Allowed

Vitex Trading and Investment Private Limited v. -----

Bombay HC8 Aug 2013CSP/43/2013

Case brief

AI extract

What is this about?

Under ordinary original civil jurisdiction, the Bombay High Court passed Company Scheme Petitions seeking sanction for the amalgamation of two inactive Transferor Companies into an active Non-Banking Financial Transferee Company. Addressing concerns about capital reserves, the Court accepted undertakings regarding the advisory roles of the parties and reserved costs.

What did the court decide?

The Company Scheme Petitions were made absolute. The Petitioners were directed to lodge copies with the Registrar of Companies and pay costs.

Vitex Trading and Investment Private Limited Vs ----- — Specific Performance | Bombay HC (2013)

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY

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ORDINARY ORIGINAL CIVIL JURISDICTION

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COMPANY SCHEME PETITION NO 43 OF 2013

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CONNECTED WITH

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COMPANY SUMMONS FOR DIRECTION NO 864 OF 2012

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Vitex Trading and Investment Private Limited

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….Petitioner/ First Transferor Company AND

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COMPANY SCHEME PETITION NO 44 OF 2013

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CONNECTED WITH

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COMPANY SUMMONS FOR DIRECTION NO 865 OF 2012

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Holtex Engineering Company Private Limited

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…………Second Transferor Company

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

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AND

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In the matter of Sections 391 to 394 of the Companies Act, 1956;

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AND

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In the matter of Scheme of Amalgamation OF

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Vitex Trading and Investment Private Limited AND

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Holtex Engineering Company Private Limited (‘the Transferor Companies’)

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WITH

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A.T.E. Private Limited (‘the Transferee Company’) AND their respective Shareholders

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Called for Hearing

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Mr. Hemant Sethi i/b M/s. Hemant Sethi & Co., for the Petitioners

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Mrs. R.N.Sutar, Asst. Official Liquidator present in both the Petitions.

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Mr. C.J joy with Mr. G Hariharan , i/b H.P Chaturvedi for Regional Director in both the Petitions.

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CORAM: N.M Jamdar, J.

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DATE: 8^th August, 2013

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P.C. :-

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Heard learned counsels for the parties. No objector has come before the court to oppose the Scheme and nor any party has contravened any averments made in the Petition.

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The sanction of the Court is sought under Sections 391 to 394 of the Companies Act, 1956, to the Scheme of Amalgamation of Vitex Trading and Investment Private Limited, First Transferor Company and Holtex Engineering Company Private Limited, the Second Transferor Company and A.T.E. Private Limited, the Transferee Company, and their respective shareholders.

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Learned counsel for the Petitioner states that both the Petitioner/Transferor Companies are not engaged in any business activities. The Transferee Company is registered with the Reserve Bank of India as Non-Banking Financial Company (not accepting public deposits). The Transferee Company is the holding company for the A.T.E group. As the group holding company, it is actively involved in corporate governance, strategy formulation and business development of its group companies, and tries to explore synergies within the group for value creation. He further states that both Petitioner Companies are wholly owned subsidiaries of A.T.E. Private Limited, the Transferee Company.

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The Rational for the Scheme is that the Transferor companies are wholly owned subsidiaries of the Transferee Company. The Transferor Companies are not engaged in any business since past few years. The First Transferor Company has certain fixed deposits kept with Banks and does not have any good avenues where the same can be put to use. The Second Transferor Company had few land parcels which has now been sold off. Cash balance available with it after selling the land parcels is lying idle with it and it does not have any good avenues where the same can be put to use. The Transferee Company is in need of funds for the purpose of business of the company. By merging the Transferor Companies with the Transferee Company, the Transferee Company will gain access to the idle cash balances of the Transferor Companies which can be put to productive use by the Transferee

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Company. By the proposed Scheme of Amalgamation the financial resources of all the Companies will be conveniently merged and pooled together leading to a more effective and centralized management and reduction of administrative and manpower expenses and overheads which are presently being duplicated because of separate entities. Amalgamation will reduce the overheads which will result in enhancing wealth of shareholders of all the Companies.

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The Petitioner Companies approved the said Scheme by passing the Board Resolution in their respective meetings which are annexed to the respective Company Scheme Petitions. The learned counsel for the Petitioner further states that the Petitioner companies have complied with all the directions passed in Company Summons for Directions and that the Company Scheme Petitions have been filed in consonance with the orders passed in respective Summons for Directions.

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The learned counsel appearing on behalf of the Petitioner Companies submits that by an order passed in the court on 21^st December, 2012 in Company Summons for Directions No. 43 of 2012 and Company summons for Direction No. 44 of 2013, the filing of separate Company Summons for Direction and Company Scheme Petition in relation to the proposed Scheme by the Transferee Company, A.T.E. Private Limited was dispensed with as Transferee Company is 100% holding Company of both Transferor Companies and in view of the Judgment passed by this Court in Mahaamba Investments Limited Versus IDI Limited (2001) 105 Company Cases (pages 16 to 18).

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The Regional Director has filed an Affidavit dated 1^st August 2013 stating therein that save and except as stated in paragraph 6 of the said Affidavit, it appears that 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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“That the Deponent further submits that:-

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(a) Clause 14-3 of the Scheme states that the excess of the net Assets of the Transferor companies acquired and recorded by the Transferee Company, over the amount as investments in the shares of Holtex and Vitex in the books

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of the Transferee Company and after making the adjustment and after adjusting for all the expenses, duties, to be incurred for the implementation of the Scheme would be credited to the „General Reserve Account‟. In this regard, it is submitted that the Reserve arising out of this Scheme is only due to transfer of Capital Assets from Transferor Company to Transferee Company, and hence that party of Reserve, be credited to Capital reserve Account of transferee Company. ”

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(b) The Transferee Company is a Non Banking finance Company. Hence, copy of the order of this Hon‟ble High Court approving scheme ,be filed with Reserve Bank of India by Transferee Company” .

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As far as the observations made in paragraph 6(a) of the Affidavit of the Regional Director is concerned, the Petitioner Companies through their Counsel undertakes that Reserve arising out of the scheme shall be credited to the Capital Reserve Account in the books of Transferee Company.

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In so far as observations made in paragraph 6(b) of the Affidavit of Regional Director is concerned, the Transferee Company undertakes to file copy of the order approving the scheme with the Reserve Bank of India within a period of one month from the date of receipt of the order.

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The Learned Counsel for Regional Director on instructions of Mr. Rajesh Dalmiya, Deputy Director in the office of the Regional Director, Ministry of Corporate Affairs, Western Region, Mumbai states that they are satisfied with the undertaking given by the Petitioner Companies. The said undertaking is accepted.

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The Official Liquidator has filed his report dated 5^th July 2013 in Company Scheme Petitions No. 43 and 44 of 2013 stating therein that the affairs of the Transferor Companies have been conducted in a proper manner and that the Transferor Company may be ordered to be dissolved by this Court.

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From the material on record, the Scheme appears to be fair and reasonable and is not violative of any provisions of law and is not

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contrary to public policy. None of the parties concerned has come forward to oppose the Scheme.

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Since all the requisite statutory compliances have been fulfilled, Company Scheme Petitions No. 43 of 2103 and 44 of 2013 filed by the Transferor Companies are made absolute in terms of prayer clause (a) of the respective Petitions.

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The Petitioner Companies 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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Petitioners are directed to file a copy of this order along with a copy of the Scheme of Amalgamation with the concerned Registrar of Companies, electronically, along with E-Form 21 in addition to physical copy as per relevant provisions of law.

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The Petitioner in the Company Scheme Petition No. 43 and 44 both of 2013 to pay costs of Rs. 10,000/- each to the Regional Director, Western Region, Mumbai and the Official Liquidator, High Court, Bombay. Costs to be paid within four weeks from today.

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

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All concerned authorities 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)

Vitex Trading and Investment Private Limited v. -----

Case brief

What is this about?

What did the court decide?

Vitex Trading and Investment Private Limited v. -----

Case brief

What is this about?

What did the court decide?

What the court decided

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Cases cited

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