Over 2 lakh Indian cases. Search powered by Google!

Case Details

IN THE MATTER OF: ACCAUTO DEALER PRIVATE LIMITED & OTHERS versus *****

High Court of Judicature at Allahabad

Case Law Search

Indian Supreme Court Cases / Judgements / Legislation

Judgement


In The Matter Of: Accauto Dealer Private Limited & Others v. ***** - COMPANY PETITION No. - 6 of 2007 [2007] RD-AH 14917 (3 September 2007)

This is an UNCERTIFIED copy for information/reference. For authentic copy please refer to certified copy only. In case of any mistake, please bring it to the notice of Joint Registrar(Copying).

HIGH COURT OF JUDICATURE AT ALLAHABAD

Court No. 30

COMPANY PETITION NO. 6 OF 2007

Connected with

COMPANY APPLICATION NO. 1 OF 2007

1. Accauto Dealer Private Limited,

at 2B, Kannailal Seth Street Kolkata 700 007

(Transferor Company)

2. Aman Goods Private Limited,

P-4A, Kalakar Street, Kolkata 700 007

- (Transferor Company)

3. Howrah Commodeal Private Limited,

35B, Brijdulal Street, Kolkata 700 006

- (Transferor Company)

4. Kannan Dealcom Private Limited,

35B, Brijdulal Street, Kolkata 700 006

- (Transferor Company)

5. Nananeek Sales Private Limited,

35B, Brijdulal Street, Kolkata 700 006

- (Transferor Company)

6. Raj Traders Tie-Up Private Limited,

9/1 Lal Madhab Mukherjee Lane

Kolkata 700 007 - (Transferor Company)

7. Shark Commodeal Private Limited,

P-4A, Lalakar Street, Kolkata 700 007

- (Transferor Company)

8. Tulsi Tie-Up Private Limited,

P-4A, Kalakar Street, Kolkata 700 007 (Transferor Company)

9. Wellbridge Tradecomm Private Limited,

9/1 Lal Madhab Mukherjee Lane

Kolkata 700 007 (Transferor Company)

10. Wellkind Merchants Private Limited,

19, Amartolla Street, Kolkata 700 007 (Transferor Company)

11. Lyton Management Services Limited,

603, City Centre, 63/2, The Mall,

Kanpur - 2008 004 (Transferor Company)

with

Flowmore Builders Pvt Ltd

at 603, City Centre, 63/2

The Mall, Kanpur-2008 004 - (Transferee Company)

Hon'ble Sunil Ambwani, J.

1. This petition to confirm the 'Scheme of Amalgamation' in respect of the Transferor Company No. 11 and the Transferee Company only with their registered office at 603, City Centre, 63/2 The Mall, Kanpur, within the State of U.P. and jurisdiction of this Court, has come up for hearing, after advertisement.

2. By the order dated 14.2.2007, the meetings of the shareholders and creditors of Transferor Company No. 11 and Transferee Company were dispensed with and petitioners were permitted to file confirmation petition:-

"Heard Shri Piyush Agrawal, learned counsel for the petitioner. The registered office of the first 10 Transferor Companies is situate at Kolkata in the State of West Bengal. The registered office of the Transferor Company No.11 and Transferee Company is situated in U.P. giving jurisdiction to this Court to hear the matter.

The Scheme of Amalgamation has been approved by the Board of Directors of the Transferor Company No.11 and the Transferee Company vide their resolution dated 4.1.2007.

A petition for amalgamation in respect of first 10 Transferor Companies has been filed in the High Court at Calcutta.

Shri Piyush Agrawal has made a prayer to dispense with the meeting of shareholders and creditors of the Transferor Company No.11 and the Transferee Company on the ground that all the shareholders have filed their affidavits approving the Scheme of Amalgamation both in respect of the Transferor Company No.11 and the Transferee Company. With regard to Transferor Company No.11, there are no creditors and that all the five creditors of Transferee Company have also filed their affidavits affirming no objection to the Scheme of Amalgamation. The Memorandum and Articles of Association of the Transferor Company No.11 and Transferee Company have been filed and that the audited balance sheets show that these companies have excess of assets over their liabilities. The Scheme of Amalgamation of the 11 Transferor Companies with 'Flowmore" Builders Pvt. Ltd., the Transferee Company annexed as Annexure-Y at page 438 proposes better, efficient and economical management, control and running of the businesses of the companies concerned and to provide administrative convenience and obtain advantages of economies of scale, pool the resources for growth, development and diversification of businesses.

Since all the shareholders of the Transferor Company No.11 and Transferee Company and that all the creditors of Transferee Company have filed affidavits, the meetings of shareholders and creditors are dispensed with. Let a confirmation petition be filed within 10 days for advertisement and fixing a date for hearing in the matter.

List on 27.2.2007."

3. The matter thereafter came up on 27.2.2007 on which the Court passed an order as follows:-

"On 14.2.2007, the Court passed following orders dispensing with the meeting of the shareholders and creditors:-

"Heard Shri Piyush Agrawal, learned counsel for the petitioner. The registered office of the first 10 Transferor Companies is situate at Kolkata in the State of West Bengal. The registered office of the Transferor Company No.11 and Transferee Company is situated in U.P. giving jurisdiction to this Court to hear the matter.

The Scheme of Amalgamation has been approved by the Board of Directors of the Transferor Company No.11 and the Transferee Company vide their resolution dated 4.1.2007.

A petition for amalgamation in respect of first 10 Transferor Companies has been filed in the High Court at Calcutta.

Shri Piyush Agrawal has made a prayer to dispense with the meeting of shareholders and creditors of the Transferor Company No.11 and the Transferee Company on the ground that all the shareholders have filed their affidavits approving the Scheme of Amalgamation both in respect of the Transferor Company No.11 and the Transferee Company. With regard to Transferor Company No.11, there are no creditors and that all the five creditors of Transferee Company have also filed their affidavits affirming no objection to the Scheme of Amalgamation. The Memorandum and Articles of Association of the Transferor Company No.11 and Transferee Company have been filed and that the audited balance sheets show that these companies have excess of assets over their liabilities. The Scheme of Amalgamation of the 11 Transferor Companies with 'Flowmore" Builders Pvt. Ltd., the Transferee Company annexed as Annexure-Y at page 438 proposes better, efficient and economical management, control and running of the businesses of the companies concerned and to provide administrative convenience and obtain advantages of economies of scale, pool the resources for growth, development and diversification of businesses.

Since all the shareholders of the Transferor Company No.11 and Transferee Company and that all the creditors of Transferee Company have filed affidavits, the meetings of shareholders and creditors are dispensed with. Let a confirmation petition be filed within 10 days for advertisement and fixing a date for hearing in the matter.

List on 27.2.2007."

Let the confirmation petition be advertised in daily newspapers 'Times of India' (English) published from Lucknow; 'Pioneer' (English) published from Lucknow and 'Amar Ujala' (Hindi) published from Kanpur on or before 19.3.2007 fixing 10.4.2007. Steps within a week. A copy of the petition has been served upon Shri B.K.L. Srivastava, Official Liquidator in Court today. Let a copy of the petition be served on Regional Director, Company Affairs, NOIDA within a week by dasti service. The Official Liquidator and Regional Director will submit their reports/comments on the next date. List on 10.4.2007.

4. The Confirmation Petition was advertised in daily newspapers 'Time of India' English published from Lucknow; 'Amar Ujala' Hindi published from Lucknow on 13th March, 2007 and 14th March, 2007 respectively and an affidavit of service enclosing the news papers fixing 10.4.2007 for hearing has been filed. In the same affidavit, it is stated that notice of the petitioner was delivered by hand to the Regional Director, Company Law Board, Northern Region, Noida on 7.5.2007.

5. The affidavits of Shri Rakesh Chandra, Regional Director, Northern Region, Ministry of Company Affairs, Noida dated 15.3.2007 and the Official Liquidator's Report No. 141 of 2007 have been filed on record.

6. The Regional Director, Company Affairs has observed in paras 4, 5 and 6 as follows:-

"4. That the deponent further craves leave to submit that the Authorised Share Capital of the Transferee Company is not sufficient to allot shares to the members of the Transferor Companies. It is, therefore, submitted that the Transferee Company may be directed to increase its Authorised Share Capital after following the procedures prescribed under the relevant provisions of the Companies Act, 1956.

5. That the deponent further craves leave to submit that Para 5 of Part-III of the Scheme provides as under:

"The Authorised Capital of the Transferor Companies will stand added to the Authorised Capital of the Transferee Company without any payment of fee, duty, charges or any payment of similar nature and without any act or deeds done by the Transferee Company."

5.1 It is submitted that the Authorised Share Capital of a company can be increased only after following the procedures prescribed under the relevant provision of the Companies Act, 1956 and payment of requisite fees to the Registrar of Companies and tamp duty to the State Government. It is, therefore, submitted that this aspect may kindly be considered.

6. That it is submitted that the Hon'ble Court may kindly consider the submissions made in Para 4 to 5.1 here in above and decide the case on its merits."

7. The Official Liquidator, in his report dated 15.5.2007, submits that books of accounts and papers of Transferor Company No. 11-M/s Lyton Management Services Ltd, were produced before him on 7.5.2007 and was scrutinized by him. They were found to be in order. The scheme provides the appointed date to be 1.4.2006. The balance sheet prior to the day of appointed date was submitted in the office. The Transferor Company is engaged in the business of investment in other bodies corporate and is dealing in shares and securities and providing finance. The Transferee Company is engaged in the business of development, construction and dealing in real estate, providing incidental services, investments in other bodies corporate and dealing in shares and securities. It incurred financial loses in the year 2004-05 and has earned nominal profit for the financial year 2006. The share exchange ratio has been prepared by M/s Agarwal & Saxena, Chartered Accountant, according to which, one share of Rs. 10/- fully paid up of Transferee Company will be alloted for every 20 equity shares of Rs. 10/- each of M/s Lyton Management Services Ltd. He also reports that the authorised share capital of the Transferee Company is Rs. 10 lacs and is not sufficient to absorb the share capital of Transferor Company, whereas Clause-5 of Part III of the Scheme of Amalgamation provides that the Authorised Capital of the Transferor Companies will stand added to the authorised capital of the Transferee Company without any payment of fee, duty, charges or any payment of similar nature and without any act or deeds done by the Transferee Company. The Official Liquidator reports that the affairs of the Transferor Company has not been conducted in a manner prejudicial to the interest of the members or to public interest and that the Company Application will be decided by the Court on merits.

8. The matter with regard to the objections of increase of authorised paid up capital to accommodate the allotment of shares to the members of the Transferor Company and after following the relevant provisions of the Companies Act 1956, was considered and decided by this Court in (2006) 6 Comp LJ 336 (All) in the matter of Jaypee Greens Ltd and Jaiprakash Associates Ltd, Company Petition No. 24 of 2006, decided 8.8.2007 and observations are as follows:-

14. Shri Rakesh Chandra, Regional Director, Northern Region, Ministry of Company Affairs, Noida, has filed his Representation/Affidavit dated 1-8-2006 under Section 394A of the Companies Act, 1956. In Para 4.1 of the said affidavit, he has raised objection about Para 3.12(ii) of the Scheme which provides that the Authorised Share Capital of the Transferor Company shall stand transferred to and combined with the Authorised Share Capital of the Transferee Company. His objection is that the Authorised Share Capital of a company can be increased only after following the procedure prescribed under the relevant provisions of the Companies Act, 1956 and payment of requisite fees to the Registrar of Companies and stamp duty to the State Government.

15. Shri R.P. Agarwal submits that the Regional Director, Company Affairs has taken identical objections, which he had raised in company petition No.26 of 2003 in the matter of Jaypee Cement Limited in which the amalgamation was proposed and confirmed between Jaiprakash Industries Ltd. with Jaypee Cement Ltd. The Court had overruled the objections by judgment reported in 2004 (122) Company Cases 854, the relevant extract is as follows:

''The second objection of the Central Government is with regard to another condition mentioned in para 4.03(ii) of the scheme which provides that upon merger authorised capital of JPI shall stand combined with the authorised share capital of JPC. According to the Regional Director, this amounts to increase of the authorised capital of JPC, which cannot be done without paying the requisite fee/stamp duty to the government. In reply to the objection, it was submitted on behalf of JPC that the fee/stamp duty is nominal and has a maximum limit which the JPC is prepared to pay. But, it was submitted that the requisite fee has already been paid on the authorised capital of JPI and merely because of its merger with JPC, there is no reason why the same fee should be paid again by JPC on the same authorised capital.

The submission has force and no good reason has been shown why the two merged companies should be required to pay duty again on the same authorised capital on which duty has already been paid by the JPI. Regarding the increase of authorised share capital by merger of the authorised capitals of the two companies, an order can be passed under section 391 of the Companies Act itself. This has been done by the Bombay High Court in the case of Vasant Investment Corporation Ltd. Vs. Official Liquidator, Colaba Land and Mills Co. Ltd. (1981) 51 Comp. Cas 20 (at page 35). The relevant part of the judgment is reproduced below :

''The whole purpose of section 391 is to reconstitute the company without the company being required to make a number of applications under the Companies Act for various alterations which may be required in its memorandum and articles of association for functioning as a reconstituted company under the scheme (vide Maneckchowk and Ahmedabad Manufacturing Co. Ltd., In re (1970) 40 Comp Cas 818 (Guj). The company is, therefore, not required to make a separate application under the Companies Act for alteration of its memorandum of association to show the new share capital. Such an alteration can be sanctioned under the scheme itself.'

A similar view has been taken by the Bombay High Court in the case of PMP Auto Industries Ltd., in re (1994) 80 Comp Cas 289 (at page 295, 296) and by the Gujarat High Court in the case of Maneckchowk and Ahmedabad Manufacturing Co. Ltd., in re (1970) 40 Comp Cas 819 (at page 854).

Therefore both the objections of the Regional Director, Northern Region, Department of Company Affairs, Kanpur, are overruled."

16. Similar view has been taken by this Court in number of cases, namely in company petition No.17 of 2005 dated 22.8.2005 in the matter of Juggilal Kamlapat Holding Limited and company petition No.22 of 2005 vide judgment dated 18.10.2005 in Surya Commercial Enterprises Limited."

9. In view of the aforesaid legal position the objections of the Regional Director are not tenable.

10. No one has filed objections to the proposed 'Scheme of Amalgamation' so far as it concerns to the Transferor Company No. 11 and the Transferee Company. The requisite statutory procedures with regard to amalgamation have been followed.

11. The Company Petition in so far as Transferor Company No. 11 and Transferee Company is allowed. The order, however, will be subject to the orders which may be passed by Kolkata High Court with regard to Transferor Companies No. 1 to 10.

12. If and when the Amalgamation Petition is accepted by the Kolkata High Court for Transferor Companies 1 to 10, the Transferor Company No. 11 shall stand on its merger with Transferee Company be dissolved without any further orders of the Court. The 'Scheme of Amalgamation' is sanctioned with the appointed date as on 1.4.2006 subject to the order which may be passed by the Kolkata High Court in respect of the Transferee Company Nos. 1 to 10. The order may be communicated to the Registrar of Companies in accordance with the provisions of the Companies Act, 1956 and the Companies (Court) Rules 1959.

Dt.3.9.2007

RKP


Copyright

Reproduced in accordance with s52(q) of the Copyright Act 1957 (India) from judis.nic.in, indiacode.nic.in and other Indian High Court Websites

Advertisement

dwi Attorney | dui attorney | dwi | dui | austin attorney | san diego attorney | houston attorney | california attorney | washington attorney | minnesota attorney | dallas attorney | alaska attorney | los angeles attorney | dwi | dui | colorado attorney | new york attorney | new jersey attorney | san francisco attorney | seattle attorney | florida attorney | attorney | london lawyer | lawyer michigan | law firm |

Tip:
Double Click on any word for its dictionary meaning or to get reference material on it.