TMI Blog2005 (3) TMI 475X X X X Extracts X X X X X X X X Extracts X X X X ..... "), Kanpur Detergents and Chemicals Private Limited, having its Registered Office at 117/H-2/202, Pandu Nagar, Kanpur-208005, Uttar Pradesh (hereinafter also referred to as "the Transferor Company No. 4" or "the Petitioner-Transferor Company No. 4"), and Shri Mahadeo Soap Industries Private Limited, having its Registered Office at 117/H-2/202, Pandu Nagar, Kanpur-208005, Uttar Pradesh (hereinafter also referred to as "the Transferee Company" or "the Petitioner-Transferee Company"). The said Transferor Company No.1, the Transferor Company No. 2, the Transferor Company No. 3, and the Transferor Company No. 4 have hereinafter been collectively also referred to as "the Transferor Companies" or the "Petitioners-Transferor Companies". The Transferor Company No. 1, the Transferor Company No. 2, the Transferor Company No. 3, the Transferor Company No. 4 and the Transferee Company have hereinafter been collectively also referred to as "the Petitioners-Companies". 2. It appears that a Scheme of Amalgamation is proposed for the amalgamation of the Transferor Company No. 1, the Transferor Company No. 2, the Transferor Company No. 3 and the Transferor Company No. 4 with the Transferee Compa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r-Transferor Company No.1 is Rs. 1,00,00,000 (Rupees One Crore) consisting of 1,00,000 Equity Shares of Rs. 100 each; and that the Issued, Subscribed and Paid-up Capital of the Petitioner-Transferor Company No. 1 is 80,250 Equity Shares of Rs. 100 each Fully Paid Up, aggregating to Rs. 80,25,000. 5.4 It is, inter alia , further stated in the Company Petition that the Petitioner-Transferor Company No.1 prepares its accounts on financial year basis under the Companies Act, 1956; and that the Petitioner-Transferor Company No.1 has got its accounts for the financial year ended 31-3-2003 prepared and audited in the normal course. 5.5 Copy of the Latest Audited Annual Accounts of the Petitioner-Transferor Company No.1 for the year ended 31-3-2003 has been filed as Annexure-C to the Company Petition, and appears at page 49 of the Paper Book of the Company Petition. 5.6 It is, inter alia , stated in paragraph 7 of the Company Petition that the Petitioner-Transferor Company No.1 has maintained proper books of account as required by law. 5.7 Summary of the financial position of the Petitioner-Transferor Company No.1 as on 31-3-2003 has also been given in paragraph 7 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6.6 It is, inter alia , stated in paragraph 14 of the Company Petition that the Petitioner-Transferor Company No.2 has maintained proper books of account, as required by law. 6.7 Summary of the financial position of the Petitioner-Transferor Company No.2 as on 31-3-2003 has also been given in paragraph 14 of the Company Petition. 6.8 It is, inter alia , further stated in paragraph 14 of the Company Petition that the Petitioner-Transferor Company No.2 has neither issued nor agreed to issue any debentures. 6.9 It is, inter alia, stated in paragraph 15 of the Company Petition that subsequent to the date of the aforementioned accounts, there has been no substantial change in the financial position of the Petitioner-Transferor Company No.2 excepting those arising or resulting from the usual course of business for which the accounts are under preparation. 7. As regards the Petitioner-Transferor Company No.3 (Singh Detergents Private Limited), it is, inter alia stated in the Company Petition that the Petitioner-Transferor Company No.3 was incorporated on 21-6-1989; and that the Registered Office of the Petitioner-Transferor Company No.3 is situated at 117/H-2/202 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8. As regards the Petitioner-Transferor Company No.4 (Kanpur Detergents and Chemicals Private Limited), it is, inter alia , stated in the Company Petition that the Petitioner-Transferor Company No.4 was incorporated on 24-10-1986; and that the Registered Office of the Petitioner-Transferor Company No.4 is situated at 117/H-2/202, Pandu Nagar, Kanpur-208005, Uttar Pradesh, within the jurisdiction of this Court. 8.1 The main objects of the Petitioner-Transferor Company No.4, as set out in the Memorandum and Articles of Association of the Petitioner-Transferor Company No.4, are reproduced in paragraph 25 of the Company Petition. 8.2 Copy of the Memorandum and Articles of Association of the Petitioner-Transferor Company No.4 has been filed as Annexure-H to the Company Petition, and appears at page 190 of the Paper Book of the Company Petition. 8.3 It is, inter alia , further stated in the Company Petition that the Authorised Share Capital of the Petitioner-Transferor Company No. 4 is Rs. 75,00,000 (Rupees Seventy Five Lakh) consisting of 75,000 Equity shares of Rs.100 each; and that the Issued, Subscribed and Paid-up Capital of the Petitioner-Transferor Company No.4 is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... raph 33 of the Company Petition that the Authorised Share Capital of the Petitioner-Transferee Company is Rs. 25,00,000 (Rupees Twenty Five Lakh Only) consisting of 25,000 Equity Shares of Rs.100 each; and that the Issued, Subscribed and Paid-up Capital of the Petitioner-Transferee Company is 24,840 Equity Shares of Rs.100 each Fully Paid Up, aggregating to Rs.24,84,000. 9.4 It is, inter alia , stated in paragraph 34 of the Company Petition that the Petitioner-Transferee Company prepares its accounts on financial year basis under the Companies Act, 1956; and that the Petitioner-Transferee Company has got its accounts for the financial year ended 31-3-2003 prepared and audited in the normal course. 9.5 Copy of the Latest Audited Annual Accounts of the Petitioner-Transferee Company for the year ended 31-3-2003 has been filed as Annexure-K to the Company Petition, and appears at page 264 of the Paper Book of the Company Petition. 9.6 It is, inter alia , stated in paragraph 35 of the Company Petition that the Petitioner-Transferee Company has maintained proper books of account, as required by law. 9.7 Summary of the financial position of the Petitioner-Transferee Comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... N to the Company Petition and appear at pages 303, 306, 309, 312 and 315 of the Paper Book of the Company Petition. 16. It is, inter alia, stated in paragraph 42 of the Company Petition that the Directors of both the Petitioners-Transferor Companies and the Petitioner-Transferee Company have no material interest in the proposed Scheme of Amalgamation, except as shareholders of the Petitioner-Transferee Company. 17. It is, inter alia , stated in paragraph 39 of the Company Petition that the Petitioners-Transferor Companies are wholly owned subsidiary of the Petitioner-Transferee Company. 18. It is pertinent to mention that making the averments narrated herein-before, the Transferor Companies No. 1,2,3 and 4 and the Transferee Company jointly filed a Company Application being Company Application No.4 of 2004 before this Court under sections 391(1) and 393 of the Companies Act, 1956. 19. On the said Company Application No.4 of 2004, the Court passed its order dated 30-1-2004, inter alia , despensing with the requirement of calling the meeting of the Equity Shareholders and the meeting of the Secured Creditors of the Transferor Company No.1, the Transferor Company N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Transferor Company No.1 and the Transferor Company No. 2, sworn on 27-2-2004, as well as copies of the newspapers, namely, The Pioneer (English), Lucknow and Amar Ujala (Hindi), Kanpur, copy of the notice issued to each Unsecured Creditor of the Transferor Company No.1, copy of the notice issued to each Unsecured Creditor of the Transferor Company No.2, Photostat copies of Certificates of Posting regarding sending of the notices to the Unsecured Creditors of the Transferor Company No.1, and Photostat copies of Certificates of Posting regarding sending of the notices to the Unsecured Creditors of the Transferor Company No.2 were filed and collectively numbered as Annexure-1 to the said Affidavit-Of-Service of Shri S.K. Garg. 22. It further appears that pursuant to the said order dated 30-1-2004, Shri C.K. Parekh, who had been appointed as Chairman for the aforesaid meetings in respect of the Transferor Company No.3 and the Transferor Company No.4 by the said order dated 30-1-2004, filed an Affidavit-Of-Service, sworn on 3-3-2004, under rule 76 of the Companies (Court) Rules, 1959, inter alia , mentioning compliance of the directions regarding giving of notices and ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 04. 27. Pursuant thereto, Shri S.K. Garg, as Chairman of the said meeting of the Unsecured Creditors of the Transferor Company No.1, submitted his Report on 29-3-2004. 28. Alongwith the said Report, Minutes of the said meeting of the Unsecured Creditors of the Transferor Company No.1, Ballot Papers and Attendance Sheet of the Unsecured Creditors of the Transferor Company No.1 were also filed. The said Report was supported by an affidavit of Shri S.K. Garg, sworn on 29-3-2004. 29. It further appears that pursuant to the said order dated 30-1-2004, the meeting of the Unsecured Creditors of the Transferor Company No.2 was held on 20-3-2004 at the time and place mentioned in the said order dated 30-1-2004. 30. Pursuant thereto, Shri S.K. Garg, as Chairman of the said meeting of the Unsecured Creditors of the Transferor Company No.2, submitted his Report on 29-3-2004. 31. Alongwith the said Reports, Minutes of the said meeting of the Unsecured Creditors of the Transferor Company No.2, Ballot Papers and Attendance Sheet of the Unsecured Creditors of the Transferor Company No.2 were also filed. The said Report was supported by an affidavit of Shri S.K. Garg, sworn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reditors of the Transferor Company No. 1 : "Resolved that pursuant to the provisions of section 391 to 394 and other applicable provisions of the Companies Act, 1956, the Scheme of Amalgamation of Rohit Soaps Detergents Private Limited, Rahul Detergents Private Limited, Singh Detergents Private Limited and Kanpur Detergents and Chemicals Private Limited with Shri Mahadeo Soap Industries Private Limited, as circulated along with the notice of the meeting, a copy of which has also been placed before the meeting and for the purpose of identification signed by the Chairman thereof, be and is hereby approved and agreed to." It is, inter alia, stated in the said Report of Shri S.K. Garg that the meeting of the Unsecured Creditors of the Transferor Company No. 1 was held on 20-3-2004 at 10.00 A.M. at 117/H-2/202, Pandu Nagar, Kanpur 208005; and that the meeting was attended by one Unsecured Creditor through Authorised Representative and 12 Unsecured Creditors through proxies, ( i.e., total 13 Unsecured Creditors); and that the said Unsecured Creditors, who attended the said meeting, represent value of Rs. 2,23,71,906.94 ( i.e., 57.36 per cent of the Total Debt as on 24-1-2004); ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the provisions of section 391 to 394 and other applicable provisions of the Companies Act, 1956, the Scheme of Amalgamation of Rohit Soaps Detergents Private Limited, Rahul Detergents Private Limited, Singh Detergents Private Limited and Kanpur Detergents and Chemicals Private Limited with Shri Mahadeo Soap Industries Private Limited, as circulated along with the notice of the meeting, a copy of which has also been placed before the meeting and for the purpose of identification signed by the Chairman thereof, be and is hereby approved and agreed to." It is, inter alia, stated in the said Report of Shri C.K. Parekh that the meeting of the Unsecured Creditors of the Transferor Company No.3 was held on 20-3-2004 at 1.30 P.M. at 117/H-2/202, Pandu Nagar, Kanpur 208005; and that the meeting was attended by one Unsecured Creditor through Authorised Representative and 3 Unsecured Creditors through proxies, ( i.e., total 4 Unsecured Creditors); and that the said Unsecured Creditors, who attended the said meeting, represent value of Rs. 6,24,86,019.20 ( i.e., 97.23 per cent of the Total Debt as on 24-1-2004); and that the Resolution quoted above, was unanimously passed in the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... : "Resolved that pursuant to the provisions of section 391 to 394 and other applicable provisions of the Companies Act, 1956, the Scheme of Amalgamation of Rohit Soaps Detergents Private Limited, Rahul Detergents Private Limited, Singh Detergents Private Limited and Kanpur Detergents and Chemicals Private Limited with Shri Mahadeo Soap Industries Private Limited, as circulated along with the notice of the meeting, a copy of which has also been placed before the meeting and for the purpose of identification signed by the Chairman thereof, be and is hereby approved and agreed to." It is, inter alia, stated in the said Report of Shri Vikram Nath that the meeting of the Unsecured Creditors of the Transferee Company was held on 20-3-2004 at 4.00 P.M. at 117/H-2/202, Pandu Nagar, Kanpur-208005; and that the meeting was attended by one Unsecured Creditor through Authorised Representative and 6 Unsecured Creditors through proxies, ( i.e., total 7 Unsecured Creditors); and that the said Unsecured Creditors, who attended the said meeting, represent value of Rs.16,20,13,929.13 ( i.e., 97.88 per cent of the Total Debt as on 24-1-2004); and that the Resolution quoted above, was unani ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e receipts given by the Office of the Official Liquidator as well as the Regional Director, Department of Company Affairs, Kanpur have been filed and collectively numbered as Annexure-I to the said Affidavit-Of-Service. 49. It is, inter alia, further stated in the said Affidavit-Of-Service that in compliance of the said order dated 15-4-2004 passed by this Court, the Petitioners-Companies got the notices published on 26-4-2004 in Pioneer (English) published from Lucknow and on 26-4-2004 in Amar Ujala (Hindi) published from Kanpur. Copies of the said newspapers have been filed and collectively numbered as Annexure-II to the said Affidavit-Of-Service. 50. Pursuant to the service of notice of the hearing of the Company Petition on the Official Liquidator, the Official Liquidator submitted his report being Report No. 123 of 2004 (Paper No. A-5 on the record of the present Company Petition). Further, pursuant to the service of notice of the hearing of the Company Petition on the Regional Director, Northern Region, Ministry of Company Affairs, Kanpur, the said Regional Director submitted his representation/affidavit, sworn on 2-7-2004, (Paper No. A-6 on the record of the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Transferor Companies being subsidiaries of the Holding Company ( i.e., Transferee Company). It is, inter alia, further stated in the said Report of the Official Liquidator (Paper No. A-5) that in view of the position explained by the Transferor Companies and on the scrutiny of the Books of Account and Papers, the Official Liquidator is of the opinion/view that the affairs of the Transferor Companies have not been conducted in a manner prejudicial to the interest of its members or to the public interest; and that the Company Petition under sections 391 and 394 of the Companies Act, 1956 may be decided by this Court on merits. 53. Coming now to the representation/affidavit of the Regional Director, Northern Region, Ministry of Company Affairs, Kanpur (Paper No. A-6), it is, inter alia, stated in the said representation/affidavit that as per clause 5.16( a ) of the proposed Scheme of Amalgamation, all the employees of the Transferor Companies shall become the employees of the Transferee Company without break or interruption in their services upon sanctioning of the proposed Scheme of Amalgamation by this Court. 54. The said representation/affidavit of the said Regional ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs to the affidavit of Shraddha Tiwari, sworn on 2-7-2004 (Paper No. A-8), as well as the Supplementary Affidavit filed on behalf of the Petitioners-Companies. 58. It is, inter alia, stated in the said affidavit of Shraddha Tiwari (Paper No. A-8) that the Board of Directors of the Transferor Companies and the Transferee Company in their respective Board Meetings held on 22-4-2004 have passed the Resolution(s) extending the period for sanctioning the proposed Scheme of Amalgamation uptil 31-3-2005 or within such further period or periods as may be agreed upon by and between the Transferor Companies and the Transferee Company. 59. Copies of the said Resolutions passed on 22-4-2004 by the Board of Directors of the Transferor Company No. 1, the Transferor Company No. 2, the Transferor Company No. 3, and the Transferor Company No. 4 have been filed as part of Annexure-1 to the said affidavit, and appear at pages 5,7,9 and 11 of the Paper Book of the said affidavit. Copy of the said Resolution passed by the Board of Directors of the Transferee Company on 22-4-2004 has been filed as part of Annexure-1 to the said affidavit, and appears at page 13 of the Paper Book of the said af ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the proposed Scheme of Amalgamation were fully valid. 65. I have considered the submissions made by Shri Satwinder Singh, learned counsel for the Petitioners-Companies on the said question, and I am inclined to accept the same. 66. Reading paragraph 6.5( a ) and paragraph 6.2( a ) of the proposed Scheme of Amalgamation together, it is evident that the Board of Directors of the Transferor Companies and the Board of Directors of the Transferee Company may agree to the extension of the period mentioned in paragraph 6.5( a ) of the proposed Scheme of Amalgamation. Paragraph 6.2( a ) of the proposed Scheme of Amalgamation, inter alia, provides that the Board of Directors of the Transferor Companies and the Board of Directors of the Transferee Company either by themselves or by any Committee constituted by the Board of Directors in this behalf "may make or assent from time to time on behalf of all persons concerned to any extension, modification or amendments of this Scheme". It is evident from the said paragraph 6.2( a ) of the proposed Scheme of Amalgamation that the respective Board of Directors of the Transferor Companies and the Transferee Company have been given powe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 1,2,3 and 4. 72. Further, the meeting of the Unsecured Creditors of the Transferee Company, as per the directions given in the said order dated 30-1-2004, was held on 20-3-2004 at the time and place mentioned in the said order dated 30-1-2004. 73. Details of the attendance at the said meeting of the Unsecured Creditors of the Transferee Company have been given in the earlier part of this order. 74. Further, as noted above, the Resolution as reproduced above, approving the proposed Scheme of Amalgamation was passed unanimously at the said meeting of the Unsecured Creditors of the Transferee Company. 75. It is further evident from a perusal of the Company Petition and Annexures C,E,G and I thereto that the Petitioners-Companies have brought on record the Annual Reports in respect of the Transferor Companies No. 1,2,3 and 4 containing the Audited Balance Sheets and Profit and Loss Account as well as other particulars of the Transferor Companies No. 1,2,3 and 4 for the year ended on 31-3-2003. Similarly, a perusal of the Company Petition and Annexure-K thereto shows that the Petitioners-Companies have brought on record the Annual Report in respect of the Transferee Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Company Petition that the proposed Scheme of Amalgamation does not involve any compromise or composition with the Creditors of the Petitioners-Companies in any manner whatsoever. 82. In paragraph 53 of the Company Petition, it is, inter alia , stated that no proceedings under sections 235 to 251 of the Companies Act, 1956 are pending against the Petitioners-Companies. 83. It is, inter alia, further stated in paragraph 53 of the Company Petition that no proceedings under sections 397 and 398 of the Companies Act, 1956 have ever been launched against the Petitioners-Companies. 84. In paragraph 54 of the Company Petition, it is averred that the Auditors of the Petitioners-Companies do not disclose any mismanagement in the affairs of the Petitioners-Companies. 85. It is, inter alia, stated in paragraph 55 of the Company Petition that the sanction of the proposed Scheme of Amalgamation will be for the benefit of the Petitioners-Transferor Companies and the Petitioner-Transferee Company. 86. It is, inter alia, stated in paragraph 57 of the Company Petition that the Company Petition is made bona fide and in the interest of justice. 87. In paragraph 58 of ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
