THE HON’BLE SRI JUSTICE G.V.SEETHAPATHY
Company Petition Nos.100 and 101 of 2010
COMMON ORDER:
These two petitions are filed under Sections 391 to 394 of the Companies Act, 1956 (hereinafter referred to as ‘Act’) seeking sanction of the Scheme of Arrangement.
Heard the learned counsel for the petitioners and the learned Assistant Solicitor General representing the Registrar of Companies. Perused the records also.
C.P.No.100 of 2010 is filed by M/s.Vasant Chemicals Private Limited (hereinafter referred as ‘transferor company’), a company incorporated under the Act on 25.10.1988 with its registered office situated at Begumpet, Hyderabad.
The main objects of the transferor company as set out in the Memorandum of Association are as follows:
“a. To carry on the business of manufacturers, dealers, distributors, importers and exporters of dyes, dye stuffs, dye intermediaries, optical brightening agents and all kinds of Organic Chemicals.
b. To carry on the business of manufacturers, dealers, distributors of Pharmaceutical, Medicinal, Herbal Bacteriological Biological, Chemical, Industrial and other preparation, articles and compounds.
c. To carry on the business of manufacturers and dealers in all types of inorganic chemicals and sorts.
d. To take over the business of Vasant Chemicals a registered partnership Firm as a going concern or any other running concern dealing in similar line of activity.”
The authorized share capital of the transferor company is Rs.5,00,00,000/- divided into 50,00,000 equity shares of Rs.10/- each. The present issued, subscribed and paid up capital of the transferor company is Rs.4,02,92,000/- divided into 40,29,200 equity shares of Rs.10/- each.
C.P.No.101 of 2010 is filed by M/s.Vasant Foods Limited (hereinafter referred to as ‘transferee company’), a company incorporated under the Act, seeking sanction of the same Scheme of Arrangement. The transferee company was incorporated on 04.04.1996 with its registered office situated at Begumpet, Hyderabad and its main objects as set out in Memorandum of Association are as follows:
“i. To carry on the business of manufacture, buy, Sell, trade and deal in all kinds of foods either as food, snacks or drinks of every description including ice creams, sodas and other aerated water, mineral water, edible oils, fruit juices, wafers biscuits, popcorn, cakes, pastries, bread, confectionery, vegetables, fruits, sausages, jams and pickles, cheese, milk, butter, crème, sweets meets, eggs, bacon, chicken or mutton patties, meat pies, potted meat, sea foods, table delicacies of every description for human consumption or otherwise.
ii. To carry on the business of exporters and importers of all food products including dairy products, vegetable products, fruit products, confectioneries, meat and poultry products of every kind and description, and also that of farmers, dealers and traders in the above said products.
iii. To carry on the business of consultants and advisers to the customers for the establishment, construction, erection or otherwise of any food industry in India or elsewhere and relating to any and all kinds of export services which may be required by any business, trade or industry or institution and to do all other things which are conductive to the attainment of the business.
iv. To take over the business of Vasant Chemicals a registered Partnership Firm as a going concern or any other running concern dealing in similar line of activity.
v. To carry on the business of trading of all kinds of goods, materials, substances and all kinds of chemicals (including chemicals for food processing industry).”
The authorized share capital of the transferee company is Rs.2,00,00,000/- divided into 20,00,000 equity shares of Rs.10/- each. The present issued, subscribed and paid up share capital of the transferee company is Rs.1,74,10,700/- divided into 17,41,070 equity shares of Rs.10/- each..
The transferor and transferee companies have proposed the Scheme of Demerger. The benefits of the proposed Demerger are set out in detail in the Scheme, which is annexed to the two petitions and they are extracted in the petitions also and they are not reiterated here for the sake of brevity.
It is stated that the Board of Directors of the transferor and transferee companies have in separate meetings held on 08.02.2010 approved the proposed Scheme of Demerger, subject to approval by the shareholders.
It is stated that in the transferor company, there are 19 shareholders and all of them have given their consent by way of affidavits approving the proposed Scheme of Arrangement and the said affidavits are also placed on record. Based on the said affidavits, this Court by order, dated 13.04.2010, in C.A.No.353 of 2010, dispensed with convening the meeting of the shareholders. A copy of the said order is also placed on record.
There are two secured creditors i.e., State Bank of India and Axis Bank Limited, for the transferor company and both of them have given No Objection Certificates for the proposed Scheme.
There are 20 unsecured creditors for the transferor company and all of them have given their No Objection Certificates in respect of the proposed Scheme of Arrangement and they are also placed on record.
The meeting of the secured and unsecured creditors of the transferor company was dispensed with by order, dated 13.04.2010, in C.A.No.353 of 2010.
There are 19 shareholders in the transferee company and all of them have given consent and approved the proposed Scheme of Arrangement by way of affidavits.
Based on the said affidavits, which are placed on record, this Court by order, dated 13.04.2010, in C.A.No.354 of 2010, dispensed with convening the meeting of the shareholders of the transferee company.
** It is stated that the transferee company does not have any secured or unsecured creditors.
While admitting the two company petitions, this Court ordered issuance of notice to the Registrar of Companies, A.P., Hyderabad and also general notice by way of publication in ‘Indian Express’, English Daily, and ‘Vaartha’, Telugu Daily, of Hyderabad editions.
In response to the general notice, no objections have been received from any quarter.
The learned Assistant Solicitor General representing the Registrar of Companies filed a common affidavit in both the matters raising two objections –
firstly that the transferee company should pay the stamp duty wherever applicable and
secondly that the transferee company has to increase its authorized share capital to enable itself to allot the shares to the shareholders of the transferor company.
Regarding the first objection, the learned counsel for the transferee company would submit that wherever applicable, the transferee company would pay the stamp duty. Regarding the second objection, he would draw the attention to Clause 11.5 of the proposed Scheme of Arrangement, wherein it is stated that the authorized share capital of the company is raised to Rs.7,00,00,000/-divided into 70,00,000 equity shares is of Rs.10/- each. The existing share capital of the transferee company is Rs.2,00,00,000/- and in the proposed Demerger, the share capital is proposed to be raised to Rs.7,00,00,000/-. It is stated that the said enhancement in the authorized share capital would take care of the allotment of shares of the shareholders of the transferor company upon the demerger.
In the circumstances, having regard to the fact that the transferor and transferee companies have entered into a Scheme of Arrangement, which is considered to be beneficial to the interests of both the companies and their members, and the interests of the shareholders and the creditors of the companies have been duly safeguarded under the terms of the proposed scheme and the shareholders of both the companies, and the creditors of the transferor company having stated no objection for the proposed scheme and there being no objection received from any quarter in response to the general notice issued by way publication and the objections raised in the affidavit filed by the Registrar of Companies having been duly taken care of, it is considered that sanction of the proposed Scheme of Demerger can be accorded and it is accordingly accorded with effect from the appointed date i.e., 01.04.2009.
The petitioners shall deposit a copy of the certified copy of this order within 30 days of receiving the same before the Registrar of Companies for the purpose of registration and for taking necessary follow-up action.
The petitioners shall pay a sum of Rs.3,000/- (Rupees three thousand only) by way of costs to the learned Assistant Solicitor General.
In the result, the Company Petitions are disposed of.
G.V.SEETHAPATHY,J
Dt.02.08.2010
(SHOW CAUSE NOTICE BEFORE ADMISSION)
IN THE HIGH COURT OF JUDICATURE OF ANDHRA PRADESH
AT HYDERABAD
WEDNESDAY THE TWENTY EIGHTH DAY OF JULY TWO THOUSAND AND TEN
PRESENT The Hon’ble sri justice: G.V. Seethapathy
Company petition no. 115 of 2010
In the matter of the companies act, 1956
And
In the matter of m/s. G.k.r.p. Chit funds (a.p) pvt. Ltd.,
Between:
Parthasarathi Art Printers (P) Ltd., having it’s Office at 3-4-168, Karnataka Sahitya Mandira, Near Raghavendra Swamy Temple, Lingampally, Kachiguda, Hyderabad, rep. by its Managing Director Sri J.B. Chenna Reddy. Petitioner
AND
G.K.R.P. Chit Funds (A.P) Pvt. Ltd., Regd. Office at G.K.R. House, H. No. 4-32-1026/2/100, Tulasi Nagar, Allwyn Colony, Kukatpally, Hyderabad, rep. by its Managing Director G. Kusudu. . .. Respondent
WHEREAS the Petitioner above named through his Advocate Sri Rakesh Sanghi, presented this petition u/s 433 (e), R/w. Sec. 434 (1) (a) and Section 439 (1) (b) of Indian Companies Act, 1956 praying the High Court to pass a Judgment & Order in favour of the Petitioner and against the Respondent as under:
1) Pass a Judgment & order directing creditor’s winding up of the Respondent Company for its inability to pay the outstanding debts of the petitioner company
2) That the Official Liquidator may be appointed as the Provisional Liquidator and Official Liquidator for the Respondent company for securing the book debts and assets and receivables of the Respondent Company in the course of liquidation proceedings and commence and close the liquidation proceedings expeditiously;
3) Costs of the subject proceedings be awarded;
AND WHEREAS, the High Court upon perusing the petition and the affidavit filed herein and the order of the High Court dated: 30-06-2010 made herein and upon hearing the arguments of Sri Rakesh Sanghi, Advocate for the Petitioner directed issue of Notice to the Respondents herein to show cause why this Petition should not be admitted. And the Court also permitted the counsel for the petitioner to take out personal notice to the respondents and file proof of service;
You viz:
G. Kusudu, Managing Director, G.K.R.P. Chit Funds (A.P) Pvt. Ltd., Regd. Office at G.K.R. House, H. No. 4-32-1026/2/100, Tulasi Nagar, Allwyn Colony, Kukatpally, Hyderabad.
are directed to show cause on or before 25-08-2010 to which date the case stands posted as to why in the circumstances set out in this petition (copy enclosed) this Company Petition should not be admitted.
JOINT REGISTRAR
//TRUE COPY//
SECTION OFFICER
To
1. G. Kusudu, Managing Director, G.K.R.P. Chit Funds (A.P) Pvt. Ltd., Regd. Office at G.K.R. House, H. No. 4-32-1026/2/100, Tulasi Nagar, Allwyn Colony, Kukatpally, Hyderabad. (BY RPAD with a copy of petition and affidavit)
One CC to Sri Rakesh Sanghi , Advocate (OPUC)
One spare copy.
Ksv
THE HON'BLE MR JUSTICE G.V.SEETHAPATHY
COMPANY PETITION No :116 of 2010
ORDER: DATED:11-08-2010
This petition is filed under Sections 391 and 394 of the Companies Act, 1956 (for brevity, ‘the Act’) seeking sanction for the proposed scheme of amalgamation of the petitioner company-M/s CC Health Care Products Private Limited, IDA Nacharam, Hyderabad (hereinafter referred to as ‘transferor company’) with M/s Colgate Palmolive (India) Limited (hereinafter referred to as ‘transferee company’).
2. Learned Assistant Solicitor General, representing the Central Government, filed a common affidavit and the learned counsel representing the Official Liquidator filed a report.
3. Heard learned counsel for the petitioner-company; learned Assistant Solicitor General, representing the Central Government; and the learned counsel representing the Official Liquidator, attached to this Court. Perused the records.
4. Petitioner-transferor company was incorporated on 01.07.1987 under the name and style ‘M/s Crystal Cosmetics Private Limited’, under the provisions of the Act and it became a deemed public company under Section 43A (1A) of the Act with effect from 15-03-1991.
Subsequently, it was reconverted into private limited company and thereafter the name was changed as ‘M/s CC Health Care Products Private Limited’ with effect from 06-01-2003. The registered office of the transferor company is situate at Nacharam, Hyderabad. The present authorized share capital of the transferor company is Rs.20,00,000/- divided into 2.00 lakhs equity shares of Rs.10/- each. The issued, subscribed and paid up share capital is Rs.20,00,000/- divided into 2.00 lakhs equity shares of Rs.10/- fully paid up.
5. The main object of the transferor company is:
to carry on business as manufacturers, buyers, sellers, distributors, agents, exporters and importers of all kinds of Cosmetic, toilet and dentifrice requisites and preparations including toothpowder, toothpaste, toothbrushes, face creams, shaving creams, talcum and face powder, shampoos, soaps, detergents and other washing materials, cleansing agents, perfumes, lotions and oils.
6. The objects of the transferor company are set out in detail in the Memorandum and Articles of Association, annexed to the petition.
7. M/s Colgate Palmolive (India) Limited-transferee company was incorporated on 23-09-2007 under the provisions of the Indian Companies Act, 1913 and subsequently it was converted into a public limited company on 06-10-1978. The registered office of the transferee company is situate at Mumbai. The authorized share capital of the transferor company is Rs.1,37,00,00,000/- divided into 1,37,00,00,000 of equity shares of Rs.1/- each. The issued, subscribed and paid up capital of the transferor company is Rs.13,59,92,817/- divided into 13,59,92,817 equity shares of Rs.1/- each fully paid up.
8. The main object of the transferee company set out in detail in the Memorandum of Association is:
to carry on business in manufacturer, sale and distribution of washing material, cleansing compounds of every character and all kinds of laundry materials, cosmetics, perfumes, detergents and toilet preparations etc.
9. It is stated that the transferor company is wholly owned subsidiary of the transferee company and that the consolidation of the transferor company and transferee company would result in benefits in terms of synergies and operations, pooling of financial, managerial, and technical resources. It is further stated that it would result in reduction of common administrative costs and will make the management control systems more effective as the proposed restructuring through the scheme of amalgamation is stated to be to the mutual advantage of both the companies. The benefits of the proposed scheme of amalgamation of the transferor company with the transferee company are set out in the scheme, annexed to the company petition and also extracted in the petition, and hence they are not reiterated herein for the sake of brevity.
10. It is stated that the Board of Directors of the transferor company have approved the proposed scheme of amalgamation in their meeting held on 29-03-2010 subject to approval of the same by the share holders.
By order, dated 30-04-2010, in C.A.No.363 of 2010, this Court dispensed with the meeting of the share holders as there are only seven share holders in the transferor company and they filed affidavits stating no objection to the proposed scheme which was placed on record.
It is also stated that the Board of Directors of the transferee company in their meeting on 21-03-2010 passed resolution approving the proposed scheme of amalgamation. It is stated that there are no secured creditors of the transferor company and there is only one unsecured creditor, which is holding the company and which gave a letter of ‘no objection’ for the proposed scheme and fully supported the claim.
As the transferor company is 100% subsidiary of the transferee company, it is stated that no separate application is filed on behalf of the transferee company seeking sanction of the proposed scheme.
11. While admitting the petition, on 30-06-2010, this Court directed issuance of notice to the Regional Director, Ministry of Corporate Affairs; Registrar of Companies; and the Official Liquidator, attached to this Court. A general notice by way of publication in ‘Business Standard’ English daily and ‘Andhra Jyothi’ Telugu daily of local editions was also directed to be issued.
12. Learned Assistant Solicitor General representing the Registrar of Companies filed a common affidavit stating ‘no objection’ except that the transferee company should pay the stamp duty, wherever applicable. Learned counsel for the petitioner would submit that the transferee company would pay the stamp duty wherever applicable.
13. Learned counsel representing the Official Liquidator filed a report stating that the verification of material papers made available revealed that the affairs of the transferor company do not appear to have been conducted in a manner prejudicial to the interest of its members or to the public interest. The Official Liquidator, however, stated that the material placed before him opinion regarding the other object has not revealed anything about the pending litigation and prosecution either by or against the transferor company or its Directors.
14. Learned counsel for the petitioner would submit that there is no pending litigation, civil or criminal, either by the company or against the company or its Directors.
15. In paragraph No.21 of the petition, it is stated that no investigation or proceedings is pending under Sections 235 and 251 of the Act or other provisions of the Act against the petitioner company.
16. In view of the said averment and submission made by the learned counsel, the objection raised by the Official Liquidator in the report stands duly taken care of. No objections have been received from any quarter in response to the general notice issued by way of publication in the newspapers opposing the proposed scheme of amalgamation.
17. In the circumstances,
--as the transferor company is 100% subsidiary of the transferee company and
--the proposed scheme of amalgamation is stated to be to the mutual benefit of both the companies and also in the interest of the members thereof, the creditors, employees, Board of Directors of the companies, the share holders and
--the creditors having stated no objection for the proposed scheme and
--no objections having been received from any quarter, it is considered that the proposed scheme of amalgamation can be sanctioned and the same is accordingly sanctioned with effect from the appointed date, i.e. 01-04-2009.
As consequence thereof, the petitioner-transferor company shall stand dissolved with effect from 01-04-2009 without going through the process of winding up.
18. As the proposed scheme envisages total amalgamation of the transferor company, which is a 100% subsidiary of the transferee company and there is no allotment of shares by the transferee company, the question of paying stamp duty under Article 20 (d) of Schedule-1A of the Indian Stamp Act,1899 does not arise in view of the explanation contained therein, as contended by the learned counsel for the petitioner and also held by this Court in the order, dated 12-03-2010 in C.P.No.25 of 2010 and batch.
19. Petitioner shall file a certified copy of this order within 30 days from the date of receipt of the same before the Registrar of Companies, Hyderabad for the purpose of registration and necessary follow up action. Petitioner shall pay a sum of Rs.3000/- (rupees three thousand only) to the learned Assistant Solicitor General towards costs.
20. Accordingly, Company Petition is allowed.
_______________________
G.V.SEETHAPATHY,J
11th August, 2010.
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