Disposed

Powers Anchor Products Pvt.Ltd. v. --

Bombay HC26 Jul 2013CSP/302/2013

Case brief

AI extract

What is this about?

The Court sanctioned a Scheme of Amalgamation involving three companies under the Companies Act, 1956, after finding it fair and reasonable. The order made the petitions absolute subject to external approval from the Karnataka High Court and issued directions for stamp duty, ROC filing, and costs.

What did the court decide?

Company Scheme Petitions Nos. 302 and 303 of 2013 made absolute subject to sanction by the High Court of Karnataka.

Powers Anchor Products Pvt.Ltd. Vs -- — Company and Corporate | Bombay HC (2013)

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION

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COMPANY SCHEME PETITION NO. 302 OF 2013.

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CONNECTED WITH

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COMPANY SUMMONS FOR DIRECTION NO. 220 OF 2013.

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POWERS ANCHOR PRODUCTS PRIVATE LIMITED,

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....Petitioner/ Transferor Company

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AND

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COMPANY SCHEME PETITION NO. 303 OF 2013.

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CONNECTED WITH

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COMPANY SUMMONS FOR DIRECTION NO. 221 OF 2013.

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STANLEY BLACK & DECKER INDIA LIMITED, ....Petitioner/ Transferee Company.

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In the matter of the Companies Act (1of 1956);

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AND

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In the matter of Sections 391 to 394 read with Section 100 to 103 of the Companies Act, 1956;

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AND

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SCHEME OF AMALGAMATION

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BLACK & DECKER INDIA PRIVATE LIMITED

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AND

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POWERS ANCHOR PRODUCTS PRIVATE LIMITED

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AND

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STANLEY BLACK & DECKER INDIA LIMITED

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AND THEIR RESPECTIVE SHAREHOLDERS AND CREDITORS

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Called for hearing

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Mr. Vikash Kumar i/b Mr. Anil T. Agarwal, Advocate for the Petitioners in both the Petitions.

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Mr. C.J. Joy with Mr. Ajay Patil i/b H. P. Chaturvedi for Regional Director in both Petitions.

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Mrs. Roopa Sutar, Assistant Official Liquidator present in CSP 302/2013.

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Coram : N.M. Jamdar J. DATE : 26^th July, 2013

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P.C.:

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Hear counsel for the parties. No objector has come before the court to oppose the Scheme and nor any party has controverted any averments made in the Petition.

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The sanction of the Court is sought to a Scheme of Amalgamation of BLACK & DECKER INDIA PRIVATE LIMITED and POWERS ANCHOR PRODUCTS PRIVATE LIMITED and STANLEY BLACK & DECKER INDIA LIMITED, and their respective Shareholders, under Sections 391 to 394 read with Section 100 to 103 of the Companies Act, 1956.

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Learned Counsel for the Petitioner states that the Petitioner in Company Scheme Petition No.302 of 2013 is presently engaged in the business of trading in Mechanical and General Anchors (including Expansion Anchors, Lead Anchors, Screw Anchors, Import Anchors, Plastic Anchors and PIN Anchors, Anchor Fasteners, Construction Fasteners, Chemical Fasteners and Adhesives, Screws, Rivets & Nails and fasteners of all kinds, and parts, components, tools and accessories required to fix the anchors and products allied thereto, and Petitioner in Company Scheme Petition No.303 of 2013 is presently engaged in manufacturing power tools, hand tools and spares. The proposed Scheme of Arrangement will have the following benefits:

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a) Strengthened position in the industry, in terms of the asset base, revenues, product range, production volumes, integrated supply chain and market share of the combined entity. The amalgamated entity will have the ability to leverage and optimise on its large asset base, diverse range of products, brands and vast pool of intellectual capital, which would facilitate enhancement of the shareholder value.

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b) Greater integration, financial strength and flexibility for the amalgamated entity, which would result in improved overall shareholder value and improvement in the competitive position of the combined entity.

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c) Greater efficiency in cash management of the amalgamated entity, and unfettered access to cash flow generated by the combined business which can be deployed more efficiently to fund organic and inorganic growth opportunities, to further improve shareholder value.

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d) Improved organizational capability and leadership, arising from the pooling of human capital that has the diverse skills, talent and vast experience to compete successfully in an increasingly competitive industry.

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e) Benefit of operational synergies to the combined entity in areas such as raw material sourcing, product placement, marketing and sales promotion initiatives, which can be put to the best advantage of the stakeholders.

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The Transferor Company and Transferee Company has approved the said Scheme of Amalgamation by passing the Board Resolutions which are annexed to the respective Company Scheme Petitions.

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The learned Advocate for the Petitioner further states that, Petitioner companies have complied with all the directions passed in Company Summon for Direction and that the Company Scheme Petitions have been filed in consonance with the orders passed in respective Summon for Directions.

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Counsel appearing on behalf of the Petitioners has stated that the Petitioners have complied with all requirements as per directions of this Court and that the Petitioners have filed necessary Affidavits of compliance in the Court. Moreover, the Petitioner Companies undertake to comply with all statutory requirements, if any, as required under the Companies Act, 1956 and the Rules made there under. The said undertaking is accepted.

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The Regional Director has filed an Affidavit on June 28, 2013 in both the Petitions stating therein that save and except as stated in paragraphs 6(a) & (b) of the said Affidavit, it appears that the Scheme is not prejudicial to the interest of shareholders and public. In paragraph 6 of the said Affidavit it is stated that

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(a) “the Registered Office of the 1^st Transferor Company is situated in the State of Karnataka. Hence, the 1^st Transferor Company has to file similar petition before the Hon’ble High Court of Karnataka for approving the said Scheme.”

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(b) “ Clause 11.8 of the scheme states that as per clause 11.8.1 of the scheme excess amount determined over the aggregate amount determined as per clause 11.8.2 of the scheme if any shall be credited to the General Reserve Account of the Transferee Company, in this regard it is submitted that reserve, if any, arising out the scheme be credited to Capital Reserve Account of Transferee Company ”.

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The learned Advocate on behalf of the of Petitioner Companies states that the Petitioner Transferee Company and Petitioner Transferor Company have filed affidavits both dated July 13, 2013 of Mr. Hari Krishnamurthy, Authorised Signatory of the Transferee Company and the Transferor Company filed on July 17, 2013, inter alia stating therein Para (4) that so far as the objection in paragraph 6(a) of the Affidavit of Regional Director is concerned, the 1^st Transferor Company has filed Petition No. 49 of 2013 before the Hon’ble High Court of Karnataka, for approving the said scheme and the same is pending for hearing.

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The learned Advocate on behalf of the Petitioner Companies states that as regards para 6(b) of the Affidavit of Regional Director is concerned, the Transferee Company acceding to the suggestion of the Regional Director as stated in Para 7 of the said Affidavit and undertakes to credit the surplus amount arising on amalgamation, if any, to the Capital Reserve Account, instead of General Reserve Account of the Transferee Company. The Ld. Advocate on behalf of the Petitioner Transferee Company undertakes that the excess amount determined over the aggregate amount determined as per clause 11.8.2 of the Scheme, if any, shall be credited to the Capital Reserve Account of the Transferee Company.

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10.Learned Counsel for the Regional Director on instructions from Mr. M. Chandanamuthu, Joint Director in the office of the Regional Director, Ministry of Corporate Affairs, Western Region, Mumbai, who is present in Court, is satisfied with the undertaking given by the Petitioner Transferee Company. The said Undertaking is accepted.

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11.The Official Liquidator has filed an Affidavit on July 12, 2013 stating therein that the Scheme is not prejudicial to the interest of shareholders and public.

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12.From the material on record, the Scheme appears to be fair and reasonable and does not violate of any provisions of law and is not contrary to public policy. None of the parties concerned has come forward to oppose the Scheme in the court.

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13.Since all the requisite statutory compliances have been fulfilled, Company Scheme Petitions Nos. 302 of 2013 and 303 of 2013 are made absolute in terms of prayer clauses (a), (b) and (c) of the respective Petitions, subject to sanction of the scheme by the High Court of Karnataka.

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14.The Petitioner Company to lodge a copy of this order and the Scheme duly authenticated by the Company Registrar, High Court (O.S.), Bombay, with the concerned Superintendent of Stamps, for the purpose of adjudication of stamp duty payable, if any, on the same within 60 days from the date of the order.

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15.Petitioners are directed to file a copy of this order alongwith a copy of the Scheme with the concerned Registrar of Companies, electronically, along with E- Form 21 in addition to physical copy as per relevant provision of the Act.

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16.The Petitioner Companies in both the Petitions to pay costs of Rs.10,000/- each to the Regional Director, Western Region, Mumbai, and the Petitioner in CSP 302 of 2013 to pay costs of Rs.10,000/- to the Official Liquidator, High Court, Bombay. Costs to be paid within four weeks from the date of the order.

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17.Filing and issuance of the drawn up order is dispensed with.

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18.All authorities concerned to act on a copy of this order along with Scheme duly authenticated by the Company Registrar, High Court (O. S.), Bombay.

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(N.M. Jamdar, J.)

Powers Anchor Products Pvt.Ltd. v. --

Case brief

What is this about?

What did the court decide?

Powers Anchor Products Pvt.Ltd. v. --

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

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