AI Structured Summary
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Judgment
The authorised, issued, subscribed and paid up capital of Applicant Company as on 30.11.2018 is as under:â€"",
Particulars,Amount (in Rs.)
Authorised share capital,"5,00,000
Equity Shares of Rs. 10/- each,"50,00,000/-
Total,"50,00,000/-
Issued, Subscribed & Paid up","4,78,164
Equity Shares of Rs. 10/- each fully paid up,"47,81,640/-
Total,"47,81,640/-
Company as on 31.12.2018.,
Learned counsel for the Applicant-Company submits that as on 31.12.2018, the Applicant Company had one unsecured creditor i.e. Midland",
Services Ltd., which is the Transferor Company. The affidavit of Mr. Manan Mahajan has been filed on behalf of the unsecured creditor given its",
consent for dispensation of holding the meeting of the unsecured creditor. The certificate of the Chartered Accountant alongwith the consent affidavit,
are at Annexure Nos. B7 & B8 respectively of the paper book.,
We have heard the learned counsel for the Applicant Company and perused the record carefully and the supporting documents/papers filed along,
with the Scheme contemplated between the applicant companies.,
The Rationale of the Scheme of Amalgamation is as follows:â€",
a) The proposed amalgamation of the Transferor Company into the Transferee Company would inter-alia result in the alignment of,
businesses of the Transferor Company and the Transferee Company as both the Companies are in the same line of business thereby,
resulting in rationalization and standardization of the business processes, economies of scale, reduction in overheads, administrative,",
managerial and other expenditure, organizational efficiency, and optimal utilization of resources which would be beneficial for all members",
and other stakeholders.,
b) It will provide significant impetus to the growth in the form of optimum utilization of various resources with reduction in overheads,",
administrative costs, managerial and other expenditure, provide holistic services, appropriate channelization of synergies, direct",
operational efficiencies and will consolidate revenue and profitability.,
c) The amalgamation will also create a simplified corporate structure focused on capitalizing the strategic investment opportunities and,
providing a concentrated management focus for development of the business of the Company.,
The learned counsel submitted that the valuation report of Sundae Capital Advisors Private Limited has also been annexed as Annexure-II. The,
following Share Exchange Ratio has been proposed.,
“for every 5 (five) equity shares of face value of INR 10 (Rupees Ten) each held in the Transferor Company as on the record date, the",
equity shareholders of the Transferor Company shall be issued 1 (One) equity share of face value of INR 10 (Rupees Ten) each credited as,
fully paid up in the Transferee Company.â€,
When the matter was listed on 24.05.2019, the authorized representative requested time for providing explanation with regard to Para 8.7 of the",
Scheme. In compliance of the above said order, the learned counsel for the Applicant Company filed affidavit of Mr. Manan Mahajan vide Diary No.",
2983 dated 12.06.2019 stating therein that the equity shares of the Transferor Company were delisted from the Metropolitan Stock Exchange of India,
Limited w.e.f. 18.10.2018 in accordance with Regulation 27 of the SEBI Delisting Regulations. A certified copy of the approval from the above,
mentioned Stock Exchange is annexed as Annexure-I of the affidavit. Mr. Manan Mahajan, Director, is controlling the Transferor Company as",
Promoter, through the Transferee Company, has given an exit offer to acquire shares of the remaining public shareholders of the Transferor Company",
on the terms specified in the exit offer letter dated 16.10.2018. A copy of the exit letter dated 16.10.2018 of the Transferor Company is annexed as,
Annexure-II of the affidavit. It is also stated that pursuant to the amalgamation of the Transferor Company into the Transferee Company the,
remaining public shareholders will be issued equity shares in the Transferee Company in lieu of the shares held by them in the Transferor Company as,
stated in Clause 8.1 of the Scheme, which is as follows:â€"",
“for every 5 (five) equity shares of face value of INR 10 (Rupees Ten) each held in the Transferor Company as on the record date, the",
equity shareholders of the Transferor Company shall be issued 1 (One) equity share of face value of INR 10 (Rupees Ten) each credited as,
fully paid up in the Transferee Company.â€,
Pursuant to the above said allotment of shares by the Applicant Company, it cannot acquire its own shares under the exit offer given under the",
SEBI Delisting Regulations. Therefore, as a result of allotment of shares by the Applicant Company to the remaining public shareholders of the",
Transferor Company, Mr. Manan Mahajan, Director, in the capacity of Promoter of the Transferee Company will now acquire shares from the",
remaining public shareholders of the Transferor Company who are allotted equity shares in the Transferee Company after adjustment of the exit price,
with the share swap ratio as envisaged under Clause 8.1 of this Scheme. The matter will be considered in the second motion petition and specific,
prayer in this regard be made in the second motion petition.,
The learned counsel for the applicant company represents that the applicant-company has filed audited financial statements for the financial year,
ended 31.03.2018 and provisional financial statements as on 01.04.2018 to 30.11.2018 which are at Annexure B2.,
The Scheme (Annexure I) also deals with and takes care of the interest of staff, workmen and employees of transferor-Company by virtue of",
Clause 10 which is reiterated as under:â€",
“10.1 Upon the Scheme becoming effective, all staff, workmen and permanent employees of the Transferor Company, if any, who are in",
service on the Effective Date shall be deemed to have become staff, workmen and employees (as the case may be) of the Transferee",
Company with effect from the Appointed Date without any break or interruption in their service, on same terms and conditions on which",
they are engaged as on the Effective Date and the terms and conditions and benefits deriving, being deposited in any provident fund,",
gratuity scheme, etc, if any, of their employment with the Transferee Company shall in no event be less favorable than those applicable to",
them with reference to the Transferor Company on the Effective Date.â€,
In Clause 12 of the Scheme, it is stated as under:",
12.1 if any suit, appeal or other proceedings of whatsoever nature by or against the Transferor Company is pending, the same shall not abate or be",
discontinued or be in any way prejudicially affected by reason of the amalgamation of the Transferor Company with the Transferee Company or,
anything contained in this Scheme, but the said suit, appeal, or other legal proceedings, as the case may be, may be continued, prosecuted and",
enforced, as the case may be, by or against the Transferee Company and to the same extent as it would be or might have been continued, prosecuted",
and enforced by or against the respective Transferor Company, as if this Scheme has not been made. In the event that the legal proceedings referred",
to herein require the Transferor Company and/or the Transferee Company to be jointly treated as parties thereto, the Transferee Company shall be",
added as party to such proceedings.,
12.2 On and from the Effective Date, the Transferee Company shall and may, if required, initiate any legal proceedings in relation to any businesses of",
the Transferor Company.,
The Statutory Auditor of the Transferor Company has furnished certificate, Annexure B10 stating that the accounting treatment proposed in the",
Scheme is in compliance with Accounting Standards prescribed under Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies",
(Accounts) Rules, 2014 and the Companies (Indian Accounting Standards) Rules, 2015 as amended.",
The ‘Scheme’ envisages that with effect from the Appointed Date i.e. 01.04.2018, Transferor Company shall merge in the Transferee",
Company and all the assets that have accrued or which may accrued to the Transferor Company on or after the Appointed Date shall pursuant to the,
provisions of Section 230 to 232 of the Act and without any further Act, instrument or deed, be transferred to and stands vested in and/or be deemed",
to have been transferred and stand vested in and be available to the Transferee Company subject to all the encumbrances, fixed and/or floating",
charges (if any).,
In view of the aforesaid discussion, the meetings of the equity shareholders and unsecured creditors of the Applicant Company is dispensed with",
as their consent by way of affidavits have been received. The Applicant Company does not have any secured creditors, there is nothing to call and",
convene their meeting. However, Rule 8 of the Rules requires the notice of the meetings to be sent to the statutory authorities in Form CAA 3. Since",
the calling and convening of the meetings are being dispensed with, the applicants shall have to make a specific prayer while moving the second",
motion petition to issue the notice to the statutory authorities.,
In view of the above, the First Motion Application stands allowed giving liberty to the Applicant Company to file Second Motion Petition with a",
direction that the Applicant Companies shall make specific prayer for sending notices to the Central Government, Registrar of Companies, Income",
Tax Authorities and Official Liquidator by disclosing the PAN numbers of all the Applicant Companies in the title of the Second Motion Petition so as,
to provide the proper opportunity to the Income Tax Department to respond and also filing an affidavit that there is no Sectoral Regulator in respect of,
the Applicant-Companies. Specific prayer as per Paragraph No. 15 be also made.,