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2017 (1) TMI 1302 - DELHI HIGH COURT

2017 (1) TMI 1302 - DELHI HIGH COURT - TMI - Scheme of Arrangement (hereinafter referred to as ‘proposed scheme’) between the Demerged Company and the Resulting Company - Held that:- Considering the approval accorded by the shareholders and creditors of the Petitioner Companies to the proposed scheme; and the circumstance that the objections/observations raised by the Regional Director having been satisfied, by way of said affidavit dated 04.10.2016, there appears to be no impediment to the gran .....

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been stated on behalf of the Petitioner Companies hereinabove, the Resulting Company shall file an undertaking with this Court, within two weeks from today, stating therein, that it will take over and defray all the liabilities of the Demerged Undertaking (as defined in the proposed scheme) of the Demerged Company. - Notwithstanding the above, if there is any deficiency found or, violation committed qua any enactment, statutory rule or regulation, the sanction granted by this Court to the p .....

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:p> 1. This joint petition has been filed under Sections 391(2), 394 and 100 to 104 of the Companies Act, 1956 (hereinafter referred to as the Act ), by Modi-Mundipharma Healthcare Pvt. Ltd. (hereinafter referred to as Demerged Company ) and Modi-Mundipharma Pvt. Ltd. (hereinafter referred to as Resulting Company ) seeking sanction to the proposed scheme of Arrangement (hereinafter referred to as proposed scheme ) between the Demerged Company and the Resulting Company. 2. The Demerged .....

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, under the name and style of Modi Omega Pharma (India) Pvt. Ltd. . Thereafter, the name of the Demerged Company was changed to its present name and fresh certificate of incorporation, dated 13.04.2015, was issued by the Registrar of Companies, N.C.T. of Delhi & Haryana at New Delhi. 5. The Resulting Company was incorporated under the provisions of the Act, on 31.10.1990, with the Registrar of Companies, N.C.T. of Delhi & Haryana at New Delhi. 6. The authorized shar .....

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bed and paid-up share capital of the Resulting Company, as on 31.03.2015, is ₹ 30,00,000/- divided into 3,00,000 equity shares of ₹ 10/- each. 8. Copies of the Memorandum of Association and Articles of Association, of the Petitioner Companies, have been duly filed as Annexures to Company Application (M) No.19 of 2016, which earlier came to be filed by the Petitioner Companies. The same are on record. The audited financial statements pertaining to the Demerged Company and t .....

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althcare and Lifestyle products, including products in categories of skin-care, hair-care, dietary supplements, anti-snoring, mosquito repellants and cholesterol management, both in the domestic and export markets. b) The nature of offerings; risk and returns of domestic and export segments of the business of the Demerged Company are distinct from each other in terms of: (i) Regulatory requirements applicable ill respective markets; (ii) Marketing know-how and in .....

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cessary that separate management focus should be imparted on each of these business segments. 10. So far as the share exchange ratio is concerned, the proposed scheme provides that in pursuance to the proposed scheme the Resulting Company shall not be required to issue and allot any shares as the Demerged Company is a wholly owned subsidiary of the Resulting Company. 11. It has been averred on behalf of the Petitioner Companies that there are no proceedings pending against .....

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filed an application, being Company Application (M) no.19 of 2016 seeking directions of this court to, dispense with the requirement of convening the meetings of the shareholders of the Demerged Company and the secured creditors and shareholders of the Resulting Company; and to convene separate meetings of the unsecured creditors (except the statutory and other dues payable) of the Demerged Company and the Resulting Company. 14. This Court, vide order dated 05.02.2016 dispensed with .....

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tion, the proposed scheme. 15. In compliance to the said order dated 05.02.2016, separate meetings of the unsecured creditors of the Demerged Company and the Resulting Company were duly convened and held on 21.03.2016, and the proposed scheme was unanimously approved by the unsecured creditors present and voting at the said meetings. The Chairpersons appointed for the said respective meetings of the unsecured creditors of the Demerged Company and the Resulting Company have filed their .....

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evant para of the said order dated 05.02.2016, in this behalf, reads as hereinunder: 10.4 In so far as the provisions made qua LTA, leave encashment and gratuity are concerned, amounts shown against them have not been expended as due dates have not been reached. 10.5 In this context, the learned counsel for the applicants has made a submission that outstanding dues referred to in Table A and B should not form part of the class of persons / entities who represent unsecured c .....

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esaid liabilities will be examined at the stage when a second motion is filed by the applicants with this court. 17. In this behalf, it would be relevant to refer to Clause 6 of the proposed scheme, which reads as hereinunder: - 6. Transfer of Demerged Undertaking: 6.1. Upon the Effective Date, Demerged Undertaking, comprising of all assets and liabilities of whatsoever nature and wherever situated. shall, under the provisions of Section 391 read with Section 39 .....

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out prejudice to the generality of the foregoing, with effect from the Appointed Date: 6.2.1. Any and all movable assets including cash in hand or incorporeal property, if any, of Demerged Undertaking, capable of passing by manual delivery or by endorsement and delivery, shall be so delivered or endorsed and delivered, by actual or constructive delivery, as the case may be, to Resulting Company without any further act, instrument or deed , and shall upon such transfer become the prope .....

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t be necessary to obtain the consent of any third party or other person in order to give effect to the provisions of this Scheme, and such transfer shall be automatically effected, or in any manner as may be mutually agreed by the Demerged Company and Resulting Company, from the Effective Date. 6.2.3. Any and all immovable properties, if any, owned or held by the Demerged Undertaking, and any documents of title, rights and easements, if any, held by the Demerged Undertaking thereto sh .....

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be transferred to the Resulting Company so as to become the debts, liabilities, contingent liabilities, duties and obligations of Resulting Company and it shall not be necessary to obtain the consent of any third party or other person who is a party to any contract or arrangement by virtue of which such debts, liabilities, contingent liabilities, duties and obligations have arisen, in order to give effect to the provisions of this subclause. 6.3. The transfer and vesting of the Demer .....

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:p> 6.5. For the avoidance of doubt and without prejudice to the generality of the foregoing, it is clarified that in accordance with the provisions of relevant laws, consents, permissions, licenses, registrations, certificates, authorities, powers of attorneys given by. issued to or executed in favour of Demerged Undertaking, and the rights and benefits under the same and all other interests of the Demerged Undertaking, be without any further act or deed, be transferred to and vested in t .....

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TA, gratuity and leave encashment, shall stand transferred to the Resulting Company and shall continue to be enforceable against the Resulting Company, in accordance with the terms and conditions of the proposed scheme. In so far as the liabilities of the Resulting Company are concerned, including towards provisions made for LTA, gratuity and leave encashment, the same shall continue to be enforceable against the Resulting Company, with no variation in the rights of the claimants pre and post sa .....

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service and publication, dated 28.07.2016, showing compliance regarding publication of citations in the aforesaid newspapers and service of petition paper book on the Regional Director and the Registrar of Companies, has been filed by the Resulting Company. Copies of the newspaper clippings, regarding publication carried out on 30.06.2016 have also been filed alongwith the said affidavit. 20. Further, in response to the notices issued in the present petition, the Regional Director, N .....

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n of ₹ 1.00 lac for cancelation of 9,00,000 equity shares of ₹ 10/- each of the Demerged Company may be given by the concerned company. (ii) The Balance Sheet as at 31.03.2015 of Resulting Company reveals in Note 2.12 regarding 'Noncurrent Investments' that during the said year, the company had purchased 475000 equity shares of Rs.,10/- each of Demerged Company on a payment of total consideration of ₹ 68/- only. In addition, it has also purchased 632400 Deben .....

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sideration of ₹ 1,00,000/- . 21. In response to the aforesaid observations made by the Regional Director, the Resulting Company has filed a reply affidavit dated 26.10.2016 stating as follows: 5. That with respect to the aforesaid observations of the Learned RD, we wish to make the following respectful submissions: a) The Demerged Company - Modi-Mundipharma Healthcare Pvt. Ltd. (MMHPL) was initially started a Joint Venture between the Resulting Company - M .....

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uring the financial year 2014-15, Omega Group sold 4,75,000 Equity Shares and 6,32,400 fully convertible debentures to the Resulting Company at a consideration of ₹ 68 each. c) Correspondingly, the Demerged Company Modi- Mundipharma Healthcare Pvt. Ltd. became a wholly owned subsidiary company of the Resulting Company-Modi Mundipharma Pvt. Ltd. Postacquisition, the Resulting Company, being the parent company, holds the entire share capital as well as the debentures of the Demerg .....

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₹ 10 each, 9,00,000 Equity Shares of ₹ 10 each will be cancelled against a payment of ₹ 1,00,000 to the Resulting Company. Post De-merger, the Demerged Company will have 50,000 Equity Shares of ₹ 10 each aggregating ₹ 5.00 lakhs held by the Resulting Company. f) The consideration of ₹ 1.00 lakh for cancellation of 9,00,000 equity shares of ₹ 10 each aggregating ₹ 90.00 lakhs has been determined in view of the accumulated losses of the D .....

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s and hence no public shareholder is interested in the aforesaid reduction of capital. 22. In view of the said affidavit dated 26.10.2016 filed by the Resulting Company, it has been stated on behalf of the Regional Director that the observations made by the latter in the said affidavit dated 04.10.2016, stand satisfied. 23. It has been noted that no objections have been received to the proposed scheme from any other party. The Resulting Company, vide affidavits dated 21.09 .....

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to be no impediment to the grant of sanction to the proposed scheme. Consequently, sanction is hereby granted to the proposed scheme. The Petitioner Companies will comply with the statutory requirements in accordance with law. Upon the sanction to the proposed scheme being effective from the appointed date of the proposed scheme, i.e. 1st January, 2015, the Demerged Undertaking (as defined in the proposed scheme) of the Demerged Company shall stand merged in the Resulting Company. 2 .....

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