Allowed

M/S Hans Paper and Pulp Private Limited v. -

Telangana HC13 Sept 2010CP/92/2010

Case brief

AI extract

What is this about?

This order sanctions and confirms the scheme of amalgamation of two transferor companies with a transferee company under Sections 391 and 394 of the Companies Act, 1956, declaring it binding on all shareholders and creditors and ordering the dissolution of the first transferor company.

What did the court decide?

Sanction and confirmation of the scheme of amalgamation; dissolution of the first transferor company without winding up; parties at liberty to apply for necessary directions.

M/S Hans Paper and Pulp Private Limited Vs - — Company and Corporate | Telangana HC (2010)

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IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD

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MONDAY, THE THIRTEENTH DAY OF SEPTEMBER TWO THOUSAND AND TEN

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HON’BLE SRI JUSTICE G. BHAVANI PRASAD Company Petition Nos.92 and 93 of 2010

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C.P. No.92 of 2010:

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M/s. Hans Paper & Pulp Private Limited .. Petitioner/First Transferor Company

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And

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C.P. No.93 of 2010:

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M/s. Vamshadhara Paper Mills Limited .. Petitioner/Transferee Company

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M/s. Sennar Paper and Boards Limited (Second Transferor Company)

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COMMON ORDER:

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Both the company petitions have been filed for sanction and confirmation of the scheme of amalgamation of the transferor companies and the transferee company under Sections 391 and 394 of the Companies Act, 1956.

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M/s. Hans Paper & Pulp Private Limited/first transferor company and M/s. Sennar Paper and Boards Limited/second

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transferor company are proposed to be amalgamated with M/s. Vamshadhara Paper Mills Limited/transferee company with effect from 01-04-2009 on obtaining confirmation and sanction of the High Court to the scheme of amalgamation.

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The first transferor company was incorporated as a private limited company in the State of Andhra Pradesh on 19-04-1993 with its registered office at Raghavpur, Nalgonda district. Its authorized share capital at present is Rs.60.00 lakhs divided into equity shares of Rs.100/- each and there is share application money of Rs.9,10,515/- as on 31-03-2009. As per the memorandum and articles of association of the first transferor company, its main object is to carry on business of manufacture, import, export and dealing in all kinds and classes of paper and similar analogous articles or things, etc.

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The second transferor company was incorporated as a private limited company in the State of Tamil Nadu on 27-05-2002 with a change of name subsequently on 06-03-2003 and the company became a deemed public limited company on 02-04-2003 with its registered office at Kilpauk, Chennai. The present authorized share capital of the second transferor company is Rs.2.00 crore divided into equity shares of Rs.10/- each as on 3103-2009 and 17,73,870 equity shares of Rs.10/- each were issued, subscribed and paid up as on 31-03-2009. As per the memorandum and articles of association of the company, its main object is also to manufacture, buy, sell, import, export and deal with all kinds and classes of paper and like things etc.

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The transferee company was incorporated as a public limited company in the State of Andhra Pradesh on 02-04-1980 and later changed its name on 04-04-1985 to the present name. The present authorized share capital of the transferee company as on

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31-03-2009 is Rs.10.00 crore divided into equity shares of Rs.10/each and 24,66,275 equity shares of Rs.10/- each were issued, subscribed and paid up as on 31-03-2009. As per the memorandum and articles of association of the company, this company also deals with all kinds and classes of paper board, card board, pulp and the like products.

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The audited balance sheets of both the transferor and transferee companies as on 31-03-2009 were also filed.

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While so, the Boards of Directors of the transferor companies and the transferee company at their respective meetings on 11-02-2010 and 17-02-2010 approved the scheme of amalgamation of the companies with effect from 01-04-2009, as they are under the same management in similar business and in order to have better and efficient administrative and economic management.

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The salient features of the scheme of amalgamation are that all the assets of the transferor companies and their rights and interests in all manner will be transferred to and vested in the transferee company in terms of Section 394 of the Companies Act, 1956. The liabilities also will be similarly taken over and the transferee company shall continue all legal and other proceedings of the transferor companies. All the permanent employees in the transferor companies become the employees of the transferee company with continuity of service and the transferee company will issue shares to the shareholders of the transferor companies as per the details incorporated in the scheme of amalgamation. The transferor and transferee companies agreed to apply to the High Courts of Andhra Pradesh and Madras accordingly for sanction of the scheme of amalgamation and also subject to approval by and consent of the requisite majorities of the members

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of the companies.

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In Company Application No.194 of 2010, the High Court dispensed with the meeting of the shareholders of the first transferor company under Section 391 of the Companies Act, 1956, while under Company Application No.195 of 2010, the High Court by orders, dated 22-03-2010 directed conduct of meeting of the shareholders and unsecured creditors of the transferee company on 24-04-2010 with clear 21 days notice and appointed Sri Sreemannarayana Vattikuti, advocate as Chairperson to preside over the meeting. The Chairperson reported the result of the meeting to the High Court on 29-04-2010.

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The secured and unsecured creditors of the first transferor company and the transferee company stated no objection for the proposed scheme of amalgamation, which information is submitted to the High Court.

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The second transferor company filed a company application for convening a meeting of its shareholders before the High Court of Madras and there are no other statutory inhibitions against the approval of the scheme of amalgamation.

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Therefore, sanction and confirmation of the scheme of amalgamation, dissolution of the first transferor company and compliance of consequential formalities were requested to be ordered.

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Sri R. Vijay Shekhar, Managing Director of the first transferor company and Sri R. Rajendran, Managing Director of the transferee company have filed their respective affidavits, as authorized by Boards of Directors of respective companies, confirming the statements made in the company petitions.

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In both the company petitions, notices were ordered to the Regional Director, Ministry of Corporate Affairs, Sastry Bhavan, Chennai and the official liquidator apart from general notice by way

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of publication in ‘Business Standard’, Hyderabad edition and ‘Eenadu’, Nalgonda edition.

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The official liquidator in his reports on the examination of the information, books and papers furnished to him by the respective companies had opined that the affairs of the subject companies do not appear to have been conducted in a manner prejudicial to the interests of their members or to public interest.

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The Registrar of Companies submitted that the scheme is subject to approval of the High Court of Madras, within the jurisdiction of which, the second transferor company is registered and no objection certificates from the secured and unsecured creditors have to be filed. It was also stated that the transferee company should pay the stamp duty wherever applicable as per the Regulations of the Stamp Act and the share application money of the transferor companies should result in allotment of shares to the investors or refund.

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No objections or any other information have been received in pursuance to the general notice by publication.

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No objection certificates from the secured and unsecured creditors have been filed during hearing in both the petitions. Sri V.S. Raju, learned counsel for the petitioners, Ms. M. Ramya, learned counsel representing the Assistant Solicitor General of India and Sri M. Anil Kumar, learned counsel for the official liquidator are heard.

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In so far as the objection about the scheme being subject to approval of the High Court of Madras also in view of the registration of the second transferor company in the State of Tamil Nadu is concerned, it was specifically stated that the second transferor company had filed a company application before the High Court of Madras for convening a meeting of its shareholders

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under Sections 391 and 394 of the Companies Act, and it was also stated by Sri V.S. Raju, learned counsel for the petitioners that the High Court of Madras will be approached for necessary sanction and confirmation of the scheme of amalgamation.

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Concerning the obligation to obtain no objection certificates from the secured and unsecured creditors, such consents have been furnished in both the company petitions.

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The liability to pay stamp duty as per the Stamp Act in force in the State of Andhra Pradesh in respect of the scheme of amalgamation is admitted on behalf of the petitioners and the liability to allot shares to the investors or refund the share application money before the scheme of amalgamation is given effect to, is also admitted.

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Under the circumstances, all the objections raised by the Central Government and the official liquidator stood answered and there appears no legal or factual impediment in sanctioning the scheme of amalgamation.

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Therefore, the scheme of amalgamation as set out in Annexure A7 to both the petitions is hereby sanctioned and it is hereby declared that the same is binding on all the shareholders and creditors of the first transferor company and the transferee company, and the first transferor company shall stand dissolved without going through the process of winding up.

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The parties to the scheme of amalgamation or any persons interested shall be at liberty to apply to this Court for any directions that may be necessary for the working of the scheme of amalgamation and the first transferor company and the transferee company shall file with the Registrar of Companies certified copies of this order within thirty days (30 days) from the date of receipt of the order.

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The first transferor company and the transferee company

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shall pay costs of these petitions set at Rs.3,000/- (Rupees three thousand only) each to the learned Assistant Solicitor General and the first transferor company shall pay costs of Rs.3,000/- (Rupees three thousand only) to the learned counsel for the official liquidator. The petitions are allowed accordingly and the order of this Court shall be made in Form No.42 with such variations, as the circumstances may require, in terms of Rule 84 of the Companies (Court) Rules, 1959.

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_____________________ G. BHAVANI PRASAD, J

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Date: 13-09-2010 Svv

M/S Hans Paper and Pulp Private Limited v. -

Case brief

What is this about?

What did the court decide?

M/S Hans Paper and Pulp Private Limited v. -

Case brief

What is this about?

What did the court decide?

What the court decided

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