Allowed

Technocrats Medical Devices Pvt. Ltd. v. Patan Finance and Investment Co. Ltd.

Punjab & Haryana HC5 Sept 2012CP/32/2012

Case brief

AI extract

What is this about?

The High Court sanctioned the Scheme of Arrangement for the amalgamation of the Transferor Company (winding up) with the Transferee Company. While the Official Liquidator noted the Transferor was an unregistered NBFC and non-compliant with Accounting Standard-14, the Court relied on the undertaking given by the signatories to comply post-sanctioning and held the scheme binding.

What did the court decide?

Scheme of Arrangement sanctioned; Transferor Company dissolved and assets vested in Transferee; parties to comply with AS-14 and RBI requirements.

Technocrats Medical Devices Pvt. Ltd. Vs… — Company and Corporate | Punjab & Haryana HC (2012)

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C.P. No. 32 OF 2012 (O &M) :: 1::

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IN THE HIGH COURT FOR THE STATES OF PUNJAB AND HARYANA AT CHANDIGARH.

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C.P. No. 32 of 2012 (O & M) Connected with C.P. No. 27 of 2012 Date of decision: 05^th September, 2012

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IN THE MATTER OF SCHEME OF ARRANGEMENT OF

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Technocrats Medical Devices Private Limited

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........Transferor Company

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With

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Patan Finance & Investment Company Limited

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........Transferee Company

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Present: Mr. Alok Jain, Advocatefor the petitioners. Mr. D. P. Ojha, Official Liquidator.

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CORAM:

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HON’BLE MR. JUSTICE SURYA KANT.

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1. Whether Reporters of local papers may be allowed to see the judgment?

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2. To be referred to the Reporters or not?

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3. Whether the judgment should be reported in the Digest?

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SURYA KANT, J. [ORAL]

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In this petition under Section 391 to 394 of the Companies Act, 1956, duly supported by affidavits, the petitioner-companies seek sanctioning of the Scheme of Arrangement (Annexure P/1) between Transferor and Transferee Companies.

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[2]. It is averred in the petition that the Transferor and Transferee Companies are registered under the Companies Act,1956 and their registered offices are situated in the State of Punjab.

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[3]. Main objects of the Transferor Company and the Transferee Company are detailed in their respective Memorandum

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C.P. No. 32 OF 2012 (O &M) :: 2::

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and Articles of Association annexed with the petition at Annexure P2 and P-8, respectively.

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[4]. The Board of Directors of the Technocrats Medical Devices Private Limited (Transferor Company) and Patan Finance & Investment Company Limited (Transferee Company) have approved the Scheme of Arrangement in their respective meetings held on 01.02.2012, vide resolutions Annexures P-4 & P-10, respectively.

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[5]. The Authorised Share Capital of Transferor Company is 2,00,00,000/- divided into 20,00,000 Equity Shares of 10/- each. Its Issued, subscribed and paid-up capital is `98,95,000/- divided into 9,89,500 Equity Shares of Rs.10/- each.

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[6]. The Authorised Share Capital of Transferee Company is 1,30,00,000/- divided into 13,00,000 Equity Shares of Rs.10/- each. Its Issued, subscribed and paid-up share capital is 1,30,00,000/divided into 13,00,000 Equity Shares of `10/- each. [7]. The petitioner companies had earlier approached this Court by way of Company Petition No.27 of 2012 and vide order dated 16.03.2012 passed therein the holding of meetings of Equity Shareholders, Secured and Un-secured Creditors of the Transferor and Transferee Companies were dispensed with and the 1^st Motion Petition was disposed of.

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[8] In this Second Motion Petition, notice was issued to the Regional Director, Northern Regional Ministry of Corporate Affairs, Noida as well as the Official Liquidator and the same was also ordered to be published in the daily 'Indian Express' (Chandigarh Edition) and 'Dainik Tribune' (Vernacular) and in the Official Gazette

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C.P. No. 32 OF 2012 (O &M) :: 3::

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of the Government of Punjab. The compliance affidavit of the said order has been placed on record.

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[9]. Pursuant thereto, the Official Liquidator has placed on record the report dated 17.05.2012 by way of affidavit of Mr.B.K.Bansal, Regional Director, Northern Region, Ministry of Corporate Affairs, Noida, at para 4 whereof reads as follows:

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“4. That the Deponent further craves leave to submit that on perusal of the Scheme of Amalgamation, it has been observed that there is no mention whether the petitioner Companies have complied with the Accounting Standard-14 issued by the Institute of Chartered Accountants of India.”

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[10]. The Official Liquidator has submitted his report dated

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24.07.2012 also and in its para 4 has observed :

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“4 That the said Chartered Accountant on the basis of the Audited Statements of Accounts and submissions have observed that while filing the income tax return, in the computation of income of the company, the nature of business mentioned is of Trading & others, but it is observed that since its incorporation no trading business is carried on by the Company. The company is carrying on the business of financial activities and its 100% income is from the financial activities. As per Section 45-I (A) of Reserve Bank of India Act, a company is not allowed to commence the business of financial activities whether accepting deposits or not without obtaining a Certificate of registration from the Reserve Bank of India as Non Banking Finance company. The Transferor CompanyTechnocrats Medical Devices Private Limited has 100% interest income and its financial assets are more than 50% of its total assets since both the conditions are satisfied therefore section 45-I(A) is applicable to the respective company, so the company will be treated as NBFC, but it has been noticed that the Transferor company is not registered with Reserve Bank of India as NBFC.”

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The Official Liquidator has lastly submitted that the matter

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may kindly be decided on merits subject to observations made in Para 4 of the said report.

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C.P. No. 32 OF 2012 (O &M) :: 4::

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[11]. Mr. Abhishek Goel, and Mr. Raghav Goel, authorized signatories of the Transferor and Transferee Companies, respectively, have responded to the above-reproduced observations of the Regional Director and vide their affidavits dated 23.08.2012, have undertaken that upon sanctioning of the Scheme of Arrangement, the Transferor and Transferee companies shall comply with AS-14 . They have further submitted in para 3, 4 & 5 in their respective affidavits, which are as:

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“3 That the deponent being authorised and competent duly undertakes that the compliance with the AS-14 shall be made upon sanction of the scheme.

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4. That the Official Liquidator has also duly submitted its report based on the report of the Chartered Accountant and has stated the Transferor Company is not registered with RBI as NBFC. That it is worthy to state here that at the outset, that the Transferor company is being wound up and hence shall cease to exist, therefore the said fact would have no bearing on the sanctioning of the scheme. Furthermore, it is pertinent to mention here that the Transferor Company has not taken any deposit from the public and there are no outstanding dues to be paid by the Transferor Company. It is further imperative to point out that there are no secured creditors of the Transferor Company and thus the scheme should be sanctioned.

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5. That it is pertinent to mentioned that the Transferee Company is duly registered as a NBFC Company and has complied with all the requirements of RBI. Copy of the certificate of registration with the RBI is annexed with the Affidavit of the authorized signatory of the Transferee Company.”

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[12]. Relying upon the above-reproduced contents of the affidavits it is urged by counsel for the petitioner that the Transferor company has not taken any deposits from the general public nor it has any secured creditor. Counsel submits that if any information is sought for, by the Reserve Bank of India, the same shall be sent promptly as per law. The Transferee Company, however, is duly

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C.P. No. 32 OF 2012 (O &M) :: 5::

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registered as NBFC with RBI and the certificate dated 05.02.2008 to this effect is appended (Annexure A-1) with the affidavit dated 23.08.2012

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[13]. The petitioner-Companies have further confirmed that there are no investigations or proceedings pending against them under Sections 235 and 251 of the Companies Act.

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[14]. In view of the procedural requirements as contemplated under Sections 391 to 394 of the Companies Act read with the Rules framed thereunder and on due consideration of the reports of Regional Director, Northern Region, Ministry of Corporate Affairs, Noida and the Official Liquidator, as also the explanation given by the petitioners coupled with the undertaking given by way of affidavits of authorised signatories of the petitioner companies, the Scheme of Arrangement between the petitioner-companies with regard to amalgamation of the Transferor Company with the Transferee Company is hereby sanctioned and as a result thereto, the assets and liabilities of the Transferor Company shall stand vested in the Transferee Company and the Transferor Company shall stand dissolved without being wound up.

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[15]. The petitioner-companies shall comply with the procedural requirements with regard to Accounting Standard-14 and also in case any information sought for by the RBI with regard to the Transferor Company the same shall be supplied immediately.

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[16]. The Scheme shall be binding on the Transferor and the Transferee Companies, their respective shareholders, creditors and all concerned.

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C.P. No. 32 OF 2012 (O &M) :: 6::

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[17]. Let formal order of sanction of the Scheme of Amalgamation be drawn in accordance with law and the certified copy of the same be filed with the Registrar of Companies within 30 days from the date of receipt of certified copy of the same.

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[18]. A notice of this order be published in the daily 'Indian Express' (Chandigarh Edition) and 'Dainik Tribune (vernacular) and in the official Gazette of the Government of Punjab.

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[19]. Any interested person shall be at liberty to apply to the Court for any direction(s) as per law.

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[20]. Disposed of accordingly. 05.09.2012 ( SURYA KANT ) dinesh JUDGE

Technocrats Medical Devices Pvt. Ltd. v. Patan Finance and Investment Co. Ltd.

Case brief

What is this about?

What did the court decide?

Technocrats Medical Devices Pvt. Ltd. v. Patan Finance and Investment Co. Ltd.

Case brief

What is this about?

What did the court decide?

What the court decided

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Issues for consideration

Statutes considered

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