Both these petitions have been preferred by two petitioner-Companies seeking sanction of the Scheme of Amalgamation between Honest Enterprise Limited (Transferee Company) and Vaghela Metals Private Limited (Transferor Company), proposed under Sections 391 and 394 of the Companies Act, 1956.
Heard Mr.S.P.Majmudar, learned advocate for the petitioner-Companies, Mr.M.Iqbal A.Shaikh, learned Central Government Counsel for the Regional Director and Dr.Amee Yagnik, learned advocate for the Official Liquidator.
It has been submitted by the learned advocate for the petitioners that the proposed Scheme of Amalgamation would result into greater integration and greater financial strength and flexibility for the amalgamated entity, which would result into maximising the overall shareholder value. The said Scheme would also result into cost saving and rationalization of administrative expenses.
It has been pointed out that this Court, vide order dated 23.03.2012, passed in Company Application No.107 of 2012, directed that the meetings of Unsecured Creditors, Secured Creditors and Equity Shareholders of the Transferee Company, that is, Honest Enterprise Limited, be dispensed with for approving the Scheme of Amalgamation.
It has further been pointed out that this Court, vide order dated 23.03.2012, passed in Company Application No.108 of 2012, directed that the meetings of the Unsecured Creditors, Secured Creditors and Equity Shareholders of Vaghela Metals Private Limited (Transferor Company) be dispensed with for approving the Scheme of Amalgamation.
The substantive petitions filed by both petitioner-Companies were admitted vide order dated 13.04.2012 of this Court. As per the said order, the same were duly advertised in the English daily newspaper "Indian Express" (Baroda Edition) and the Gujarati daily newspaper "Divya Bhaskar" (Baroda Edition), on 23.04.2012. None has come forward with any objections to the said petitions even after the publication.
Notices of the petitions have been served upon the Central Government and Mr.M.Iqbal A.Shaikh, learned Central Government Counsel appears for the Central Government. A common affidavit dated 25.05.2012 has been filed by Mr.Kashmir Lal Kamboj, Regional Director, North Western Region, Ministry of Corporate Affairs, whereby two observations have been made. The first observation is that in Clause 10.1 of Part-III of the Scheme, there is a typographical mistake and it has been prayed that this Court may direct the petitioner-Companies to clarify the position in relation to the issue of allotment of shares and to amend the Scheme by inserting an appropriate and correct clause for issue and allotment of shares, mentioning the correct face value of the shares of the respective petitioner-Companies. The second observation is to the effect that the transferee-Company should be directed to comply with the requirements of Accounting Standard 14 read with Section 211(3A) of the Companies Act, 1956. Apart from that, it is observed that the Scheme, prima-facie, does not appear to be prejudicial to the interest of the shareholders of the petitioner-Companies and the public at large.
It is further pointed out that the Official Liquidator of the Transferor-Company has filed his Report dated 18.06.2012, wherein it is stated that the affairs of the Transferor-Company have not been conducted in a manner prejudicial to the interest of the members or to the public interest.
The petitioner-Companies have filed affidavits-in-rejoinder dated 20.06.2012. With regard to the first observation contained in the affidavit filed by the Regional Director, it has been pointed out that a Resolution has been passed by the petitioner-Companies on 20.06.2012 (annexed to the said affidavit-in-rejoinder), whereby the Scheme has been amended and the typing mistake pointed out with respect to the exchange ratio has been corrected and Clause 10.1 of the Scheme has been substituted, which would be in compliance with the requirement pointed out in the affidavit of the Regional Director. With regard to the second observation made by the Regional Director, it is stated that the Transferee-Company would be complying with the requirement of Accounting Standard 14 as well as the provisions of Section 211(3A) of the Companies Act, 1956, and a Resolution to this effect dated 20.06.2012 has also been annexed with the affidavit-in-rejoinder.
Having heard Mr.S.P.Majmudar, learned advocate for the petitioner-Companies, Mr.M.Iqbal A.Shaikh, learned Central Government Counsel and Dr.Amee Yagnik, learned advocate for the Official Liquidator of the Transferor-Company, and upon consideration of the affidavits on record and the submissions made in this regard, this Court is of the view that the observations made by the Regional Director have been sufficiently addressed. Moreover, the Official Liquidator has stated that the affairs of the Transferor Company have not been conducted in a manner prejudicial to the interest of the members or to the public interest. There is no material on record to dissuade the Court from sanctioning the Scheme of Amalgamation. The petitioner-Companies have placed on record the abovementioned two Resolutions dated 20.06.2012, passed by the Board of Directors of the petitioner-Companies which demonstrate that the observations made by the Regional Director in his affidavit have been taken care of. In addition thereto, none has come forward or raised any objection to the Scheme, as is clearly borne out by the affidavit of the Regional Director, as well as that filed by the Official Liquidator.
Upon perusal of the material on record, this Court is satisfied that the Scheme of Amalgamation, as proposed, is in the interest of the Companies and their members and is not otherwise prejudicial to the public interest.
This Court hereby approves and sanctions the Scheme of Amalgamation set forth in Annexure-E to the petitions (as corrected by Resolutions dated 20.06.2012 as far as Clauses 10.1 and 12(d) are concerned) and declares the same to be binding on the petitioner-Companies and all the members and creditors of the petitioner-Companies and all other concerned parties.
The petitions are disposed of, accordingly. Insofar as costs to be paid to the Central Government Counsel is concerned, the same are quantified at Rs.10,000/- per petition, and may be paid to Mr.M.Iqbal A.Shaikh, learned Central Government Counsel. An amount of Rs.7,500/- be paid to the Office of the Official Liquidator towards costs for the Transferor-Company.
(Smt.
Abhilasha Kumari, J.) (sunil) Top