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A And M Publications Ltd. v/s State

    CP Appeal No. 277 of 2007

    Decided On, 28 February 2008

    At, High Court of Delhi

    By, THE HONOURABLE MR. JUSTICE VIPIN SANGHI

    For the Appearing Parties: Hemant Sharma, Manisha Tyagi, P. Nagesh, R.D. Kashyap, Advocates



Judgment Text

Vipin Sanghi, J.



( 1 ) THIS is a petition under Sections 391 and 394 of the Companies Act, 1956 seeking sanction of the Scheme of Amalgamation of A and M Publications Ltd. (Transferor company) with Amar Ujala Publications Ltd. (Transferee company ).


( 2 ) THE registered offices of both the Transferor and Transferee companies are situated at 19, Siddhartha Enclave, Ashram Chowk, New Delhi - 110019, that is, within the jurisdiction of this Court.


( 3 ) THE Transferor company was incorporated on 23. 04. 1996. The authorized share capital of the Transferor company is Rs. 1,50,00,000/- divided into 15,00,000 equity shares of Rs. 10/- each. The issued, subscribed and paid up equity share capital of the Transferor company is Rs. 1,21,95,120/- divided into 12,19,512 equity shares of Rs. 10/- each.


( 4 ) THE Transferee company was incorporated on 29. 03. 2001. The authorized share capital of the Transferee company is Rs. 15,00,00,000/- divided into 1,50,00,000 equity shares of Rs. 10/- each. The issued, subscribed and paid-up equity share capital of the Transferee company is Rs. 4,87,80,490/- divided into 48,78,049 equity shares of Rs. 10/- each.


( 5 ) THE Transferee company, pursuant to the Board Resolution dated 30th july 2007, issued and alloted 15,89,984 convertible share warrants of Rs. 10/-each aggregating to Rs. 1,58,99,840/- to Antarctica Finvest Pvt. Ltd. The same is convertible into equity shares of the Transferee company within or at the end of 18 months from the date of issue, and is subject to the sanctioning of the scheme of Amalgamation.


( 6 ) THE Transferor and the Transferee company further pursuant to the resolution passed by the debt committee on 29th October 2007, issued and allotted debenture of Rs. 26. 5 crores divided into 265 debentures of Rs. 10,00,000 each on private placement basis in order to retire the commercial paper dated 31st July 2007, in favour of ABN Amro Securities (India) Pvt. Ltd.


( 7 ) THE Transferor and the Transferee companies had filed the joint 1st motion Company Application (M) No. 149/2007, which was allowed by order dated 23rd October, 2007. By the aforesaid order, the requirement of conducting statutory meetings of equity shareholders and secured creditors of both the petitioner companies were dispensed with. However, both the Transferor and the transferee companies were directed to convene separate meetings of their respective unsecured creditors.


( 8 ) THE Court directed the separate meetings of the unsecured creditors of the Transferor and the Transferee companies to be convened at E-55, Sector-8, noida (U. P.) on 17th November 2007 at 12. 00 pm and 12. 30 pm respectively, for the purpose of considering and, if thought fit, approving the said Scheme of amalgamation.


( 9 ) MR Rajive Mehra, Advocate and Mr Sunil Lakhina, Advocate were appointed as the Chairperson and the Alternate Chairperson respectively of the said meeting of unsecured creditors of the Transferor company. The required quorum was fixed 100% in number and in value. The meeting as directed was held. The Chairperson of the said meeting, in his report dated 19th November 2007, has reported that both the unsecured creditors attended the meeting, either in person or through their representatives, thus satisfying the required quorum. The said Scheme was approved unanimously. The copy of the Chairperson's report has been filed on record.


( 10 ) MR Alakh Kumar, Advocate and Mr Rajal Dua, Advocate were appointed as the Chairperson and the Alternate Chairperson respectively of the meeting of unsecured creditors of the Transferee company. The required quorum was fixed 100% in number and in value. The Chairperson of the said meeting, in his report dated 19th November 2007, has reported that all the three unsecured creditors attended the meeting, either in person or through their representatives, thus satisfying the required quorum. The said Scheme was approved unanimously. The copy of the Chairperson's report has been filed on record.


( 11 ) VIDE order dated 30th November 2007, citations were directed to be published in "the Statesman" (English edition) and "amar Ujala" (Hindi edition), in terms of Companies (Court) Rules, 1959. An affidavit dated 3rd January 2008 has been filed by one Mr. I. P. Chaturvedi, the authorized signatory of the petitioner companies about the publication of the citations in "the Statesman" (English) and "amar Ujala" (Hindi) on 19th December and 13th December 2007 respectively. The said publication containing the said citations were also produced along with the affidavit.


( 12 ) NOTICES were issued to the OL and the Regional Director (Northern region) vide order dated 30th November 2007. Pursuant to the notice issued to the OL, a report dated 8th January 2008 has been filed by the Official liquidator. The Official Liquidator sought information from the petitioner company vide its letter no. OL/tech/amal/1873 dated 20th December 2007, upon which the requisite information was furnished by the Petitioner companies.


( 13 ) THE OL has considered the accounts of petitioner companies as on 31st march 2007. The OL in its report has stated that he has not received any complaint against the Scheme of Amalgamation from any person/parties interested in the scheme in any manner whatsoever, and on the basis of information submitted by the petitioner companies. Thus it was inferred that the affairs of the petitioner companies do not appear to have been conducted in a manner prejudicial to the interest of the members, creditors, or public interest, and is well in accordance with the provisions of Section 394 (1) of the Companies act, 1956.


( 14 ) THE report has also been filed by Shri Dhan Raj, Regional Director (Northern Region) by an affidavit, dated 9th January 2008. Relying on Clause 2. 19 of Part II of the Scheme of Amalgamation, it was submitted that all the employees of the Transferor company shall become the employees of the Transferee company without any break or interruption in their services upon the sanctioning of the said Scheme of Amalgamation.


( 15 ) THE Regional Director further submitted that in Para 1 of Para-IV C of the Scheme, which provides for the Accounting Standards, there is no mention whether the petitioner companies have complies with the Accounting Standard-14 (Accounting for Amalgamation), issued by the Institute of Chartered Accountants of India. The petitioner have filed a reply undertaking that they will adopt the said Accounting Standard-14. Thus the objection of the Regional Director does not subsist.



( 16 ) THERE is no other legal impediment to sanction of the Scheme of amalgamation which is annexed to the petition. Consequently, sanction is hereby granted to the Scheme of Amalgamation of Tr

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ansferor company with the Transferee company, under Sections 391 and 394 of the Companies Act, 1956. The Transferee company will comply with the statutory requirements in accordance with law. Certified copies of this order be filed with the Registrar of Companies within five weeks. It is also clarified that this order will not be construed as an order granting exemption from payment of stamp duty that is payable in accordance to law. Upon sanction becoming effective from the appointed date of amalgamation, that is 1st April 2007, the Transferor company shall stand dissolved without being wound up. One set of costs quantified at Rs. 10,000/-shall be deposited by the petitioners in the Common Pool Fund within two weeks. The petition is disposed of in terms of the above order.
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