Allowed

Novalead Pharma Pvt.Ltd. v. --

Bombay HC30 Sept 2013CSP/596/2013

Case brief

AI extract

What is this about?

This judgment sanctions a Scheme of Amalgamation between Vlife Sciencese Technologies Private Limited and NovaLead Pharma Private Limited under Sections 391 and 394 of the Companies Act, 1956. The court accepted undertakings from the petitioners to correct typographical errors and share capital details in the scheme, deemed the scheme fair and reasonable, and made the petitions absolute.

What did the court decide?

Company Scheme Petitions No. 595 of 2013 and 596 of 2013 were made absolute; directives issued for lodge stamp duty adjudication, filing Form No. 21 with ROC, and payment of costs.

Novalead Pharma Pvt.Ltd. Vs -- — Insolvency and Bankruptcy | Bombay HC (2013)

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION COMPANY SCHEME PETITION NO. 595 OF 2013

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CONNECTED WITH

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COMPANY SUMMONS FOR DIRECTION NO. 395 OF 2013

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VLife Sciences Technologies Private Limited

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…Transferor / Petitioner Company

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WITH

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COMPANY SCHEME PETITION NO. 596 OF 2013

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CONNECTED WITH

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COMPANY SUMMONS FOR DIRECTION NO. 396 OF 2013

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NovaLead Pharma Private Limited

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…Transferee / Petitioner Company

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In the matter of the Companies Act, 1956

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AND

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In the matter of Section 391 & 394 of the Companies Act, 1956;

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Vlife Sciencese Technologies Private Limited

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WITH

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NovaLead Pharma Private Limited

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Called for Hearing

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Mr. Rahul Risbud alongwith Ms. Shruti S Kelji, Advocates for the Petitioners in both the Petitions.

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Mr. C. J. Joy with Ms. Soma Singh, i/b H. P. Chaturvedi for Regional Director in both the Petitions.

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Mrs. R. N. Sutar, Asst. Official Liquidator, present in CSP No.496 of 2013.

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CORAM: N. M. Jamdar, J

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DATE: 30^th September, 2013

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PC:

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Heard counsel for the parties. No objector has come before the Court to oppose the Scheme of Amalgamation nor has any party controverted any averments made in the Petition.

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The sanction of the Court is sought under Sections 391 to 394 to a Scheme of Amalgamation of Vlife Sciencese Technologies Pvt. Ltd. with NovaLead Pharma Pvt. Ltd. and their respective shareholders.

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Learned Counsel for the Petitioner states that the Transferor Company and the Transferee Company are engaged in the business of Discovery through Research & Development of new chemical entities, new molecular entities and new indication discovery for USFDA (U.S Food & Drug Administration) approved generic drugs, for sale, assignment, transfer, licensing or lease of Intellectual Property created in the research and development process.

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The proposed Scheme of Amalgamation will be beneficial to the interest of the Transferor Company and the Transferee

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Company as well as its shareholders. The amalgamation is also in the interest of the employees of the amalgamating companies. VLife started as a bio-informatics company focusing on solutions to aid drug discovery. It later initiated own drug discovery work using its proprietary software. To have a focused development of drug discovery pipeline, NovaLead was created in 2007 with existing investors of VLife subscribing to shares of NovaLead in same proportion as VLife. In the last 3 years while NovaLead has made substantial progress in the discovery pipeline. However NovaLead continues to depend on VLife for future development and research support. While VLife's business has grown, substantial portion of its revenues is still through services to Novalead. The commonality of business interests of the Transferor Company and the Transferee Company and synergistic linkages that exist between them, it is considered desirable and expedient to amalgamate the Transferor Company with the Transferee Company in the manner and on the terms and conditions stated in this Scheme. The amalgamation will enable appropriate consolidation of the activities of the Transferor Company and the Transferee Company with pooling and more efficient utilization of their resources, greater economies of scale, reduction in overheads and other expenses and improvement in various operating parameters. The same will result, inter alia, from advantages of

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vertical integration of the operations of the said companies. The amalgamation will enable the business of the Transferee Company to be carried on more conveniently and advantageously. The Scheme is proposed accordingly and will have beneficial results for the said companies, their shareholders, employees and all concerned.

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The Petitioner Companies have approved the said Scheme by passing Board Resolution which is annexed to the Company Scheme Petition.

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The learned counsel for the Petitioner state that Petitioner Companies have complied with all directions passed in Company Summons for Direction and that the Scheme has been filed in consonance with the orders passed in Company Summons for Direction.

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Counsel appearing on behalf of the Petitioners has stated that they have complied with all requirements as per directions of this Court and they have filed necessary affidavits of compliance in the Court. Moreover, 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 undertakings given by the Petitioner Companies are accepted.

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The Regional Director has filed an Affidavit stating therein that save and except as stated in paragraph 6 of the said Affidavit, it appears that the Scheme is not prejudicial to the interest of the shareholders and public. In paragraph 6 of the said Affidavit is stated that:

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a)The name of the Transferor Company is not given properly in operative para of the scheme as well as the clause 1.1 of scheme. It is therefore suggested that the name for the Transferor Company shall be corrected suitably wherever it appears.

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b) That the Transferor Company is having one foreign body corporate as its shareholders. Hence for allotment of new shares by the Transferee Company to the shareholders of Transferor Company, the Transferee Company may be directed to comply with FEMA/RBI regulations as applicable in this regards.

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c) Clause 17.1 of the scheme provides for merging of the authorise share capital of Transferor Company with Transferee Company. In this regard, it is observed that post amalgamation the authorised share capital of the Transferee Company would be Rs. 3,73,91,374/- which has not been properly given in the 3^rd

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line of the said clause of the scheme, which shall be corrected suitably.

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Similarly in Para (a) of clause 17.1 of the Scheme, the authorised share capital of the Transferee Company post amalgamation is wrongly given, besides the break up details of the authorised capital mentioned in sub paragraph are also not in order. It is therefore suggested that said clause shall be corrected suitably.

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It is also noticed that in para no. 4.2 of the scheme the details of the authorised capital of Transferee company is not disclosed correctly this also needs to be corrected in this scheme. In this regard company vide its letter dated 5.9.2013 clarified the above position copy of the same is annexed and marked as Exhibit ‘D’. In view of the above clause 17.1 as well as clause 4.2 of the scheme be suitably corrected.

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d) Clause 13 of the Scheme provides for amendment of object clause of the Memorandum of Association of the Transferee Company. In this connection, Transferee Company may be directed to comply with provision of Section 40 read with Section 18 of the Act and to file amended copy of Memorandum of Association alongwith Form No 21 with Registrar of Companies.

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The Learned Counsel for the Petitioner states that the Director for the Petitioner Companies has filed an Affidavit dated 24^th September 2013 and further replied to the objection vide letter dated 5^th September, 2013 and filed their reply and dealt with objection raised by the Regional Director.

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So far as the objection in paragraph 6 (a) of the Affidavit of Regional Director is concerned, the Transferee Company has undertaken to correct the name of the Transferor Company in operative part of the Scheme as well as wherever the typographical error has occurred in the scheme. The said undertaking is accepted.

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So far as the objection in paragraph 6 (b) of the Affidavit of Regional Director is concerned, the Transferee Company has undertaken to comply with the Rules and Regulations laid down by FEMA / RBI at the time of allotment of new shares by the Transferee Company to the shareholders of the Transferor Company. The said undertaking is accepted.

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So far as the objection in paragraph 6 (c) of the Affidavit of Regional Director is concerned, the Transferee Company has undertaken to carry out appropriate corrections in respect of the Authorised Share Capital in Clause 17.1. The Clause 17.1 deal

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with combined Authorised Share Capital of the Company and same be corrected from Rs. 1,90,554/- (Rupees One Lakh Ninety Thousand Five Hundred Fifty Four) to Rs. 3,73,91,374/- (Rupees Three Crores, Seventy Three Lacs, Ninety One Thousand, Three Hundred and Seventy Four). The Company had combined all the Share Capital such as the Equity Share Capital and Preference Share Capital together and therefore, the same has to be mentioned separately. The Petitioner seeks leave of this Court, to make necessary corrections in respect of Clause 4.2 of the Scheme in the following manner :

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Equity Capital	Amount (in Rs.)
Authorized Share Capital
86,10,940 Equity shares of Rs. 3/- each	2,58,32,820/-
30,17,115 Series A Optionally Convertible Preference Shares of Rs.3/- each.	90,51,345/-
1,383 Series B Compulsorily Convertible Preference Shares of Rs.3/- each.	4,149/-
1,020 Class A equity shares of Rs. 3 each with differential voting rights	3,060/-
250,000 Series A preference shares of Rs.10 each	25,00,000/-
Total	3,73,91,374/-

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So far as the objection in paragraph 6 (d) of the Affidavit of Regional Director is concerned, the Transferee Company through

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its Counsel undertakes to file an amended copy of the Memorandum of Association alongwith Form No.21 with the Registrar of Companies. The said undertaking is accepted.

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The learned counsel for the Regional Director on instructions from Mr. M. Chandana Muthu Jt. 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 Transferee Company. The said undertaking is accepted.

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The Official Liquidator has filed his report on 20^th September, 2013 in Company Scheme Petition No. 595 of 2013 stating therein that the Affairs of the Transferor Company have been conducted in a proper manner and that the Transferor Company may be ordered to be dissolved.

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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 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 Petition Nos. 595 of 2013 and 596 of 2013 are

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made absolute in terms of prayer clauses (a) and (c) 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 the provisions of the Companies Act, 1956.

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The Petitioner Companies to pay costs of Rs.10,000/- each to the Regional Director, Western Region, Mumbai, in Company Scheme Petition No. 595 of 2013 and 596 of 2013 and the Petitioners in the Company Scheme Petition No. 595of 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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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 the Scheme of Amalgamation duly authenticated by the Company Registrar, High Court (O.S.), Bombay.

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(N. M. Jamdar, J.)

Novalead Pharma Pvt.Ltd. v. --

Case brief

What is this about?

What did the court decide?

Novalead Pharma Pvt.Ltd. v. --

Case brief

What is this about?

What did the court decide?

What the court decided

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Issues for consideration

Statutes considered

Parties & counsel

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