Back
2015 Supreme(Del) 3124
IN THE HIGH COURT OF DELHI
SUDERSHAN KUMAR MISRA, J.
In the matter of : Trading Company Private Limited
Company Application (Main) No. 177/2015
Decided on : 23-12-2015
Advocate Appeared:
Mr. N. Ganpathy
The central legal point established in the judgment is the court's authority to dispense with the requirement of convening meetings of shareholders and creditors for the approval of a proposed Scheme of Amalgamation under Sections 391 to 394 of the Companies Act, 1956.
Headnote:
Companies Act - Amalgamation - Sections 391 to 394 - Summary of the Acts and Sections: The court discussed Sections 391 to 394 of the Companies Act, 1956, which provide for the procedure for amalgamation of companies. The court highlighted the requirements for dispensing with the meetings of equity shareholders, preference shareholders, secured and unsecured creditors, and the share exchange ratio as provided in the Scheme of Amalgamation.
Fact of the Case:
The joint application was filed under Sections 391 to 394 of the Companies Act, 1956 by the applicant companies seeking directions to dispense with the requirement of convening meetings of their equity shareholders, preference shareholders, secured and unsecured creditors to consider and approve the proposed Scheme of Amalgamation.
Finding of the Court:
The court allowed the application in the terms mentioned, after examining the consents and no objections of the shareholders and creditors of both the transferor and transferee companies.
Issues: The main issue was whether the court should dispense with the requirement of convening meetings of shareholders and creditors to consider and approve the proposed Scheme of Amalgamation.
Ratio Decidendi: The court's decision was based on the unanimous approval of the proposed Scheme of Amalgamation by the Board of Directors of both the transferor and transferee companies, and the consents/no objections given by the shareholders and creditors, leading to the dispensation of the meetings.
Final Decision: The application was allowed in the terms mentioned, and the requirement of convening the meetings of shareholders and creditors to consider and approve the proposed Scheme of Amalgamation was dispensed with.
Sudershan Kumar Misra, J.
1. This joint application has been filed under Sections 391 to 394 of the Companies Act, 1956 by the applicant companies seeking directions of this court to dispense with the requirement of convening the meetings of their equity shareholders, preference shareholders, secured and unsecured creditors to consider and approve, with or without modification, the proposed Scheme of Amalgamation of Trophy Holdings Private Limited (hereinafter referred to as the transferor company) with Liquid Investment and Trading Company Private Limited (hereinafter referred to as the transferee company).
2. The registered offices of the transferor and transferee companies are situated at New Delhi, within the jurisdiction of this Court.
3. The transferor company was incorporated under the Companies Act, 1956 on 19th February, 2003 with the Registrar of Companies, NCT of Delhi & Haryana.
4. The transferee company was originally incorporated under the Companies Act, 1956 on 24th May, 1982 with the Registrar of Companies, NCT of Delhi & Haryana at New Delhi under the name and style of Liquid Investment and Trading Company. The company changed its name to Liquid Investment and Trading Company Private Limited and obtained the fresh certificate of incorporation on 15th April, 2011.
5. The present authorized share capital of the transferor company is Rs.3,00,00,000/- divided into 30,00,000 equity shares of Rs.10/- each. The issued, subscribed and paid-up share capital of the company is Rs.2,90,24,110/- divided into 29,02,411 equity shares of Rs.10/- each.
6. The present authorized share capital of the transferee company is Rs.27,00,00,000/- divided into 1,85,00,000 equity shares of Rs.10/- each aggregating to Rs.18,50,00,000/-; 10,000 11% non-cumulative redeemable preference shares of Rs.100/- each aggregating to Rs.10,00,000/-; 3,40,000 12.5% non-cumulative redeemable preference shares of Rs.100/- each aggregating to Rs.3,40,00,000/-; and 5,00,000 5% non-cumulative redeemable preference shares of Rs.100/- each aggregating to Rs.5,00,00,000/-. The issued, subscribed and paid-up share capital of the company is Rs.24,50,27,000/- divided into 1,82,50,600 equity shares of Rs.10/- each aggregating to Rs.18,25,06,000/-; 210 11% non-cumulative redeemable preference shares of Rs.100/- each aggregating to Rs.21,000/-; 3,00,000 12.5% non-cumulative redeemable preference shares of Rs.100/- each aggregating to Rs.3,00,00,000/-; and 3,25,000 5% non-cumulative redeemable preference shares of Rs.100/- each aggregating to Rs.3,25,00,000/-.
7. Copies of the Memorandum and Articles of Association of the transferor and transferee companies have been filed on record. The audited balance sheets, as on 31st March, 2015, of the transferor and transferee companies, along with the reports of the auditors, have also been filed.
8. A copy of the Scheme of Amalgamation has been placed on record and the salient features of the Scheme have been incorporated and detailed in the application and the accompanying affidavit. It is claimed that the proposed amalgamation would lead to more efficient utilization of capital and create a stronger capital base for future growth of the amalgamated entity which will be beneficial for all its stakeholders. It is further claimed that the proposed amalgamation will lead to reduction of administrative cost and overhead expenses which would further lead to greater and effective executive control, synergy of operations and optimum utilization of available resources.
9. So far as the share exchange ratio is concerned, the Scheme provides that, upon coming into effect of this Scheme, the transferee company shall issue and allot equity shares to the shareholders of the transferor company in the following ratio:-
“25 equity shares of Rs.10/- each, credited as fully paid up, of the transferee company for every 100 equity shares of Rs.10/- each fully paid up held in the transferor company.”
10. It has been submitted by the applicants
