Allowed

M/s. Clt Apparel India Priate Limited. v. -

Telangana HC6 Nov 2014CP/163/2014

Case brief

AI extract

What is this about?

This common order sanctions the proposed scheme of amalgamation between two apparel companies. The Court approved the scheme after receiving reports from the Official Liquidator and the Regional Director stating no objections existed under Sections 391 and 394 of the Companies Act, 1956. The transferor company is ordered to be dissolved without winding up.

What did the court decide?

Scheme of amalgamation sanctioned with effect from 01.04.2013; Transferor company ordered to be dissolved without winding up.

M/s. Clt Apparel India Priate Limited. Vs - — Insolvency and Bankruptcy | Telangana HC (2014)

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HON’BLE SRI JUSTICE A. RAJASHEKER REDDY COMPANY PETITION NOs.163 and 164 of 2014

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COMMON ORDER:

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C.P.No.163 of 2014 is filed by M/s. CLT Apparel India Private Limited (transferor company) and C.P.164 of 2014 is filed by M/s. Brandix Apparel India Private Limited (transferee company), for sanction of this Court to the proposed scheme of amalgamation of transferor company with the transferee company.

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In C.P.No.163 of 2014, the transferor company has pleaded that it was incorporated on 10.02.2010, that its authorized share capital is Rs.55,00,00,000/- divided into 5,50,00,000 equity shares of Rs.10/each and that the share capital has been issued, subscribed and fully paid up. That its main objects are to carry on the business as manufacturers, producers, processors, makers, inventors, converters, importers, exporters, traders, buyers, sellers, retailers, whole sellers, suppliers, indenters, packers, movers, preservers, stockiest, agents, sub agents, merchants, distributors, consignors, jobbers, brokers, concessionaires or otherwise deal in clothing and wearing apparel and hosiery goods of every kinds, nature and description, durries, mats, rugs, blankets, shawls and all other articles of woolen and worsted materials.

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To carry on the business to manufacture, buy, sell, manipulate, refine, prepare, import, export and deal both in wholesale and retail in cotton, silk, linen, woolen, artificial and chemical fabrics of all kinds and descriptions, staple fiber, rayon, nylon, synthetic materials and all other types of fibrous materials, yarn and polymers of all description and to carry on business as manufacturers, producers, processors, makers, inventors, converters, importers, exporters, traders, buyers, sellers, retailers, whole sellers, suppliers, indenters, packers, movers, preservers, stockiest, agents, sub agents, merchants, distributors,

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consignors, jobbers, broker, concessionaires or otherwise deal in textiles of all varieties, silk, synthetics, fibre and yarns of all varieties and woolen. That its Board of Directors, by resolution dated 11.03.2014, has approved the proposed scheme of amalgamation, by fixing 01.04.2013 as appointed date.

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The transferor company has filed Company Application No.763 of 2014 for dispensing with the requirement of convening the meetings of the equity shareholders and unsecured creditors of the applicant for considering the proposed scheme of amalgamation and this Court after considering the affidavits filed by the shareholders and letters of the five unsecured creditors, who constitute 99.4% of the unsecured amount, dispensed with the requirement of convening the meetings of the shareholders and the unsecured creditors of the applicant to consider the proposed scheme of amalgamation by order dated 02.07.2014.

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It is the pleaded case of the transferee company, petitioner in C.P.No.164 of 2014, that it was incorporated on 28.03.2005, that its authorized share capital as on is Rs.30,00,00,000/- divided into 30,00,000 equity shares of Rs.100/- each and that the entire share capital has been issued, subscribed and fully paid up. That its main objects are to carry on the business of buyingm selling, importing and exporting of raw materials, accessories and finished products relating to and /or in connection with the apparel industry or apparel related industries.

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To carry on the business of manufacturers and exporters of and dealers in readymade garments of all kinds and every description including gents, ladies and children’s shirts, trousers, pants, and underpants, jackets, vests, and waistcoats, jeans, suits, ladies and overcoats, T shirts, overalls, raincoats, aprons and infants and other children’s garment and also all other types of garments.

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To carry on the business as spinners, weavers, manufactures,

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bleachers, printers, dyers, processors, exporters, importers of and dealers in cotton, skill artificial skill, rayon, woolen, hemp, jute, nylon, terylene, and other fibrous substances whether natural or synthetic, raw or manufacturers and yarn and other manufactured products or fabrics from the said substances or any other similar materials.

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To import, semi manufactured or raw mterials, connected with the textiles, garments manufacturing industry, including all textile fabrics, linings, buttons, sewing thread and merchandising cottons from and to sell, distribute and export to any part of the world, garments made up of textiles, readymade wear of every king and description and the like in their manufactured state.

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To carry on the business of hatters, glowers, furriers and embroiders.

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That its Board of Directors, by resolution dated 11.03.2014 has approved the proposed scheme of amalgamation, by fixing 01.04.2013 as the appointed date.

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The transferee company has filed Company Application No.764 of 2014 for dispensing with the requirement of convening the meetings of the equity shareholders and unsecured creditors of the applicant for considering the proposed scheme of amalgamation and this Court after considering the affidavits filed by the shareholders and letters of the five unsecured creditors, who constitute 99.8% of the unsecured amount, dispensed with the requirement of convening the meetings of the shareholders and the unsecured creditors of the applicant to consider the proposed scheme of amalgamation by order dated 02.07.2014.

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In both these petitions, this Court on 05.08.2014 directed the petitioners to issue notices to the Regional Director, South Eastern Region, Ministry of Corporate Affairs, Hyderabad, besides publication of notices in New Indian Express (English) and Andhra Bhoomi (Telugu) of Visakhapatnam Editions. Learned counsel for the petitioners has

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filed copies of proof of publication in the newspapers and stated that he has not received any claims or objections to the proposed scheme of amalgamation.

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

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The Official Liquidator filed a report stating that basing on the information made available by the petitioner company, he is of the opinion that the affairs of the Company appears to have not been conducted in a manner prejudicial to the interests of the members or to public interest. The learned counsel for the Official Liquidator states that Official Liquidator has no objection for approving scheme of amalgamation.

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The Regional Director, in his common report dated 26.09.2014, 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 under Section 391 and 394 of Companies Act, 1956 and that no objections/comments were received from the Income Tax Department. It is stated that ROC, Hyderabad has reported that the petitioner company involved in the scheme of amalgamation is regular in filing the statutory returns and no complaints, no investigation and no inspections are pending against the transferee company.

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It is stated that the Amalgamation of the Transferor Company with the Transferee Company would result in the following benefits:

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1. Greater integration, financial strength and flexibility for the amalgamated entity in cash management of the amalgamated entity, and unferrered access to cash flow generated by the combined business which can be deployed more efficiently.

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2. Improved organisational capability and leadership, arising from the pooling of human capital that has the diverse skills, talent and vast

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experience to compete successfully in an increasingly competitive industry.

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3. There is no likelihood that interests of any shareholder or creditor of either the Transferor Company or the Transferee Company would be prejudiced as a result of the scheme.

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4. The Amalgamation will enable more efficient and economic control and conduct of the companies.

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For the above mentioned reasons, there is no hurdle for objecting the scheme of amalgamation. Accordingly, the scheme of amalgamation is sanctioned with effect from appointed dated i.e.,01.04.2013. The petitioner in C.P.No.163 of 2014 is ordered to be dissolved without going through the process of winding up. The petitioner in C.P.No.164 of 2014 shall, within thirty days from the date of receipt 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 actions in pursuance of the approval of the scheme of amalgamation. The company petitions are accordingly allowed.

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The petitioner in Company Petition No.163 shall pay fee in a sum of Rs.5,000/- to the learned Assistant Solicitor General appearing for Regional Director and Sri M.Anil Kumar, learned counsel for Official Liquidator each and the petitioner in Company Petition No.164 is to pay Rs.5000/- to the learned Assistant Solicitor General towards fee.

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_____________________________ A. RAJASHEKER REDDY, J

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Date: 06.11.2014 dv

M/s. Clt Apparel India Priate Limited. v. -

Case brief

What is this about?

What did the court decide?

M/s. Clt Apparel India Priate Limited. v. -

Case brief

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What did the court decide?

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