businesses.
9. So far as the share exchange ratio is concerned, the Scheme provides that since the transferor company is a wholly owned subsidiary of the transferee company, no shares will be issued by the transferee company to the shareholders of the transferor company pursuant to the Scheme of Amalgamation.
10. It has been submitted by the petitioners that no proceedings under Sections 235 to 251 of the Companies Act, 1956 are pending against the petitioner companies.
11. The Board of Directors of the transferor and transferee companies in their separate meetings held on 1st April, 2014 have unanimously approved the proposed Scheme of Amalgamation. Copies of the Resolutions passed at the meetings of the Board of Directors of the transferor and transferee companies have been placed on record.
12. The petitioner companies had earlier filed CA (M) No. 46/2015 seeking directions of this court to dispense with the requirement of convening the meetings of their equity shareholders, secured and unsecured creditors, which are statutorily required for sanction of the Scheme of Amalgamation. Vide order dated 14th May, 2015 this court allowed the application and dispensed with the requirement of convening and holding the meetings of the equity shareholders and creditors of the transferor and transferee companies, there being no secured creditor of the transferor company, to consider and, if thought fit, approve, with or without modification, the proposed Scheme of Amalgamation.
13. The petitioner companies have thereafter filed the present petition seeking sanction of the Scheme of Amalgamation. Vide order dated 25th August, 2015, 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 'Statesman' (English) and ‘Rashtriya Sahara’ (Hindi) editions. An affidavit has been filed by the petitioners showing compliance regarding publication of citations in the aforesaid newspapers on 30th September, 2015. Copies of the newspaper clippings containing the publications have been filed along with the said affidavit.
14. Pursuant to the notices issued, the Official Liquidator sought information from the petitioner companies. Based on the information received, the Official Liquidator has filed a report dated 2nd February, 2016 wherein he has stated that he has not received any complaint against the proposed Scheme of Amalgamation 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 public interest, as per second proviso of Section 394(1) of the Companies Act, 1956.
15. In response to the notices issued in the petition, Mr. A. K. Chaturvedi, Regional Director, Northern Region, Ministry of Corporate Affairs has filed his report dated 2nd February, 2016 stating that the ROC in his report has not made any adverse comments to the Scheme of Amalgamation and that the Regional Director has no objection to the proposed Scheme of Amalgamation. However, in para 8 of his report, the Regional Director prays that the petitioner companies may be directed to comply with the provisions of the Accounting Standard-14 related to the ‘pooling of interest method’ as prescribed under Section 211(3C) of the Companies Act, 1956 and under Section 133 of the Companies Act,
2013. Further, in para 9 of his report, the Regional Director further prays that the petitioner/transferee company may be directed to continue all the employees of the transferor company on existing or similar terms and conditions as to remuneration and other benefits, and without any breach or interruption of service as provided in Clause 7(a) of the Scheme.
16. In response to the aforesaid observation, the petitioner companies in the affidavit dated 25th May, 2015 of Mr. Pankaj Bhardwaj, authorized signatory of the petitioner companies, have undertaken that the transferee company shall comply with the provisions of Accounting Standard-14 for the proposed amalgamation and further that the employees of the transferor company shall continue on the existing or similar terms and conditions as to remuneration and other benefits without any breach or interruption of service as is provided in Clause VII of the Scheme. The undertaking given by the petitioners is accepted and they shall remain bound by the same. In view of the aforesaid, the observations made by the Regional Director stand satisfied.
17. No objection has been received to the Scheme of Amalgamation from any other party. The petitioner companies, in the affidavit dated 8th April, 2016 of Mr. Pankaj Bhardwaj, authorized signatory of the petitioner companies have submitted that they have not received any objection pursuant to the citations published in the newspapers on 30th September,
2015.
18. Considering the approval accorded by the equity shareholders and creditors of the petitioner companies to the proposed Scheme of Amalgamation and the affidavits filed by the Regional Director, Northern Region and the Official Liquidator having not raised any objection to the proposed Scheme of Amalgamation, there appears to be no impediment to the grant of sanction to the Scheme of Amalgamation. Consequently, sanction is hereby granted to the Scheme of Amalgamation 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 Registrar of Companies within 30 days. It is also clarified that this order 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 Amalgamation, i.e. 1st April, 2014, the transferor company shall stand dissolved without undergoing the process of winding up.
19. Learned counsel for the Official Liquidator prays that costs of at least Rs.50,000/- should be paid by the petitioners keeping in view the fact that the matter has involved examination of extensive records and also prioritized hearings. Learned counsel for the petitioner company states that the same is acceptable to her. As already directed vide order dated 03.05.2016, the petitioners shall deposit a sum of Rs.50,000/- by way of costs with the Common Pool Fund of the Official Liquidator.
20. The petition is allowed in the above terms. Dasti.
SUDERSHAN KUMAR MISRA, J. July 19, 2016