1. These are the petitions filed by the petitioner companies for sanction of a Scheme of Arrangement in the nature of Amalgamation of seven Transferor companies viz. Anil Hospitality Ventures Limited, Ascent Knowledge Solutions Limited, Agranil Marketing Limited, Aught Investments Private Limited, Rahil Marketing Private Limited, Agallochun Investments Private Limited, Bharti Consumer Marketing Private Limited with Adella Enterprise Private Limited, the Transferee Company, u/s 391 to 394 of the Companies Act, 1956. It has been contended that the all the companies belong to the same group of management and all of them are engaged essentially in the investment activities. The amalgamation is proposed in order to achieve synergic benefits and consolidation of the activities for the rapid growth of the Transferee Company. The petitions give in details the benefits envisaged due to the scheme. It has been pointed out that vide the orders dated 19th June 2013 passed in the Company Applications No. 171 to 178 of 2013, the meetings of the Shareholders as well as the Unsecured Creditors of the Transferor companies, wherever applicable were dispensed with in view of the written consent letters from all of them being placed on record and there being no Secured Creditors of any of the Transferor Companies. Similarly vide the order dated 19th June 2013 passed in the Company Application No. 178 of 2013, the meeting of the Equity Shareholders of the Transferee Company was also dispensed with in view of the written consent letters from all of them being placed on record.
2. The substantive petitions were admitted vide order dated 24th July 2013. The public notices for the same were duly advertised in the newspapers 'Indian Express' English daily, Ahmedabad edition, and 'Sandesh', Gujarati daily, Ahmedabad edition dated 17th August 2013. The publication in the Government gazette was dispensed with. Affidavits dt. 20th September 2013 confirm the same. No one has come forward with any objections to the said petitions even after the publication and the same has been further confirmed by the additional affidavit dated 3rd December 2013.
3. Notice of the petitions of the Transferor Companies were served upon the Official Liquidator attached to Gujarat High Court. Vide the respective reports dated 23rd January 2014, filed by the Official Liquidator; it is observed that the affairs of the Transferor companies have not been conducted in a manner prejudicial to the interest of their members or to the public interest. However, the Official Liquidator has requested this court to direct the Transferor Companies to maintain their respective books of accounts and records for a period of 8 years from the date of sanctioning the scheme and not to dispose off the same without prior permission of the Central Govt. The Petitioner companies are accordingly directed to keep the books and records of all the Transferor Companies for a period of 8 years from the date of sanctioning the scheme and not to dispose of the same without prior permission of the Central Govt.
4. Notice of the petitions have been served upon the Central Govt. and Mr. M. Iqbal A. Shaikh, learned Senior Central Government Counsel appears for the Central Govt. in Company Petition Nos. 216 to 220 of 2013 and Mr. I.H. Syed, learned Assistant Solicitor General of India appears for the Central Govt. in Company Petition Nos. 221 to 223 of 2013. A common affidavit dt. 30th October 2013 has been filed by Mr. Kashmir Lal Kamboj, the Regional Director, North-Western Region, Ministry of Corporate Affairs, whereby some observations are made.
5. The attention of this Court is drawn to the common Additional Affidavit dated 3rd November 2013, filed by Mr. Amol Sheth on behalf of the petitioner companies which provides requisite explanation for the said issues raised by the Regional Director.
(i) the first two remarks of the Regional Director refer to the facts about the proposed amalgamation and the Balance sheet presented for the Transferee Company being the Provisional one. These being factual aspects, do not require any response.
(ii) the first observation made vide para 2(c) pertains to the Appointed Date being 30th April 2013 for the scheme as against 31st March 2013, being the end of the financial year. It has been pointed out by the Petitioners that apart from the said choice being permissible in law and due approval having been obtained from the concerned parties, the petitioner also had commercial and administrative reasons for selecting the said date. It has been pointed out that the first Transferor company of the present scheme viz. Anil Hospitality Ventures Limited had proposed a scheme of de-merger and transfer of its hospitality division to Ascent Lifestyle Private Limited. The said scheme was still under consideration of the Hon'ble court when the present scheme was filed. Upon the sanction of the said scheme, the company needed some time to complete the requisite accounting treatment of the same in its books. Since the appointed date of the scheme of de-merger was 1st February 2013, in order to avoid the unnecessary complications due to such accounting entries, the appointed date for the present scheme is proposed as 30th April 2013.
(iii)The next observations made vide Para 2(d) and 2(e) deal with the determination of Share Exchange Ratio. It has been observed by the Regional Director that the amount of consideration being given to the Equity shareholders and Preference Shareholders of the Transferor Companies is negligible, the said share exchange ratio is based on the valuation report of M/s. Tarang Shah & Co., however the working notes are not provided for the same and that there is no clarity provided for the voting rights entailed to the new shares to be issued by the Transferee Company. In this regard, it has been pointed out that all the petitioner companies are either private limited companies or closely held public limited companies. It has been clarified that they belong to the same group of management and there is no public interest involved from any investors. Further, the Management of the petitioner companies have proposed the share exchange ratio keeping in mind the desired share capital and serviceability of capital. The said exchange ratio is certified to be fair and reasonable by a Chartered Accountant and the same is approved unanimously by the concerned shareholders of all the companies in their commercial wisdom. In light of the same, the working sheets for the calculation of the exchange ratio and the differential voting rights are not relevant considerations for the Regional Director. It is a settled principle of law that unless the Exchange ratio is apparently fraudulent and detrimental to the interest of any shareholders, the same is not a material issue for considering the sanction of the scheme by the Hon'ble court. The reliance is placed on the view taken by the Hon'ble Gujarat High Court in the matter of In Re: Mahavir Weaves Pvt. Ltd., and the Hon'ble Supreme Court in case of Mihir Mafatlal ( 87 CC pg. 792). Further, the Regional Director has not substantiated his contention about the ratio being unfair or not reasonable. In view of the facts and circumstances, no further facts or information is required to be brought on record for the consideration of the scheme.
(iv) The last observation of the Regional Director vide Para 2(f) pertaining to consent of the creditors of the Transferee Company is the result of non-appreciation of the factual position. The Transferee Company has been incorporated recently as noted by the Regional Director. It is also pointed out in the petitions that it is yet to commence its commercial activities. As apparent form the Balance Sheet of the company already placed on record, the company has no Secured and Unsecured Creditors. In light of the same, there could not be any directions for either convening such meetings or dispensing with such meetings of the creditors of the Transferee Company....
(v) Thus, considering all the observations of the Regional Director and the submissions and explanations given by the Petitioner Companies, I am satisfied that the issues raised by the Regional Director are not material for the sanction of the scheme.
6. Heard Smt. Swati Saurabh Soparkar, learned advocate for the petitioner company as well as Mr. M. Iqbal A. Shaikh, learned Senior Central Government Counsel and Mr. I.H. Syed, learned Assistant Solicitor General of India appearing for the Central Govt. Having gone through the petitions, having considered the submissions made in this regard and being satisfied that amalgamation under the proposed scheme would be in the interest of the companies and their members and creditors, the Scheme is hereby sanctioned. Prayers in terms of paragraph 16(a) of the Co. Petitions No. 216 of 2013 to 223 of 2013 are hereby granted.
7. The petitions are disposed of accordingly. So far as the costs to be paid to the counsels appearing for the Central Govt. is concerned, the same are quantified at Rs. 7,500/- per petition. The same may be paid to the Counsels appearing for the Central Govt. Cost of Rs. 7,500/- be paid to the Office of the Official Liquidator towards cost for the Transf
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eror Companies. 8. The petitioner companies are further directed to lodge a copy of this order, the schedules of immovable assets of all the Transferor Companies as on the date of this order and the Scheme duly authenticated by the Registrar, High Court of Gujarat, with the concerned Superintendent of Stamps, for the purpose of adjudication of stamp duty, if any, on the same within 60 days from the date of the order. 9. The Petitioner companies are directed to file a copy of this order alongwith a copy of the scheme with the concerned Registrar of Companies, electronically, along with E-Form 21 in addition to physical copy as per relevant provisions of the Act. 10. Filing and issuance of drawn up order is hereby dispensed with. All concerned authorities to act on a copy of this order along with the scheme duly authenticated by the Registrar, High Court of Gujarat. The Registrar, High Court of Gujarat shall issue the authenticated copy of this order alongwith Scheme as expeditiously as possible.