In Re: Snoways Laundrers And Drycleaners Private Limited Vs

Rajeswara Rao Vittanala, J

C.A(CAA) No.28/BB/2020is filed by M/s. Snoways Laundrers & Drycleaners Private Limited ,under Sections230 to 232 of the Companies Act, 2013 and other applicable provisions of the Companies Act, 2013 R/w Companies (Compromises, Arrangements and Amalgamations) Rules, 2016, by inter alia seeking to dispense with convening of meetings of the Equity Shareholders and the Unsecured Creditors of the Applicant Company for purpose of considering the proposed scheme etc.

Brief facts of the case, as mentioned in the Application, which are relevant to the issue in question, are as follows:

(1) Snoways Laundrers & Drycleaners Private Limited (hereinafter referred to as Applicant Company/Transferor Company No. 1 ') was incorporated on 16.04.2008 with CIN No. U93010KA2008PTC046087 under the Companies Act, 1956, and having its Registered Office situated at N-119, North Block, Manipal Centre, Dickenson Road, Bengaluru - 560042. Its Authorised Share Capital is Rs. 1,00,00,000/- (Rupees One Crores only) comprising of 10,00,000 Equity Shares of Rs.10/- each and the Issued, subscribed and paid-up capital is Rs. 1,00,00,000/- (Rupees One Crore only) comprising of 10,00,000 Equity Shares of Rs.l0/-each fully paid up. The Company is inter alia engaged in the business of launderers, dry cleaners and dyers of all kinds of fabrics, clothing and clothes of all kinds and descriptions whether natural artificial or man-made etc.

(2) M/s. ASBS 8s Co., Chartered Accountants through the Applicant Company, have certified that there are 2 (two) Equity Shareholders of the Applicant company as on 31st January 2020 viz., Jyothy Fabricare Services Limited holding 9,99,000 equity shares of Rs. 10/- each and Mr. AnanthRao Talemogaru holding 1000 equity shares of Rs. 10 each. Accordingly, Mr. Ramachandran Panjan Moothedath has filed an Affidavit dated 28.02.2020, by inter alia stating that he is holding 9,99,000 Equity Shares of Rs.10/- each and has no objection for the Scheme of Amalgamation. Similarly,another Shareholder has filed his respective Affidavit with similar declaration, for approval of the proposed Scheme of Amalgamation.

(3) Further, they have also certified that there is one (1) Unsecured Creditor of the Applicant Company as on 31st January 2020viz., Jyothy Fabricare Services Limited amounting to Rs. 52,13,473/-.Accordingly, Mr. Mayank Patwa Company Secretary and authorised signatory of Jyothy Fabricare Services Limited has filed an Affidavit dated 02.06.2020, by inter alia stating that he is unsecured Creditor of the Applicant Company and has no objection for the Scheme of Amalgamation and dispensation with convening conducting and holding of the meeting of the Unsecured Creditors.

(4) Four Seasons Drycleaning Company Private Limited (hereinafter referred as the Transferor Company No.2) was incorporated on 06.06.2002 under the Companies Act, 1956 bearing CIN: U93010MH2002PTC246838. Its registered office situated at Ujala House, Ramakrishna Mandir Road, Kondivita, Andheri (East), Mumbai - 400 059. Its Authorised Share Capital is Rs.5,00,00,000/- divided into 50,00,000 Equity Shares of Rs.10/- each and the Issued, Subscribed and Paid-up Share Capital is Rs.4,96,57,500/- divided into 49,65,750 Equity Shares of Rs.10/- each. The main objects of Transferor Company is interalia engaged in the business of dry cleaning, washing, cleaning, stain, removing, starching, pressing, steam pressing of all types of apparels, clothes, upholstery curtains carpets, bad spreads, quilts etc.

(5) Jyothy Fabricare Services Limited (hereinafter referred as the Transferee Company) is a public company was incorporated on 18.03.2008 bearing CIN: U17120MH2008PLC180246 and having its registered office situated at Ujala House, Ramakrishna Mandir Road, Kondivita Andheri (East), Mumbai - 400059. Its Authorised Share Capital is Rs.30,55,00,000/- divided into 1,72,50,000 Equity Shares of Rs.10/- each and the Issued, Subscribed and Paid- up Share Capital is Rs. 16,35,00,000/- divided into 1,30,50,000 Equity Shares of Rs.10/- each. The main objects of Transferee Company is inter-alia to carry on business of electric, steam and general laundry and to wash, clean, purify, scour, bleach, diy-clean, starch, darn, calendar, wring, dry, iron, color, dye, disinfect, polish, mothproof, renovate, prepare for use of all articles of wearing apparel, clothes etc.,

(6) The Board of Directors of the Applicant/Transferor Company No.2 in their respective meetings held on 04.02.2020 have approved and adopted the Scheme of amalgamation in question subject to usual conditions.

(7) M/s. Dhiraj & Dheeraj, Chartered Accountants, the Statutory Auditors of the Applicant Company, has issued a Certificate dated 29.05.2020 by inter alia stating that the proposed accounting treatment as specified in Clause 14 Accounting Treatment; of Part B of the Draft Scheme dealing with the Accounting treatment in the books of the company is in compliance with all the Accounting Standards specified by the Central Government in Section 133 of the Companies Act, 2013.

(8) The rationale for the Scheme inter alia to achieve business and administrative synergies and reducing administrative costs and avoiding duplication of efforts and facilitate consolidation of all undertakings in order to enable effective management and unified control of operations, this would enable streamlining the activities and consequently reducing managerial overlaps by reducing the number of companies under the same management and thus lead to reduction in administration efforts.

(9) There are no proceedings pending under section 206 to 229 of the Companies Act, 2013 against the Transferor Companies or the Transferee Company.

Heard Mr. Himanshu.S.Kamdar, learned Counsel for the Applicant Company, through video conference. We have carefully perused the pleadings of the party and extant provisions of the Companies Act, 2013 and the Rules made thereunder, and the Law on the issue.

Mr. Himanshu.S.Kamdar, Learned Counsel for the Applicant Company, while pointing out various averments made in the Company Application, has further submitted that the Scheme in question is made in the best interests of the Company and its stake holders. The Chartered Accountants of Applicant Company after verifying the records, have duly certified the existing Shareholders and Creditors of all the Company. Further, all the Shareholders and Creditors of the Companies constituting greater than 90% in value of the total amount due have given their 'no objection' to the Scheme in question and consent for dispensation of their meetings by the Tribunal. Therefore, there is no necessity to convene the meetings for the same purpose and the Tribunal may allow the Application as prayed for, on the principle of ease of doing business.

We have perused the Certificates given by the Chartered Accountants, as mentioned above, and all the concerned Affidavits and consent letters, wherein the parties have declared that they have 'no objection' for dispensation of their meetings for consideration of the Scheme in question by the Tribunal. The Companies have disclosed material information with regard to the Scheme in question, and in the normal circumstances, it is the prerogative of concerned Companies to evolve a Scheme suitable to them and the Tribunal is only empowered to examine the Scheme broadly, whether the Scheme is prepared in accordance with law and the interest of all the stakeholders of Companies involved, are taken care of by affording due notice of Scheme, etc.

The Tribunal is empowered, under Section 230(9) of the Companies Act, 2013, to dispense with calling of a meeting of creditors or class of creditors, where such creditors or class of creditors, having at least ninety per cent value, agree and confirm, by way of affidavit, to the Scheme of compromise or arrangement.

In the instant case, as detailed supra, the Company involved in the case, have filed necessary Certificates given by the Chartered Accountants duly certifying the number of Shareholders, unsecured Creditors constituting 100% of Equity Shareholding and the Creditor of the Applicant Company constituting greater than 90% in value of the total amount due, and have also furnished his consent affidavit. There would not serve any purpose to direct to convene the meetings in question. Therefore, it would be just and appropriate to dispense with the meetings as sought for, on the principle of ease of doing business, and to facilitate the Company to file necessary second stage Petition seeking to sanction the Scheme, subject to fulfillment of all statutory conditions, after ordering notices to respective Statutory Authorities.

In the result, C.A. (CAA) No.28/BB/2020 is disposed of with the following directions:

(i) It is hereby dispensed with convening and holding of the meetings of the Equity Shareholders and Unsecured Creditors of Applicant Company.

(ii) Any party, aggrieved by this Order, is entitled to file miscellaneous application, in the instant Company Application, by seeking appropriate direction(s).

(iii) The Company is permitted to file necessary Company Petition for the sanction of Scheme of Arrangement in question, in accordance with law.