9911796707
TMI Blog2005 (3) TMI 475X X X X Extracts X X X X X X X X Extracts X X X X ..... er-Transferor Company No. 3"), Kanpur Detergents and Chemicals Private Limited, having its Registered Office at 117/H-2/202, Pandu Nagar, Kanpur-208005, Uttar Pradesh (hereinafter also referred to as "the Transferor Company No. 4" or "the Petitioner-Transferor Company No. 4"), and Shri Mahadeo Soap Industries Private Limited, having its Registered Office at 117/H-2/202, Pandu Nagar, Kanpur-208005, Uttar Pradesh (hereinafter also referred to as "the Transferee Company" or "the Petitioner-Transferee Company"). The said Transferor Company No.1, the Transferor Company No. 2, the Transferor Company No. 3, and the Transferor Company No. 4 have hereinafter been collectively also referred to as "the Transferor Companies" or the "Petitioners-Transferor Companies". The Transferor Company No. 1, the Transferor Company No. 2, the Transferor Company No. 3, the Transferor Company No. 4 and the Transferee Company have hereinafter been collectively also referred to as "the Petitioners-Companies". 2. It appears that a Scheme of Amalgamation is proposed for the amalgamation of the Transferor Company No. 1, the Transferor Company No. 2, the Transferor Company No. 3 and the Transferor Company No. 4 w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Transferor Company No.1 is Rs. 1,00,00,000 (Rupees One Crore) consisting of 1,00,000 Equity Shares of Rs. 100 each; and that the Issued, Subscribed and Paid-up Capital of the Petitioner-Transferor Company No. 1 is 80,250 Equity Shares of Rs. 100 each Fully Paid Up, aggregating to Rs. 80,25,000. 5.4 It is, inter alia, further stated in the Company Petition that the Petitioner-Transferor Company No.1 prepares its accounts on financial year basis under the Companies Act, 1956; and that the Petitioner-Transferor Company No.1 has got its accounts for the financial year ended 31-3-2003 prepared and audited in the normal course. 5.5 Copy of the Latest Audited Annual Accounts of the Petitioner-Transferor Company No.1 for the year ended 31-3-2003 has been filed as Annexure-C to the Company Petition, and appears at page 49 of the Paper Book of the Company Petition. 5.6 It is, inter alia, stated in paragraph 7 of the Company Petition that the Petitioner-Transferor Company No.1 has maintained proper books of account as required by law. 5.7 Summary of the financial position of the Petitioner-Transferor Company No.1 as on 31-3-2003 has also been given in paragraph 7 of the Company Petition. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Company Petition that the Petitioner-Transferor Company No.2 has maintained proper books of account, as required by law. 6.7 Summary of the financial position of the Petitioner-Transferor Company No.2 as on 31-3-2003 has also been given in paragraph 14 of the Company Petition. 6.8 It is, inter alia, further stated in paragraph 14 of the Company Petition that the Petitioner-Transferor Company No.2 has neither issued nor agreed to issue any debentures. 6.9 It is, inter alia, stated in paragraph 15 of the Company Petition that subsequent to the date of the aforementioned accounts, there has been no substantial change in the financial position of the Petitioner-Transferor Company No.2 excepting those arising or resulting from the usual course of business for which the accounts are under preparation. 7. As regards the Petitioner-Transferor Company No.3 (Singh Detergents Private Limited), it is, inter alia stated in the Company Petition that the Petitioner-Transferor Company No.3 was incorporated on 21-6-1989; and that the Registered Office of the Petitioner-Transferor Company No.3 is situated at 117/H-2/202, Pandu Nagar, Kanpur-208005, Uttar Pradesh, within the jurisdiction of thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter alia, stated in the Company Petition that the Petitioner-Transferor Company No.4 was incorporated on 24-10-1986; and that the Registered Office of the Petitioner-Transferor Company No.4 is situated at 117/H-2/202, Pandu Nagar, Kanpur-208005, Uttar Pradesh, within the jurisdiction of this Court. 8.1 The main objects of the Petitioner-Transferor Company No.4, as set out in the Memorandum and Articles of Association of the Petitioner-Transferor Company No.4, are reproduced in paragraph 25 of the Company Petition. 8.2 Copy of the Memorandum and Articles of Association of the Petitioner-Transferor Company No.4 has been filed as Annexure-H to the Company Petition, and appears at page 190 of the Paper Book of the Company Petition. 8.3 It is, inter alia, further stated in the Company Petition that the Authorised Share Capital of the Petitioner-Transferor Company No. 4 is Rs. 75,00,000 (Rupees Seventy Five Lakh) consisting of 75,000 Equity shares of Rs.100 each; and that the Issued, Subscribed and Paid-up Capital of the Petitioner-Transferor Company No.4 is 58,685 Equity Shares of Rs.100 each Fully Paid Up, aggregating to Rs.58,68,500. 8.4 It is, inter alia, further stated in the Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 Equity Shares of Rs.100 each; and that the Issued, Subscribed and Paid-up Capital of the Petitioner-Transferee Company is 24,840 Equity Shares of Rs.100 each Fully Paid Up, aggregating to Rs.24,84,000. 9.4 It is, inter alia, stated in paragraph 34 of the Company Petition that the Petitioner-Transferee Company prepares its accounts on financial year basis under the Companies Act, 1956; and that the Petitioner-Transferee Company has got its accounts for the financial year ended 31-3-2003 prepared and audited in the normal course. 9.5 Copy of the Latest Audited Annual Accounts of the Petitioner-Transferee Company for the year ended 31-3-2003 has been filed as Annexure-K to the Company Petition, and appears at page 264 of the Paper Book of the Company Petition. 9.6 It is, inter alia, stated in paragraph 35 of the Company Petition that the Petitioner-Transferee Company has maintained proper books of account, as required by law. 9.7 Summary of the financial position of the Petitioner-Transferee Company as on 31-3-2003 has also been given in paragraph 35 of the Company Petition. 9.8 It is, inter alia, further stated in paragraph 35 of the Company Petition that the Petitioner-Transf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Petitioners-Transferor Companies and the Petitioner-Transferee Company have no material interest in the proposed Scheme of Amalgamation, except as shareholders of the Petitioner-Transferee Company. 17. It is, inter alia, stated in paragraph 39 of the Company Petition that the Petitioners-Transferor Companies are wholly owned subsidiary of the Petitioner-Transferee Company. 18. It is pertinent to mention that making the averments narrated herein-before, the Transferor Companies No. 1,2,3 and 4 and the Transferee Company jointly filed a Company Application being Company Application No.4 of 2004 before this Court under sections 391(1) and 393 of the Companies Act, 1956. 19. On the said Company Application No.4 of 2004, the Court passed its order dated 30-1-2004, inter alia, despensing with the requirement of calling the meeting of the Equity Shareholders and the meeting of the Secured Creditors of the Transferor Company No.1, the Transferor Company No.2, the Transferor Company No.3, the Transferor Company No.4 and the Transferee Company. The Court further directed for holding the meeting of the Unsecured Creditors of the Transferor Company No.1, Transferor Company No.2, Transfero ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tor of the Transferor Company No.1, copy of the notice issued to each Unsecured Creditor of the Transferor Company No.2, Photostat copies of Certificates of Posting regarding sending of the notices to the Unsecured Creditors of the Transferor Company No.1, and Photostat copies of Certificates of Posting regarding sending of the notices to the Unsecured Creditors of the Transferor Company No.2 were filed and collectively numbered as Annexure-1 to the said Affidavit-Of-Service of Shri S.K. Garg. 22. It further appears that pursuant to the said order dated 30-1-2004, Shri C.K. Parekh, who had been appointed as Chairman for the aforesaid meetings in respect of the Transferor Company No.3 and the Transferor Company No.4 by the said order dated 30-1-2004, filed an Affidavit-Of-Service, sworn on 3-3-2004, under rule 76 of the Companies (Court) Rules, 1959, inter alia, mentioning compliance of the directions regarding giving of notices and taking out advertisements in the newspapers, as directed by the order dated 30-1-2004. 23. Alongwith the said Affidavit-Of-Service of Shri C.K. Parekh, an Affidavit of Shraddha Tiwari, stated to be a Company Secretary in practice and Constituted Attorn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ansferor Company No.1, Ballot Papers and Attendance Sheet of the Unsecured Creditors of the Transferor Company No.1 were also filed. The said Report was supported by an affidavit of Shri S.K. Garg, sworn on 29-3-2004. 29. It further appears that pursuant to the said order dated 30-1-2004, the meeting of the Unsecured Creditors of the Transferor Company No.2 was held on 20-3-2004 at the time and place mentioned in the said order dated 30-1-2004. 30. Pursuant thereto, Shri S.K. Garg, as Chairman of the said meeting of the Unsecured Creditors of the Transferor Company No.2, submitted his Report on 29-3-2004. 31. Alongwith the said Reports, Minutes of the said meeting of the Unsecured Creditors of the Transferor Company No.2, Ballot Papers and Attendance Sheet of the Unsecured Creditors of the Transferor Company No.2 were also filed. The said Report was supported by an affidavit of Shri S.K. Garg, sworn on 29-3-2004. 32. It further appears that pursuant to the said order dated 30-1-2004, the meeting of the Unsecured Creditors of the Transferor Company No.3 was held on 20-3-2004 at the time and place mentioned in the said order dated 30-1-2004. 33. Pursuant thereto, Shri C.K. Par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ur Detergents and Chemicals Private Limited with Shri Mahadeo Soap Industries Private Limited, as circulated along with the notice of the meeting, a copy of which has also been placed before the meeting and for the purpose of identification signed by the Chairman thereof, be and is hereby approved and agreed to." It is, inter alia, stated in the said Report of Shri S.K. Garg that the meeting of the Unsecured Creditors of the Transferor Company No. 1 was held on 20-3-2004 at 10.00 A.M. at 117/H-2/202, Pandu Nagar, Kanpur 208005; and that the meeting was attended by one Unsecured Creditor through Authorised Representative and 12 Unsecured Creditors through proxies, (i.e., total 13 Unsecured Creditors); and that the said Unsecured Creditors, who attended the said meeting, represent value of Rs. 2,23,71,906.94 (i.e., 57.36 per cent of the Total Debt as on 24-1-2004); and that the Resolution quoted above, was unanimously passed in the said meeting; and that the total amount payable to the Unsecured Creditors of the Transferor Company No. 1 as on 24-1-2004 was Rs. 3,90,05,864 out of which Rs. 2,23,71,906.94 (i.e., 57.36 per cent of the Total Debt as on 24-1-2004) were present at the sai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d, as circulated along with the notice of the meeting, a copy of which has also been placed before the meeting and for the purpose of identification signed by the Chairman thereof, be and is hereby approved and agreed to." It is, inter alia, stated in the said Report of Shri C.K. Parekh that the meeting of the Unsecured Creditors of the Transferor Company No.3 was held on 20-3-2004 at 1.30 P.M. at 117/H-2/202, Pandu Nagar, Kanpur 208005; and that the meeting was attended by one Unsecured Creditor through Authorised Representative and 3 Unsecured Creditors through proxies, (i.e., total 4 Unsecured Creditors); and that the said Unsecured Creditors, who attended the said meeting, represent value of Rs. 6,24,86,019.20 (i.e., 97.23 per cent of the Total Debt as on 24-1-2004); and that the Resolution quoted above, was unanimously passed in the said meeting; and that the total amount payable to the Unsecured Creditors of the Transferor Company No. 3 as on 24-1-2004 was Rs. 6,42,67,738.20 out of which Rs. 6,24,86,019.20 (i.e., 97.23 per cent of the Total Debt as on 24-1-2004) were present at the said meeting, who voted unanimously in favour of the said Resolution. 44. From a perusal of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted, as circulated along with the notice of the meeting, a copy of which has also been placed before the meeting and for the purpose of identification signed by the Chairman thereof, be and is hereby approved and agreed to." It is, inter alia, stated in the said Report of Shri Vikram Nath that the meeting of the Unsecured Creditors of the Transferee Company was held on 20-3-2004 at 4.00 P.M. at 117/H-2/202, Pandu Nagar, Kanpur-208005; and that the meeting was attended by one Unsecured Creditor through Authorised Representative and 6 Unsecured Creditors through proxies, (i.e., total 7 Unsecured Creditors); and that the said Unsecured Creditors, who attended the said meeting, represent value of Rs.16,20,13,929.13 (i.e., 97.88 per cent of the Total Debt as on 24-1-2004); and that the Resolution quoted above, was unanimously passed in the said meeting; and that the total amount payable to the Unsecured Creditors of the Transferee Company as on 24-1-2004 was Rs. 16,55,23,350.22 out of which Rs. 16,20,13,929.13 (i.e., 97.88 per cent of the Total Debt as on 24-1-2004) were present at the said meeting, who voted unanimously in favour of the said Resolution. 46. If further appears that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... got the notices published on 26-4-2004 in 'Pioneer' (English) published from Lucknow and on 26-4-2004 in 'Amar Ujala' (Hindi) published from Kanpur. Copies of the said newspapers have been filed and collectively numbered as Annexure-II to the said Affidavit-Of-Service. 50. Pursuant to the service of notice of the hearing of the Company Petition on the Official Liquidator, the Official Liquidator submitted his report being Report No. 123 of 2004 (Paper No. A-5 on the record of the present Company Petition). Further, pursuant to the service of notice of the hearing of the Company Petition on the Regional Director, Northern Region, Ministry of Company Affairs, Kanpur, the said Regional Director submitted his representation/affidavit, sworn on 2-7-2004, (Paper No. A-6 on the record of the present Company Petition) under section 394A of the Companies Act, 1956. However, despite the notices of the hearing of the Company Petition having been advertised in the aforementioned newspapers, no one filed any objections in the matter. 51. I have heard Shri Satwinder Singh and Shri Piyush Agrawal, learned counsel for the Petitioners-Companies, and Shri S.K. Saxena, Official Liquidator at lengt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conducted in a manner prejudicial to the interest of its members or to the public interest; and that the Company Petition under sections 391 and 394 of the Companies Act, 1956 may be decided by this Court on merits. 53. Coming now to the representation/affidavit of the Regional Director, Northern Region, Ministry of Company Affairs, Kanpur (Paper No. A-6), it is, inter alia, stated in the said representation/affidavit that as per clause 5.16(a) of the proposed Scheme of Amalgamation, all the employees of the Transferor Companies shall become the employees of the Transferee Company without break or interruption in their services upon sanctioning of the proposed Scheme of Amalgamation by this Court. 54. The said representation/affidavit of the said Regional Director quotes paragraph 6.5(a) of the proposed Scheme of Amalgamation, which is as under: "(a)In the event of any of the said sanctions and approvals not being obtained and/or the Scheme not being sanctioned by the Hon'ble High Court and/or the order(s) not being passed as aforesaid on or before 30-6-2004 or within such further period or periods as may be agreed upon by and between the Transferor Companies and the Transferee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... posed Scheme of Amalgamation uptil 31-3-2005 or within such further period or periods as may be agreed upon by and between the Transferor Companies and the Transferee Company. 59. Copies of the said Resolutions passed on 22-4-2004 by the Board of Directors of the Transferor Company No. 1, the Transferor Company No. 2, the Transferor Company No. 3, and the Transferor Company No. 4 have been filed as part of Annexure-1 to the said affidavit, and appear at pages 5,7,9 and 11 of the Paper Book of the said affidavit. Copy of the said Resolution passed by the Board of Directors of the Transferee Company on 22-4-2004 has been filed as part of Annexure-1 to the said affidavit, and appears at page 13 of the Paper Book of the said affidavit. 60. During the course of hearing, question arose as to whether the extension of period contemplated in the aforesaid paragraph 6.5(a) of the proposed Scheme of Amalgamation could be done only by calling fresh meeting(s) as contemplated under section 391(1) and (2) read with section 393 of the Companies Act, 1956 or such extension could be done by the Board of Directors of the Transferor Companies and the Transferee Company by passing Resolutions at the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d mentioned in paragraph 6.5(a) of the proposed Scheme of Amalgamation. Paragraph 6.2(a) of the proposed Scheme of Amalgamation, inter alia, provides that the Board of Directors of the Transferor Companies and the Board of Directors of the Transferee Company either by themselves or by any Committee constituted by the Board of Directors in this behalf "may make or assent from time to time on behalf of all persons concerned to any extension, modification or amendments of this Scheme". It is evident from the said paragraph 6.2(a) of the proposed Scheme of Amalgamation that the respective Board of Directors of the Transferor Companies and the Transferee Company have been given power to make or assent to any extension of the proposed Scheme of Amalgamation, and this would be done by such Board of Directors on behalf of all persons concerned. In view of the wide powers given in the said paragraph 6.2(a) of the proposed Scheme of Amalgamation,I am of the opinion that it is not necessary to call fresh meeting(s) as per the provisions of section 391(1) and (2) read with section 393 of the Companies Act, 1956 for extending the period as contemplated in paragraph 6.5(a) of the proposed Scheme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y at the said meeting of the Unsecured Creditors of the Transferee Company. 75. It is further evident from a perusal of the Company Petition and Annexures C,E,G and I thereto that the Petitioners-Companies have brought on record the Annual Reports in respect of the Transferor Companies No. 1,2,3 and 4 containing the Audited Balance Sheets and Profit and Loss Account as well as other particulars of the Transferor Companies No. 1,2,3 and 4 for the year ended on 31-3-2003. Similarly, a perusal of the Company Petition and Annexure-K thereto shows that the Petitioners-Companies have brought on record the Annual Report in respect of the Transferee Company containing the Audited Balance Sheet and Profit and Loss Account as well as other particulars of the Transferee Company for the year ended on 31-3-2003. 76. Further, summary of the financial position of the Transferor Company No. 1 as on 31-3-2003 has been given in paragraph 7 of the Company Petition. In paragraph 8 of the Company Petition, it is, inter alia, stated that subsequent to the date of the said Accounts, there has been no substantial change in the financial position of the Transferor Company No. 1 excepting those arising or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... panies. 84. In paragraph 54 of the Company Petition, it is averred that the Auditors of the Petitioners-Companies do not disclose any mismanagement in the affairs of the Petitioners-Companies. 85. It is, inter alia, stated in paragraph 55 of the Company Petition that the sanction of the proposed Scheme of Amalgamation will be for the benefit of the Petitioners-Transferor Companies and the Petitioner-Transferee Company. 86. It is, inter alia, stated in paragraph 57 of the Company Petition that the Company Petition is made bona fide and in the interest of justice. 87. In paragraph 58 of the Company Petition, it is, inter alia, averred that no one will be prejudiced if the proposed Scheme of Amalgamation is sanctioned, and the sanction of the said Scheme will benefit and will be in the interest of the Petitioners-Companies, their Shareholders, Creditors, Employees and all concerned. 88. It is, inter alia, further stated in paragraph 53 of the Company Petition that the Petitioners-Companies have disclosed all the material particulars in relation to the Transferor Companies and the Transferee Company. 89. As already noted above, despite the notices of the hearing of the Company Pe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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