Allowed

Digital Securities Privat Limited Vs

Bombay HC1 Mar 2013CSP/823/2012

Case brief

AI extract

What is this about?

The Court sanctioned the Scheme of Amalgamation of Digital Securities Private Limited with Unilever Industries Private Limited and their respective shareholders under Sections 391 to 394 of the Companies Act, 1956, observing it was fair, reasonable, and not violative of the law.

What did the court decide?

Company Scheme Petition No. 823 of 2012 made absolute regarding sanction to the Scheme of Amalgamation, with directions to file copy with Registrar of Companies and authorities.

Digital Securities Privat Limited Vs — Company and Corporate | 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. 823 OF 2012

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CONNECTED WITH

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COMPANY SUMMONS FOR DIRECTION NO. 785 OF 2012

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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 Sections 391 to 394 of the Companies Act, 1956;

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AND

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IN THE MATTER of Digital Securities Private Limited;

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AND

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IN THE MATTER of Scheme of Amalgamation of Digital Securities Private Limited with Unilever Industries Private Limited and their respective shareholders.

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Digital Securities Private Limited

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.... Petitioner/Transferor Company.

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Ms. Renuka Shetty i/b Crawford Bayley & Co. for Petitioner. Mr. C. J. Joy, i/b Dr. T. C. Kaushik for Regional Director. Mrs. R. N. Suttar, Asst. Official Liquidator present.

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CORAM: N. M. JAMDAR, J. DATE: 1^st March, 2013.

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PC:

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Heard Learned Counsel for the parties.

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None appears before the Court to oppose the Petition and nor any party has contravened averments made in the Petition.

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Learned Counsel appearing on behalf of the Petitioner states that the Petitioner Company is the owner of the Trade Mark – Kwality Walls and royalty received from the Trade Mark is the main source of revenue for the company. The Transferee Company is currently engaged in the business of providing R&D services & information reports to Unilever, the Holding Company. The proposed scheme of Amalgamation will help to achieve synergies in administration and marketing and business operations, achieving economies of scale, Pooling of the human talents in terms of manpower, management, administration and marketing which would result in savings of costs, and combined capital resources would strengthen the financial position of the merged entity and result in increasing leveraging capacity of the merged entity, Avoiding duplication of efforts, costs and resources lesser regulatory/procedural compliance. The transferor and transferee companies both approved the said Scheme of Amalgamation by passing the Board Resolution which are annexed to the Company Petition. The Learned Counsel for the Petitioner further states that, Petitioner company have complied with all the directions passed in Company Summons for Direction and that the Company Scheme Petition have been filed in consonance with the order passed in respective Summons for Directions and seeks sanction to the said proposed Scheme of Amalgamation. The sanction of this Court is sought under Sections 391 to 394 of the Companies Act, 1956 to a Scheme of Amalgamation of Digital Securities Private Limited with Unilever Industries Private Limited and their respective shareholders.

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Learned Counsel appearing on behalf of the Petitioner Company states that, Transferee Company is 100% Holding Company of the Petitioner Company and in view of the averments made in paragraph 16 of the Affidavit in support of Company Summons for Direction, the filing of a separate Company Scheme Petition by the Transferee Company, is dispensed with vide order dated 2^nd November, 2012 passed in CSD No. 785 of 2012.

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Learned Counsel appearing on behalf of the Petitioner Company has stated that they have complied with all the requirements as per directions of this Court and they have filed necessary affidavits of compliance in the Court. Moreover, the Petitioner Company undertakes to comply with all the statutory requirements, if any, as required under the Companies Act, 1956 and the Rules made thereunder. The Undertaking is accepted.

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The Regional Director has filed an Affidavit dated 8^th day of February, 2013 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 shareholders and public. In paragraph 6 of the Affidavit it is stated that:

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a) “Clause 11.1.6 of the Scheme states that the difference, being the excess of the book value of the assets over the book value of the liabilities of the Transferor Company recorded by the Transferee Company in its book of account shall be credited to Capital Reserve Account or the Amalgamation Reserve Account. Further stated in Clause 11.1.8 of the Scheme that the Reserve, as created above, shall be a free reserve for all intents and purposes and shall form part of the net worth of the Transferee Company. In this regard, it is submitted that the Reserve arising out of this Scheme of Amalgamation is not Free Reserve as

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defined u/s. 2(29A) proviso of the Companies Act, 1956 and hence the same shall not be treated as Free Reserve.

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b) Clause 12 of the Scheme that the Objects of the Memorandum of Association of the Transferor Company shall form part of the Objects of the Memorandum and Articles of the Transferee Company, in addition to its existing objects. In this regard, it is submitted that Transferee Company shall comply with provision of Section 40 read with Section 18 of the Companies Act, 1956 and also follow the procedure laid down under the said provisions for filing of necessary forms/documents with Registrar of Companies, Mumbai.

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Learned Counsel appearing on behalf of the Petitioner Companies has stated that in respect of the paragraph 6 (a) of the Affidavit of the Regional Director is in the nature of an observation and not an objection. Moreover, the Petitioner Company gives an undertaking that, the Reserve arising out of the Scheme of Amalgamation will not be treated as Free Reserve.

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Learned Counsel appearing on behalf of the Petitioner Companies has further stated that paragraph 6 (b) of the Affidavit of the Regional Director is in the nature of an observation and not an objection and the Petitioner Company further undertakes to follow the procedure laid down under the provision of Section 40 read with Section 18 for filing of necessary forms/documents with Registrar of Companies, Mumbai. Learned Counsel appearing for the petitioner states that they will abide by the said undertakings. The said Undertakings are accepted.

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The Learned Counsel appearing on behalf of the Regional Director, Western Region on intimation from Mr. Chandana Muthu, Joint Director (Legal) in the office of Ministry of Corporate Affairs states that, they are satisfied with the aforesaid observations. The said Undertaking is accepted.

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10.The Official Liquidator has filed the report dated 21^st day of February, 2013 stating that the affairs of the Petitioner/Transferor Company has been conducted in a proper manner and that the Transferor Company may be ordered to be dissolved.

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11.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 have come forward to oppose the Scheme.

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12.Since all the requisite statutory compliances have been fulfilled, Company Scheme Petition No. 823 of 2012 is made absolute in terms of prayer clauses (a), (b) and (d) of the Petition.

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13.The Transferee Company to lodge a copy of this Order and the Scheme, duly authenticated by the Company Registrar, High Court, 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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14.The Petitioner and Transferee Company is 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 provision of the Act.

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15.The Petitioner in the Company Scheme Petition 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 the date of the order.

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

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17.All authorities concerned to act on a copy of this Order along with Scheme duly authenticated by the Company Registrar, High Court, Bombay.

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(N. M. JAMDAR J.)

Digital Securities Privat Limited Vs

Case brief

What is this about?

What did the court decide?

Digital Securities Privat Limited Vs

Case brief

What is this about?

What did the court decide?

What the court decided

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