Allowed

Jindal Infrastructure Private Ltd. v. ..

Delhi HC3 Aug 2011CO.PET./54/2011

Case brief

AI extract

What is this about?

The court sanctioned a Scheme of Amalgamation between two companies under Sections 391 and 394 of the Companies Act, 1956. The court approved a modification to the share exchange ratio from 4:1 to 7:1 as suggested by the Official Liquidator, finding no impediments to the transfer of undertaking and liabilities.

What did the court decide?

Sanction granted to the Scheme of Amalgamation with the share exchange ratio modified to 7 equity shares for every 1 equity share held.

Jindal Infrastructure Private Ltd. Vs .. — Company and Corporate | Delhi HC (2011)

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Signature Not Verified Digitally Signed By:AMULYA Certify that the digital file and physical file have been compared and the digital data i s as p er the physical file and no page is missing.

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Details with regard to the date of incorporation of Transferor and Transferee Companies, their authorized issued, subscribed and paid up capital have been given in the petition.

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Copies of the Memorandum and Articles of Association as well as the latest audited Annual Accounts for the year ended^31st March, 2010 of the Transferor and Transferee Companies have also been enclosed with the petition.

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Copies of Resolutions passed by the Board of Directors of the petitioner Companies approving the Scheme have also been placed on record.

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Mr. P. Nagesh, learned counsel for petitioner companies submits that no proceedings under Sections 235^{to 251 of the Act are pending against the} petitioner companies.

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So far as the share exchange ratio for amalgamation is concerned, the Scheme provides that, upon the Scheme finally coming into effect, the Transferee Company shall issue shares to the shareholders of the Transferor Company in the following manner:

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Co. Pets. No. 53 & 54 of 2011

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"4 (four) equity shares of Rs. 10/- (Rupees Ten) each in Transferee Company for every 1 (One) equity share of Rs. 10/(Rupees Ten) each held by them in the Transferor Company."

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The petitioner companies had earlier filed C.A. (M) No. 225 of 2010 and C.A. (M) No.226 of 2010 seeking directions of this Court for dispensation of meetings. Vide order dated^21st December 2010, this Court allowed the application and dispensed with the requirement of convening meetings of shareholders and Secured creditors of the Transferor and Transferee Companies.

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The Transferor and Transferee Companies have thereafter filed the present petitions seeking sanction of the Scheme. This Court vide order dated 02^nd February, 2011, issued notice in the Petition to the Regional Director, Northern Region and the Official Liquidator. Citations were also directed to be published in "Financial Express" (English, Delhi Edition) and "Jansatta" (Hindi Delhi Edition). Affidavit of service and publication has been filed by the petitioner companies showing compliance regarding service of the petitions on the Regional Director, Northern Region and the Official Liquidator and also regarding publication of citations in the

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Co. Pets. No.53 & 54 of 2011

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aforesaid newspapers on^91h March 2011. Copies of the newspapers' cuttings, in original, containing the publications have been filed with the affidavit of service.

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Pursuant to the notices issued, the Official Liquidator sought information from the petitioner companies. Based on the information received the Official Liquidator has filed his report dated^22nd July, 2011 wherein he has stated that he has not received any complaint against the proposed Scheme from any personl party interested in the Scheme in any manner till the date of filing of the report and subject to the submissions made in para 1.1 and para 12 of the report the affairs of the Transferor company does not appear to have been conducted in a manner prejudicial to the interest of its members or to public interest as per the second proviso of Section 394 (1) of the Act.

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Dealing with the submissions made by the Official Liquidator in para 1.1 Mr. Nagesh, learned counsel for the petitioner companies submits that the petitioner companies are willing to accept the share exchange ratio of 1:7 as suggested by the Official Liquidator and to that extent the Scheme may be modified by this Court in terms of clause 13.1 of the Scheme. Accordingly,

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Co. Pets. No. 53 & 54 of 2011

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-7

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as prayed the Scheme is modified and clause 11.1 of the Scheme is modified

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to read as follows

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"the transferee company shall allot to the equity share holders

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of the transferor company 7{seven} equity shares of Rs. 10/- each for evely 1 {one} equity share of Rs. 10/- each held by them in the

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transferor company"

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In so far as the submissions made by the Official Liquidator in para 12

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• of the report, Mr. Nagesh submits that the Scheme has been approved by the shareholders and creditors of both the companies and the Transferor Company is merging with the Transferee Company in the interest of all stake holders.

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In my opinion, as the shareholders and creditors of both the Transferor and Transferee Companies have given their consent to the Scheme in their commercial wisdom, the Official Liquidator has no locus standi to challenge the same on the aforesaid ground.

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In response to the notices issued in the Petition, Regional Director, Northern Region, Ministry of Corporate Affairs has filed his affidavit^I report dated 12th July, 2011. Relying on Clause 8 of the Scheme, he has

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Co. Pets. No. 53 & 54 of 2011

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stated that, upon sanction of the Scheme, all the employees of the Transferor Company shall become the employees of Transferee Company without any break or interruption in their services upon sanctioning of the Scheme by the Court. He further states in the affidavit that the Central Government has no objection to the proposed Scheme and the case may be decided by this Court on merits.

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No objection has been received to the Scheme from any other party. Mr. P. Nagesh, learned counsel for Transferor and Transferee companies has filed an affidavit dated 2'' August, 2011 confirming that neither the petitioner companies nor their Counsel has received any objection pursuant to the citations published in the newspapers.

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Even today, during the course of hearing, Mr. Rajiv Bahl, learned counsel for Official Liquidator and Mr. K.S. Pradhan, Deputy Registrar of Companies for Regional Director (Northern Region) state that they have no is � objection to the present Scheme being sanctioned.

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In view of the approval accorded by the Shareholders and Creditors of the petitioner companies, representations/ reports filed by the Regional Director, Northern Region and the Official Liquidator, attached to this Court

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to the proposed Scheme, there appears to be no impediment to the grant of sanction to the Scheme. Consequently sanction is hereby granted to the Scheme as modified hereinabove under Sections 391 and 394 of the Act. The petitioner companies will comply with the statutory requirements in accordance with law. Certified copy of the order be filed with the Registrar of Companies within 30 days from receipt of the same. In terms of the provisions of Section 391 and 394 of the Act and in terms of the Scheme, the • whole or part of the undertaking, the property, rights and powers of the Transferor company be transferred to and vest in the Transferee Company without any further act or deed. Similarly, in terms of the Scheme, all the liabilities and duties of the Transferor Company be transferred to the Transferee company without any further act or deed. It is, however, clarified that this order will not be construed as an order granting exemption from

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payment of stamp duty or taxes or any other charges, if payable in accordance with any law; or permissionl compliance with any other requirement which may be specifically required under any law.

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Learned counsel for the petitioner companies states that the petitioner companies would voluntarily deposit a sum of Rs. 50,0001- with the

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Co. Pets. No.53 & 54 of 2011

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Common Pool Fund of the Official Liquidator within three weeks from

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today. The statement is accepted.

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The petitions are allowed in the above terms.

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Order dasti

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iLl MANMOHAN,J

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AUGUST 03, 2011 is

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Pv W'
-

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Co. Pets. No.53 & 54 of 2011

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Jindal Infrastructure Private Ltd. v. ..

Case brief

What is this about?

What did the court decide?

Jindal Infrastructure Private 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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