Himachal Plywoods Pvt. Ltd vs Registrar of Companies

Subrata Kumar Dash, Member (Technical)

This is a First Motion Application filed by Applicant Company namely; Himachal Plywoods Pvt Ltd (for short hereinafter referred to as Applicant Company/Transferor Company) under Sections 230-232 of Companies Act, 2013 (the Act) and other applicable provisions of the Act read with Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 (the Rules) in relation to the Scheme of Amalgamation of Himachal Plywoods Pvt Ltd (Transferor Company) with DS Drinks and Beverages Pvt Ltd (Transferee Company). The said Scheme is attached as Annexure A-3 of the Application.

The present application is filed by Mr. Ajay Kumar Jaiswal, Authorized Signatory of Transferor Company, duly authorized by the Board of Directors by way of a Board Resolution. ( Annexure A-1/5 ). The Applicant Company/Transferor Company has prayed for dispensing with the requirement of convening the meetings of its Shareholders, Secured Creditors and Unsecured Creditors.

The registered office of the Transferor Company is situated in the State of Himachal Pradesh and the Transferee Company has its registered office in New Delhi. Therefore, only the territorial jurisdiction of Transferor Company falls with this Bench.

The Applicant Company/Transferor Company is engaged to carry on business as timber merchants, saw mill proprietors and forest contractors and to erect a factory or factories at a suitable place or places for the conversion of raw timber into plants, scantlings, sleepers, flitches and other forms of sawn timber for the manufacture of plywood of all kinds (including that required for tea chests, commercial uses and for ornamental purposes) for the manufacture of packing cases, shorks, foot rules, picture frames, shoe heels, bobbins, shuttles, articles of furniture, battery separator and all kinds of manufactured articles of wood and in general to carry on the business of saw mills, plywood manufacturers and to carry on the purchases and sale of wood, timber in all forms and description including teak both Indian and Burma, Kail, Deodar, Partal, Chail, Sal, Sheesham, Rose Wood, Walnut, Champ, Chakras, Mahogany, Mango, Gunzon, Seer, Haldu, Sandal, Ballies, Sleepers, Boards, Furniture of any description whatsoever, plywood (commercial, ornamental and for teas chests) battens for tea chests, metal fittings, glues for timber and plywood, including animal glue, casein, varnishes and fillen, fibre boards, insulation boards, hard boards, chip boards, insulation tiles, block boards, and all other kinds of boards, veneers and laminated, decorative and PVC Sheets, thermocole, sunglass and to manufacture, deal in, purchase and sell articles and things of all kinds, whatsoever in which timber, wood, bamboo, or cane is used either wholly or in part including sports articles, household requisites and textile accessories.

The rationale of the Scheme is given below:

a. The Transferor Company is a wholly owned subsidiary of the Transferee Company. The proposed Scheme of Amalgamation would result in consolidation of the wholly owned subsidiary with its Parent/Holding Company.

b. Both the Transferor and Transferee Companies are under the same management and it would be advantageous to combine the activities and operations in a single company and building strong capability to effectively meet future challenges in a competitive business environment.

c. The proposed Scheme of Amalgamation will result in usual economies of a centralized and a large company including elimination of duplicate work, reduction in overheads, better and more productive utilization of financial, human and other resources and enhancement of overall business efficiency. The proposed Scheme of Amalgamation will result in usual economies of a centralized and a large company including elimination of duplicate work, reduction in overheads, better and more productive utilization of financial, human and other resources and enhancement of overall business efficiency. The proposed Scheme will enable these Companies to combine their managerial and operating strength, to build a wider capital and financial base and to promote and secure overall growth.

d. The amalgamation will result in significant reduction in multiplicity of legal and regulatory compliances which at present is required to be made separately by the Transferor Company and the Transferee Company.

e. The proposed amalgamation will provide greater efficiency in fund management and unfettered access to fund flow generated by the combined business which can be deployed more efficiently to fund organic and inorganic growth opportunities. The proposed amalgamation would enhance the shareholders’ value of the Transferor and the Transferee Companies.

f. The proposed Scheme of Amalgamation will have a beneficial impact on the Transferor and the Transferee Companies, their shareholders, employees and other stakeholders and all concerned.

It is stated that the Board of Directors of the Transferor Company in its meeting held on 18.04.2022, considered and unanimously approved the proposed Scheme of Amalgamation subject to sanctioning of the same by this Tribunal. The copy of the Minutes of the Transferor Company is attached as Annexure A-1/5 with the application.

The appointed date of the Scheme is 01.04.2022 as mentioned in Clause 1.1(iv) of Scheme of Amalgamation which is attached as Annexure A-3 of the application.

It is stated that Applicant Company has filed the Audited Financial Statements as on 31.03.2021 which is attached as Annexure A-1/2 of the Application. The Applicant Company have also filed its Provisional/Un-audited Financial Statements as on 28.02.2022 which is attached as Annexure A-1/3 of the Application.

It is further submitted that in pursuance of the proviso to Sec. 230 (7) and Section 232 (3) of the Act, the applicant company and non-applicant company have filed the certificates dated 27.06.2022 issued by statutory auditors of applicant and non- applicant companies certifying that the Scheme is in compliance with the Accounting Standards under Section 133 of the Act and the same are attached as Annexure A-4 of the application.

It is further submitted by the counsel for the Applicant Company that the Transferor Company is a wholly owned subsidiary of the Transferee Company, no new shares will be issued pursuant to the Scheme of Amalgamation. Accordingly, no valuation report is required to be obtained in the present matter.

It is submitted by the learned counsel that the Scheme (Annexure A-3) also takes care of the interest of the staff/workers and employees of the Applicant Company, by virtue of Clause 7 of the Scheme.

It is stated that the applicant company is not regulated or governed by the Reserve Bank of India (RBI), the Securities and Exchange Board of India (SEBI), the Competition Commissioner of India (CCI) or any other Sectoral Regulator or Regulatory Authority. Hence, notice is not required to be served on the RBI, the SEBI, the CCI or any other Sectoral regulator or Regulatory Authority. It is further submitted that the present scheme will not attract the provisions of the Competition Act, 2002. Hence, no approval of the Competition Commission of India (CCI) is required for the present Scheme of Amalgamation.

It is submitted by the Applicant Company that no proceedings for inspection, inquiry or investigation under the provision of the Companies Act, 2013 or under the provisions of the Companies Act, 1956, is pending against the Transferor Company.

It is further mentioned that the Scheme being filed herein is not a corporate debt restructuring scheme and hence a creditor’s responsibility statement and other requirements under Section 230 (2) (c) are not applicable to the present case.

The Applicant Company have furnished the following documents:

i. Proposed Scheme of Amalgamation (Annexure A-3 of the application).

ii. Certificate of Incorporation along with Memorandum and Articles of Association of the Applicant Company (Annexure A-1/1 of the application).

iii. List of Equity Shareholders of the Applicant Company along with consent affidavits (Annexure A-1/6 of the application).

iv. List of Secured Creditors of the Applicant Company as on 28.02.2022 duly certified by Singh R K & Associates, Chartered Accountants (Annexure A-1/7 of the application).

v. List of Unsecured Creditors of the Applicant Company as on 28.02.2022 duly certified by Singh R K & Associates, Chartered Accountants (Annexure A-1/8 of the application).

vi. List of Statutory dues of Applicant Company as on 30.06.2022 duly certified by Singh R K & Associates, Chartered Accountants showing that all dues are paid by the company. (Annexure-1/9 of the application).

vii. Certificates of Statutory Auditors to the effect that the Accounting treatment proposed in the Scheme is in conformity with Section 133 of the Companies Act, 2013 (Annexure A-4 of the application)

viii. Audited Financial Statements as on 31.03.2021 of the Applicant Company (Annexure A-1/2 of the application)

ix. Unaudited Financial Statements (provisional) for the period ended on 28.02.2022 of the Applicant Company (Annexure A-1/3 of the application).

The Applicant Company/ Transferor Company i.e. Himachal Plywoods Pvt Ltd CIN: U20219HP1974PTC003495 is a Private limited company incorporated under the Companies Act, 1956 on 24.09.1974. The Non-Applicant/Transferee Company i.e. DS Drinks and Beverages Pvt Ltd, CIN: U15500DL2013PTC254108 is a Private limited company incorporated under the Companies Act, 1956 on 19.06.2013.

The Applicant Company has furnished the details of the Equity Shareholders, Secured Creditors and Unsecured Creditors as follows:

Name of the Applicant

Companies

Shareholders along with their consent on affidavit

Creditors along with their consents on affidavit

Equity Shareholders

Consents

submitted on  affidavit

Secured

Creditors

Consents

Unsecured

Creditors

Consents

submitted

on affidavit

Submitted on

affidavit

Applicant Company

2

(Two)

100%

in value

1(One)

100%

in value

95

(Ninety Five)

98.18% of total value

The applicant company vide order dated 01.09.2022 has submitted the first motion order passed by the Hon’ble NCLT, New Delhi Bench-IV with respect to Transferee Company in CA(CAA) 73/(ND)/2022 pronounced on 08.08.2022.

Accordingly, the directions of this Bench in the present case are as under:

I. In relation to Applicant Company/Transferor Company:

a. The meetings of the Equity Shareholders are dispensed with keeping in view the shareholding pattern, financial structure of the company and the fact that the consent of both the Equity Shareholders has been received by way of affidavits.

b. The meeting of the Secured Creditor of the Applicant Company/Transferor Company is dispensed with as consent of the Secured Creditor has been received by way of affidavit.

c. The meetings of the Unsecured Creditors of the Applicant Company/Transferor Company are dispensed with as out of 95 Unsecured Creditors, consent affidavits from 2 Unsecured Creditors constituting over 98.18% of the total value of the Unsecured Creditors have been received by way of affidavits.

In view of the above, the First Motion Application stands allowed by giving liberty to the Applicant Company/Transferor Company to file Second Motion Petition with a direction that the Applicant Company shall make specific prayer for sending notices to the (a) Central Government through Regional Director, Northern Region, Ministry of Corporate Affairs, New Delhi, (b) concerned Registrar of Companies; (c) The Official Liquidator; and (d) Income Tax Authorities by disclosing the PAN numbers of all the Applicant Company in the title of the Second Motion Petition.

With the aforesaid directions, this First Motion Application is allowed and stands disposed of accordingly. A copy of this order be supplied to the learned counsel for the Applicant Company.