Allowed

M/s. Ind Natali Granite Private Limited v. -

Telangana HC21 Oct 2014CP/149/2014

Case brief

AI extract

What is this about?

The Court sanctioned a scheme of amalgamation for several private limited companies engaged in granite and agro businesses. Despite pending tax penalty proceedings against two transferor companies, the Court approved the merger based on the reports of the Official Liquidator and the Regional Director, consuming unsecured creditor meetings and finding no legally sustainable objection to the proposa

What did the court decide?

Scheme of amalgamation sanctioned; transferor companies to be dissolved and merge with transferee company; certified copy forwarded to Registrar.

M/s. Ind Natali Granite Private Limited Vs - — Company and Corporate | Telangana HC (2014)

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HON’BLE SRI JUSTICE A.RAJASHEKER REDDY COMPANY PETITION Nos.149, 150, 151, 152, 153, 154 and 155 of 2014

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COMMON ORDER:

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Company Petition No.149 of 2014 is filed by M/s.Ind Natali Granite Private Limited, CP.No.150 of 2014 is filed by M/s.Opusasia Technologies Private Limited, CP.No.151 of 2014 is filed by M/s.Reliance Granite Private Limited, CP.No.152 of 2014 is filed by M/s.Subhiksha Agro Farms Private Limited, CP.No.153 of 2014 is filed by M/s.Victorian Granites Private Limited and CP.No.154 of 2014 is filed by M/s.Yarra Agro Estates Private Limited (Transferor Companies) and CP.No.155 of 2014 is filed by M/s.Midwest Granite Private Limited (Transferee Company), for sanction of this Court to the proposed scheme of amalgamation of transferor companies with the transferee company.

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In CP.No.149 of 2014, the transferor company has pleaded that it was incorporated on 03.06.1985, that its authorized share capital is Rs.5,00,000/- divided into 5,000 equity shares of Rs.100/- each and that the subscribed and paid-up capital is Rs.5,00,000/- divided into 5,000 equity shares of Rs.100/- each fully paid. That its main objects are to carry on in India and elsewhere the business of mine owners, miniral contractors and/or agents, and to purchase, take in exchange, take on lease or otherwise acquire any mines, mining properties, mining products, mining licences or rights, concessions, claims prospecting lincences or rights, protected areas, ores, mineral products or by products and substances from earth, iron manganese, cobalt, nickel, tin, copper, silver, gold, granite, building stone and natural decorative stones, aluminium deposits, railin concentrates,

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forests, water rights, grants, mineral or other lands etc and to carry on any business relating to the finding and working of minerals, the production and working of metals. That its Board of Directors in the meeting held on 29.03.2014 has approved the proposed scheme of arrangement by fixing 01.04.2013 as the appointed date. It has further pleaded that it has four shareholders, that they have submitted their No Objection affidavits to the proposed scheme of amalgamation in Company Application No.623 of 2014, wherein this Court has dispensed with the requirement of holding their meeting vide its order dated 28.04.2014, that it has not availed any secured loans, and that however, it availed unsecured loans from the transferee company, No Objection letters already submitted to the Official Liquidator.

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In CP.No.150 of 2014, the transferor company has pleaded that it was incorporated on 31.01.1996 as ‘Reliance Cyber-tech Private Limited’ and it was changed to ‘Opusasia.com Private Limited’ on 16.11.1999 and to ‘M/s. Opusasia Technologies Private Limited’ on 02.08.2000 and a fresh Certificate of Incorporation was obtained on 02.08.2000, that its authorized share capital is Rs.3,00,00,000/- divided into 30,00,000 equity shares of Rs.10/each and that the issued, subscribed and paid-up capital is Rs.1,24,53,700/- divided into 12,45,370/- equity shares of Rs.10/each fully paid. That its main objects are to render consultancy and other services in the field of Computers and Software development, to develop programmers and systems, to undertake turkey software projects an operation research, to offer complete hardware and software solutions and technical services and to subject the same to commercial exploitation, export, import and to act as dealers and authorized representatives of the same. That its Board of Directors in the meeting held on 29.03.2014 has

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approved the proposed scheme of arrangement by fixing 01.04.2013 as the appointed date. It has further pleaded that it has eight shareholders, that they have submitted their No Objection affidavits to the proposed scheme of amalgamation in Company Application No.624 of 2014, wherein this Court has dispensed with the requirement of holding their meeting vide its order dated 28.04.2014, that it has not availed any secured loans, and that however, it availed unsecured loans from group of companies and No Objection letters already submitted to the Official Liquidator.

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In CP.No.151 of 2014, the transferor company has pleaded that it was incorporated on 13.02.1987, that its authorized share capital is Rs.2,00,00,000/- divided into 20,00,000 equity shares of Rs.10/- each and that the issued, subscribed and paid-up capital is Rs.1,23,13,070/- divided into 12,31,307 equity shares of Rs.10/each fully paid. That its main objects are to carry on the business as manufacturers, excavators of quarries, mines, dealers, distributors, agents of all kinds of Granite Stones raw finished and semi finished including random slabs – polished or flamed tiles, panels flamed or polished and monuments and all kinds of stones stone products that may be directly or indirectly derived there from or may be discovered in relation thereto. That its Board of Directors in the meeting held on 29.03.2014 has approved the proposed scheme of arrangement by fixing 01.04.2013 as the appointed date. It has further pleaded that it has five shareholders, that they have submitted their No Objection affidavits to the proposed scheme of amalgamation in Company Application No.625 of 2014, wherein this Court has dispensed with the requirement of holding their meeting vide its order dated 28.04.2014, that it has not availed any secured loans, and that

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however, it availed unsecured loans from its directors & group companies and No Objection letters already submitted to the Official Liquidator.

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In CP.No.152 of 2014, the transferor company has pleaded that it was incorporated on 30.01.2004 as ‘M/s.Opus Labs Private Limited’ and later it was changed to ‘M/s. Subhiksha Agro Farms Private Limited’ and a fresh Certificate of Incorporation was obtained on 19.08.2010, that its authorized share capital is Rs.1,00,000/- divided into 10,000 equity shares of Rs.10/- each and that the issued, subscribed and paid-up capital is Rs.1,00,000/- divided into 10,000 equity shares of Rs.10/- each fully paid. That its main objects are to carry on the business of farming on land, water or in special chambers, plantation of all types of trees and plants as farm forestry or otherwise for commercial, domestic, industrial and other purposes, horticulture, floriculture, tissue culture of all kinds of food grains, seeds, fruits, proprietors of orchards and traders, exporters and sellers of and dealers in products of farming, horticulture, tissue culture, and pisci culture and forestry etc. That its Board of Directors in the meeting held on 29.03.2014 has approved the proposed scheme of arrangement by fixing 01.04.2013 as the appointed date. It has further pleaded that it has four shareholders, that they have submitted their No Objection affidavits to the proposed scheme of amalgamation in Company Application No.626 of 2014, wherein this Court has dispensed with the requirement of holding their meeting vide its order dated 28.04.2014, that it has not availed any secured loans, and that however, it availed unsecured loans from the transferee company and No Objection letters already submitted to the Official Liquidator.

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In CP.No.153 of 2014, the transferor company has pleaded

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that it was incorporated on 31.05.1984, that its authorized share capital is Rs.1,0000,000/- divided into 1,00,000 equity shares of Rs.100/- each and that the issued, subscribed and paid-up capital is Rs.83,00,000/- divided into 83,000 equity shares of Rs.100/each fully paid. That its main objects are to carry on the business as manufacturers, excavators of quarries, mines, dealers, distributors, merchants, exporters, importers, stockiest and agents of all kinds of granite stones-raw, finished and semi finished including random slabs-polished or flamed tiles, panels flamed or polished and monuments and all kinds of stones and stone products that may be directly or indirectly derived there from or may be discovered in relation thereto. That its Board of Directors in the meeting held on 29.03.2014 has approved the proposed scheme of arrangement by fixing 01.04.2013 as the appointed date. It has further pleaded that it has six shareholders, that they have submitted their No Objection affidavits to the proposed scheme of amalgamation in Company Application No.627 of 2014, wherein this Court has dispensed with the requirement of holding their meeting vide its order dated 28.04.2014, that it has not availed any secured loans, and that however, it availed unsecured loans from its group companies and No Objection letters already submitted to the Official Liquidator.

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In CP.No.154 of 2014, the transferor company has pleaded that it was incorporated on 31.07.2008, that its authorized share capital is Rs.1,00,000/- divided into 10,000 equity shares of Rs.10/- each and that the issued, subscribed and paid-up capital is Rs.1,00,000/- divided into 10,000 equity shares of Rs.100/- each fully paid. That its main objects are to construct, let out furnish and carry on all or any of the functions of properties of flats,

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residential colonies, development of layouts, dwelling houses, shops, offices and clubs and for these purposes to purchase take on lease or otherwise acquire and hold any lands and prepare layout interests therein on connected therewith to layout prepare building sites and to construct, reconstruct, repair, pull down alter or improve, decorate furnish and maintain flats, dwelling houses, shops, offices, buildings, works and sanitary conveniences of all kinds to layout roads, drainage pipes, water pipes and electric installations and to set apart and for pleasure gardens and recreation grounds or otherwise improve the land or any part thereof. That its Board of Directors in the meeting held on 29.03.2014 has approved the proposed scheme of arrangement by fixing 01.04.2013 as the appointed date. It has further pleaded that it has two shareholders, that both of them have submitted their No Objection affidavits to the proposed scheme of amalgamation in Company Application No.628 of 2014, wherein this Court has dispensed with the requirement of holding their meeting vide its order dated 28.04.2014, that it has not availed any secured loans, and that however, it availed unsecured loans from the transferee company and No Objection letters already submitted to the Official Liquidator.

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It is the pleaded case of the transferee company, petitioner in CP.No.155 of 2014, that it was incorporated on 11.12.1981, that its authorized share capital is Rs.2,00,00,000/- divided into 2,00,000 equity shares of Rs.100/- each and that the issued, subscribed and paid-up capital is Rs.99,00,000/- divided into 99,000 equity shares of Rs.100/- each fully paid. That its main objects are to carry on the business as manufacturers, excavators of quarries, mines, dealers, distributors, merchants, exporters, importers, stockists and agents of all kinds of granite stones raw

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finished and semi finished including random slabs-polished or flamed tiles, panels flamed or polished and monuments and all kinds of stones and stone products that may be directly or indirectly derived there from or may be discovered in relation thereto. That its Board of Directors in the meeting held on 29.03.2014 has approved the proposed scheme of arrangement by fixing 01.04.2013 as the appointed date.

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The transferee company has filed Company Application No.629 of 2014 and this Court by Order, dated 28.04.2014, dispensed with the requirement of holding the meetings of its shareholders and appointed Sri Krishna Kishore as the Chairperson for convening the meeting of its unsecured creditors and Sri P.Chandrasekhar Reddy, Advocate as the Chairperson for convening the meeting of its secured creditors and fixed the quoram for both the meeting as 5, respectively. This Court further directed that notices for the meeting be published in Business Standard (English) and Andhra Bhoomi (Telugu) of Hyderabad Editions as per the statutory provisions. Accordingly, the transferee company got published the notices of the meeting of the secured and unsecured creditors in the said newspapers on 21-052014. The Chairperson appointed to conduct meeting for Secured creditors submitted a report on 20-06-2014, wherein he has stated that the meeting of the secured creditors of the transferee Company was attended by six secured creditors in person and that all of them voted in favour of the proposed resolution. The Chairperson appointed to conduct meeting for Unsecured Creditors submitted a report on 20.06.2014 wherein he has stated that the meeting of the unsecured creditors of the transferee Company was attended by 17 unsecured creditors in person and 2 unsecured Creditors through proxies and that all the unsecured

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creditors present in person and through proxies voted in favour of the proposed resolution.

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In all these petitions, this Court on 16.07.2014, directed the petitioners to issue notices to the Regional Director, South East Region, Ministry of Corporate Affairs, Hyderabad, besides publication of notices in Business Standard (English Daily) and Andhra Bhoomi (Telugu Daily) of Hyderabad editions. Learned counsel for the petitioners has filed copies of proof of publication in the newspapers and stated that he has not received any claims or objections to the proposed scheme.

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In pursuance of the notices issued, the Regional Director, South East Region, Ministry of Corporate Affairs and Official Liquidator have filed their respective reports.

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The Official Liquidator filed separate reports in all the petitions stating that basing on the information made available by the transferor companies, he is of the opinion that the affairs of the transferor companies appear to have not been conducted in a manner prejudicial to the interests of the members or to public interest.

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The Regional Director in his common report dated 11.09.2014, stated that in pursuance to the General Circular No.1/2014, dated 15.01.2014 issued by the Ministry of Corporate Affairs, New Delhi, comments of the Income Tax Department were sought and that the Income Tax Department submitted its comments/remarks vide letters dated 14.08.2014 and 18.08.2014 to the proposed scheme of arrangement wherein it has stated that penalty proceedings under Section 271(I)(c) are pending before

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the Income Tax Department against 3^rd and 5^th transferor companies. He further submitted that the Registrar of Companies, Telangana & Andhra Pradesh, Hyderabad has reported that all the companies involved in the Scheme of Amalgamation are regular in filing the statutory returns and no complaints, no investigations are pending against all the companies. He also prayed this Court to dispose of the petitions on merits after taking into consideration the comments/remarks made by the Income Tax Department in their letters dated 14.08.2014 and 18.08.2014.

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In reply to the above observation made by the Regional Director, South East Region, Ministry of Corporate Affairs, learned counsel for the petitioners submitted that since penalty proceedings are pending against the Transferor Companies 3 and 5 only, they do not come in the way of scheme of amalgamation.

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It is also submitted that the transferor companies are mostly engaged in the business of granites and also in agro activities. The transferee company is also engaged in the business of quarrying and extracting the granites, export of granites and other natural stones and minerals. In order to take advantages of the infrastructure facilities of the transferor companies, the transferee company after amalgamation would be in a position to utilize the infrastructure at optimum level. Further the proposed amalgamation would also benefit the companies by the rationalizing the activities of the respective companies which will be economical and there would be reduction in over heads and other expenses by the saving substantial amounts. Further the proposed amalgamation would financially strengthen the Transferee Company and result in profitability. Therefore, it would be beneficial to all the shareholders, creditors and employees and

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all persons concerned.

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Further the proposed amalgamation would also result in the following advantages:-

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i) To achieve greater integration and greater financial strength and flexibility, which may maximize overall shareholder value and improve the competitive position of the combined entity.

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ii) To achieve strengthened leadership in the industry, in terms of the consolidated asset base, consolidated revenues of the combined entity.

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iii) To achieve greater efficiency in cash management and unfettered access to cash flows generated by the combined business which can be deployed more effectively to fund organic or inorganic growth opportunities.

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iv) Enhancement of net worth of the combined business to capitalize on future growth potential.

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v) The amalgamation will result in reduction of multiplicity of regulatory compliances required to be carried out at present.

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In view of the above facts and circumstances and in view of the reports submitted by the Official Liquidator and Regional Director, I do not find any legally sustainable objection for not approving the proposed scheme of amalgamation. Accordingly, the proposed scheme of amalgamation is sanctioned with effect from the appointed date i.e., 01.04.2013. The petitioners/Transferor Companies shall stand dissolved and merge with the Transferee Company without going through the process of winding up. The petitioner in CP.No.155 of 2014 (Transferee Company) within thirty (30) days from the date of receipt of a copy of this order, cause a certified copy of the same to be delivered to the Registrar of Companies for the State of Telangana and the State of Andhra Pradesh at Hyderabad and take all other consequential steps in pursuance of the approval of the scheme of amalgamation.

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Accordingly, Company Petitions are allowed.

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The petitioner companies in CP.No.149 to 154 of 2014 shall also pay a sum of Rs.5,000/- each to the learned Assistant Solicitor General appearing for the Regional Director and to Sri M.Anil Kumar, learned counsel for the Official Liquidator each and the petitioner in Company Petition No.155 of 2014 is to pay Rs.5,000/- to the learned Assistant Solicitor General towards fee in these petitions.

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____________________________ A.RAJASHEKER REDDY, J 21.10.2014 tk

M/s. Ind Natali Granite Private Limited v. -

Case brief

What is this about?

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M/s. Ind Natali Granite Private Limited v. -

Case brief

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