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2016 Supreme(Del) 2782
IN THE HIGH COURT OF DELHI AT NEW DELHI
SUDERSHAN KUMAR MISRA, J.
In the matter of : Jindal Polymer Products Private Limited – Appellant
COMPANY APPLICATION (MAIN) NO. 87/2016
Decided on : 03-08-2016
For the Appellant :Mr. Rajeev K. Goel, Advocate
The central legal point established in the judgment is that the court may dispense with the requirement of convening meetings of equity shareholders and creditors to consider and approve a proposed Scheme of Arrangement if all necessary consents and no objections have been obtained.
Headnote:
Companies Act - Scheme of Arrangement - Section 391(1) - [Companies Act, 1956, Section 391(1)]
Fact of the Case:
The joint application was filed under Section 391(1) of the Companies Act, 1956 by the applicant companies seeking directions to dispense with the requirement of convening meetings of their equity shareholders, secured and unsecured creditors to consider and approve the proposed Scheme of Arrangement.
Finding of the Court:
The court found that all necessary consents and no objections from the equity shareholders and creditors had been obtained, and therefore, the requirement of convening the meetings was dispensed with.
Issues: The main issue was whether the court should dispense with the requirement of convening meetings of equity shareholders and creditors to consider and approve the proposed Scheme of Arrangement.
Ratio Decidendi: The court's decision was based on the fact that all necessary consents and no objections from the equity shareholders and creditors had been obtained, and therefore, the requirement of convening the meetings was dispensed with.
Final Decision: The application was allowed in the aforesaid terms.
SUDERSHAN KUMAR MISRA, J.
1. This joint application has been filed under Section 391(1) 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, secured and unsecured creditors to consider and approve, with or without modification, the proposed Scheme of Arrangement between Jindal Polymer Products Private Limited (hereinafter referred to as the transferor company no. 1) and Shatabdi Paper Mills Private Limited (hereinafter referred to as the transferor company no. 2) and Annapurna Steels 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 no. 1 was originally incorporated under the Companies Act, 1956 on 21st April, 1980 with the Registrar of Companies, Uttar Pradesh at Kanpur. The company shifted its registered office from the State of Uttarakhand to Delhi and obtained a certificate in this regard from the Registrar of companies, NCT of Delhi & Haryana at New Delhi on 12th November, 2015.
4. The transferor company no. 2 was incorporated under the Companies Act, 1956 on 19th April, 1989 with the Registrar of Companies, NCT of Delhi & Haryana at New Delhi.
5. The transferee company was originally incorporated under the Companies Act, 1956 on 5th September, 1985 with the Registrar of Companies, NCT of Delhi & Haryana at New Delhi under the name and style of Annapurna Steels Private Limited. The company changed its name to Annapurna Steels Limited and obtained the fresh certificate of incorporation on 15th December, 2006. The company again changed its name to Annapurna Steels Private Limited and obtained the fresh certificate of incorporation on 30th October, 2014.
6. The present authorized share capital of the transferor company no.1 is Rs.1,20,00,000/- divided into 1,20,000 equity shares of Rs.100/- each. The issued, subscribed and paid-up share capital of the company is Rs.98,05,700/- divided into 98,057 equity shares of Rs.100/- each.
7. The present authorized share capital of the transferor company no.2 is Rs.50,00,000/- divided into 5,00,000 equity shares of Rs.10/- each. The issued, subscribed and paid-up share capital of the company is Rs.18,15,000/- divided into 1,81,500 equity shares of Rs.10/- each.
8. The present authorized share capital of the transferee company is Rs.1,10,00,000/- divided into 1,10,000 equity shares of Rs.100/- each. The issued, subscribed and paid-up share capital of the company is Rs.77,70,800/- divided into 77,708 equity shares of Rs.100/- each.
9. 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 report of the auditors, have also been filed.
10. A copy of the Scheme of Arrangement has been placed on record and the salient features of the Scheme have been incorporated and detailed in the application and the accompanying affidavits. It is submitted by the applicants that the proposed Scheme, inter alia, provides for demerger of the respective Investments Business of transferor companies no. 1 & 2 and their merger into the transferee company and demerger of the Investment Business of the transferee company and its merger into the transferor company no. 1. It is claimed that the proposed demerger will simplify the corporate structure and will ensure seamless integration of transferor business with the respective companies. It is further claimed that the proposed demerger will strengthen, consolidate and stabilize the business of these companies and will facilitate further expansion and growth of their business.
11. So far as the share exchange ratio is concerned, the Scheme provides that, upon coming into effect of this Scheme,
