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1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 11TH DAY OF MARCH 2016 BEFORE
THE HON’BLE MR.JUSTICE BUDIHAL R.B.
COMPANY PETITION NO.99 /2015 C/W COMPANY PETITION NO.100/2015 C/W COMPANY PETITION NO.101/2015 C/W COMPANY PETITION NO.102/2015 C/W COMPANY PETITION NO.103/2015
IN COMPANY PETITION NO.99/2015
BETWEEN:
Nivish Infrastructure Private Limited Having its registered office at No.24, 1st Main, Vyalikaval Near Bhashyam Circle Petrol Pump Bengaluru-560 003 Karnataka.
... PETITIONER
(By Sri. Uday Shankar R Manjeshwar, Adv.)
AND:
Nil.
….RESPONDENT
(By Sri K S Mahadevan, Adv. for O.L. Smt. Prema Hatti, CGC for ROC)
This Company Petition is filed under Section 391 to 394 of the Companies Act, 1956, praying to sanction the
2 Scheme of Amalgamation of Petitioner Company/NIPL with the Transferee Company as produced in Annexure-A hereto; and etc.,
IN COMPANY PETITION NO.100/2015
BETWEEN:
Inspire Hotels Private Limited Registered office at No.24, 1st Main Road Near Bhashyam Circle Petrol Pump Vyalikaval Bengaluru-560 003 Karnataka.
... PETITIONER
(By Sri. Uday Shankar R Manjeshwar, Adv.)
AND:
Nil.
….RESPONDENT
(By Sri K S Mahadevan, Adv. for O.L. Smt. Prema Hatti, CGC for ROC)
This Company Petition is filed under Section 391 to 394 of the Companies Act, 1956, praying to sanction the Scheme of Amalgamation of Petitioner Company/IHPL with the Transferee Company as produced in Annexure-A hereto; and etc.,
IN COMPANY PETITION NO.101/2015
BETWEEN:
Marvel Infrastructure Private Limited Having its registered office at No.24, 1st Main Road Near Bhashyam Circle Petrol Pump Vyalikaval Bengaluru-560 003
3 Karnataka.
... PETITIONER
(By Sri K S Mahadevan, Adv. for O.L. Smt. Prema Hatti, CGC for ROC)
AND:
Nil.
….RESPONDENT
(By Smt. Prema Hatti, CGC for ROC)
This Company Petition is filed under Section 391 to 394 of the Companies Act, 1956, praying to sanction the Scheme of Amalgamation of Petitioner Company/MIPL with the Transferee Company as produced in Annexure-A hereto; and etc.,
IN COMPANY PETITION NO.102/2015
BETWEEN:
Shalom Infrastructure Private Limited Having its registered office at No.24, 1st Main Road Near Bhashyam Circle Petrol Pump Vyalikaval Bengaluru-560 003 Karnataka.
... PETITIONER
(By Sri. Uday Shankar R Manjeshwar, Adv.)
AND:
Nil.
….RESPONDENT
(By Sri K S Mahadevan, Adv. for O.L. Smt. Prema Hatti, CGC for ROC)
This Company Petition is filed under Section 391 to 394 of the Companies Act, 1956, praying to sanction the Scheme of Amalgamation of Petitioner Company/SIPL with
4 the Transferee Company as produced in Annexure-A hereto; and etc.,
IN COMPANY PETITION NO.103/2015
BETWEEN:
Classic Realty Private Limited Having its registered office at No.56B/34, 1st Main, Vyalikaval Lower Palace Orchards Bengaluru-560 003 Karnataka.
... PETITIONER
(By Sri. Uday Shankar R Manjeshwar, Adv.)
AND:
Nil.
….RESPONDENT
(By Smt. Prema Hatti, CGC for ROC)
This Company Petition is filed under Section 391 to 394 of the Companies Act, 1956, praying to sanction the Scheme of Amalgamation of Transferor Companies with the Petitioner/Transferee Company as produced in Annexure-A hereto; and etc.,
These Company Petitions having been heard and reserved for orders, coming on for pronouncement of orders, this day, the Court made the following:
O R D E R
All the above company petitions are filed under Sections 391 to 394 of the Companies Act, 1956 seeking sanction of the scheme of amalgamation of the petitioners in
5 Co.P. Nos.99 to 102/2015, which are transferor company Nos.1 to 4 respectively, with the petitioner in Co.P. No.103/2015, which is the transferee company.
The petitioner in Co.P. No.99/2015 is transferor company No.1. It has filed this company petition seeking sanction for scheme of amalgamation as prayed in the petition. Brief facts of transferor company No.1 are that transferor company No.1 was incorporated on 18.1.2007 under the name and style of Nivish Infrastructure Private Limited having its Registered Office at No.24, I Main Road, Near Bashyam Circle Petrol Pump, Vyalikaval, Bengaluru- 560 003. The Memorandum and Articles of Association is produced as per Annexure-B. Clause III(B)(19) of the Memorandum of Association of transferor company No.1 permits for amalgamation of the company. The main objects of petitioner-transferor company No.1 are set out in the Memorandum of Association. The audited balance sheet of petitioner-transferor company No.1 from 1.4.2013 to 31.3.2014 is produced as per Annexure-C. The unaudited
6 balance sheet of transferor company No.1 made up to 28.2.2015 is produced as per Annexure-D. The details of the share capital of the petitioner transferor company No.1 as on 28.2.2015 are as under: (a) The authorized share capital of Rs.10.00 crores divided into 1.00 crore equity share of Rs.10/- each. (b) Issued, subscribed and paid up equity share capital of Rs.8,29,94,000/- divided into 82,99,400 equity shares of Rs.10/- each. (c) Preference share holdings : Nil. (d) There are four equity share holders. The Board of Directors of the petitioner transferor company No.1 has passed its resolution at its meting held on 3.3.2015 and approved the scheme of amalgamation by virtue of which the petitioner transferor company No.1 along with other transferor companies are being amalgamated with the transferee company subject to the confirmation of this Court, within whose jurisdiction the registered office of the company is situated. The copy of the board resolution approving the scheme of amalmation is produced as per Annexure-H.
7 The petitioner-transferor company No.1 filed company application in C.A. No.342/2015 seeking dispensation of meeting of the equity shareholders. The said application was allowed by this Court on 16.4.2015 and meeting of the shareholders was dispensed with. Copy of the order passed in the company application is produced as per Annexure-J.
The petitioner in Co.P. No.100/2015 is transferor company No.2. It has filed this company petition seeking sanction for scheme of amalgamation as prayed in the petition. Brief facts of transferor company No.2 are that transferor company No.2 was incorporated on 18.1.2007 under the name and style of Inspire Hotels Private Limited having its Registered Office at No.24, I Main Road, Near Bashyam Circle Petrol Pump, Vyalikaval, Bengaluru-560 003. The Memorandum and Articles of Association is produced as per Annexure-B. Clause III(B)(17) of the Memorandum of Association of transferor company No.2 permits for amalgamation of the company. The main objects of petitioner-transferor company No.2 are set out in the Memorandum of Association. The audited balance sheet of
8 petitioner-transferor company No.2 from 1.4.2013 to 31.3.2014 is produced as per Annexure-C. The unaudited balance sheet of transferor company No.2 made up to 28.2.2015 is produced as per Annexure-D. The details of the share capital of the petitioner transferor company No.2 as on 28.2.2015 are as under: (a) The authorized share capital of Rs.8.00 crores divided into 80.00 lakh equity share of Rs.10/- each. (b) Issued, subscribed and paid up equity share capital of Rs.6,60,85,870/- divided into 66,08,587 equity shares of Rs.10/- each. (c) Preference share holdings : Nil. (d) There are five equity share holders. The Board of Directors of the petitioner transferor company No.2 has passed its resolution at its meting held on 3.3.2015 and approved the scheme of amalgamation by virtue of which the petitioner transferor company No.2 along with other transferor companies are being amalgamated with the transferee company subject to the confirmation of this Court, within whose jurisdiction the registered office of the company is situated. The copy of the board resolution
9 approving the scheme of amalmation is produced as per Annexure-H. The petitioner-transferor company No.2 filed company application in C.A. No.343/2015 seeking dispensation of meeting of the equity shareholders. The said application was allowed by this Court on 16.4.2015 and meeting of the shareholders was dispensed with. Copy of the order passed in the company application is produced as per Annexure-J.
The petitioner in Co.P. No.101/2015 is transferor company No.3. It has filed this company petition seeking sanction for scheme of amalgamation as prayed in the petition. Brief facts of transferor company No.3 are that transferor company No.3 was incorporated on 18.1.2007 under the name and style of Marvel Infrastructure Private Limited having its Registered Office at No.24, I Main Road, Near Bashyam Circle Petrol Pump, Vyalikaval, Bengaluru- 560 003. The Memorandum and Articles of Association is produced as per Annexure-B. Clause III(B)(30) of the Memorandum of Association of transferor company No.3 permits for amalgamation of the company. The main objects
10 of petitioner-transferor company No.3 are set out in the Memorandum of Association. The audited balance sheet of petitioner-transferor company No.3 from 1.4.2013 to 31.3.2014 is produced as per Annexure-C. The unaudited balance sheet of transferor company No.3 made up to 28.2.2015 is produced as per Annexure-D. The details of the share capital of the petitioner transferor company No.3 as on 28.2.2015 are as under: (a) The authorized share capital of Rs.30.00 crores divided into 3.00 crore equity share of Rs.10/- each. (b) Issued, subscribed and paid up equity share capital of Rs.28,69,33,270/- divided into 2,86,93,327 equity shares of Rs.10/- each. (c) Preference share holdings : Nil. (d) There are six equity share holders. The Board of Directors of the petitioner transferor company No.3 has passed its resolution at its meting held on 3.3.2015 and approved the scheme of amalgamation by virtue of which the petitioner transferor company No.3 along with other transferor companies are being amalgamated with the transferee company subject to the confirmation of this Court, within whose jurisdiction the registered office of the
11 company is situated. The copy of the board resolution approving the scheme of amalmation is produced as per Annexure-H. The petitioner-transferor company No.3 filed company application in C.A. No.344/2015 seeking dispensation of meeting of the equity shareholders. The said application was allowed by this Court on 16.4.2015 and meeting of the shareholders was dispensed with. Copy of the order passed in the company application is produced as per Annexure-J.
The petitioner in Co.P. No.102/2015 is transferor company No.4. It has filed this company petition seeking sanction for scheme of amalgamation as prayed in the petition. Brief facts of transferor company No.4 are that transferor company No.4 was incorporated on 18.7.2006 under the name and style of Shalom Infrastructure Private Limited having its Registered Office at No.24, I Main Road, Near Bashyam Circle Petrol Pump, Vyalikaval, Bengaluru- 560 003. The Memorandum and Articles of Association is produced as per Annexure-B. Clause III(B)(19) of the Memorandum of Association of transferor company No.4
12 permits for amalgamation of the company. The main objects of petitioner-transferor company No.4 are set out in the Memorandum of Association. The audited balance sheet of petitioner-transferor company No.4 from 1.4.2013 to 31.3.2014 is produced as per Annexure-C. The unaudited balance sheet of transferor company No.4 made up to 28.2.2015 is produced as per Annexure-D. The details of the share capital of the petitioner transferor company No.4 as on 28.2.2015 are as under: (a) The authorized share capital of Rs.13.00 crores divided into 1,30,00,000 equity share of Rs.10/- each. (b) Issued, subscribed and paid up equity share capital of Rs.12,44,98,760/- divided into 1,24,49,876 equity shares of Rs.10/- each. (c) Preference share holdings : Nil. (d) There are six equity share holders. The Board of Directors of the petitioner transferor company No.4 has passed its resolution at its meting held on 3.3.2015 and approved the scheme of amalgamation by virtue of which the petitioner transferor company No.4 along with other transferor companies are being amalgamated with the transferee company subject to the confirmation of this
13 Court, within whose jurisdiction the registered office of the company is situated. The copy of the board resolution approving the scheme of amalmation is produced as per Annexure-H. The petitioner-transferor company No.4 filed company application in C.A. No.345/2015 seeking dispensation of meeting of the equity shareholders. The said application was allowed by this Court on 16.4.2015 and meeting of the shareholders was dispensed with. Copy of the order passed in the company application is produced as per Annexure-J.
The petitioner in Co.P. No.103/2015 is the transferee company. Brief facts as stated in this petition are that the scheme of amalgamation of the transferor companies i.e., Nivish Infrastructure Private Limited (NIPL), Inspire Hotels Private Limited (IHPL), Marvel Infrastructure Private Limited (MIPL), Shalom Infrastructure Private Limited (SIPL) proposed to be amalgamated with the petitioner-transferee company namely Classic Realty Private Limited (CRPL) is approved by the Board of respective companies. The scheme of amalgamation sets out the terms and conditions upon
14 which transferor company Nos.1 to 4 are desirous of amalgamating into the transferee company. The petitioner transferee company was incorporated on 18.11.1988 as Ace Property Developers Private Limited (as on 1.11.2001, the name of the petitioner-transferee company was changed into Classic Realty Private Limited) having its registered office at No.56B/34, I Main, Vyalikaval, Lower Palace Orchards, Bengaluru 560 003.
The Memorandum and Articles of Association is produced as per Annexure-B. Clause III(B)(14) of the Memorandum of Association of the petitioner-transferee company permits for amalgamation of the company. The main objects of the petitioner-transferee company is set out in Memorandum of Association. The audited balance sheet of petitioner- transferee company from 1.4.2013 to 31.3.2014 is produced as per Annexure-C. The unaudited balance sheet of transferee company made from 1.4.2014 up to 28.2.2015 is produced as per Annexure-D. There is no secured or unsecured creditors in the petitioner transferee company as on 28.2.2015. The details of the share capital of the petitioner transferee company as on 28.2.2015 are as under:
15 (a) The authorized share capital of Rs.1.00 crore divided into 1.00 lakh equity share of Rs.100/- each. (b) Issued, subscribed and paid up equity share capital of Rs.95,00,000/- divided into 95,000 equity shares of Rs.100/- each. (c) Preference share holdings : Nil. (d) There are two equity share holders. The Board of Directors of the petitioner transferee company has passed its resolution at its meting held on 3.3.2015 and approved the scheme of amalgamation by virtue of which the petitioner transferee company along with the other transferor companies are being amalgamated with the transferee company subject to the confirmation of this Court, within whose jurisdiction the registered offices of all the companies i.e., transferee and transferor companies, are situated. The copy of the board resolution approving the scheme of amalmation is produced as per Annexure-S. The petitioner-transferee company filed company application in C.A. No.346/2015 seeking dispensation of meeting of the equity shareholders. The said application was allowed by this Court on 16.4.2015 and meeting of the
16 shareholders was dispensed with. Copy of the order passed in the company application is produced as per Annexure-T.
Heard the arguments of the learned counsel appearing for the petitioners, the arguments of the learned counsel for the official liquidator and also the learned counsel representing the Registrar of companies.
Perusing the contentions raised by the above mentioned petitioners-transferor company Nos.1 to 4 and the petitioner-transferee company, the averments made in the respective petitions are supported by the documentary evidence. The publications by way of advertisement of the petitions were taken by the above companies in two news papers i.e., one in ‘Hindu’, an English daily and another in ‘Udayavani’ a Kannada daily. Even after publication of the notices in the said news papers, no persons have come forward to raise any objection for the proposed scheme of amalgamation. There is nothing on record to show that the affairs of transferor company Nos.1 to 4 were conducted against the interest of the public or any members of the said companies. The company applications filed by the above
17 petitioners- companies requesting the Court to dispense with the holding of the meeting of the share holders were allowed by this Court. Further, the learned counsel appearing for the Official Liquidator in respect of the transferor companies submits that in respect of the transferor companies he has no objection to pass the appropriate orders.
However, learned counsel representing the Registrar of Companies submits that observations have been made on behalf of the Regional Director and in that regard, affidavits are filed by the Registrar of Companies. The learned counsel drew the attention of this Court to the contents of the affidavits. In the affidavit dated 29.10.2015 one Mr. M. Jayakumar, s/o K.P. Mani Elango has stated that he has been authorised and instructed by the Regional Director to file the affidavit. The relevant observations in the said affidavit are as under: “ I) The notice dated 14.5.2015 was issued to the Income Tax Department as required by the Ministry of Corporate Affairs, general circular No.1/2014 dated 15.1.2014 giving 15 days time.
But no
18 comments/objections have been received so far from the Income Tax Department. II) The auditors in their report for the financial year ended 31.3.2014, have qualified that CBI has carried out enquiry into the affairs of M/s. Classic Realty Private Limited, transferee company and its subsidies. The petitioner company may clarify the nature of enquiry, status of enquiry and whether the said enquiry has any effect on the scheme. III) M/s. Shalom Infrastructure Private Limited, petitioner transferor company No.4 has an amount of INR 2,90,00,000/- towards share application money as per the balance sheet as on 31.3.2014. However, the petitioner transferor company is not having sufficient authorized share capital to allot shares to the extent of money received. IV) M/s. Classic Realty Private Limited, petitioner transferee company has an amount of INR 85,07,50,000/- towards share application money as per the balance sheet as on 31.3.2014. However, the company is not having sufficient authorized share capital to allot shares to the extent of money received. V) The petitioner transferor company No.4 and petitioner transferee company may increase the authorized share capital and file necessary forms with the Registrar of Companies by paying
19 the registration fee and additional fee in terms of Section 64 of the Companies Act, 2013. (V) As per clause 3(b) of the Scheme, the authorized share capital of the transferee company is Rs.1.00 crore. The petitioner transferee company has to increase its authorized share capital to meet the requirement of issue of shares in terms of Clauses 7, 12, 17 and 22 of the Scheme to the members of the petitioner transferor companies.
In the second affidavit dated 3.12.2015, the same contentions are again reiterated by the Regional Director.
In the third affidavit dated 17.12.2015, the following observations are made: (i) Explanation (a) of sub clause (vii) of Rule 2 of Companies (Acceptance of Deposits) Rules, 2014, which was amended vide notification dated 31.3.2015 vide G.S.R. 241(E) provides as under: “Provided that unless other wise required under the Companies Act, 1956 (1 of 1956) or the Securities and Exchange Board of India Act, 1992 (15 of 1992) or rules or regulations made thereunder to allot any shares, stock, bond or debenture within a specified period, if a
20 company had received any amount by way of subscriptions to any shares, stock, bonds or debentures before the 1st April, 2014 and disclosed in the balance sheet for the financial year ending on or before 31st March, 2014 against which the allotment is pending on 31st March, 2015, the company, shall by the 1st June, 2015 either returns such amount to the persons from whom these were received or allot shares, stock, bonds or debentures or comply with these rules.”
The Director of the petitioner company by filing the affidavits dated 7.11.2015, 8.12.2015 and 11.1.2016 so also the memo dated 4.2.2016 has clarified the observations raised by the Regional Director. So far as the observations regarding CBI enquiry is concerned, it is stated in the affidavits that the order of this Court for approval of the Scheme would be without prejudice to the enquiry being conducted by the CBI against the transferee company or the transferor companies and their directors/officers on the basis of such enquiry or findings. The Director of the petitioner company has also stated as under:
21 (i) M/s. Shalom Infrastructure Pvt. Ltd., the transferor company No.4 has accepted the share application money amounting to Rs.2,90,00,000/- as its share application money from the transferee company.
Post amalgamation, the same will be cancelled out as transferor company No.4 would merge into the transferee company. (ii) M/s. Classic Realty Private Limited- the transferee company undertakes to allot securities to the extent of money received, if so required or agreed upon between the companies amounting to Rs.85,07,50,000/- based on the valuation of the company once the amalgamation is completed. (iii) The transferee company, if so required undertakes to increase its authorized capital in terms of Section 64 of the Companies Act 2013 to meet up with Clauses 7, 12, 17, 22 of the Scheme.
With regard to the payment of registration fee of Rs.63,76,875/- for increasing the authorized share capital, it is stated in the affidavit by the Director of the petitioner transferee Company, that once amalgamation is taken place and the merger of the transferor company with the transferee company is competed, the question of payment of said
22 registration fee does not arise. In this connection, the petitioner company has relied upon the judgment of this Court dated 26th day of November 2009 passed in OSA No.26/2007 so also another decision rendered by this Court in Company Petition No.121/2007 dated 19.6.2007.
Even with regard to increasing the authorized share capital of the transferee company, it is stated by the Director of the petitioner transferee Company that the petitioner transferor companies have undertaken to that effect at para Nos.3.4, 3.5, 3.6 of the affidavit dated 8.12.2015. Even in the subsequent affidavit dated 11.1.2016 at para Nos.4 to 6 of the said affidavit, the petitioners have clarified that the steps will be taken after completion of amalgamation process.
Before filing the above company petitions, all the respective companies filed the company applications seeking dispensation of holding of the meeting of the share holders and creditors, which applications came to be allowed. After filing of these petitions, as directed by the Court, advertisement of the petitions in the newspapers were taken
23 and in spite of that, no persons have come forwarded to raise any objections about the Scheme of amalgamation. But it is only the Regional Director made observations which I have referred above and about those observations also, the Director of the petitioner company has filed the affidavits and undertaken to comply those observations about which also I have made a detailed reference.
Looking to the contents of the affidavits filed by the petitioner-Director of the company, though the notice was issued to Income Tax Department, no objections were received from the Income Tax Department. Regarding the observation made by the Regional Director for the payment of additional filing fee and stamp duty, the petitioner companies have clarified the legal position that the payment of additional filing fee and stamp fee is not required. Under such circumstances, perusing the entire materials placed on record, the averments in the petitions and the documents produced by both sides, I am of the opinion that the petitioners of the above respective petitions have made out the case to allow their petitions. Accordingly, the following order is passed:
24 (i) All the above five company petitions are allowed. (ii) The scheme of proposed amalgamation of transferor company Nos.1 to 4 with the transferee company is hereby sanctioned so as to bind the shareholders and the members of the said companies. (iii) In view of sanctioning of the scheme of amalgamation, transferor company Nos.1 to 4 are ordered to be dissolved without going into the process of winding up. (iv) The order of sanctioning of the scheme of amalgamation by this Court would be without prejudice to the enquiry being conducted by CBI against the transferee company or the transferor companies and their directors/officers on the basis of such enquiry or findings. (v) The transferee company has to comply with the observations to increase its authorized capital in terms of section 64 of the Companies Act, 2013 to meet up with Clauses 7, 12, 17 and 22 of the Scheme of Amalgamation. (vi) A copy of this order be produced before the Registrar of Companies within 30 days from the date of receipt of a copy of this order.
Sd/-
JUDGE
Cs/-
CT-SG