w w w . L a w y e r S e r v i c e s . i n



HCL Technologies (Mumbai) Ltd. v/s HCL Technologies BPO Services Ltd.

    Decided On, 23 January 2004

    At, High Court of Delhi

    By, THE HONOURABLE MR. JUSTICE S.K. AGARWAL

    For the Appearing Parties: Manish Lamba, Advocate.



Judgment Text

(1) THE applicants HCL Technologies (Mumbai)Ltd. (hereinafter "transferor company-I") and hcl Technologies BPO Services Ltd. (hereinafter 'transferor company-II) have filed this application under Sections 391 and 394 of the Companies Act, 1956 praying for directions dispensing with the requirement to convene separate meeting of the shareholders and creditors for the purpose of considering and approving the Scheme of amalgamation of the transferor companies with HCL Technologies Ltd. (hereinafter "transferee company"):

(2) THE registered offices of the transferor companies as well as the transferee company are situated at 806, Siddharth, 96, Nehru place, New Delhi, which is within the territorial jurisdiction of this Court.

(3) THE petition is accompanied by the scheme for Amalgamation (hereinafter "the Scheme") Memorandum and Articles of association of the transferee and transferor companies as well as their balance-sheets. The salient features of the scheme and the circumstances necessitating the scheme have been explained in the application. It is also stated that no proceedings under Sections 235 to 251 of the Companies Act are pending against the applicant companies. The application is duly supported by an affidavit

(4) NO objection letters approving the scheme have been filed by the shareholders of the two transferor companies. As the shareholders have already given their written consent to the proposed Scheme for amalgamation, therefore, the requirement of convening and holding the meeting of equity shareholders of these two transferor companies for the purpose of considering and approving the Scheme for Amalgamation is dispensed with.

(5) TRANSFEROR company-I has no secured creditor. Transferor company-II has two secured creditors, and both of them have given their consent for amalgamation, therefore, holding of the meeting of the secured creditors, is also dispensed with.

(6) TRANSFEROR company-I has 21 unsecured creditors of the value of Rs. 20, 629, 412. 00 and transferor company-II has 109 unsecured creditors of the value of Rs, 14, 04, 21, 127. 00 learned counsel appearing on behalf" of applicants does not press for dispensation of meeting of unsecured creditors of these companies. In view of the same, let meeting of the unsecured creditors of these companies be held as per directions contained in this order.

(7) INSOFAR as the Transferee company is concerned, the secured creditor being only one has given its consent, therefore, meeting for approving the Scheme is not necessary. However, it has 73. 254 shareholders as on 31. 12. 2003, and 399 unsecured creditors. Learned counsel for petitioner argued that transferor company-I and transferor company-II are wholly owned subsidiaries of the transferee company, the amalgamation would not alter the financial position of the transferee company and would not impact the shareholders or the creditors of the transferee company, therefore, there is no necessity for holding the meeting either of shareholders or the creditors for approving the said scheme.

(8) IN support of his submissions, learned counsel has placed reliance on the observations made in HCL Infosystems limited, CA (M) 150/2002 decided by Hon'ble mr. Justice Vikramajit Sen on 3. 9. 2002, and sharat Hardware Industries P. Ltd. (1978) 48 Company Cases (Delhi) 23. Emphasis was laid on the following observations:-

". . . Therefore, the scheme or arrangement considered from the point of view of the transferee-company is not a scheme or arrangement coming within the field of operation of section 391 and does not seem to require the approval of creditors or a subsequent sanction by the court. Now, two other cases have been brought to my notice in which the question whether the transferee-company is also required to approve the scheme, has been considered. Those two cases are in re carron Tea Co. Ltd. (1966) 2 com LJ. 278 (Cal) decided by the Calcutta High court and in re Union Services Private ltd. (1973) 43 Comp Cass 319 (Mad)decided by the Madras High Court; although both these cases are somewhat different on facts, the decision in both cases was that the scheme does require the approval of the transferee-company under section 391 of the Act. In both cases there was some change affecting the members or creditors of the transferee-company. That position is, not true in the present case. The point that requires analysis is whether, in law, the present scheme requires the approval of the transferee-company, because if it does, it would be pointless approving the scheme which could not be carried into effect qua the transferee-company. "

(9) EACH case depends upon its own facts. Ordinarily, the convening of the meeting of the members and the creditors for considering and approving the Scheme for Amalgamation is a must. The discretion for waiving the same can be exercised only in the cases where most of them have given their consent. As noticed above, in this case, transferee company has 399 unsecured creditors of the value of Rs. 24, 05, 86, 283. 06. The unsecured creditors of the company above Rs. 1,00,000/- would be about 72 having value of rs. 23, 49, 99, 113. 00, i. e. , 97. 68%.

(10) THEREFORE, meeting of the shareholders and the unsecured creditors in my view, would be necessary for considering and approving the Scheme for Amalgamation.

(11) HAVING regard to the averments made in the application, materials on record and facts of this case, the following directions would meet the ends of justice:-

(i) Let a meeting of the unsecured creditors of the transferor company-I be convened and held on 13. 3. 2004 at 11. 00 A. M. at FICCI Auditorium. Tansen marg. New Delhi or at any other venue to be fixed in consultation with the chairperson for the purpose of. considering and approving the Scheme of Amalgamation. The quorum for the meeting shall be four:

(ii) A meeting of the unsecured creditors of the transferor company-II shall be convened and hetd on 13. 3. 2004 at 11. 30 A. M. at FICCI Auditorium, Tansen marg, New Delhi or at any other venue to be fixed in consultation with the chairperson, for the purpose of considering and approving the Scheme of Amalgamation. The quorum for the meeting shall be fifteen:

(iii) A meeting of the shareholders of the transferee company shall be convened and held on 13. 3. 2004 at 12. 00 P. M. at FICCI Auditorium. Tansen marg, New Delhi or at any other venue to be fixed in consultation with the chairperson, for the purpose of considering and approving the Scheme of Amalgamation. The quorum for the meeting shall be one hundred:

(iv) A meeting of the unsecured creditors of transferee company shall be convened and held on 13. 3. 2004 at 1. 00 P. M. at FICCI Auditorium. Tansen marg, New Delhi or at any other venue to be fixed in consultation with the chairperson, for the purpose of considering and approving the Scheme of Amalgamation. The quorum for the meeting shall be 40:

(v) Notices for convening the aforesaid meetings of the unsecured creditors and shareholders, stating that copies of the proposed scheme and the statement under section 393 of the companies Act, can be obtained free 6f charge from the registered offices of the companies, shall be published in one issue of "economic Times" (English)and ' Nav Bharat Times' (Hind) at least twenty-one days before the day appointed for the meetings:

(iv) In addition to the publication of the notice in the said newspapers, individual notices convening the meetings along with the Scheme of Amalgamation and the statement under section 393 of the Companies Act shall be sent by post under certificate of posting to the aforesaid secured creditors and unsecured creditors of the transferee company at their registered office or last known addresses, at least twenty-one days before the date appointed for the meeting. However, the transferee company is exempted from serving individual notices of the meeting of the unsecured creditors on those whose value of credit in the books of account of the company is Rs. 1. 0 lac or less:

(vii) For the purpose of holding all the said meetings of the unsecured creditors and shareholders of the transferor companies and the transferee company, this court hereby appoints Mr. S. K. Tewari, Advocate, N-17, Green Park extension, New Delhi (telephone no. 26191067, cell No,9810025730) as the Chairperson and Mr, L. R. Luthra, advocate, 99, South Park, Kalkaji, (telephone No. 26421800 and mobile no. 98101089525) as the Alternate chairperson. The Chairperson shall be paid a sum of Rs. 30,000/~ and the alternate Chairperson shall be paid a sum of Rs. 15,000/- by the applicant company in addition to meeting their incidental expenses. The Alternate chairperson also shall attend the meetings and assist the Chairperson in conducting the meetings and preparing the report:

(viii) The advocate for the companies shall issue the advertisement and the notice as per the dr

Please Login To View The Full Judgment!

aft settled by the chairperson appointed by this Court: (ix) Proof of sending the notices to the creditors shall be furnished by the advocate of the applicant company to the Chairperson and the Chairperson, after satisfying himself will furnish the requisite affidavit in this court: (x) Voting by proxy shall be permitted if a proxy in the prescribed form duly signed by the person entitled to attend and vote in the meeting is filed with the registered office of the company at least 48 hours before the meetings: (xi) The result of the above mentioned meetings shall be reported to this court by the Chairperson within one week from the conclusion of the meetings and the report shall be verified by affidavit: (12) WITH the above directions, application stands disposed of. Copy of this order be given Dasti to counsel for the applicant registry is further directed to send copies of this order to the Chairperson and Alternate chairperson noted-above. Dasti as well.
O R